The Trump administration has begun dismantling a small independent agency that aids the economic development of poor but stable nations, according to five people familiar with the matter.
Employees for the agency, the Millennium Challenge Corporation, were told in an email that they would be offered early retirement or deferred resignation after visits last week from Elon Musk’s government cost-cutting team, according to a copy reviewed by The New York Times.
“We understand from the DOGE team there will soon be a significant reduction in the number of MCC’s programs and relatedly the agency’s staff,” read an email sent to staff on Tuesday by the acting chief executive. Staff members were given until Tuesday to decide whether to accept an offer to step down or have their employment terminated as soon as May 5, according to the email.
The White House declined to comment Wednesday on the planned cuts at the agency.
Mr. Musk’s team, known as the Department of Government Efficiency, has in recent weeks moved to gut several federal agencies and entities that work on foreign aid and development projects. That includes the U.S. African Development Foundation and the U.S. Agency for International Development, which would shrink to just the legally required 15 positions after employing about 10,000 people before the start of the Trump administration.
The Millennium Challenge Corporation is much smaller — roughly 300 employees, mostly in Washington, with about 20 people in offices overseas. But like U.S.A.I.D., it is slated to be reduced to the minimum required by law, according to the people familiar with the matter, who spoke on the condition of anonymity to speak freely about internal conversations.
The agency, established by Congress in 2004, was conceived by President George W. Bush as a way to aid poor nations while holding them accountable for using U.S. funds responsibly. The agency’s annual budget is a relatively modest $1 billion. It provides grants directly to foreign governments for development projects, including ones aimed at limiting the influence of China in Asia and Africa.
The agency had 20 projects in various stages of planning or progress before the Trump administration instituted a 90-day funding freeze on foreign aid earlier this year. It was granted waivers by the State Department to continue five large-scale infrastructure projects that were in the middle of construction, but the agency was still waiting for the results of a review by the State Department and the Office of Management and Budget as of this week.
One of the five projects, to build more than 200 miles of roads and transmission lines in Nepal, had angered Chinese officials and spurred five years of intense debate in Nepal before the nation’s government accepted the offer. The Trump administration’s decision to freeze funding caused deep consternation among Nepali leaders who had backed the deal despite criticism from opponents who called them U.S. puppets and traitors. The future of the project is unclear.
Organizations and individuals focused on global development criticized any effort to close the agency, noting that it had a bipartisan reputation and a track record of delivering in poor countries.
Millennium Challenge Corporation is “the only aid agency in the world that targets poor countries with good policies, helps countries choose the most growth-promoting investments through rigorous analysis, and funds the investments in ways that do not build unsustainable debt,” Nancy Lee, a former deputy chief executive of the agency, said in a statement. “Why destroy a model that has a 20 year track record of success?”
Edward Wong and Ryan Mac contributed reporting.
