Keith Ives, CEO of Causal Design, joined "Forbes Newsroom" to discuss the dismantling of USAID and the "unintended consequences" the cuts to the agency have had on small businesses, like his own, across the country.
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NewsTranscript
00:00Hi, everybody. I'm Brittany Lewis, a breaking news reporter here at Forbes. Joining me now
00:08is Keith Ives, CEO of Causal Design. Keith, thank you so much for joining me.
00:13Thanks for having me.
00:15The U.S. Agency for International Development has really been in Trump administration's
00:19crosshairs since President Trump started his second term. The State Department announced
00:25last week it told Congress that they are going to go through with effectively dismantling
00:30the entire agency and then reorganizing some of it to the State Department. But before
00:34we get into your reaction to that news, you've worked with USAID. Can you talk about how
00:39exactly you've worked with them and your company works with them?
00:43Yeah, thank you. Causal Design, we're a research, evaluation, and economic analysis
00:50firm. And for the past 11 years, we've been supporting USAID as well as other development
00:56organizations, nonprofits, and even governments overseas with understanding the impact of
01:04foreign assistance. So we design experiments and evaluations to, one, hold both donors
01:13and implementing partners, those nonprofits that are normally delivering projects overseas,
01:18to hold them accountable to ensure they're doing what they said they were going to do
01:22and avoiding the concerns of fraud, waste, and abuse. And then, two, we also help them
01:27optimize, providing research and insights into what works and also how to do it better
01:31and how to do it at a lower cost. And we've done that for years. We're a small business.
01:37And so 10 years ago when we started, we were doing a lot of small-scale elements. And then
01:42as of January this year, we were working in 25 countries around the world supporting USAID
01:48with these types of analytics and evaluation.
01:52So if you've been in this business now for over a decade, you have worked in the Obama
01:57years, Trump years, part one, Biden years, and Trump years, part two. What do you think
02:04then is missing from this conversation when it comes to the impact of foreign aid? Because
02:08people who are critical of this say, hey, this is not only hurting people abroad. This
02:12is hurting our friends abroad. This is also hurting research and small businesses here.
02:18People who are supporting the cuts are saying, hey, we need to put America first. There's
02:22a lot of waste, fraud, and abuse. Where do you land?
02:25Yeah. We've worked through numerous administrations, different political agendas and policy objectives.
02:35I think, one, we need to make sure that we, when we're talking about this, we talk about
02:40humanitarian assistance, which is something that individuals and communities might pursue
02:47on their own and value just on the value of life. And that is a tool that we use in foreign
02:55assistance. But foreign assistance isn't just humanitarian work. It's a policy tool. It's
03:01a relationship tool. And every administration uses it a little differently to focus on expanding
03:08trade, securing our borders, and reducing migration. The foreign policy is a much larger
03:14umbrella than just humanitarian assistance. And humanitarian assistance is one of those
03:19tools. It's one of the most powerful tools that we have to demonstrate to the world and
03:26other communities what we value and what it means to be American, to demonstrate and even
03:33nudge other countries towards the democratic values that we hold. It's an incredible tool.
03:40And it does. It's always, you know, for decades, it's been a tool that every administration
03:45has wanted to use. They might change it a little bit, but it's a powerful tool and it's
03:51dumbfounding to watch the administration dismantle it and set it aside.
03:56Let's talk about that reaction just a little bit more, because since President Trump came
04:00into office now the second time, USAID has faced cuts. Now the State Department says it
04:06is officially going to be shuttered with some of its responsibilities being moved over
04:10to the State Department. What is your reaction to that news?
04:15Well, today, I'm glad they have a plan, because since January 27th, we had a stop work
04:22order that stopped all aid flows, all foreign assistance, killed, you know, all of these
04:29activities, stopped them dead in their tracks. And then three months later, they finally
04:34have a plan. So I'm thrilled to see a plan.
04:37I actually think that the way that they're reorganizing, folding it under State Department,
04:41emphasizing the role of some other development agencies that we have in our government that
04:45we don't talk about as much, like the Millennium Challenge Corporation, the Development
04:50Finance Corporation. Those are powerful tools for foreign assistance and trade, and they
04:54were doing great work. And I'm glad that we're going to expand that work. And I think
04:59there'll be some synergies by bringing those together and having them more closely
05:03coordinated. I am concerned, though, that we are pulling everything into the State
05:08Department, which, you know, the State Department has a different objective.
05:13It has a different mission. And I think in quick glance, at a quick glance for the average
05:18American, we go, oh, the State Department does everything overseas.
05:22So it makes sense that everything international should be under the State Department.
05:26But their objectives are usually more political and more relational, whereas some of
05:33these other niche agencies like USAID have a different mission that that it's actually
05:38and there's an added value to it being independent in pursuing that.
05:43I want to read part of Secretary of State Marco Rubio's statement on this.
