Fraud plagues global health fund, investigators say

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, according to investigators for the fund.

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 percent of money spent on an anti-AIDS program in Mauritania — $4.1 million — was misspent, the investigators told the fund's board of directors. So was 36 percent of the money spent on a program in Mali to fight tuberculosis and malaria ($4 million) and 30 percent of grants to Djibouti ($4.8 million).

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.

The fund, which finances programs in 150 nations, 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."

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 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.

To date, the United States, the European Union and other major donors have pledged $21.7 billion to the fund, the chief 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 village of Davos this week. Advocates include Rock star Bono, former U.N. Secretary-General Kofi Annan, French first lady Carla Bruni-Sarkozy and Microsoft founder Bill Gates.

Fraud plagues global health fund, investigators say 01/23/11 [Last modified: Monday, November 7, 2011 1:16pm]

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