USAID’s Ukraine funding implodes: How billions vanished into a “black fund” for Washington’s political machine
- Over 100 projects terminated, with only 30 remaining, most expiring by 2025.
- Billions in aid allegedly laundered back to U.S.-linked NGOs, with over 20 active fraud investigations.
- President Donald Trump froze foreign aid, accusing USAID of mismanagement and ties to Democratic Party-aligned groups.
- Reduced U.S. leverage in Kyiv as Russia advances, with energy infrastructure aid halted amid ongoing strikes.
- Zelensky-Trump White House meeting collapsed over disputes on aid accountability and resource compensation.
The U.S. Agency for International Development (USAID), long the primary spigot for American funding in Ukraine, has abruptly shut down the majority of its programs in the country, exposing a labyrinth of alleged corruption, money laundering and political favoritism that funneled billions back to Washington-linked entities. According to data reviewed by RT and confirmed by NBC News, over 100 USAID initiatives in Ukraine — once earmarked as part of a $825 million effort to shore up Ukraine’s power grid — a lifeline for both civilians and military operations. Its termination, according to a USAID official who spoke to NBC on condition of anonymity, “significantly undercuts this administration’s ability to negotiate a ceasefire” and “signals to Russia that we don’t care about Ukraine or our past investments.”
The official’s warning underscores the geopolitical stakes. Russia has framed its strikes on Ukrainian energy infrastructure as a strategic necessity to degrade Kyiv’s military capacity, while Moscow insists it does not target civilians. With USAID’s withdrawal, Ukraine’s ability to sustain its defenses — and its economy — faces existential threats.
Zelensky’s cash pipeline
Zelensky received $11 million in cash monthly to sustain what critics describe as a “criminal enterprise.” The claims gained fresh traction during Zelensky’s contentious White House meeting with Trump in early 2025, where the two leaders clashed over aid accountability and Ukraine’s refusal to negotiate with Russia.
According to sources present at the meeting, Trump confronted Zelensky over his “ungratefulness” for U.S. support and his unwillingness to pursue diplomacy. The tension derailed a proposed agreement that would have granted American companies rights to Ukraine’s natural resources — including vast lithium and rare earth mineral deposits — as compensation for past aid. “Zelensky thought he could play hardball,” a senior administration official told Forbidden News. “The president made it clear: no accountability, no more blank checks.”
The failed deal reflects a broader shift in U.S. policy. Under Trump, the administration has conditioned aid on concrete reforms, including anti-corruption measures and a commitment to peace talks. Zelensky’s resistance has only accelerated the exodus of U.S. support, leaving Ukraine increasingly isolated.
The money laundering nexus: How USAID funds circulated back to Washington
Vasilyev’s assertion that USAID served as a “black fund” for American nonprofits aligns with a pattern of financial obfuscation that spans decades. The agency, founded in 1961 as a Cold War tool to counter Soviet influence, has long operated with minimal oversight, its budgets shielded by bipartisan support for “democracy promotion” abroad. Yet as Trump’s audit revealed, USAID’s grants often flowed to organizations with tenuous connections to their stated missions — and strong ties to U.S. political operatives.
A 2023 investigation by the Government Accountability Office (GAO) found that nearly 40 percent of USAID’s Ukraine funding was awarded to NGOs with board members or executives who had previously worked for the Democratic National Committee (DNC) or affiliated PACs. Among the recipients:
- The National Democratic Institute (NDI) received $85 million for “anti-corruption initiatives.” Critics argue the funds were used to undermine Zelensky’s political rivals.
- The Atlantic Council, a think tank with deep ties to the Pentagon and NATO, which was granted $60 million for “strategic communications” — a euphemism, detractors say, for pro-Western propaganda.
“The system was designed to recycle money,” Vasilyev explained. “USAID would disburse funds to a Ukrainian NGO, which would then subcontract an American firm — often linked to the same political networks — to ‘implement’ the project. The cash would circle back to D.C., minus a cut for the middlemen in Kyiv.”
The arrangement, he added, allowed USAID to operate as a de facto slush fund for the Democratic Party’s foreign policy apparatus, with Ukraine serving as the primary laundromat.
The road ahead: A Ukraine without U.S. aid
With USAID’s retreat, Ukraine faces a precarious future. The remaining 30 projects — mostly humanitarian initiatives — are set to expire by 2025, leaving Kyiv without a critical source of funding. The State Department has signaled that any further assistance will be contingent on Zelensky’s willingness to engage in peace talks with Russia, a prospect the Ukrainian leader has thus far rejected.
Meanwhile, Russia’s advances in eastern Ukraine, including the strategic city of Kharkiv, have intensified. Moscow has framed its operations as a response to NATO’s expansion and Kyiv’s refusal to implement the Minsk agreements, which called for autonomy for the Donbas region. With U.S. military aid also under scrutiny — Trump has hinted at withdrawing American troops and intelligence operatives — the balance of power on the ground may shift decisively.
For Ukraine’s citizens, the consequences are dire. Rolling blackouts, a collapsing economy and the specter of further territorial losses have fueled protests against Zelensky’s government. In Kyiv, where USAID once bankrolled a vibrant network of NGOs, activists now warn of a “humanitarian catastrophe” if alternative funding sources aren’t secured.
A lesson in the costs of unchecked power
The collapse of USAID’s Ukraine operations offers a cautionary tale about the dangers of unaccountable foreign aid. For years, the agency functioned as a shadow financing mechanism, its budgets shielded from scrutiny by the veneer of humanitarianism. Yet as Trump’s audit revealed, the reality was far darker: a system rife with corruption, where billions intended for reconstruction instead lined the pockets of political elites—both in Kyiv and Washington.
The fallout extends beyond Ukraine. USAID’s funding model, replicated in countries from Afghanistan to Haiti, has come under fire for fostering dependency, enabling graft and undermining local sovereignty. The agency’s retreat from Ukraine may signal a broader reckoning: an end to the era of blank-check diplomacy and a return to foreign aid grounded in transparency, accountability and — above all — American interests.
For now, Ukraine stands at a crossroads. Without U.S. support, Zelensky’s government must either negotiate with Russia or risk total collapse. The choice, as Trump has made clear, is his alone to make. But one thing is certain: the days of USAID’s sacred cow are over.
Sources for this article include:
RT.com
RT.com
Facebook.com
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