A Deepening Scandal: Federal Watchdog Agencies Grapple With USAID Fallout
The United States Agency for International Development (USAID) is facing one of the largest bribery scandals in its history, a case that is now reshaping how federal contracting is overseen.
For years, USAID was promoted as a cornerstone of American soft power, helping to direct billions in taxpayer dollars toward humanitarian programs across the globe. Yet recent investigations have revealed that while those dollars were flowing out, some officials were funneling benefits into their own pockets.
Now, the Small Business Administration (SBA) has ordered a full audit of contracting officers who handled awards under its business development program over the last 15 years.
A Sweeping Audit Ordered
SBA Administrator Isabella Casillas Guzman described the scandal as a damning reflection of systemic failures that were ignored for too long. In a letter obtained by Fox News, she emphasized that this was not an isolated case but evidence of widespread oversight breakdowns.
Guzman instructed Associate Administrator Tre Pennie to begin a full audit of all awarding officers dating back to 2010. The goal, she wrote, is to restore public trust and ensure that contracting authority is exercised responsibly.
“The role of federal contracting officers is not ceremonial,” she said. “It carries immense authority and must be rooted in merit and transparency, not personal gain.”
The USAID Scandal at the Center
At the heart of the case is former USAID contracting officer Roderick Watson. Federal prosecutors revealed that Watson accepted more than $1 million in bribes between 2013 and 2020. These came from Walter Barnes, owner of Vistant, and Darryl Britt, owner of Apprio, with assistance from subcontractor Paul Young.
The Department of Justice said the payments were not limited to cash. Watson received laptops, luxury event tickets, downpayments on mortgages, cell phones, and even jobs for family members. To hide the scheme, the group used shell companies, fake invoices, and disguised payroll transfers.
Watson has pleaded guilty to bribery of a public official. His case is only one example of what lawmakers and watchdogs now warn could be a culture of corruption inside long-running aid programs.
A Contract Worth $800 Million
The scandal has spilled into a broader political battle. In 2023, Vistant, through a joint venture, was awarded a contract worth up to $800 million. Its purpose was to help address irregular migration from Central America, a project tied to former Vice President Kamala Harris.
Yet almost immediately after the award, USAID canceled the contract, citing evidence of dishonesty. Despite that cancellation, the joint venture challenged the decision in court, won the case, and had the contract restored along with a $10,000 payment from the government.
This sequence has fueled criticism that the Biden administration allowed a tainted company to secure one of the largest aid contracts in recent memory.
Trump Pushes the Fight to the Supreme Court
Separate from the bribery case, former President Donald Trump is now fighting over USAID funding itself. His administration has asked the U.S. Supreme Court to allow a freeze on billions in foreign aid, including $12 billion due to be spent by September 30.
Solicitor General D. John Sauer argued in an emergency filing that without immediate intervention, the administration would be forced to obligate the funds despite clear evidence of waste, fraud, and abuse.
This is not Trump’s first confrontation with USAID. Since his first term, he has pushed for major cuts to foreign aid programs, arguing that they benefit corrupt contractors abroad rather than American taxpayers. His allies point to the Watson bribery scandal as proof that the system is broken.
Democrats Push Back
Democrats have defended USAID, warning that deep cuts could leave vulnerable communities without critical assistance. They also argue that dismantling foreign aid weakens U.S. influence overseas and leaves room for rivals like China to expand their reach.
However, critics note that the fraud uncovered within USAID programs undermines these very arguments. Billions meant to address poverty and migration instead enriched insiders who manipulated the contracting system for personal benefit.
What Comes Next
The SBA audit could expose a pattern that extends far beyond Watson and his associates. By reviewing 15 years of contracts, investigators will determine whether bribery and kickbacks were isolated or systemic.
If further misconduct is discovered, it could reshape how aid programs are structured and how contracts are awarded. Lawmakers from both parties have already signaled that major reforms may be required, especially as the scandal continues to reach new corners of the federal bureaucracy.
For now, USAID remains under a cloud of suspicion, and the political battle over its future is only intensifying.
