Hamas Threatened to Shut Down US-Funded Aid Groups in Gaza. A Federal Inspector General Put It in Writing to Congress.
A confidential report from the USAID Office of Inspector General, dated June 2026 and transmitted to Congress on June 24, documents how Hamas coerced American-funded humanitarian organizations operating in Gaza and diverted United States taxpayer dollars in the process. The Washington Free Beacon published its contents in an exclusive on August 4.
The report does not accuse the aid groups of complicity. It describes what was done to them: threats to send Hamas police to shut down operations, demands for employee rosters and beneficiary lists, and orders to redirect material support to families Hamas selected.
It also lands on top of a separate, earlier document that reached a very different conclusion — and keeping the two straight is most of this story.
- $938,400,000 in federal funds obligated for Gaza and West Bank assistance in FY2024, followed by roughly $536,000,000 in FY2025 — USAFacts, federal obligation records
- 100+ current and former UNRWA staff the Inspector General has referred for federal suspension or debarment over suspected Hamas ties or October 7 participation — USAID OIG, via Washington Free Beacon
- $200,000,000 routed by USAID and the State Department to "miscellaneous foreign awardees" in Gaza and the West Bank in 2024 — with no recipient organization named on usaspending.gov — NGO Monitor
The Office of Inspector General is not the same thing as the agency it audits. When the Trump administration wound down USAID as a standalone agency in 2025, its Inspector General survived as an independent law-enforcement entity with its own investigators and its own reporting line to Congress. That distinction is the reason a document like this exists at all: the office that produced it does not answer to the program managers whose spending it is examining.
The June report sits inside a broader OIG investigation the office calls “Operation Stop the Carousel” — a name that describes the problem it was built to chase: the same Hamas-linked individuals recirculating through United Nations and non-governmental aid pipelines that United States money flows into, exiting one payroll and reappearing on another. Six non-governmental organizations complied with the Inspector General’s requests for information and turned over records.
The organizations operating in Gaza on United States funding include Mercy Corps, International Medical Corps, Save the Children, Action Against Hunger, ACTED, Project Hope, World Vision, Catholic Relief Services, ANERA and Oxfam, among others. They are listed here to convey the scale of the American footprint being pressured, not as an accusation against any of them. The report’s framing is that these groups were targets of coercion, operating in a territory where the governing authority controls the police, the permits and the roads.
What makes the Inspector General’s account harder to wave off than a general allegation is its specificity. The pressure came through Hamas’s Ministry of Interior and a body identified as its “Institutional Investigations Unit,” and it took the form of concrete, itemizable demands rather than vague intimidation.
Threatened to deploy Hamas police to shut down NGO operations for noncompliance.
Sought NGO employee personnel data and lists of aid beneficiaries.
Demanded dedicated Hamas-staffed booths and outposts inside hospitals.
Ordered NGOs to divert material support to specific families Hamas identified.
Restricted national staff to 24 hours per week at facilities Hamas did not control.
Demanded inspection access to aid warehouses.
Source: USAID Office of Inspector General report dated June 2026, transmitted to Congress June 24, 2026, as reported by the Washington Free Beacon
A separate watchdog report published December 3, 2025 by NGO Monitor, built on declassified Israeli military documents covering 2018 through 2022, describes an older and more structural version of the same arrangement. Hamas placed approved locals — described as “guarantors” — into senior administrative roles inside aid organizations, where they monitored staff, finances, vehicle movements and, in some documented cases, employees’ dress and religious observance. That is not an episodic shakedown. That is an embedded supervisory layer sitting inside organizations funded by American taxpayers.
None of this is hypothetical. In 2022, an Israeli court convicted Mohammed el-Halabi, World Vision’s former Gaza operations manager, of diverting tens of millions of dollars in aid money to Hamas. That conviction is the proof of concept the current investigation rests on: a single trusted administrator inside a major international charity was able to move an enormous sum, for years, before anyone in the funding chain caught it.
U.S. Central Command released drone footage of an incident in Khan Younis in which armed individuals are seen intercepting and offloading a humanitarian aid truck.
