USAGM Proposes Cutting Federal Funding to OTF

The U.S. Agency for Global Media has proposed blocking federal funding to the Open Technology Fund, an independent nonprofit that uses the money to award grants to projects aimed at improving internet freedom.In a December 15 letter, USAGM chief executive Michael Pack citied conflicts of interest and alleged irregularities at OTF as reason for the proposed debarment — allegations disputed by OTF. If enforced, the independent nonprofit would be blocked from receiving funds from any federal entity for three years.OTF, which was founded in 2012 as part of Radio Free Asia — another USAGM grantee — has 30 days to contest the proposal.USAGM told VOA it provided OTF with memos from McGuireWoods, a private law firm hired by the agency to carry out compliance reviews. In the December 10 memos, viewed by VOA, McGuireWoods says it assessed OTF resources for “potential legal violations and waste.”In a memo on investigations into compliance, McGuireWoods says that based on the information available, “many projects do not appear to have produced any results.”The memos note however, that its assessments were limited because OTF did not provide documents or unrestricted access to staff for interviews.OTF’s president, Laura Cunningham, described the allegations in Pack’s letter as “baseless and utterly absurd.”“[Pack’s] bizarre and unfounded accusations demonstrate a fundamental misunderstanding of the legislative process, corporate governance, technology development, internet freedom, and the will of Congress,” Cunningham told VOA.Technology tools for democracy movementsHouse Foreign Affairs Committee ranking Republican Michael McCaul of Texas and Senator Marsha Blackburn of Tennessee, the Republican authors of the Open Technology Fund Authorization Act, said Pack’s attempt to debar OTF is “a blow to democracy movements around the world.”“We have expressed grave concerns about CEO Pack’s decisions throughout his short, but tumultuous tenure at USAGM, including his firing of OTF leadership and unlawfully restricting OTF funding,” McCaul and Blackburn said in a joint statement shared with VOA. “This latest attempt by CEO Pack to circumvent Congress and gut the Open Technology Fund, which is a lifeline for freedom fighters around the world, is absolutely unacceptable and will endanger democracy movements, and lives, across the globe.”Over 2 billion people globally use tools and technologies supported by OTF, according to the USAGM website, including popular encryption tools like Signal and the Tor Project. Besides helping journalists and activists in countries such as China and Iran, the OTF helps USAGM’s news networks avoid being censored or blocked in hostile countries.USAGM also oversees Voice of America, Radio Free Europe/Radio Liberty, the Middle East Broadcasting Network, and other U.S.-funded news and information outlets.In 2019 OTF was granted independent nonprofit status. With a budget of around $20 million, the fund supports open-source technology projects to help journalists and activists living under authoritarian regimes to evade censorship and surveillance.
OTF is “an indispensable force in the global struggle for internet freedom” Adrian Shahbaz, director of technology and democracy at Freedom House, a global watchdog of civil liberties and political rights, told VOA. “The fund is designed to support tools that are highly secure, open source, and often free of charge. Any disruption to OTF’s operations may end up jeopardizing the personal security of journalists and activists around the world, particularly in repressive environments like China and Iran.”A USAGM spokesperson told VOA providing access to tools to “evade censorship and surveillance” remains a priority at the agency.“The challenges to internet freedom throughout the world are varied, and that is precisely why USAGM is actively funding a range of secure and effective circumvention technologies through its Office of Internet Freedom,” the spokesperson said. “It is a priority of the agency to embolden journalists, activists, and everyday citizens fighting for liberty by expanding their access to vital services and allowing them to evade censorship and surveillance.”The Office of Internet Freedom was a project USAGM started in 2016 but which had ceased operations until Pack revived it in August to fund two internet freedom projects. Legal challenges over OTF board, actionsUSAGM and OTF have clashed since Pack’s June Senate confirmation as CEO of USAGM, with OTF filing a lawsuit alleging the USAGM is in breach of contract for withholding $18 million in funding. In a separate case, an appellate court in Washington issued a temporary block on Pack installing appointees to oversee the OTF while a lawsuit into the changes is being heard. Cunningham said that the move to cut off all funding to OTF is an attempt to end the organization.“It appears that the debarment process at USAGM includes no impartial participants nor requires any actual evidence of wrongdoing in order for Mr. Pack to rule against OTF. He has made himself judge, jury, and executioner,” Cunningham said.The McGuireWoods assessment cited several projects funded by OTF that it says did not appear to have produced results, could have been sufficiently funded elsewhere, or did not appear to be part of OTF’s mandate.It cited alleged conflicts between members of OTF and a group it awarded funds, and said OTF failed to provide records and agreed to staff interviews only under certain conditions, including having a representative present.In a December 10 memo, McGuireWoods concluded there was “evidence of OTF’s lack of transparency and refusal to cooperate with USAGM.”The memo by McGuireWoods cited four tools that it deemed were in-line with appropriation statutes and successful, including GlobalLeaks, an open-source software that enables anyone to set up a secure whistleblowing platform, and Journalists in Distress, a website providing digital safety resources.Shahbaz, of Freedom House, said the resources provided by OTF are vital for smaller organizations trying to respond to new threats.“These tools provide crucial assistance in the cat-and-mouse game of government censorship. The USAGM’s moves may deprive these small organizations of the resources needed not only to pay for things like server capacity, but also to update their code against the rapidly evolving threats posed by well-equipped governments,” Shahbaz said.