In the wake of a sweeping bribery scandal uncovered at USAID, the Small Business Administration (SBA) has announced a full audit of all government contracting officers who have exercised grant-awarding authority under the agency’s business development program over the past 15 years.
In a letter obtained by Fox News Digital, SBA Administrator Kelly Loeffler called the scale of the USAID fraud “a damning reflection of systemic failures in oversight and accountability,” emphasizing that the misconduct “was not an isolated incident.”
Loeffler directed Associate Administrator Tre Pennie, who oversees the SBA’s government contracting operations, to “act decisively” to root out and prevent any similar abuses within the agency. Loeffler directed Pennie to immediately launch a comprehensive audit of the agency’s grant-awarding officers, going back to 2010.
“The role of federal government contracting officers is not ceremonial or self-dealing; rather, it is a position of immense authority and fiduciary responsibility,” said Loeffler. “The contracting process must be transparent and built on merit, not personal gain.”
This development follows the near-dismantling of USAID—an agency responsible for administering civilian foreign aid—under waste, fraud, and abuse reduction efforts led by the Department of Government Efficiency (DOGE) during the Trump administration and spearheaded by Elon Musk. The cuts sparked widespread protests from Democrats, who warned that eliminating USAID would harm vulnerable populations around the world, Fox News reported exclusively on Friday.
Despite longstanding claims about the agency’s positive global impact, a major corruption scandal recently came to light. Roderick Watson, a senior contracting officer at USAID, was found to have orchestrated a large-scale bribery scheme that spanned more than a decade, beginning in 2013. Watson, 57, pleaded guilty to “bribery of a public official,” according to a press release from the Department of Justice.
According to the Department of Justice, Watson began selling his influence in 2013, with contractors Walter Barnes, owner of Vistant, and Darryl Britt, owner of Apprio, channeling bribes through subcontractor Paul Young in an effort to conceal the scheme.
A DOJ press release said that Britt and Barnes “regularly funneled bribes to Watson, including cash, laptops, thousands of dollars in tickets to a suite at an NBA game, a country club wedding, downpayments on two residential mortgages, cellular phones, and jobs for relatives. The bribes were also often concealed through electronic bank transfers falsely listing Watson on payroll, incorporated shell companies, and false invoices.”
In her letter, Loeffler said the USAID scandal “represents a collapse in the very safeguards that are supposed to protect American taxpayer dollars and ensure fair access for legitimate small businesses.” She criticized the Biden administration for awarding an $800 million contract to Vistant, despite the company being labeled by USAID as lacking “honesty and integrity.”
“The fact that a federal official was able to act as the linchpin of a persistent, large-scale fraud operation speaks to a failure in internal controls and a breakdown in the contracting environment that demands immediate correction,” said Loeffler.