A network of Somali landowners, clan leaders, police, and other local authorities have systematically enforced a coercive system of taxes on U.S.-funded aid recipients displaced by drought and conflict, threatening to arrest, beat, or deny life-saving assistance to those who refuse to pay up, according to an independent review commissioned by the United Nations.

The revelation, which is contained in a highly confidential U.N. investigation into the theft of aid in camps for the displaced in Somalia, comes months after the U.S. halted humanitarian assistance in Ethiopia through the World Food Programme, citing concerns that massive amounts of U.S.-funded food supplies in the province of Tigray were being stolen and sold on the commercial market. The findings of the U.N. report — which was commissioned by Secretary-General António Guterres and reviewed exclusively by Devex — have not been previously reported.

The two cases have highlighted deeper concerns about the capacity of the U.S. Agency for International Development, the United Nations, and private charities to ensure that billions of dollars of taxpayer money is responsibly spent in the global effort to provide a humanitarian safety net for the world’s most vulnerable.

At the same time, it has underscored the challenges of delivering humanitarian assistance to a population on the brink of starvation in a country plagued by war, terrorism, and a complex clan system that thrives on patronage. For U.S. and U.N. policymakers, the disclosure of theft poses a difficult moral dilemma: Is it justifiable to accept a level of corruption in order to save large numbers of lives, particularly in the midst of conflict where it may be impossible to adequately monitor the delivery of aid?

In an effort to rein in abuses, USAID has appointed a new coordinator to strengthen oversight efforts across the agency. USAID’s Bureau for Humanitarian Assistance has also created a working group “to implement an aggressive plan to mitigate the risk of diversions around the world,” an agency official told Devex.

That bureau is also reviewing its field staffing levels, third-party monitoring work, and developing new guidance and training for partners and staff, according to the official. WFP, meanwhile, is conducting its own global review of procedures to prevent misuse of international financial aid.

“The United Nations condemns any and all interference with the delivery of humanitarian assistance at any time, including after it is received by the people we serve, as this robs families of assistance they need to survive and recover,” Eri Kaneko, the spokesperson for the U.N. Office of the Coordination of Humanitarian Affairs, told Devex by email. “Since these reports came to us in late 2022, the UN has been strengthening [its] measures to protect IDPs [internally displaced persons] from post-delivery aid interference.”

“It is unacceptable and appalling that some of the most vulnerable appear to have been coerced into giving up the vital assistance they rely on for food and housing,” USAID spokesperson Jessica Jennings told Devex in an emailed statement. “The United States will take further necessary actions as needed to prevent aid diversion in Somalia. We are working with our partners, including the U.N., to review and understand the extent of the diversion, and are already taking steps to protect beneficiaries and ensure taxpayer money is used to benefit vulnerable persons in Somalia, as intended.”

“USAID is aware of the recent reports regarding extortion of IDPs,” a USAID official said. “We are working in close coordination with the government of Somalia, humanitarian leadership, and our humanitarian partners to develop a collective plan to ensure humanitarian aid goes to those who need it most, recognizing that system-wide changes are needed to better identify and prevent aid diversion.”

The U.N. report also includes a list of 16 recommendations aimed at minimizing corruption, including a wider investigation into aid diversion nationwide, an appeal to fully fund a financially stretched U.N. Somalia risk management unit, more extensive site monitoring, outreach to the Somali government at the highest level, and reviewing and redesigning the beneficiary selection process to minimize the influence of the gatekeepers.

Following previous aid scandals, the U.N. implemented a wide range of policies to thwart aid theft, including the use of biometric registration systems, education programs to inform recipients of their rights, and the creation of a more comprehensive risk management system, including spot checks and audits of aid programs. But those efforts failed to embed effective safeguards against future abuses.