USAID was ostensibly funding humanitarian and democracy-building programs for Palestinians in the territories. It took pains to ensure that any infrastructure projects it built in the territories were only for Arabs, not Jews. (In at least one case, a road that they built for Palestinians
There have been many bumps along the way. For example, the head of a Palestinian "refugee" agency that USAID funded was a
raging antisemite. But in general, USAID would attempt to ensure that the funding they gave did not go to terrorists, at least not directly.
In more recent years, however, USAID (like the EU) has been actively trying to give Area C land, under Israeli control, to Palestinians. The Biden administration supported USAID building
an entire Palestinian university as well as other Palestinian projects
on Area C lands.
There is another angle to this which is rarely reported. When USAID attaches strings to its programs to minimize the chances that they will be used for terror, Palestinian leaders fume.
As early as 2011, Palestinians warned about the evils of USAID requiring recipients to sign statements that they oppose terrorism. In 2012, Palestinian universities were
urged not to accept USAID money because they would investigate whether professors were terrorists.
In 2019.
the PA itself told USAID to stop all activities out of fear of terror-related lawsuits. The Anti-Terrorism Clarification Act (ATCA), passed by Congress and signed into law by then-President Trump allows Americans to sue those receiving foreign aid from their country in US courts over complicity in "acts of war" and the PA did not want any money under those circumstances.
The major reason given for US foreign aid is to be "soft power" to promote pro-American and pro-democracy thinking among the people. However, Palestinians - and Arabs altogether - never got that memo.
Millions of dollars were given in private,
without publishing the recipients and with no transparency, apparently because of fear that there would be backlash from Palestinians for accepting money from the US.
What kind of "soft power" is it when the US cannot even make the names of the recipients public because they hate the US so much?
USAID has clearly not come close to
achieving its stated goals in the Palestinian territories. It has not advanced democracy, it has not dissuaded terrorism, it has not improved Palestinian governance or reduced corruption. The Palestinians want all of the funding but none of the responsibility.
An Egyptian cleric once said that he considered all US funding of Egypt
to be a form of jizya tax - something the dhimmis owe their Muslim masters. This is exactly how the Palestinians have treated US funding from USAID - it is something they feel they are owed.
As with UNRWA, over the years USAID itself has internalized that thinking and throwing money away on Palestinians without expecting anything in return became the entrenched mentality of the agency.
That is all the evidence you need that hundreds of millions of dollars have been wasted over the years.