$35.9 Million for “Positive Youth Experiences” in a Territory Controlled by Hamas

§ 01 / The Program

A Five-Year, $35.9M Award. Hamas Has Controlled Gaza Since 2007.

In 2018, USAID awarded a five-year, $35.9 million contract for the Palestinian Youth Empowerment Program (PYEP), covering both the West Bank and the Gaza Strip. The program’s stated objectives included vocational training for youth ages 15–29, psychosocial support services, civic engagement workshops, and youth leadership development. Implementation was contracted through a consortium of Palestinian NGOs and international development organizations.

Hamas, designated as a Foreign Terrorist Organization by the U.S. State Department, has exercised de facto governmental control over the Gaza Strip since 2007 — eleven years before the program launched. USAID is prohibited by U.S. law from providing material support to designated terrorist organizations, and the program’s implementers were required to certify compliance with anti-terrorism provisions. But the program ran in an environment where Hamas controls education institutions, civil society registration, and the movement of people and goods.

The Oversight Problem

USAID’s ability to conduct oversight in Gaza has been limited by security conditions since at least 2014. The agency’s own Office of Inspector General documented in multiple reviews that USAID program staff could not conduct in-person monitoring of Gaza programs with the frequency required by agency standards. Implementers submitted self-reported progress data. USAID’s remote oversight depended on partner reporting, third-party evaluators who faced the same access constraints, and document review. GAO noted in 2024 that USAID had not fully resolved outstanding OIG findings related to Gaza program oversight.

§ 02 / The Timeline

Launched Before October 7. Continued After.

2018

USAID launches Palestinian Youth Empowerment Program (PYEP); five-year, $35.9M award to consortium of Palestinian NGOs and international implementers.

2019–2022

Programs run in West Bank and Gaza: vocational training, psychosocial support, civic engagement workshops, youth leadership curriculum. Hamas controls Gaza administration throughout.

Oct 7, 2023

Hamas attacks Israel, killing 1,200 people. USAID pauses Gaza programming. West Bank programs continue. The partner organizations that ran Gaza programs continue to receive payments through unwinding of prior obligations.

Jan 2024

GAO formally notes concern about USAID's ability to conduct oversight of Gaza programming given security environment. USAID's inspector general opens review.

Jan 20, 2025

Executive Order 14169 suspends all USAID foreign assistance pending review. All Palestinian programs, including those in wind-down phase, are halted.

2025

DOGE flags the $35.9M Gaza youth program cluster as part of USAID comprehensive review. Programs terminated under EO 14169.

§ 03 / The Accountability Gap

$35.9 Million. Remote Oversight. Hamas Controls Who Operates in Gaza.

The specific accountability concern is not that USAID intentionally funded Hamas. The concern is that running a $35.9 million youth development program in a territory controlled by a designated terrorist organization — with limited in-person oversight capacity — creates structural conditions in which diversion or indirect benefit to the controlling authority cannot be ruled out. Every NGO operating in Gaza requires Hamas permission to operate. Every facility, event space, and distribution point is within Hamas’s administrative reach.

USAID has consistently maintained that its anti-terrorism vetting and compliance systems are rigorous. Congressional critics, particularly after October 7, have argued that those systems are inadequate for an operating environment where the entity USAID is prohibited from supporting is also the entity that controls the ground. The program’s own OIG audits acknowledged the oversight limitations without concluding the program should have been terminated.

“USAID has not fully resolved outstanding Inspector General findings related to oversight of programs in Gaza. The security environment limits in-person monitoring below agency standards.”
GAO — U.S. Assistance to the Palestinians: Key Issues for Congressional Oversight (2024)

§ 04 / The Bottom Line

What This Means

$35.9 million in American taxpayer money spent on youth development programs in a territory governed by a U.S.-designated terrorist organization, with acknowledged limitations on in-person oversight, from 2018 through the October 7, 2023 Hamas attacks on Israel. The programs were not demonstrated to be ineffective, but they also could not be fully verified as effective — or as free from indirect Hamas benefit — given the oversight constraints. All Palestinian programs suspended January 20, 2025 under Executive Order 14169, then terminated under DOGE’s USAID review. No accountability findings have been published for the termination period.

Sources · 10 Citations