Global Fund identifies fraud, media has learned

Jan 24, 2011

Today’s big global health news: An international fund that was created (with significant support from the Gates Foundation) to fight AIDS, tuberculosis and malaria in poor countries has identified episodes of fraud or at least misappropriation of funds amounting to tens millions of dollars.

That sounds pretty bad all right.

But first, let’s keep in mind that the media normally doesn’t usually pay that much attention to the Global Fund for AIDS, Tuberculosis and Malaria — which I’ve written about a bit, and is estimated to have saved millions of lives so far. This story about fraud, however, really had legs!

As a journalist-blogger covering global health and development, I’m supposed to add value by not just reporting the news but also providing perspective, or context, on the nature of the news story.

So, let me just start by saying I had to chuckle when I read this story from the Associated Press over the weekend:

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, The Associated Press has learned.

No, I didn’t chuckle because I think fraud and corruption is funny (though it can be, just take a look at this video from the Colbert Report with Arianna Huffington expounding on Wall Street corruption):

 

The Colbert Report Mon - Thurs 11:30pm / 10:30c
Arianna Huffington
www.colbertnation.com
Colbert Report Full Episodes Political Humor & Satire Blog</a> Video Archive

 

I chuckled first because of the phrase “backed by celebrities” and mostly because I’ve known about these fraud allegations and the investigations for months now. As the AP story notes, it was the Global Fund’s own investigators that identified these problems with specific programs in Mauritania, Mali, Zambia and Djibouti.

(I also chuckle when media organizations say they “have learned” something when all they are doing is reporting information that someone else has already said publicly.)

 

The 0.3% Problem

The problem of fraud in the Global Fund is real and serious. All fraud needs to be identified and weeded out, which is what the Global Fund said it is doing.

But the first piece of context to consider is that the Global Fund, besides having flagged the problem in the first place, is seeking to recover $34 million in misspent funds from four countries out of a total portfolio of about $13 billion in grants made to 145 countries to fight AIDS, TB and malaria.

If my math is correct, that translates into about 0.003 % of all grants, or 0.3%.

Many of the individual instances of misappropriation and fraud are, as the AP not-so-objectively characterized them, “astonishing” in their boldness and criminality. There are criminal proceedings under way in some cases.

Of greater concern to some is that the way this story is being played out — largely, probably, due to the way it was initially “framed” by the AP — risks exaggerating the nature of the problem and providing ammo to those who would abandon these grand initiatives aimed at improving the health and welfare of the developing world.

The Global Fund is already struggling to deal with broken funding promises by governments.

Michel Kazatchkine, executive director of the Fund, is well aware that the fraud allegations — viewed incorrectly — could be all some donors need to further reduce support for this project. In an interview with Voice of America, Kazatchkine noted that this “comes at a time when governments are under pressure to cut public expenditures.”

Millions of lives now depend on the Global Fund, he said, and the project today saves an estimated 4,000 lives every day by getting necessary AIDS or TB drugs, bed nets to protect against malaria and other public health measures out to people for whom these efforts literally mean the difference between life and death.

So, yes, fraud is bad and needs to be dealt with swiftly and severely. But let’s not lose the forest for the trees.

Here’s one of those celebrity-backed organizations (RED) that advocates for the Global Fund trying to put a positive spin on the AP story.

 

Updated: Tuesday, January 25th 3:45 pm

This story was updated to correct the percentage of grant money sought for recovery at 0.3%. 

Postscript:

The Gates Foundation, which has donated $650 million to the initiative, came out Monday afternoon with a statement supporting the Global Fund, saying it is doing a “tremendous job” and that problems with fraud don’t change the fact that “not trying to save these lives is unacceptable.”