$28 billion health fund is investigated for fraud

Daily Mail
03.02.2011
By Daily Mail Reporter

$28 billion health fund backed by Bill Gates and Bono is investigated for fraud

A multi billion dollar global health fund backed by the Bill and Melinda Gates Foundation is being probed for widespread fraud after it emerged grant money to developing countries had been ‘eaten up by corruption.’

The Global Fund to Fight Aids, Tuberculosis and Malaria (GFATM), which distributes $28 billion in aid, found that two-thirds of the money from some grants had been stolen or misused by recipient countries.

As a result of the internal investigation, donor countries Germany and Sweden have withheld over $250 million in aid money from the Global Fund on the back of the claims.

The Fund’s newly reinforced inspector general’s office, which uncovered the corruption, can’t give an overall figure on the size of the fraud because it has examined only a tiny fraction of the $10 billion that the fund has spent since its creation in 2002.

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 Global Fund receives money from 54 countries and charitable foundations such as (Product) Red, which is supported by rock star Bono.

Other prominent backers of the Fund 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 controversy over the misuse of Fund health money erupted after a report from the Fund’s inspector-general found that ‘as much as two-thirds’ of some health grants to developing countries had been ‘eaten up by corruption.’

Reports specifically named projects in Djibouti, Mali, Mauritania and Zambia, and cited forged or non-existent receipts for ‘training events,’ fake travel and housing claims and outright theft, along with shoddy bookkeeping.

A full 67 percent of money spent on an anti-AIDS program in Mauritania was misspent, the investigators told the Fund’s board of directors.

It also emerged that 36 percent of the money spent on a program in Mali to fight tuberculosis and malaria, and 30 percent of grants to Djibouti were similarly misappropriated.

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.

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.

Full article


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