Global health fund plagued by corruption

A $21.7 billion development fund backed by celebrities and hailed as an alternative to the bureaucracy of the United Nations sees as much as two-thirds of some grants eaten up by corruption, The Associated Press has learned.

GENEVA — A $21.7 billion development fund backed by celebrities and hailed as an alternative to the bureaucracy of the United Nations sees as much as two-thirds of some grants eaten up by corruption, The Associated Press has learned.

Much of the money is accounted for with forged documents or improper bookkeeping, indicating it was pocketed, investigators for the Global Fund to Fight AIDS, Tuberculosis and Malaria say. Donated prescription drugs wind up being sold on the black market.

The fund’s newly reinforced inspector general’s office, which uncovered the corruption, can’t give an overall accounting because it has examined only a tiny fraction of the $10 billion that the fund has spent since its creation in 2002. But the levels of corruption in the grants they have audited so far are astonishing.

A full 67 per cent of money spent on an anti-AIDS program in Mauritania was misspent, the investigators told the fund’s board of directors. So did 36 per cent of the money spent on a program in Mali to fight tuberculosis and malaria, and 30 per cent of grants to Djibouti.

In Zambia, where $3.5 million in spending was undocumented and one accountant pilfered $104,130, the fund decided the nation’s health ministry simply couldn’t manage the grants and put the United Nations in charge of them. The fund is trying to recover $7 million in “unsupported and ineligible costs” from the ministry.

The fund is pulling or suspending grants from nations where corruption is found, and demanding recipients return millions of dollars of misspent money.

“The messenger is being shot to some extent,” fund spokesman Jon Liden said. “We would contend that we do not have any corruption problems that are significantly different in scale or nature to any other international financing institution.”

To date, the United States, the European Union and other major donors have pledged $21.7 billion to the fund, the dominant financier of efforts to fight the three diseases. The fund has been a darling of the power set that will hold the World Economic Forum in the Swiss mountain village of Davos this week.

It was on the sidelines of Davos that rock star Bono launched a new global brand, (Product) Red, which donates a large share of profits to the Global Fund. Other prominent backers include former U.N. secretary-general Kofi Annan, French first lady Carla Bruni-Sarkozy and Microsoft founder Bill Gates, whose Bill and Melinda Gates Foundation gives $150 million a year.

The fund’s inspector general, John Parsons, said donors should be reassured that the fund is serious about uncovering corruption: “It should be viewed as a comparative advantage to anyone who’s thinking about putting funds in here.”

But some donors are outraged at what the investigators are turning up. Sweden, the fund’s 11th-biggest contributor, has suspended its $85 million annual donation until the fund’s problems are fixed. It held talks with fund officials in Stockholm last week.

Swedish Foreign Ministry spokesman Peter Larsson said in a statement that his country is concerned about “extensive examples of irregularities and corruption that the fund has uncovered” in nations like Mali and Mauritania.

“For Sweden, the issues of greatest importance are risk management, combating corruption and ultimately ensuring that the funds managed by the Global Fund really do contribute to improved health,” he said.

The investigative arm of the U.S. Congress also has issued reports criticizing the fund’s ability to police itself and its overreliance on grant recipients to assess their own performance.

Fund officials blame the misspending on the lack of financial controls among the grants’ recipients, many of which are African health ministries whose budgets are heavily supported by the fund. Others are nations or international organizations without the resources to deal with pervasive corruption. The fund finances programs in 150 nations in all.

Among the corruption uncovered by Parsons’ task force:

—Last month, the fund announced it had halted grants to Mali worth $22.6 million, after the fund’s investigative unit found that $4 million was misappropriated. Half of Mali’s TB and malaria grant money went to supposed “training events,” and signatures were forged on receipts for per diem payments, lodging and travel expense claims. The fund says Mali has arrested 15 people suspected of committing fraud, and its health minister resigned without explanation two days before the audit was made public.

—Mauritania had “pervasive fraud,” investigators say, with $4.1 million — 67 per cent of an anti-HIV grant — lost to faked documents and other fraud. Similarly, 67 per cent of $3.5 million in TB and malaria grant money that investigators examined was eaten up by faked invoices and other requests for payment.

—Investigators reviewed more than four-fifths of Djibouti’s $20 million in grants, and found about 30 per cent of what they examined was lost, unaccounted for or misused. About three-fifths of the almost $5.3 million in misappropriated money went to buy cars, motorcycles and other items without receipts. Almost $750,000 was transferred out of the account with no explanation.

—Investigators report that tens of millions of dollars worth of free malaria drugs sent to Africa each year by international donors including the Global Fund are stolen and resold on commercial markets.

—The U.N. Development Program manages more than half of the fund’s spending, but U.N. officials won’t release internal audits of their programs to the fund’s investigators. Parsons said that has blocked him from investigating programs in the more than two dozen nations, including some of the most corruption-prone.

UNDP spokesman Stephane Dujarric said Sunday that the program’s policy bars it from sharing internal audit reports with the Global Fund, but that it is reassessing that policy.

