Cruz sounds alarm over $400M Hamas-era provision in Board of Peace plan — issues blunt warning

U.S.officials have for years warned thatHamashas exploited ostensibly civilian and humanitarian funding streams to support its terrorist infrastructure, fueling concerns over whether money entering Gaza can be kept out of the terror group’s hands as a new U.S.-backed governing structure prepares to take control.

TheTreasury Departmenthas repeatedly targeted what it describes as Hamas financing networks, including a secret investment portfolio, sham charities and organizations that raised money under the guise of humanitarian work while supporting Hamas’ military wing.

Those concerns resurfaced this week after Israel’s Kan News reported that a provision in the Board of Peace’s Gaza roadmap could allow up to $400 million to address unpaid obligations accumulated during Hamas’ rule, including money owed to public-sector workers, suppliers and contractors.

The dispute is over whether a successor government can settle legitimate obligations inherited from nearly two decades of Hamas rule without indirectly benefiting the terrorist group.Critics warn that doing so could relieve financial burdens associated with Hamas’ rule or create opportunities for the group to siphon off resources while it retains influence on the ground.Board officials argue the mechanism is instead designed to allow a successor government to preserve essential services and relationships with legitimate workers and suppliers — with each claim individually vetted and any payment that could benefit Hamas rejected.

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TRUMP ADMINISTRATION PROBES UNRWA OVER ALLEGED EMPLOYMENT OF 1,500 TERRORISTS

U.S.President Donald Trump takes part in a charter announcement for his Board of Peace initiative aimed at resolving global conflicts, alongside the 56th annual World Economic Forum (WEF), in Davos, Switzerland, Jan.22, 2026.(Jonathan Ernst/Reuters)

Nickolay Mladenov, the Board of Peace’s high representative for Gaza, sharply rejected the characterization that the provision amounted to a financial agreement with Hamas.

“The claims that there is a financial agreement between the Board of Peace and Hamas are false,” Mladenov wrote in Hebrew on X Wednesday, adding that no such proposal had been “discussed, negotiated, or considered.” He said the Board’s objective remained the completedisarmament of Hamasand the establishment of civilian governance backed by an international security presence.

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“I’m deeply concerned about these reports.Terrorists use money as fungible and they build credibility by having international donors finance their debts, which is whyCongresslong ago banned money from going to Palestinian governments in the West Bank,” Cruz said.

“We also know that international donors paid for Hamas to build terrorist infrastructure across the Gaza Strip in the first place, and shouldn’t be trusted to direct reimbursement money,” Cruz continued.“Hamas should be utterly eradicated before new resources flow into Gaza.”

HAMAS AGREES TO COMPLETE DISARMAMENT UNDER ‘HISTORIC’ GAZA AGREEMENT: TRUMP

Palestinian Hamas terrorists stand guard on the day of the handover of hostages held in Gaza since the deadly Oct.7, 2023, attack, as part of a ceasefire and a hostages-prisoners swap deal between Hamas and Israel, in Rafah in the southern Gaza Strip, Feb.22, 2025.(Hatem Khaled/File Photo/Reuters)

� debts.

“There’s really just a commitment to analyze when we get the data.There’s no commitment to fund anything.We don’t have an obligation to even do $400 million,” the official said.

The official described the provision as a three-year review process, capped at $400 million, under which the successor Gaza administration could determine whether particular unpaid obligations need to be resolved in order to maintain essential services and relationships with legitimate suppliers.

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Palestinians shop at a crowded Eid al-Adha market in Gaza hours after Israel announced the killing of Mohammed Odeh, the newly appointed head of Hamas’ military wing, in an airstrike in Gaza.(Credit: Jusoor News)

“This notion that there’s a $400 million payoff vehicle, Hamas kind of has a commitment for it — none of that is true,” the official said.“If anybody’s gonna start running with a narrative that a $400 million committed tab is beginning now … that would just be incorrect reporting.That’s not the deal.”

“No one’s picking up a tab right now,” the official added, saying any review would take place only after the new Gaza administration gains access to financial records allowing it to determine who the creditors are, what services they provided and whether those relationships are needed going forward.

“Even the first dollar of the $400 million, we’re going to evaluate that first dollar,” the official said.“It’s not going to be a blank check handed to Hamas.It’s going to be evaluated, rigorously analyzed.”

The official compared the process to a corporate restructuring, arguing that while Hamas is being permanentlyremoved from government, the successor administration cannot necessarily walk away from every legitimate obligation accumulated during the previous government’s rule.

HAMAS SAYS IT WILL DISSOLVE GAZA GOVERNMENT, BUT ISRAEL WARNS GROUP STILL SEEKS HEZBOLLAH-STYLE CONTROL

Displaced Palestinians gather with pots and containers to receive hot meals distributed by charities ahead of Iftar in Khan Yunis, Gaza Families, including children, wait in line amid difficult living conditions.(Abed Rahim Khatib/Anadolu via Getty Images)

He offered the example of a European pharmaceutical company thatsupplied medicineto Gaza hospitals but was never paid.If the new administration needs that company to continue supplying medicine, he said, resolving some of its unpaid invoices could be necessary to maintain the relationship.