05:47He said this, quote, Thanks to President Trump, this misguided and fiscally irresponsible
05:53era is now over. We are reorienting our foreign assistance programs to align directly
05:58with what is best for the United States and our citizens.
06:01What do you make of that?
06:02And what it what do you think knowing because, you know, USAID, what do you think is
06:08best for the United States and its citizens?
06:11Well, first of all, calling this whole process responsible is just false.
06:18It wasn't a review.
06:20It was just a gutting.
06:22I heard the analogy.
06:23Someone said this was like doing surgery with an ax.
06:28Secretary Rubio asserted in court filings that he personally reviewed over 8000
06:36contracts to ensure that they weren't, you know, doing these things, that they're
06:41accusing the agency and its activities of do it.
06:44I saw the data point that somebody did the math on the period of time where he's
06:49asserted he did that review.
06:50And that means he would have dedicated on average eight seconds to every contractor
06:56review. There's no way that that was a responsible, intentional review.
07:03An example, one of the things contracts that our firm has that's been terminated now
07:08was to do the third party monitoring of our emergency food aid programs in the conflict
07:15affected areas of Sudan and South Sudan.
07:18I am really glad to see that some of the contracts and grants to deliver food aid
07:23continue in that area.
07:25But now who's monitoring it?
07:28Who's ensuring that the U.S.
07:29interests are actually being delivered when they just wholesale dismantle the foreign
07:34assistance program and activities?
07:38These aren't just individual pieces.
07:39It's a concert of contracts that ensure that we're delivering aid to the right places
07:45in the right way, that there isn't fraud.
07:48And I think they've intentionally or unintentionally dismantled actually a lot of
07:53the things that assure the American public that our dollars are being spent in a way
07:57that benefits America.
07:59I mean, if that math is correct and you're it's on average eight seconds to look at a
08:04contract, that's really not time, not enough time to read an entire contract, absorb it
08:10and then make a decision.
08:11So let's say you were talking not with me, but with Secretary of State Marco Rubio, what
08:16exactly would you tell him?
08:17I mean, what do you think he's missing here?
08:20Yeah, I don't know where I'd start because I'm so dumbfounded by the difference of
08:26what's being said and what was done.
08:29I would have loved a thorough review.
08:32I'm an evaluator.
08:33I've dedicated my career to aid, effectiveness and accountability in foreign
08:37assistance. I would have loved to have been a part of it.
08:40Let's do a review.
08:43Let's go through while programs continue.
08:45Let's go through and let's look at these and let's make them make sense for this
08:48administration. But the narrative that they're giving the public doesn't align with
08:54reality. Two of the contracts that Causal Design had terminated were issued by the last
09:02Trump administration.
09:04And if these are, in fact, fraud, waste and abuse, then under those two contracts that
09:10would have been under the supervision of Trump during his first administration.
09:14So that was his fraud, waste and abuse.
09:16And clearly that's not the case.
09:18These were meaningful, powerful and valid work that we were doing and they were just
09:23dismantling it. The other big point that I would I would make to Rubio is that these
09:30actions have not made America safer, stronger and more prosperous.
09:35What they've done is devastated small businesses here in America.
09:40When we go on the news and people hear about foreign assistance, they always think
09:45about the programs that are happening overseas in Africa, in Asia, in Latin America.
09:49And that's right. We should think about the humanitarian impact that we're having.
09:53But the people delivering that work are U.S.
09:57small businesses like our firm, our firm that lost 90 percent of its revenue.
10:02And as of tomorrow, April 1st, we'll be down to 10 percent of our employees.
10:12And by June 1st, I don't know that we'll be in business.
10:16This is killing businesses across the country.
10:18We're not a D.C. based firm.
10:20We're based here in Colorado.
10:23And and there are thousands of U.S.
10:25businesses and tens of thousands of Americans who've been devastated by this and the
10:32run on effect economically and socially here in America will be enormous.
10:37You're a veteran, you're a CEO of a small business, and it's really alarming to hear you
10:42say 90 percent of this business has been chopped at its knees.
10:46I don't know if we will be in business come June and tomorrow is April 1st.
10:51So talk to us a little bit about that.
10:54I mean, because this is being reorganized to the State Department, do you think is that a
10:58glimmer of hope for you or no?
11:02No, it's not.
11:04I think, again, we need to be clear that this isn't it is a reorganization of our foreign
11:11aid infrastructure, but it's still a gutting up.
11:13It's still a complete dismantling of those systems.
11:18There are programs that are continuing and those are going to continue under the State
11:21Department, but they're a fraction, a fraction of what was being done before.
11:25The majority is going to be concentrated on that emergency humanitarian work.
11:30As well as some that's that's more focused on economic development and investment, and
11:35again, I'm thrilled to see some pieces moving forward, but it's such a small fraction.
11:40It's not going to help not us as small businesses.
11:44You know, the other piece is that this review process.
