AIDS-Fighting Funds Misused

Money is being eaten up by corruption: Who is to blame, and how can it be prevented?

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What if all that charitable money isn't going to the right people? That's the perennial fear--and in this case, it looks to be well-founded. The Global Fund to Fight AIDS, Tuberculosis and Malaria was founded in 2002 by the United Nations as a portal through which donated funds, medicines and tools could be properly distributed and accounted for. According to Foreign Policy, "the Global Fund has dispersed an incredible $21.7 billion in grants since its creation, $7 billion if it donated by Washington." But such large organizations are often susceptible to cracks in accountability. Recent reports suggest that noticeably large amounts of donated funds are being misused by the countries to which they are appropriated.

Earlier this week, the Associated Press announced that the Fund's own inspector general's office had discovered "as much as two-thirds of some grants [are] eaten up by corruption." The report suggests many of the Fund's recipients are not equipped to dole out donations fairly in the face of corruption, and listed several of the misuses of funds discovered by the Fund. Since it's publication on January 24, the AP's report has received equally complimentary and critical reactions, as some point out the Fund already acknowledged these issues last year. Regardless, the article has sparked significant discussion about the power of global institutions to fight local corruption.

  • The Problem Has Been Acknowledged, Now Fix It  Roger Bate at Foreign Policy notices holes in the Global Fund's accountability and the problems they pose, and offers suggestions for a solution. The small African nation Togo is one fund recipient where donated drugs are sold on the street rather than given away at local clinics. "Togo's poor, who were supposed to be the beneficiaries, were now entirely excluded," Bate points out. "Worse, these drugs were not stored in ideal conditions and hence were degraded,reducing their efficiency--and potentially even helping to incubate drug-resistant strains for malaria." The author notes that though the fund is commendably transparent about its corruption issues, it could do a lot more to prevent these problems from escalating to the point that they have. He suggests that the Fund conduct earlier and more frequent investigations into specific countries and consider changing its system to adapt to the corruption. He encourages the Fund look to other agencies that have solved similar problems, such as the US medicinal aid system.
First, unlike the Global Fund, the US government doesn't simply provide funds to recipient countries. Rather it comes to an invidual agreement with each country regarding which drugs the country wants; then it buys the drugs and has US contractors deliver the products to the government distributors. When it encounters a problem with public-sector drug distributors, as it has in Angola, it completely bypasses the troublesome actor--in this case the Angola government--and looks for other private distribution networks, including direct handoffs from US contractors to in-country clinics.
  • Praise, Don't Slam, the Global Fund  William Savedoff, at the Center for Global Development, took issue with the Associated Press's "dramatic" portrayal of the Global Fund's corruption. The article's exaggerations, he says, include the implication that this corruption is news, though it was disclosed by the Fund last year, and the use of insufficient and misleading figures. While the AP may have exaggerated the amount of money that has been stolen, he writes, the Global Fund's low ball estimate is likely inaccurate as well. Savedoff insists, "the Global Fund should be praised, not slammed for its investigations and for its openness. But, it also needs to be challenged to find a way to estimate how representative these cases may be."
  • Helping Those in Need Is First Priority  Todd Summers, a senior advisor for global health who says he has worked closely with the Global Fund, also praises the group's openness and its serious efforts to combat corruption while successfully distributing money and medicine to the people that need it. The Associated Press's report on the corruption "abused" the Global Fund's information, he writes at The Huffington Post, with "misused facts and salacious headlines." A better approach to solving this problem? He offers: "We should fight harder to support programs that improve global health AND governance and transparency--fighting for funds needed to save lives and at the same time to build robust systems and checks and balances needed to guarantee their effective use."
  • AP Shows the Global Fund Knows What It's Doing  Two other Huffington Post contributors seem to disagree with Summers, writing that they are "thrilled" about the AP report, because it highlights the Global Fund's "best practice" of seeking out fraud and taking action against it. RED founders Bobby Shriver and Bono write:
By implementing stringent standards and by being diligent in quickly addressing issues such as those raised in the IG's report, the Global Fund has made tremendous progress in the fight against AIDS. In just eight years it has saved 6.5 million lives by providing AIDS treatment for 3 million people.
  • Corruption Deterring Donors  The Global Fund may be attempting to combat the corruption that plagues several recipient countries, but in the mean time, some industrialized donors don't want to give money that may be stolen or misused. The BBC reports that Germany, the Global Fund's third-largest donor, had decided to put a hold on its annual donation (usually more than 200 million euros) in response to claims that "billions of dollars may have been siphoned off." Jon Liden, the Global Fund's spokesman, told the BBC that though he didn't blame Germany for its decision, he thinks the media has overblown the corruption--"a necessary risk the fund had to take when dispursing funds in countries racked by poverty and war." According to the Associated Press, Sweden also "suspended its $85 million annual donation until the funds problems are fixed."
This article is from the archive of our partner The Wire.