Aug 20, 2020 - Technology

Accusations of hobbling internet freedom fund roil U.S. media agency

Illustration of tech's trust gap

Illustration: Aïda Amer/Axios

Congressional Democrats and Republicans are crying foul as evidence mounts that an agency meant to promote U.S. interests abroad is undermining the Open Technology Fund.

Why it matters: The OTF supports tech tools to help dissidents in authoritarian regimes escape government surveillance and censorship. That mission is in jeopardy as the U.S. Agency for Global Media (USAGM), which is looking to revive its own Office of Internet Freedom, threatens OTF funding.

Driving the news: Democrats and Republicans on the House Foreign Affairs Committee were stunned by a recent phone call with the USAGM during which an agency official gave misleading answers to basic questions about recent personnel changes and missing funds, sources on the call tell Axios.

  • Recent correspondence obtained by Axios shows the USAGM pressing the OTF to immediately produce highly detailed and lengthy information about its operations and use of funds, threatening to pull the grant it relies on to operate if it fails to do so.

Catch up quick: The USAGM has had the OTF in its sights since President Trump-appointed CEO Michael Pack took over the agency in June and swiftly launched a leadership purge of the OTF and and other USAGM-affiliated organizations. The OTF is an independent grantee of the USAGM.

  • A federal appeals court last month turned back Pack's attempt to replace the OTF board with Trump loyalists, but both the documents obtained by Axios and lawmaker complaints suggest the push to sideline the OTF is still ongoing.

What we're hearing: During an Aug. 13 call, USAGM deputy chief of staff Diane Cullo misled a bipartisan group of Foreign Affairs Committee members about whether funds were withheld from the OTF and the circumstances behind senior OTF advisers being dismissed, sources on the call said.

  • "We spent a half-hour on these pretty basic questions, which they just flat-out refused to answer in a substantive way. They were incredibly evasive," one source said.
  • Cullo wouldn't answer directly whether other federal agencies consulted in the personnel changes recommended making them or not, committee sources said.

Cullo also told lawmakers the agency transferred $1.6 million in funds to OTF in July, contradicting statements from OTF officials to the committee that the USAGM hadn't sent any of the allotted funding for July or August.

  • It wasn't until this Wednesday — after Axios asked the USAGM about the matter — that a pending transfer from the USAGM showed up in the OTF's account, an OTF source told Axios.
  • A USAGM spokesperson told Axios that Pack approved the transfer in July and that, following the call with the committee, agency staff confirmed it had been processed on their end.

Meanwhile: Documents show that between Aug. 10 and Aug. 18, the USAGM repeatedly pressed OTF officials for a raft of information including personnel and pay records, all its contracts and all communications with government officials, initially demanding the material be produced within 48 hours.

  • The OTF raised concerns about the rationale for the requests but still responded to them.
  • On Aug. 18, the USAGM said it was still not satisfied with information the OTF provided, and gave the fund 10 business days to do so or risk losing its grant.

What they're saying: “We are extremely concerned by the state of affairs at USAGM," Rep. Michael McCaul (R-Texas), lead Republican on the Foreign Affairs Committee, and Sen. Marsha Blackburn (R-Tenn.), a member of the Senate Armed Services Committee, said in a statement. Both are involved in approving funding for the OTF.

  • "With dangerous totalitarian regimes on the rise, including the Chinese Communist Party, it is essential that USAGM programs and that of their grantees like the Open Technology Fund, are up and running and performing their vital work," they said.

What to watch: Pack is slated to testify Sept. 24 before the Foreign Affairs Committee.

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