DIIS Comment
'Bono's Global Fund' and Corruption
Why Countries Should Not Suspend Support to The Global Fund
28 January 2011
Corruption and The Global Fund
During the past week, the Associated Press (AP) released a story picked up by 250 media outlets worldwide with headlines such as in the US, 'Fraud plagues global health fund backed by Bono.' Here in Denmark, the headlines stated similarly, 'Bonos fond ramt af svindel - Danmark dropper støtten.'
What The Global Fund Does
The Global Fund to Fight AIDS, Tuberculosis and Malaria is a re-granting institution that allocates public and private contributions toward global health. It works in 150 countries and has committed $21.7 billion since its inception to programs for prevention and treatment of the three diseases. The Fund controls the second largest allocation of development aid money in the world, after the UN system itself. The Fund's procedures for applying for money and for reporting its usage are notoriously difficult to follow for local collaborators.
Is $34 Million a Lot to Lose?
Allegations of extensive fraud are based on reports by the Global Fund itself, whose Inspector General's Office has undertaken audits or investigations in 33 of the 145 countries where the Fund currently has grants, and found a misappropriation or unsubstantiation of funds in the amount of $34 million. The Fund's Executive Director Michel Kazatchkine issued an immediate statement that 'While all fraud is unacceptable and the Global Fund is taking strong and firm action to recover such losses, 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 reality is that from the information available and the investigations that are not yet complete, we can not know whether $34 million is a lot, a little or even representative of all of The Fund's disbursements—nor do we know if this is better or worse than the records of other development organizations or European donors.
The Perils of Transparency
There is actually no new information in the claimed 'recent' discoveries about corruption in The Global Fund. The reports of all of these incidents had already been publicly posted, as well as the measures taken by The Fund to attempt to recover the money. While the pledge of Professor Kazatchkine for 'zero tolerance' on corruption is laudable, it is highly unrealistic to expect to prevent all corruption in any organization that distributes multi-million dollar grants.
In spite of The Fund's commitment toward public transparency and accountability, it is being punished by some donor countries. This week Denmark, Sweden and Germany announced that they have suspended their contributions to the Fund in light of corruption charges. Yet, how many donor organizations post unedited reports of their Inspector General's on their website for view by the public?
The Perils of Celebrity
Would the worldwide news media spread with great interest a story of corruption in the United Nations or perhaps the World Bank? Probably not. The Global Fund is now labeled 'celebrity backed,' and almost no news story of this recent corruption saga has been without reference to the Irish rockstar Bono and the celebrity philanthropist Bill Gates. Celebrities draw attention and stir emotion. Since the 2006 launch of Product RED by Bono and Bobby Shriver (of the famous US Kennedy political clan) to raise money from consumers to support The Global Fund, the institution has been much more visible in the media.
But now, the opportunity to link banal allocations of international development aid mismanagement with global celebrities has led to increased negative publicity for The Fund. People all over the world are interested in what is happening to 'Bono's Fund.' Yet, as is often the case with celebrity-driven media, the AP story actually provides little information on what is going on in The Global Fund or the countries where it works, but we are emotionally driven by the call to take action. Unfortunately, some significant donor governments have responded to this call, perhaps without considering the implications of less transparency. Germany, Sweden and Denmark should take this opportunity to press for better accountability and more transparency.
During the past week, the Associated Press (AP) released a story picked up by 250 media outlets worldwide with headlines such as in the US, 'Fraud plagues global health fund backed by Bono.' Here in Denmark, the headlines stated similarly, 'Bonos fond ramt af svindel - Danmark dropper støtten.'
What The Global Fund Does
The Global Fund to Fight AIDS, Tuberculosis and Malaria is a re-granting institution that allocates public and private contributions toward global health. It works in 150 countries and has committed $21.7 billion since its inception to programs for prevention and treatment of the three diseases. The Fund controls the second largest allocation of development aid money in the world, after the UN system itself. The Fund's procedures for applying for money and for reporting its usage are notoriously difficult to follow for local collaborators.
Is $34 Million a Lot to Lose?
Allegations of extensive fraud are based on reports by the Global Fund itself, whose Inspector General's Office has undertaken audits or investigations in 33 of the 145 countries where the Fund currently has grants, and found a misappropriation or unsubstantiation of funds in the amount of $34 million. The Fund's Executive Director Michel Kazatchkine issued an immediate statement that 'While all fraud is unacceptable and the Global Fund is taking strong and firm action to recover such losses, 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 reality is that from the information available and the investigations that are not yet complete, we can not know whether $34 million is a lot, a little or even representative of all of The Fund's disbursements—nor do we know if this is better or worse than the records of other development organizations or European donors.
The Perils of Transparency
There is actually no new information in the claimed 'recent' discoveries about corruption in The Global Fund. The reports of all of these incidents had already been publicly posted, as well as the measures taken by The Fund to attempt to recover the money. While the pledge of Professor Kazatchkine for 'zero tolerance' on corruption is laudable, it is highly unrealistic to expect to prevent all corruption in any organization that distributes multi-million dollar grants.
In spite of The Fund's commitment toward public transparency and accountability, it is being punished by some donor countries. This week Denmark, Sweden and Germany announced that they have suspended their contributions to the Fund in light of corruption charges. Yet, how many donor organizations post unedited reports of their Inspector General's on their website for view by the public?
The Perils of Celebrity
Would the worldwide news media spread with great interest a story of corruption in the United Nations or perhaps the World Bank? Probably not. The Global Fund is now labeled 'celebrity backed,' and almost no news story of this recent corruption saga has been without reference to the Irish rockstar Bono and the celebrity philanthropist Bill Gates. Celebrities draw attention and stir emotion. Since the 2006 launch of Product RED by Bono and Bobby Shriver (of the famous US Kennedy political clan) to raise money from consumers to support The Global Fund, the institution has been much more visible in the media.
But now, the opportunity to link banal allocations of international development aid mismanagement with global celebrities has led to increased negative publicity for The Fund. People all over the world are interested in what is happening to 'Bono's Fund.' Yet, as is often the case with celebrity-driven media, the AP story actually provides little information on what is going on in The Global Fund or the countries where it works, but we are emotionally driven by the call to take action. Unfortunately, some significant donor governments have responded to this call, perhaps without considering the implications of less transparency. Germany, Sweden and Denmark should take this opportunity to press for better accountability and more transparency.
Emner
'Bono's Global Fund' and Corruption
Why Countries Should Not Suspend Support to The Global Fund