Illustration: Aïda Amer/Axios

The Open Technology Fund (OTF) is suing the U.S. Agency for Global Media (USAGM) over roughly $20 million in congressionally appropriated funds it says the government is refusing to provide, Axios has learned.

Why it matters: There's bipartisan uproar from Congress over the funding that OTF says is being withheld. The USAGM, whose new CEO is seeking to replace OTF leaders with Trump loyalists, is required by law to provide the funding via federal grants, but it has given shifting rationales for why the money has been held up.

The big picture: The OTF is a government-supported nonprofit focused on advancing internet freedom. Without funds, it can't support work by activist journalists in places like Hong Kong and Belarus, where authorities are increasingly cracking down on internet freedom.

Details: The lawsuit, set to be filed Thursday in federal claims court, alleges the USAGM breached its contracts with the OTF in three ways:

  1. It withheld about $9.4 million in funding that it owes under OTF’s 2020 grant agreement.
  2. It withheld an additional $9.8 million in prior OTF program grants held by Radio Free Asia, OTF’s former parent organization.
  3. A USAGM senior adviser "engaged in transparently pretextual efforts to force OTF into breaching its grant agreement."

The lawsuit also says two chief financial officers at the USAGM flagged that it was illegal to withhold the funds, but the USAGM tried to move forward with the plan anyway.

  • The first CFO, Grant Turner, a longtime career civil servant, was ordered by a USAGM adviser last week to “cease and desist” transferring a portion of the promised OTF funding. Turner also protested the unlawful transfer of
    those OTF funds to another account.
  • Turner said, according to the lawsuit, that the USAGM's efforts are a “thin cover” for the “operational destruction” of the OTF.
  • The following day, Turner’s replacement, acting CFO John Barkhamer, also refused to comply with the order to transfer funds into another account, according to the lawsuit. He resigned in protest and reported USAGM leadership's conduct to the inspector general for the agency.

Be smart: The issue of funding the OTF is particularly sensitive, given that the USAGM announced on Tuesday that it plans to create and fund its own Office of Internet Freedom. Sources fear the agency is withholding the OTF's funds in order to shift them to its new agency, which is illegal if done without congressional approval.

Read the lawsuit.

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

Go deeper

Aug 31, 2020 - Politics & Policy

VOA journalists say new USAGM CEO is endangering reporters

Illustration: Aïda Amer/Axios

A group of veteran Voice of America journalists penned a letter to VOA acting director Elez Biberaj saying that Michael Pack, the new CEO of VOA's parent agency, the U.S. Agency for Global Media (USAGM), is endangering the livelihoods of contract journalists.

Why it matters: Pack has been the center of controversy ever since he took over the agency in June. The letter alleges that Pack's recent remarks in an interview with the conservative-leaning website The Federalist prove his malicious intent.

Trump's 2 chilling debate warnings

Photo: Morry Gash/Pool via Getty Images

One of the few groups in America with anything to celebrate after last night's loud, ugly, rowdy presidential "debate" was the violent, far-right Proud Boys, after President Trump pointedly refused to condemn white supremacist groups.

Why it matters: This was a for-the-history-books moment in a debate that was mostly headache-inducing noise. Trump failed to condemn racist groups after four months when millions marched for racial justice in the country's largest wave of activism in half a century.

Ina Fried, author of Login
46 mins ago - Technology

Candidates go online to cut through debate noise

Photo: Saul Loeb/AFP via Getty Images

While President Trump and Joe Biden fought to be heard in a rowdy debate Tuesday, both campaigns sought to draw digital battle lines and occupy online turf they could have all to themselves.

The big picture: Trump's impulsive Twitter style made a shambles of the debate format, but online the candidates were able to find niches where they couldn't be interrupted — and could motivate their supporters to donate, organize and turn out to vote.

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