USAID analysis found no evidence of massive Hamas theft of Gaza aid

By Jonathan Landay

WASHINGTON (Reuters) -An internal U.S. government analysis found no evidence of systematic theft by the Palestinian militant group Hamas of U.S.-funded humanitarian supplies, challenging the main rationale that Israel and the U.S. give for backing a new armed private aid operation.

The analysis, which has not been previously reported, was conducted by a bureau within the U.S. Agency for International Development and completed in late June. It examined 156 incidents of theft or loss of U.S.-funded supplies reported by U.S. aid partner organizations between October 2023 and this May.

It found “no reports alleging Hamas” benefited from U.S.-funded supplies, according to a slide presentation of the findings seen by Reuters.

A State Department spokesperson disputed the findings, saying there is video evidence of Hamas looting aid, but provided no such videos. The spokesperson also accused traditional humanitarian groups of covering up "aid corruption."

A White House spokesperson, Anna Kelly, questioned the existence of the analysis, saying no State Department official had seen it and that it "was likely produced by a deep state operative" seeking to discredit President Donald Trump's "humanitarian agenda."

The findings were shared with the USAID's inspector general's office and State Department officials involved in Middle East policy, said two sources familiar with the matter, and come as dire food shortages deepen in the devastated enclave.

Israel says it is committed to allowing in aid but must control it to prevent it from being stolen by Hamas, which it blames for the crisis.

The U.N. World Food Program says nearly a quarter of Gaza’s 2.1 million Palestinians face famine-like conditions, thousands are suffering acute malnutrition, and the World Health Organization and doctors in the enclave report starvation deaths of children and others.

The U.N. also estimates that Israeli forces have killed more than 1,000 people seeking food supplies, the majority near the militarized distribution sites of the Gaza Humanitarian Foundation (GHF), the new private aid group that uses a for-profit U.S. logistics firm run by a former CIA officer and armed U.S. military veterans.

The study was conducted by the Bureau of Humanitarian Assistance (BHA) of USAID, which was the largest funder of assistance to Gaza before the Trump administration froze all U.S. foreign aid in January, terminating thousands of programs. It has also begun dismantling USAID, whose functions have been folded into the State Department.

The analysis found that at least 44 of the 156 incidents where aid supplies were reported stolen or lost were “either directly or indirectly” due to Israeli military actions, according to the briefing slides.

Israel's military did not respond to questions about those findings.

The study noted a limitation: because Palestinians who receive aid cannot be vetted, it was possible that U.S.-funded supplies went to administrative officials of Hamas, the Islamist rulers of Gaza.

One source familiar with the study also cautioned that the absence of reports of widespread aid diversion by Hamas “does not mean that diversion has not occurred.”

The war in Gaza began after Hamas attacked Israel in October 2023, killing 1,200 people and capturing 251 hostages, according to Israeli tallies. Nearly 60,000 Palestinians have been killed since the Israeli assault began, according to Palestinian health officials. 

ISRAEL SAYS HAMAS DIVERTS HUMANITARIAN AID

Israel, which controls access to Gaza, has said that Hamas steals food supplies from U.N. and other organizations to use to control the civilian population and boost its finances, including by jacking up the prices of the goods and reselling them to civilians.

Asked about the USAID report, the Israeli military told Reuters that its allegations are based on intelligence reports that Hamas militants seized cargoes by "both covertly and overtly" embedding themselves on aid trucks.

Those reports also show that Hamas has diverted up to 25% of aid supplies to its fighters or sold them to civilians, the Israeli military said, adding that GHF has ended the militants' control of aid by distributing it directly to civilians.

Hamas denies the allegations. A Hamas security official said that Israel has killed more than 800 Hamas-affiliated police and security guards trying to protect aid vehicles and convoy routes. Their missions were coordinated with the U.N.

Reuters could not independently verify the claims by Hamas and Israel, which has not made public proof that the militants have systematically stolen aid.

GHF also accuses Hamas of massive aid theft in defending its distribution model. The U.N. and other groups have rejected calls by GHF, Israel and the U.S. to cooperate with the foundation, saying it violates international humanitarian principles of neutrality.

In response to a request for comment, GHF referred Reuters to a July 2 Washington Post article that quoted an unidentified Gazan and anonymous Israeli officials as saying Hamas profited from the sales and taxing of pilfered humanitarian aid.

AID GROUPS REQUIRED TO REPORT LOSSES

The 156 reports of theft or losses of supplies reviewed by BHA were filed by U.N. agencies and other humanitarian groups working in Gaza as a condition of receiving U.S. aid funds.

The second source familiar with the matter said that after receiving reports of U.S.-funded aid thefts or losses, USAID staff followed up with partner organizations to try to determine if there was Hamas involvement.

Those organizations also would "redirect or pause" aid distributions if they learned that Hamas was in the vicinity, the source said.

Aid organizations working in Gaza also are required to vet their personnel, sub-contractors and suppliers for ties to extremist groups before receiving U.S. funds, a condition that the State Department waived in approving $30 million for GHF last month.

The slide presentation noted that USAID partners tended to over-report aid diversion and theft by groups sanctioned or designated by the U.S. as foreign terrorist organizations - such as Hamas and Palestinian Islamic Jihad - because they want to avoid losing U.S. funding.

Of the 156 incidents of loss or theft reported, 63 were attributed to unknown perpetrators, 35 to armed actors, 25 to unarmed people, 11 directly to Israeli military action, 11 to corrupt subcontractors, five to aid group personnel “engaging in corrupt activities,” and six to “others," a category that accounted for “commodities stolen in unknown circumstances,” according to the slide presentation.

The armed actors “included gangs and other miscellaneous individuals who may have had weapons,” said a slide. Another slide said "a review of all 156 incidents found no affiliations with" U.S.-designated foreign terrorist organizations, of which Hamas is one.

“The majority of incidents could not be definitively attributed to a specific actor,” said another slide. “Partners often largely discovered the commodities had been stolen in transit without identifying the perpetrator.”

It is possible there were classified intelligence reports on Hamas aid thefts, but BHA staff lost access to classified systems in the dismantlement of USAID, said a slide.

However, a source familiar with U.S. intelligence assessments told Reuters that they knew of no U.S. intelligence reports detailing Hamas aid diversions and that Washington was relying on Israeli reports.

The BHA analysis found that the Israeli military “directly or indirectly caused” a total of 44 incidents in which U.S.-funded aid was lost or stolen. Those included the 11 attributed to direct Israeli military actions, such as airstrikes or orders to Palestinians to evacuate areas of the war-torn enclave.

Losses indirectly attributed to Israeli military included cases where they compelled aid groups to use delivery routes with high risks of theft or looting, ignoring requests for alternative routes, the analysis said.

(Reporting by Jonathan Landay; Additional reporting by Maayan Lubell in Jerusalem; Editing by Don Durfee and Claudia Parsons)