“The theme here, really, is continuity of services,” the official said.

Disarmament could precede payments area by area

The official did not say that Hamas would have to befully disarmed across the entire Gaza Stripbefore the first claim could potentially be paid.

“The reality is that this is going to be community by community,” the official said, explaining that the successor administration is expected to move into individual areas as Hamas disarms there.

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Al-Hayya, Hamas’ longtime chief negotiator in indirect ceasefire and hostage talks with Israel, will now lead its political bureau.(LOUAI BESHARA / AFP via Getty Images)

Asked whether Hamas would have to be completely removed from Gaza before the new administration could resolve an outstanding liability — for example, involving a hospital in Rafah — the official said a payment could occur even if Hamas had not yet been fully removed elsewhere in the Strip.

“The idea is that where those decisions are made, Hamas is not gonna be there,” he said.

�It’s accurate to say.”

The official acknowledged that more complicated cases could arise if the same supplier operates in both Hamas-free and Hamas-controlled portions of Gaza.Officials might then have to determine whether to reimburse only the portion associated with the area controlled by the successor government or negotiate some other arrangement necessary to maintain the service.

US URGES DONORS TO ABANDON UNRWA FUNDING AS UN DEFENDS AGENCY’S MISSION

Hamas terrorists stand guard on the day of the handover of hostages held in Gaza since the deadly October 7, 2023, attack, as part of a ceasefire and a hostages-prisoners swap deal between Hamas and Israel, in Rafah in the southern Gaza Strip, Feb.22, 2025.(Hatem Khaled/Reuters)

Board pushes back on fungibility concern

Cruz’s central criticism is thatmoney is fungible: if international donors satisfy obligations accumulated under Hamas rule, resources that might otherwise have been needed to cover those liabilities could theoretically be used elsewhere.

The Board official rejected that argument, saying Hamas is insolvent and was never going to pay many of the outstanding creditors in the first place.

“It’s not as though we’re alleviating them from their budget that they actually were going actually go pay that $100, and now they get to save it,” the official said.

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“They were never paying for it in the first place,” he continued.“We’re making a decision separate and apart from Hamas, whether this fits into our budget and our relationships.”

HAMAS TAPS ‘ULTIMATE INSTITUTIONAL SURVIVOR’ AS TERROR CHIEF, SENDING MESSAGE TO ISRAEL: EXPERT

Hamas terrorists take security measures as preparations are completed at Nasser Hospital to welcome Gazans to be released under the ceasefire and hostage-prisoner exchange deal between Israel and Hamas in Khan Yunis, Gaza, on October 13, 2025.(Doaa Albaz/Anadolu via Getty Images)

The official described Hamas as “dead insolvent right now” and “financially, completely, completely in shambles.”

“If there’s a risk that some of the money is going to still end up in the hands of Hamas, then we’re going to shut it down,” the official said.

He said officials would examine each recipient, the services provided and where the money ultimately would go.

“If Hamas is not fully disarmed … can it end up in their hands?If the answer to that question is yes, then they’re not going to get money,” he said.“That is crystal clear.”

The official also disclosed that the Board intends to try to recover assets it believes Hamas stole and use those assets, where possible, to satisfy legitimate obligations.

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“We are going to make a real effort to go and try to recover those assets and use some of those assets, where we have found theft … to satisfy some of these obligations,” he said.

If recovered assets are insufficient, the official said outside funding would come from countries in the region rather than Washington.

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Palestinians inspect the site of an overnight Israeli strike on a medicine warehouse, according to medics, next to tents sheltering displaced Palestinians, in Deir al-Balah, in the central Gaza Strip, August 1, 2026.Residents had been pre-warned by the Israeli military to evacuate.(Mahmoud Issa/Reuters)

“This is coming from regional partners.This is not coming from the United States,” he said.

com/category/world/conflicts" target="_blank" rel="noopener noreferrer">conflict, global affairs, human rights and political accountability. She has directed and produced more than 200 documentary segments across more than 40 countries, documenting conflicts, humanitarian crises, corruption, human trafficking, gender-based violence and the human stories behind major world events. 

Lachter’s reporting has taken her into conflict zones and crisis areas across the Middle East, Europe, Asia and Africa.Her work has included uncovering human trafficking networks, revealing an ISIS underground torture prison in Syria, documenting thewar in Ukraine and interviewing senior political figures and world leaders.She was also among the Western journalists who entered Russia after the war began to bring testimonies from Putin’s opposition.Lachter is the recipient of the 2022 Peres Center for Peace Award and was a 2023–2024 Knight-Wallace Journalism Fellow at the University of Michigan.She also won two Rockower Awards for Excellence in Reporting.She holds a bachelor’s degree in communication and a master’s degree in political science.