In July 2025, Reuters published a leaked internal USAID analysis, completed the month before by career staff, which reviewed roughly 150 to 156 reported incidents and found no evidence of systemic or widespread Hamas diversion of American-funded aid. That report was widely cited, and it is real. It is also a different document, produced by a different office, using a different evidentiary base.
The distinction matters, and it is not a rhetorical dodge. The 2025 internal review was assembled from information supplied by the United Nations — that is, from the institutions whose own pipelines were the subject of the question. The Inspector General’s newer findings rest on direct evidence: records obtained from the non-governmental organizations themselves and material tied to Hamas’s own bodies. One asked the system to describe itself. The other went and collected the documents.
There is a further complicating data point that deserves to be on the page rather than buried: Israeli military officials have separately told reporters that over roughly twenty months they never found proof of Hamas stealing United Nations aid. That account exists in the record and cuts against the harder version of this story. It is also an assessment about a specific question — theft of UN convoy cargo — while the Inspector General’s report is about something structurally different: coercion of American-funded organizations, control of their staffing and distribution lists, and the recirculation of individuals across payrolls. Those can both be true.
“Hamas terrorists actively coerced aid organizations to impede, coerce, and divert U.S. taxpayer-funded aid.”
Senior State Department official, quoted in the Washington Free Beacon, August 4, 2026
Running alongside the NGO findings is a parallel and larger track aimed at the UN Relief and Works Agency. The Inspector General has referred more than 100 current and former UNRWA staff for federal suspension or debarment over suspected Hamas ties or participation in the October 7 attacks, and the probe’s scope now covers roughly 1,500 UNRWA-linked individuals. At least 100 confirmed Hamas members drew salaries paid through UNRWA. According to the report, six United Nations agencies are withholding documents the Inspector General has requested.
The American stake in that agency is not small. United States contributions to UNRWA ran $343,000,000 in 2022 and $422,000,000 in 2023. More broadly, the United States supplies about 22 percent of the United Nations’ general budget and roughly 40 percent of its humanitarian budget — which means an obstructed audit of UN aid pipelines is, functionally, an obstructed audit of American money.
Then there is the traceability problem on the American side of the ledger. NGO Monitor’s review of 2024 funding found roughly $200,000,000 sent by USAID and the State Department to Gaza and West Bank recipients logged only as “miscellaneous foreign awardees” — a category that names no organization at all on usaspending.gov, the government’s own public spending database. That is a standalone accountability failure independent of anything Hamas did. You cannot investigate diversion from a recipient the public record refuses to identify.
The report went to Congress, and Congress reacted. Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa), whose committee has jurisdiction over federal law-enforcement oversight, said the findings “shine even more light on the Biden administration’s failure to prevent Americans’ hard-earned money from going to terrorists who hate America and who murder our allies.” House Foreign Affairs Committee Chairman Michael McCaul (R-TX) holds the parallel jurisdiction over foreign assistance authorization on the House side.
Secretary of State Marco Rubio (R) has held the same position publicly since well before this report surfaced, arguing that Hamas is the obstacle standing between Gazans and the aid intended for them. A senior State Department official put the department’s read on the Inspector General’s findings more bluntly still: “The facts speak for themselves, even if inconvenient for some.”
Hamas continues to deprive the people of Gaza of the humanitarian aid they desperately need... Hamas is the impediment.
What the Inspector General has not produced is a total. There is no published figure for how many American dollars were diverted, because the investigation to date has documented mechanism rather than quantified loss. That is an honest limitation, and it is also the argument for the debarment referrals and the document demands: you cannot put a number on a skim you are still being denied the records to measure.
An independent federal watchdog told Congress in June that a terrorist organization dictated staffing, distribution lists and warehouse access inside American-funded aid operations. It has referred more than a hundred UN-affiliated staff for debarment and says six UN agencies are withholding documents. And roughly $200,000,000 of the 2024 spending in question went to recipients the government’s own database will not name. No total has been published for what was lost — which is exactly the problem.
