Picture two is the back left corner of the unfinished basement.
Note the concrete foundation wall, the insulation in the I-joists above, the light string for the basement light, the hinges of the door to the exterior, the insulation installed with the exposed facing (for later finishing), etc.
Larry, it was properly sloped, flashed etc. Not there, though that is always something to check. They build a bunch of them that way around here and it’s not always done right.
Erby - here they usually separate the brick and wood structure by an inch or so, to allow drainage, with weep holes in the brick (above the grass/dirt line). Also, there is some kind of wrap between the brick and wood framing. Did the insects/andorelephantpee eat the wrap? Do builders there not put wrapping these days (you know, Tyvek, Amoco, etc.)?
Tyvek not required (according to the local code guru(?)).
Spacing is there. But look where the soil height is. Lines right up with the rot inside the structure.
See all them there termites, carpenter ants and carpenter ant eggs. (Picture 4, OP) Boy did the ants start scurrying away with their eggs when I pulled the insulation off of them.
Wrap or no wrap, the bricks that were covered by the grade were exposed to moisture problems. That side foundation wall should have just been poured the rest of the way and problem solved. I have seen where they will stud out the back wall but never have I seen stopped short on the sides. Brick is pourus and I wouldn’t trust a wrap such as tyvek if it couldn’t breathe and dry out after the moisture was present. Thanks for the pics!!
I believe many codes require 4 to 8 inches or so above grade to bottom of brick which shouldn’t be allowed under/below grade.
Keeping the weep holes exposed to allow for drainage of condensation is good and preventing ants and such from having a concealed avenue to the framing is good.
Was the brick veneer on the opposite side of this wall, and without building paper and weeps, properly installed?
Recommend further evaluation, and all necessary repairs.