Judge orders Trump administration to restore funds for foreign aid programs

A federal judge on Thursday ordered the Trump administration to restore funding for hundreds of foreign aid contractors who say they’ve been devastated by President Donald Trump’s abrupt — and in their view illegal — 90-day blanket freeze.

U.S. District Judge Amir Ali, a Washington, D.C.-based appointee of President Joe Biden, said the Trump administration failed to account for the extraordinary harm caused by the broad-based halt to foreign aid.

“At least to date, Defendants have not offered any explanation for why a blanket suspension of all congressionally appropriated foreign aid, which set off a shock wave and upended reliance interests for thousands of agreements with businesses, nonprofits, and organizations around the country, was a rational precursor to reviewing programs,” Ali wrote.

“Absent temporary injunctive relief, therefore, the scale of the enormous harm that has already occurred will almost certainly increase,” the judge added.

Ali barred Trump’s top State Department and budget aides — including Secretary of State Marco Rubio and Office of Management and Budget Director Russell Vought — from implementing any contract cancellations or stop-work orders put into effect after Trump’s inauguration, at least while further litigation plays out.

The ruling effectively halts a central component of one of Trump’s Day One executive orders commanding his administration to freeze foreign aid for 90 days.

The judge concluded that the Trump administration appeared to act in an “arbitrary and capricious” manner by abruptly shutting off all foreign aid without considering consequences for businesses to whom that aid was awarded prior to Trump’s inauguration.

“There is nothing arbitrary and capricious about executive agencies conducting a review of programs,” he said. “But there has been no explanation offered … as to why reviewing programs — many longstanding and taking place pursuant to contractual terms — required an immediate and wholesale suspension of appropriated foreign aid.”

Lawyers for the contractors described extensive damage and disruption caused by Trump’s bid to freeze and cancel thousands of ongoing contracts with organizations funded by USAID foreign assistance dollars. Their claims were bolstered by a list the administration delivered at the judge’s order of more than 200 foreign aid contracts that were canceled just this week.

“Businesses are shuttering, terminating employees … food is rotting, medication is expiring,” attorney Stephen Wirth described in a 90-minute, conference-call hearing Ali held Wednesday as the courthouse was closed due to snow.

Lawyers for the contract and grant recipients emphasized that it wasn’t just foreign organizations being harmed but businesses and organizations across the United States — who work with overseas partners — that were laying off or furloughing nearly their entire staffs. Many of them won’t survive the 90-day freeze, the attorneys said.

“Shutting down billions of dollars in government spending, sending numerous foreign aid partners large and small into oblivion, shutting them down so they are out of business is clearly of sufficient political, social and economic significance that it would require clear congressional authorization,” another attorney for the groups argued.

Ali agreed that the harm being caused by the freeze, coupled with their credible arguments that the freeze could violate laws against government officials making “arbitrary and capricious” decisions, justified ordering the administration to lift the freeze while further litigation plays out.

In the arguments Wednesday, the Justice Department took an unusually expansive view of executive power. DOJ attorney Eric Hamilton argued that, because the steps being taken are at presidential direction, the groups had no authority to challenge the actions by USAID and the State Department under the Administrative Procedure Act, which is what allows courts to block “arbitrary and capricious” actions by federal agencies.

“We don’t have agency action because the agency is implementing an executive order,” Hamilton said. “It is an enormously disruptive suggestion … to have this intrusion into USAID which would basically place USAID into receivership with a federal court … This policy is happening against the backdrop of the president’s exercise of his Article II authority to set the foreign policy for the United States.”

In his Thursday night ruling, Ali scoffed at that argument, saying the Justice Department’s interpretation would put all sorts of agency action beyond review from the courts and could gut the APA.

“Defendants’ argument, at least as it has been articulated to date, proves too much — it would allow the President and agencies to simply reframe agency action as orders or directives originating from the President to avoid APA review,” the judge wrote.

Ali’s order is the second to interrupt Trump’s sweeping effort to defund and dismantle USAID, the agency responsible for administering billions of dollars in foreign aid programs.

Last week, U.S. District Judge Carl Nichols, a Trump appointee, blocked the administration from abruptly placing thousands of workers on administrative leave and cutting off their access to government systems. Nichols extended that hold Thursday for another week.

Ali is also the third judge to issue an emergency block on Trump’s efforts to unilaterally freeze wide swaths of government spending. U.S. District Judge John McConnell, an appointee of President Barack Obama based in Rhode Island, has forced the administration to lift a blanket freeze on domestic federal programs. Another Washington, D.C., judge, Biden appointee Loren AliKhan, has also blocked aspects of Trump’s domestic spending freeze.