How US equipment ended up in the hands of Iran’s allies in Yemen as USAID was disbanded

By Jennifer Hansler, CNN

(CNN) — The Iranian-backed Houthis in Yemen seized US funded supplies and equipment, including vehicles, after the Trump administration suspended and slashed humanitarian funding around the world and began dismantling the US Agency of International Development.

Former US officials told the CNN the seizure of more than $122,000 worth of equipment in 2025, was a consequence of the speed of the Trump administration funding cuts and the drastic changes at USAID.

According to those former officials, USAID officials and humanitarian workers had warned that those sudden changes – which the administration said were made to combat waste of taxpayer resources – could lead to US-funded goods falling into hostile hands.

“You have to ask yourself – did we, by all of a sudden pulling out all of this aid, did we unwittingly help (the Houthis)?” one former government official said.

The seizure was revealed by the USAID watchdog in early April. CNN spoke to several former US government officials who said the organization’s sudden dismantling created a vacuum which the US adversary was able to exploit.

The US is historically the largest donor of humanitarian aid to Yemen, where millions rely on the assistance. At the beginning of the administration’s suspension of humanitarian aid, officials said funding for Yemen was not affected. But that suddenly changed in April when the administration terminated all of its humanitarian awards for work in Yemen.

“Within 24 to 48 hours, 100% of the portfolio was gone,” the former official said.

Under normal circumstances, the officials said, humanitarian organizations that are no longer going to receive funding will work with USAID on what is called a “disposition plan.” Those plans are meant to ensure that US-funded assets are used “in the best interest of the United States,” and might see equipment or goods transferred to other organizations or other countries or disposed of to ensure they are not wasted, stolen or misused.

The plans typically are reviewed by multiple officials before receiving final approval, and they usually take several months, the former official said.

“In this case, none of that happened,” they said. The Trump administration had already put most USAID staff on leave and furloughed or laid off thousands of contractors when contracts for Yemen were cut. Staff members who remained were not allowed to communicate with humanitarian partners on the ground.

“Partners wouldn’t even know whom to contact, and they weren’t getting any callbacks,” another former US government official told CNN.

“Not only did we not have any guidance for them – in fact we were not even allowed to acknowledge the receipt of an email – they couldn’t spend any money to dispose of the items responsibly and they didn’t know who they were allowed to give it to,” the first former official said.

There were very few organizations who could have taken the assets, because US support “was so central to the humanitarian response” in Yemen. As such, the humanitarian organizations were left in limbo about what to do with the US-funded goods, including food, hygiene kits and equipment, now that the funding was cut off.

The situation was especially complicated in northern Yemen, which is largely controlled by the Houthis. The Iranian-backed Houthis were one party to Yemen’s yearslong civil war that plunged the country into famine. Days after taking office for a second term, President Donald Trump re-designated the group as a foreign terrorist organization.

If there had been enough time, the second former official said they believed they could have worked with the UN or other parties on a plan that would allow them to transfer US-funded assets to southern Yemen, where the Houthis were not the de-facto authorities and the population is still in desperate need. That did not happen.

Unclear if warnings reached leadership

There were efforts to warn of the risks of Houthi seizure in light of the sudden and wholesale cuts to funding and the lack of guidance on disposition plans. It is unclear if those warnings reached the senior leadership at USAID or the State Department.

“It was so sudden, and partners were already saying, ‘What are we going to do with our assets? What if the Houthis confiscate the assets?” the second former officials said, noting they were particularly concerned about violating laws that prohibit monetary or other support for terrorists given the re-designation of the Houthis.

“We had said the Houthis have already started to seize assets, and this is going to be an issue and a concern for partners, and a concern for us also because it’s USAID-funded equipment, funded assets,” this official said. “When it was raised to our leadership, they were like, yes, yes, we’re aware.”

“Organizations were really, really scared. Particularly because the Houthis have kidnapped, tortured, and killed both USG, UN, and NGO staff for less,” the first former official said. “Now there were assets in play and very quickly, so you had the Houthis just coming in and starting to take stuff by force.”

Asked about the OIG findings and the warnings and concerns from former officials, a State Department spokesperson did not directly answer the questions.

“The Houthis are terrorists who are wholly uninterested in helping Yemenis,” the spokesperson said. They acknowledged that “within Yemen, the terrorist Houthis continue to round up and detain dozens of local staff members of the UN, NGOs, and diplomatic missions under abysmal conditions, including current and former Yemeni staff of the United States government unlawfully held based on false accusations.”

In one example, a partner organization had USAID-funded goods in a warehouse in northern Yemen, but when funding was suspended, it couldn’t pay for the warehouse anymore. Remaining USAID officials “couldn’t give them any disposition guidance because Washington wouldn’t answer emails,” the official described, adding that it was very likely the Houthis took the assets.

“We kept hearing of reports of Houthi trucks, flatbed trucks, full of USAID equipment,” they noted.

The investigative summary released by the USAID Inspector General’s Office said that it was informed in June 2025 of the Houthi seizure of US government funded-equipment, including vehicles and “other physical inventory,” from a USAID-funded aid organization.

“OIG’s investigation found evidence that, after the termination of the aid organization’s USAID-funded award, it ceased operations in Yemen and sought to donate its U.S.-government-funded assets, to include vehicles and other physical inventory, in accordance with award requirements. However, Houthi representatives required the awardee to inventory and transfer the assets to the Houthis. The awardee complied due to concerns about the safety of its local and international staff,” the summary said.

The inspector general’s office had also warned in a report last February that the Trump administration’s dismantling of the US Agency for International Development (USAID) and its sweeping freeze on foreign aid has made it more difficult to track potential misuse of US taxpayer-funded humanitarian assistance and could end up unintentionally supporting terrorist groups.

“Recent widespread staffing reductions across the Agency…coupled with uncertainty about the scope of foreign assistance waivers and permissible communications with implementers, has degraded USAID’s ability to distribute and safeguard taxpayer-funded humanitarian assistance,” that report said. The USAID inspector general was fired one day after that report was released.

On Yemen, the former officials said USAID could have reduced the risk of the seizure of the assets it had been done in a more phased way.

“If they had given us even a little bit of a heads up, we could have reduced our liabilities in the north, but because they did it with no notice and then adamantly refused to provide any responsible guidance, it really left our partners in an impossible position and handed the Houthis a huge win in terms of assets,” the first former official said.

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