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Supporters come to its defense, saying record one of best against corruption

UNDP administrator Helen Clark meets with Dr Michel Kazatchkine, executive director of the Global Fund to Fight Aids, Tuberculosis and Malaria in Geneva, March, 2010: UNDP oversees 12% of the Gobal Fund's disbursements (photo: UNDP)

Geneva, Switzerland (GenevaLunch) - Geneva-based Global Fund’s grants for programmes that fight tuberculosis, malaria and HIV-Aids have been under public scrutiny since the Associated Press’s new man in town took the group to task 23 January over alleged cases of fraud.

“Fraud plagues global health fund backed by celebrities”, AP’s story by chief correspondent in Geneva John Heilprin was based largely on information that the Global Fund had published in press releases in October and earlier, and that had been picked up by specialist publications.

Some 200 US media outlets, including Fox News, ran AP’s two-part story, and it was picked up outside the US as well.

AP is a non-profit news cooperative, owned by its American newspaper and broadcast members, that distributes content to its members.

Heilprin, an investigative reporter, was appointed AP’s chief news reporter in December 2010, following the death of longtime bureau chief Sandy Higgins in August.

The announcement by AP in December said that Heilprin would “use his background in investigative journalism to increase the AP’s use of public records in its coverage of Europe.”

The story’s headline shifted into “Global Fund . . . rife with fraud” on some web sites.

Global Fund says AP story “seriously misrepresented” fraud problem

The Global Fund came back with a sharp reply to his articles 24 January, with Michel Kazatchkine, executive director, saying the stories had “seriously misrepresented the extent of fraud” and that “one should keep in mind that this amount represents 0.3 percent of the total amount of $13 billion disbursed to countries by the Global Fund so far.”

The Global Fund was created in 2002 after a UN Special Assembly on Aids in 1999 agreed on the need for a fund to gather and distribute monies to fight three diseases: tuberculosis, malaria and HIV-Aids. It is a private-public partnership that works closely with numerous aid organizations, distributing US$ 21.7 billion for more than 600 programmes in 150 countries.

Media ramp-up results in Germany and others suspending funding

Fox followed AP’s accusations with a followup interview, where the story was characterized by one observer as possibly resulting in billions of dollars of missing funds and if [italics, GenevaLunch] that were the case it would be the biggest financial scandal of the 21st century. The media blitz resulted in Germany suspending funding payments to the Global Fund 26 January.

Ireland followed, but made it less clear the reason was the news stories. Sweden, which had earlier suspended payments following the October revelations from the fund itself, appeared to be ready to start its 2011 payments, but it is not clear it will go ahead now.

AP then followed its original two lengthy articles with another 26 January article which recalled that “the AP reported Sunday that the fund’s new investigative unit has found that high percentages of some contract money for health care were eaten up by corruption.” Part of the story centred around mis-information that UNDP (UN Development Programme) manages half of the Global Fund’s disbursed funds and that the Global Fund does not have full access to UNDP’s audits. A correction was issued later, noting that UNDP manages 12 percent of the money.

The Global Fund and German officials are meeting in Bonn this week to review the situation.

Supporters speak up

Defenders of the Global Fund’s track record, including the Bill & Melinda Gates Foundation and some media organizations, have come forward in the past five days with articles and blogs that question some of Heilbrin’s allegations, as well as the intentions of some media in giving the story top space. The discussion has been continued on the Global Fund’s Facebook page.

Bernard Rivers at independent watchdog group Aidspan, which has monitored the Global Fund since 2002, has published numerous articles about the Global Fund and abuse, including its efforts to fight it. His work appears to have been part of Heilprin’s background work. Rivers says it’s time to 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.”

Rivers believes that when uncompleted audits or those not yet started are taken into account, fraud figures may reach 1 percent, which he calls “a worrying figure. But it also means that the great majority of grants don’t involve corruption.”

The Guardian’s Sarah Boseley says the story should have been a storm in a teacup, but “the agency story was followed up by Fox News, which laid into the fund with both fists . . . The real fear for the fund’s supporters will be that the storm may have been whipped up by those who want the US to slash its spending on foreign aid and will not only have the Global Fund in their sights, but also the UN. The Global Fund is already short of the money it hoped it would have to pass on to developing countries in the next two years.”

Pangaea, an Aids support group in China and Humanosphere in Seattle, in the US, have published blogs saying the AP stories and media attention that followed risk encouraging some governments that are looking for ways to trim budgets to focus on the Global Fund despite the value of its programmes.