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Corruption at the Global Fund: part 2

Can searching out corruption ever be a mistake for an aid agency to make? Perhaps, if it loses some control over the way the story is portrayed in the media.

Witness the experience of The Global Fund to Fight AIDS, Tuberculosis and Malaria, which has been praised for its transparency in uncovering abuse of its grants in some countries, and for cracking down on the problem.

The international fund, which distributes billions of dollars to tackle disease, had also taken care to inform its donors of the problems last year, and was confident that it would not lose any financial support.

But after the Associated Press re-reported the news of the corruption at the weekend (more details here), Germany – a major donor – announced today that it was suspending annual payments of €200 million to the Fund.

“We have initiated a special enquiry and stopped all German payments into this fund until further notice, meaning that payments for 2011 have not been made yet,” a spokesperson tells AP. (The statement of Germany’s development minister Dirk Niebel is here). Niebel’s press office told Nature that the media’s corruption reports had come as a surprise.

“We are surprised that Germany is surprised,” says the Global Fund’s spokesperson Jon Liden. Germany would have received all the information on corruption uncovered by the fund’s Office of the Inspector General over the past year (which has also been released online), he points out. Also puzzling is that Sweden, the only other donor country currently withholding payments over corruption concerns, started discussions of the issue last October at a fundraising meeting in New York City – which Germany also attended. (Sweden appears now to be prepared to give full – and perhaps increased – donations, and no other donor has said it will withhold money).

What went wrong? Though neither the Global Fund nor Niebel’s office will comment further, one can speculate that the wider glare of publicity that AP gave the issue, combined with a sensationalist portrayal of the scale of the problem, bounced Germany into its stance – because no-one wants to be seen to publicly condone corruption.

The Global Fund has been working hard to control the media message. “Media reports alleging that “billions of dollars have been misappropriated from the Global Fund” or that the extent of fraud uncovered is “massive” are irresponsible, false and misleading,” it has stated. The Fund says it has a zero tolerance stance on corruption, and points out that it is demanding the return of only $34 million of a total disbursement of US$13 billion (since it was founded in 2002). And the reports refer to “well-known incidents”, contain “no new revelations”, and have already been acted on, it says.

In the long run, uncovering corruption and cracking down on it is a good thing; as the New York Times noted, some agencies may not even be looking, for fear of turning away donors. The Global Fund’s experience is proving that point, though the halt in its funding will likely be only temporary.


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