Small Business Administration (SBA) Administrator Kelly Loeffler has launched an audit of all government contracting officers after the recent scandal at the U.S. Agency for International Development (USAID).
As previously reported, USAID contracting officer Roderick Watson, 57, agreed in 2013 to accept bribes in exchange for using his position and power to award contracts to the companies Apprio and Vistant.
Earlier this month, Watson pleaded guilty to bribery and securities fraud. He now faces up to 15 years in prison when he’s sentenced on Oct. 6.
This is just the tip of the iceberg https://t.co/MXXCJBDdLn
— Elon Musk (@elonmusk) June 13, 2025
Loeffler responded to the scandal by reportedly penning a letter reviewed by Fox News noting that what happened is a “damning reflection of systemic failures in oversight and accountability” and warning that it “was not an isolated incident.”
She also instructed SBA Associate Administrator Tre Pennie, who reportedly oversees the contracts awarded by the agency, to “act decisively” to crack down on any similar abuses and launch an audit of all contracting officers dating 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,” Loeffler wrote. “The contracting process must be transparent and built on merit, not personal gain.”
She also reportedly wrote that the Watson 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 went on to specifically slam the administration of former President Joe Biden for ultimately awarding contracts to Apprio and Vistant.
“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,” she argued.
DOJ uncovered a MASSIVE $550M fraud and bribery scheme at USAID – involving contracts to help the government identify “root causes of irregular migration from Central America.”
Today, I ordered a full audit of SBA’s 8(a) contracting program – to make sure it never happens again. https://t.co/sXgaXGfiP3
— Kelly Loeffler (@SBA_Kelly) June 27, 2025
According to Fox News, Loeffler stressed that the SBA plays a “critical role” in federal contracting and “will no longer stand by while abuses are perpetrated at the expense of taxpayers and deserving small businesses.”
“Loeffler said the agency’s audit will begin with high-dollar and limited competition contracts within SBA’s 8(a) business development program,” Fox News noted. “The findings will be referred to the U.S. Office of Inspector General (OIG) and the DOJ.”
“Any officials or businesses found in violation of the SBA’s ethical standards or who have committed criminal misconduct will be referred to the appropriate authorities and SBA will assist the DOJ in recovering misappropriated funds,” Fox’s reporting continued.
“We will not allow public trust to be quietly eroded by backdoor deals and unchecked discretion,” Loeffler wrote. “We owe it to America’s small businesses to get this right. Your office has the authority, and now the mandate, to act decisively.”
USAID, in particular, has a deep history of corruption.
“In November 2022 … USAID awarded $100,000 to a Palestinian activist group whose leaders hailed the Popular Front for the Liberation of Palestine, a designated terror group,” according to the Washington Free Beacon.
“Just six days before Hamas’s Oct. 7 assault on Israel, USAID handed $900,000 ‘to a terror charity in Gaza involved with the son of Hamas leader Ismail Haniyeh,’” the reporting continues.
TERROR: Who knew that the easiest way to defeat Hamas was to shutdown USAID? Evidently even terrorists won’t work for free. The US provided as much as 70% of the funding for the Palestinians and their fighters and with it gone they can’t pay their soldiers or leaders. pic.twitter.com/hJxBFsrnph
— @amuse (@amuse) April 17, 2025
NGO Monitor has also been tracking USAID’s funding of pro-Hamas and anti-Israel groups.
“In 2022, USAID provided $78,000 to the Community Development and Continuing Education Institute, three years after the group’s board chair participated in an event honoring the Popular Front for the Liberation of Palestine, a U.S.-designated terror group,” according to Jewish Insider.
“Between 2009 and 2012, USAID provided $1.1 million to Just Vision to produce ‘short films.’ In 2021, Just Vision released a documentary called ‘Boycott’ that criticized U.S. laws targeting the Boycott, Divestment and Sanctions movement,” the reporting continues.
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Author: Vivek Saxena
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