In Washington, a lawsuit filed on Tuesday accuses the Trump administration of severely undermining the U.S. Agency for International Development (USAID), which has resulted in American businesses owed hundreds of millions of dollars for services already rendered. This legal action comes as the administration has put a sudden halt on foreign aid, leading to significant layoffs among U.S. suppliers and contractors linked to USAID, such as 750 furloughs reported by Chemonics International, a Washington-based firm, according to the lawsuit.
The impact of these actions is described as far-reaching, not only affecting large and small businesses that must close their programs and lay off employees but also harming vulnerable populations globally, including hungry children and those facing deadly diseases. A coalition of U.S. businesses, including an organization representing 170 small businesses and major suppliers, along with the American Jewish community and the American Bar Association, has united in this legal challenge.
The suit was presented in U.S. District Court in Washington, targeting President Donald Trump, Secretary of State Marco Rubio, acting USAID Deputy Administrator Peter Marocco, and Russell Vought, director of the Office of Management and Budget. This legal action marks at least the third lawsuit against the administration concerning the rapid decline of the U.S. aid and development agency, with Trump and prominent ally Elon Musk openly criticizing USAID and its initiatives, claiming they contravene the administration’s objectives.
Marocco, alongside Musk and Rubio, has implemented a complete freeze on foreign aid as part of an executive order issued by Trump on January 20. A previous lawsuit led by federal employee associations has temporarily halted efforts to displace thousands of USAID workers, yet the funding freeze continues, impacting operations including the loss of the agency’s Washington headquarters lease.
According to a U.S. official, a contractor affiliated with USAID, and an email correspondence, the new administration has canceled contracts without the legally required 30-day notice and failed to compensate for services already performed. For Chemonics, one of the largest partners of USAID, the funding freeze has resulted in $103 million in unpaid invoices and nearly $500 million worth of USAID-ordered medications, food, and other supplies stuck in the logistics chain.
The lawsuit warns that delays in delivering health commodities could potentially lead to the loss of around 566,000 lives due to conditions such as HIV/AIDS, malaria, and unmet reproductive health requirements, including 215,000 deaths among children. The complaint argues that the administration lacks the authority to interfere with programs and funds that Congress has mandated.
In an affidavit submitted late Monday in response to the workers’ lawsuit, Marocco justified the funding suspension and the drastic reduction in USAID personnel on leave. He cited “insubordination” and “noncompliance” among USAID staff as reasons that necessitated halting funding and operations to facilitate a thorough review of each U.S. aid program to determine which could continue operating internationally.
