The revelation that USAID, a statutory body of the U.S. government, indirectly funded the Pakistan-based Falah-e-Insaniat Foundation (FIF), a front for the notorious terrorist group Lashkar-e-Taiba (LeT), has sparked significant controversy and concerns over the oversight of American foreign aid. The LeT, which has been responsible for multiple terrorist attacks in India, including the devastating 2008 Mumbai attacks that claimed the lives of 166 innocent people, including six American citizens, has long been designated as a terrorist organization by both India and the United States. Despite this clear classification and the global consensus on LeT’s role in orchestrating terror across the Indian subcontinent, FIF, its charitable front, managed to receive financial assistance through a U.S.-based charity, Helping Hand for Relief and Development (HHRD), which has been found to have direct and indirect links to jihadist groups operating in South Asia.
This shocking revelation was brought to light even as former U.S. President Donald Trump began taking concrete steps to dismantle USAID through an executive order. Trump had repeatedly expressed concerns over the agency’s role in distributing American taxpayer money to entities that lacked proper scrutiny. While this move faced criticism from various quarters, including developmental organizations that rely on USAID funding for legitimate projects, it now appears that his administration’s concerns were not entirely misplaced. Although this policy shift could impact numerous developmental initiatives across the world, including those in India, it also underscores the urgent necessity of ensuring that American financial aid does not inadvertently end up supporting organizations with terrorist affiliations. USAID, which is responsible for channeling more than half of America’s foreign aid, reportedly failed to adhere to its own government’s ban on FIF when it provided funding through HHRD, raising serious concerns about internal accountability and due diligence within the agency.
According to an official U.S. State Department document, the FIF is essentially Jamaat-ud-Dawa (JuD) operating under a different name, designed to evade scrutiny and sanctions imposed on the group due to its direct involvement in terrorist activities. This document explicitly links FIF to the 2008 Mumbai attacks, reinforcing the argument that any financial assistance to this organization, whether direct or indirect, constitutes indirect support for terrorism. What makes this situation even more alarming is the fact that despite being designated as a terrorist organization by the U.S. in 2010, FIF continued to receive funds through intermediaries, raising serious questions about how such transactions were approved and who within the U.S. administration was responsible for the oversight.
The financial conduit for this aid was the USAID-funded HHRD, a Michigan-based Islamist charity that has been under scrutiny for its links to jihadist networks in South Asia. Amjad Taha, a well-respected expert on strategic and political affairs in the Middle East, revealed that USAID had allocated at least $110,000 to organizations in South Asia with known jihadist ties. When confronted with this damning evidence, USAID merely launched an internal investigation—one that failed to yield any meaningful results or hold anyone accountable for these lapses. The failure to take decisive action in response to these revelations only raises further suspicions about how deeply entrenched such financial mismanagement may be within the agency.
Concerns about USAID’s funding practices were first formally raised in 2019, when three U.S. Members of Congress urged the State Department to conduct a thorough investigation into HHRD’s alleged ties to terrorism. However, despite these warnings and an ongoing probe into HHRD’s financial activities, USAID still approved another tranche of funding—this time amounting to $73,000—in 2023 under the Biden administration. This raises a fundamental question: How was a known terror-linked entity still receiving American taxpayer money even after multiple alarms were raised?
Michael T. McCaul, Chairman of the House Foreign Affairs Committee, brought these concerns to the forefront in a 2023 letter to USAID Administrator Samantha Power. He pointed out that in October 2021, USAID had awarded $110,000 to HHRD under the Ocean Freight Reimbursement Program, despite longstanding allegations that HHRD had links to designated terrorist organizations, terror financiers, and extremist groups. McCaul strongly emphasized the need to halt all funding to the NGO until a comprehensive investigation could be conducted into its affiliations and financial transactions. This letter only added to the growing chorus of voices questioning USAID’s ability to maintain due diligence in ensuring that American foreign aid does not end up in the hands of those who seek to destabilize democratic nations and promote violent extremism.
Trump, who has been vocal about his distrust of USAID, previously referred to it as part of the "deep state" and took measures to crack down on its operations. The revelation that USAID funds had been misdirected to a terror-linked entity reinforces the arguments made by his administration that the agency required urgent reform and stricter oversight. Amjad Taha further questioned how those responsible for this glaring lapse were being held accountable, asking, “Which department are they in now? How are they serving Islamists? Which charity or school are they operating today?” His pointed remarks highlight the need for a thorough and transparent inquiry into how USAID’s funds were allocated and whether similar instances of mismanagement exist.
The implications of this controversy extend far beyond bureaucratic failures. The Lashkar-e-Taiba and its affiliated groups continue to pose a significant security threat to India, particularly in the volatile region of Jammu and Kashmir. Even after the 2008 Mumbai attacks, LeT operatives have remained active on the ground, carrying out attacks and engaging in militant training. To further obscure its operations, LeT has established a proxy organization called The Resistance Front (TRF), which continues to threaten peace in Kashmir. The Indian government has already designated TRF as a terrorist organization due to its direct links to Pakistan-based terror networks, yet these groups continue to find ways to operate and recruit. The exposure of American funding indirectly supporting such organizations serves as a wake-up call for both the U.S. and its allies, including India, to adopt more rigorous mechanisms to monitor and track the distribution of foreign aid.
The entire episode raises serious concerns about the effectiveness of existing counter-terror financing mechanisms and calls for an independent, transparent investigation into how USAID’s funds were misused. The fact that an entity banned by the U.S. government itself still managed to receive funding suggests either gross negligence or, even worse, deliberate circumvention of regulatory safeguards. If USAID was unable to prevent such funds from reaching terror-linked organizations despite multiple warnings, it calls into question the agency’s overall credibility and effectiveness in handling American taxpayer money responsibly.
For India, the exposure of these links underscores the need for continued vigilance, stronger diplomatic engagement, and greater cooperation with global institutions to ensure that international aid does not inadvertently support entities that threaten its national security. The dismantling of USAID by Trump, while controversial, now appears to have an unintended but significant benefit for India by potentially cutting off funding streams to terrorist organizations operating in the region. Moving forward, there must be a greater emphasis on transparency, accountability, and due diligence in the distribution of international aid to prevent such dangerous lapses from occurring again.