“UNDP does, as a standing practice, inform the Global Fund about key audit findings and recommendations resulting from internal audits of Global Fund grants managed by UNDP,” he said.

The Global Fund was set up as a response to complaints about the cumbersome U.N. bureaucracy, and is strictly a financing mechanism to get money quickly to health programs. In just eight years it claims to have saved 6.5 million lives by providing AIDS treatment for 3 million people, TB treatment for 7.7 million people and handing out 160 million insecticide-treated malaria bed nets.

People should focus on those results, said Homi Kharas, a senior fellow at the Brookings Institution and formerly the World Bank’s chief economist for East Asia and the Pacific.

“Without a spotlight, without investigations, and without some sort of accountability, it’s impossible to root out corruption,” he said. “But just simply withdrawing donations, I do believe, would condemn millions of people who are not involved in the corruption to terrible fates.”

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

House sales remain hot in central Alberta with first-quarter sales nearly double last year’s numbers. Photo by PAUL COWLEY/Advocate staff
Central Alberta real estate market hot in 2021

Residential sales nearly double 2020 in first quarter

Red Deer Mayor Tara Veer gave an update on Olymel's COVID-19 situation on Wednesday. (File photo by Advocate staff).
Veer addresses rising COVID-19 cases in Red Deer

Red Deer has added nearly 200 cases of active COVID-19 cases in past week

Alberta’s chief medical officer of health Dr. Deena Hinshaw and Premier Jason Kenney say the province would look at adding additional COVID-19 measures in the coming weeks if the virus continues to spread. (Photo by Government of Alberta)
Walk-in COVID-19 vaccination clinic to open in Red Deer

Alberta adds 1,345 new cases of the virus

Innisfail RCMP are investigating a single-vehicle crash that happened west of Bowden on March 21, 2021. (File photo by Advocate staff)
RCMP investigate culturally insensitive graffiti at Sylvan Lake school

Sylvan Lake RCMP is investigating a vandalism incident. On April 17 around… Continue reading

A vial of the Medicago vaccine sits on a surface. CARe Clinic, located in Red Deer, has been selected to participate in the third phase of vaccine study. (Photo courtesy www.medicago.com)
Red Deer clinical research centre participating in plant-based COVID-19 vaccine trial

A Red Deer research centre has been selected to participate in the… Continue reading

Vancouver Canucks' Tanner Pearson, right, celebrates after scoring against Toronto Maple Leafs goalie David Rittich during the third period of an NHL hockey game in Vancouver, on Tuesday, April 20, 2021. THE CANADIAN PRESS/Darryl Dyck
Pearson, Sutter each score twice as Canucks dump Leafs 6-3

Pearson, Sutter each score twice as Canucks dump Leafs 6-3

Everton's Gylfi Sigurdsson celebrates with teammates after scoring his side's second goal during the English Premier League soccer match between Everton and Tottenham Hotspur at Goodison Park in Liverpool, England, Friday, April 16, 2021. (Peter Powell/Pool via AP)
Super League collapses after the 6 English clubs withdraw

Super League collapses after the 6 English clubs withdraw

Boston Red Sox starting pitcher Eduardo Rodriguez delivers against the Toronto Blue Jays during the first inning of a baseball game Tuesday, April 20, 2021, at Fenway Park in Boston. (AP Photo/Winslow Townson)
Bogaerts’ 3-run HR, Rodriguez lift BoSox over Blue Jays 4-2

Bogaerts’ 3-run HR, Rodriguez lift BoSox over Blue Jays 4-2

Pound says Olympic qualifying issues a concern to IOC

Pound says Olympic qualifying issues a concern to IOC

Former University of Victoria rowing coach Barney Williams is photographed in the stands during the Greater Victoria Invitational at CARSA Performance Gym at the University of Victoria in Victoria, B.C., on Friday, November 29, 2019. THE CANADIAN PRESS/Chad Hipolito
Rowing Canada sanctions former head coach of B.C. varsity women’s team

Rowing Canada sanctions former head coach of B.C. varsity women’s team

Ontario Hockey League cancels 2020-21 season as COVID-19 cases surge in province

Ontario Hockey League cancels 2020-21 season as COVID-19 cases surge in province

Lionel Desmond (front row, far right) was part of the 2nd battalion, of the Royal Canadian Regiment, based at CFB Gagetown and shown in this 2007 handout photo taken in Panjwai district in between patrol base Wilson and Masum Ghar in Afghanistan. THE CANADIAN PRESS/HO-Facebook-Trev Bungay MANDATORY CREDIT
Desmond inquiry: Veterans Affairs submits internal review after initial refusal

Desmond inquiry: Veterans Affairs submits internal review after initial refusal

FILE - In this Feb. 18, 2021 file photo State representatives gather at the Capitol, in Phoenix. Two years after Arizona lawmakers repealed a law barring any instruction on HIV or AIDS that that "promotes a homosexual lifestyle," they are close to enacting a broad remake of the state's sex education laws with a particular focus on LGBTQ issues. (AP Photo/Matt York,File)
Arizona governor vetoes strict sex education legislation

Arizona governor vetoes strict sex education legislation

Most Read