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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

Oct 28, 2020 - Health

MLB to investigate Dodgers player who joined celebration after positive COVID test

Justin Turner (front center) and the Los Angeles Dodgers pose for a photo after defeating the Tampa Bay Rays to win the World Series. Photo: Ronald Martinez via Getty Images

Los Angeles Dodgers third baseman Justin Turner will be investigated after he left isolation to celebrate with the team on the field, the MLB said in a statement on Wednesday. Turner’s case is the first positive of the playoffs, which closed with the Dodgers’ 3-1 win over the Tampa Bay Rays on Tuesday.

Why it matters: This is the Dodgers’ first World Series title since 1988, and it now threatens to be overshadowed by the possibility of an outbreak. Outbreaks sidelined at least two teams before the MLB announced that the playoffs would adhere to the "bubble" concept adopted by other leagues.

Mike Allen, author of AM
2 hours ago - Energy & Environment

Laurene Powell Jobs' $3.5 billion climate campaign

Laurene Powell Jobs, president of Emerson Collective, is investing $3.5 billion in her new climate-action group, the Waverley Street Foundation — all to be spent in 10 years, as a way to show urgency on the issue.

  • Then the group will sunset.

The big picture: The foundation "will focus on initiatives and ideas that will aid underserved communities who are most impacted by climate change," an official tells Axios.

R. Kelly found guilty of racketeering and sex trafficking

Photo: Nuccio DiNuzzo/Getty Images

Singer R. Kelly on Monday was found guilty of racketeering and eight counts of violating an anti-sex trafficking law, the New York Times reports.

Why it matters: Sexual misconduct allegations have surrounded R. Kelly's career, including a child sexual abuse image case in 2008 where he was acquitted. Multiple other victims have come forward to speak about the abuse in recent years.

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