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  • on 31.01.2011
  • at 04:24 PM
  • by Staff

Africa: corruption by global fund grant implementers 0

OPINION On January 23 the Associated Press (AP) ran a long story about the Global Fund entitled “Fraud Plagues Global Health Fund.” The story was picked up by nearly 200 media outlets in the U.S. and 50 in other parts of the world. This led to Germany putting on hold its 2011 contribution to the Fund pending a full investigation.

The story stated that in Mali, the Fund’s Office of the Inspector General (OIG) found that $4 million in funding was misappropriated. Half of Mali’s TB and malaria grant money went to supposed “training events,” for which signatures were forged on receipts for per diem payments and travel expense claims. Mali has arrested 15 people suspected of committing fraud, and its health minister resigned without explanation two days before the audit was made public. (Note: GFO, in one of its 30 articles on the OIG over the past year, reported on the Mali developments in December.)

The AP story added that in Mauritania, the OIG found “pervasive fraud,” with $4.1 million – 67 percent of an HIV grant – lost to faked documents and other fraud. And in Djibouti, the OIG found that about 30 percent of grant funding they examined was lost, unaccounted for or misused. Much of this money went to buy motor vehicles. Almost $750,000 was transferred out of one account with no explanation.

The AP story was quickly seized upon by the Fund’s critics in some donor countries. For instance, Fox News ran an interview with Nile Gardiner, director of The Heritage Foundation’s Margaret Thatcher Center for Freedom, in which he said, “Potentially, we could be looking at billions of dollars here in terms of missing funds. If that is the case, we are looking at the biggest financial scandal of the 21st Century.”

Hmm. Let’s take a deep breath. First, the corruption is nothing like as extensive as a fast reader of the AP story would conclude. Second, the story shows that the Global Fund takes corruption seriously and tackles it forcefully – which suggests that the Fund deserves greater, not lesser, donor support. Third, the funding from the Global Fund saves 4,400 lives a day, and the Fund’s expenditure on this still represents remarkable value. But fourth, there are some things that the Fund should have done long ago to better tackle corruption. Let’s review these points in more detail.

When any entity gives multi-million dollar grants, there will always be corruption. The key issue is what is being done to unearth the corruption and minimise losses. The Global Fund is far better at investigating allegations of corruption and at recovering stolen monies than most or all other major aid donors.

Roger Bate of the American Enterprise Institute, a conservative think tank, who has criticised the Fund on some matters, says, “All the focus on the Global Fund is a shame – the Fund has done far more than any other multilateral agency to be transparent and expose corruption.” Bobby Shriver, founder of (Product) RED, adds, “The Fund was set up to find the bad guys early. Many other international organizations do not have the aggressive tools used by the Fund. Others find bad guys late in the game.”

Another thing that distinguishes the Global Fund from other donors is its willingness to publish the details of the corruption that it has unearthed. How many donors such as Pepfar, DFID, USAID, UNDP, Gates Foundation, Norad, SIDA and the World Bank have committed to publish at their website, unedited, the findings of their Inspector General (assuming they even have one)? I’ll ask them, and I’ll let you know what I learn. Right now, the Fund is paying a price for its toughness and transparency.

By Bernard RiversGlobal Fund Observer

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