11:49Delta blow to our business and probably hundreds of other small businesses working in
11:54this area that we can't recover from.
11:57Our firm has invoices from November and December and January for work that was
12:03approved and delivered that still hasn't been paid.
12:08It wasn't just the review.
12:09We haven't been paid and we're not alone in this.
12:13And we've been paid for for work we did last year.
12:18And because of that, the financial implications, I'm not sure that we can recover.
12:24I'm not sure that U.S.
12:26banks are going to make credit available to firms like ours anymore.
12:32You know, the government has always been seen as a very safe and reliable client.
12:36And when when small businesses that work in government contracting seek financial tools
12:41to finance this work, it's a safe bet for banks.
12:45Government contracting is not a safe bet for banks anymore.
12:49The Treasury is not releasing payments.
12:53That is really, really alarming to hear.
12:56I mean, do you think that the Trump administration knows just how devastating these
13:01cuts have been for small for small businesses like your own?
13:07I hope so.
13:08I think my concern is they're moving so fast and and so swiftly and so dramatically
13:18that they're not paying attention.
13:20You know, if there was the due diligence of the unintended consequences, then then they
13:27wouldn't have done this and they would have done it with with intention.
13:31We had no warning when our stop work orders came for 100 percent of our U.S.
13:37federal work.
13:38There was no warning. It wasn't a, hey, we're going to turn these programs off.
13:43We're going to ramp down and give us all time to pivot.
13:47They they cut it with an axe.
13:52Didn't pay us what they owed us.
13:54For work before the executive order, you can't take those sort of actions unless, you
14:02know, you're someone like Elon Musk or Trump and and you're not going to feel those
14:07consequences. You're not concerned about the small guy.
14:10I mean, this is there's just no way around it.
14:14This is demolishing small businesses.
14:16And while they they do this, they parrot these lines like, oh, it's just Beltway bandits
14:21and it's just D.C.
14:22and it's it's the swamp.
14:25But I'm sitting here in Denver, Colorado, with employees in 11 states, and that's who's
14:31being hit. And you're sitting in Denver, Colorado, still waiting to get paid for work you
14:36did in 2024.
14:38So how how are you going to get paid for that work?
14:41Is there any lawsuit?
14:42What are what are your next steps?
14:45Yeah, so we are engaged through a membership association, the Small Business Association
14:51of International Companies, and we're a plaintiff in a court case, one that's gone all
14:55the way to the Supreme Court now and then come back down and told the government you need
14:59to pay them for work they did.
15:02But those those payments are are slow coming.
15:05I think some of our peers have gotten paid up to maybe 50 or 60 percent of what the
15:12government owes them. We still haven't received our payments.
15:15And the government is is saying that they're going to pay them.
15:19They're saying they need another month.
15:22But again, that's those unintended consequences.
15:24And their original filings, they said, oh, we have no way of making these payments.
15:29And our point back to them was, well, that's what happens when you fire everyone in an
15:34agency and you get rid of all your contract officers, you get rid of everyone who approves
15:38the the the payments.
15:43The the analogy that that I read was, you know, the government's saying they don't have
15:49the infrastructure to ensure that these payments are made and get them done on a timely
15:54basis is is akin to the child who kills his parents and then begs for mercy because he's
16:01an orphan. They they obliterated the system and now are complaining that they don't have
16:07the capability to pay us what the what we're owed.
16:11Keith, I will certainly be hoping for a follow up conversation here, but before I do, I
16:16am curious, what is what's next for causal design?
16:20Because you're saying, hey, we might not be in business come June.
16:24I know you're a veteran, you're you were a veteran, a Marine veteran.
16:29I am related to Marine veterans.
16:30I know just how problem solving, solution oriented they are.
16:35I mean, what's next for you?
16:36What what are you thinking of next?
16:39Yeah. Adapt, improvise and overcome.
16:42The last few months have leveraged all of that.
16:46And every day I wake up and go, how do we solve today's problem?
16:49Right now, my my focus is on our employees, which we've been trying to give them as much
16:55notice and financial assistance as possible, making sure that that they land and they
17:00continue their careers.
17:02To be honest, I'm not worried about the business.
17:05I'm worried about our staff.
17:07I'm worried about the sector as a whole.
17:09I'm working hard with industry associations.
17:11I'm talking to my representatives and trying to get out the message about how important
17:15this work is. And I'll figure out what's next for me later on.
17:22But that that's, you know, since I was 18 and raised my hand and stepped onto the yellow
17:29footprints to become a Marine, I've been mission, mission oriented.
17:32And that's been in humanitarian action.
17:35It's been in development economics and now in in accountability on aid.
17:39We'll figure out what's next.
17:41The mission will continue.
17:42Keith, I really appreciate the conversation today.
17:46Best of luck to you, and I hope we can have a follow up soon.
17:48Thank you again for joining me.