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January 27, 2015

USAID Drops Aid Charity Accused of Massive Misspending

The U.S. Agency for International Development said Monday that it is suspending one of its biggest nonprofit contractors after investigators uncovered "serious misconduct" in the group's handling of hundreds of millions of dollars in federal funds, reports The Washington Post. International Relief and Development has received more than $2.4-billion from USAID since 2007, primarily for humanitarian and community-development projects in Iraq and Afghanistan.

Federal reviews and reports from USAID's inspector general alleged that the Arlington, Va.-based charity overcharged millions of dollars in overhead costs. The organization has also been criticized for paying lavish salaries and bonuses to top staff, including husband-and-wife founders Arthur B. Keys and Jasna Basaric-Keys, both of whom retired last summer. The Post detailed the allegations in a May 2014 report.

The USAID order blocks the charity from receiving new contracts, but it will be allowed to complete projects already underway. Roger Ervin, who took over as the group's president last month, said the suspension is "an opportunity to make some changes, and many of them are already under way. I think we can show in short order that we can demonstrate that we are a good service provider for USAID."