Corruption Depletes Global Fund to Fight AIDS, Tuberculosis and Malaria
The story that first got attention was from AP:
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.Corruption Depletes Health Alliance International
Much of the money is accounted for with forged documents or improper bookkeeping, indicating it was pocketed, investigators for the Global Fund to Fight AIDS, Tuberculosis and Malaria say. Donated prescription drugs wind up being sold on the black market.
The fund's newly reinforced inspector general's office, which uncovered the corruption, can't give an overall accounting because it has examined only a tiny fraction of the $10 billion that the fund has spent since its creation in 2002. But the levels of corruption in the grants they have audited so far are astonishing.
A full 67 percent of money spent on an anti-AIDS program in Mauritania was misspent, the investigators told the fund's board of directors. So did 36 percent of the money spent on a program in Mali to fight tuberculosis and malaria, and 30 percent of grants to Djibouti.
In Zambia, where $3.5 million in spending was undocumented and one accountant pilfered $104,130, the fund decided the nation's health ministry simply couldn't manage the grants and put the United Nations in charge of them. The fund is trying to recover $7 million in 'unsupported and ineligible costs' from the ministry.
The fund is pulling or suspending grants from nations where corruption is found, and demanding recipients return millions of dollars of misspent money.
'The messenger is being shot to some extent,' fund spokesman Jon Liden said. 'We would contend that we do not have any corruption problems that are significantly different in scale or nature to any other international financing institution.'
To date, the United States, the European Union and other major donors have pledged $21.7 to the fund, the dominant financier of efforts to fight the three diseases. The fund has been a darling of the power set that will hold the World Economic Forum in the Swiss mountain village of Davos this week.
It was on the sidelines of Davos that rock star Bono launched a new global brand, (Product) Red, which donates a large share of profits to the Global Fund. Other prominent backers include former U.N. secretary-general Kofi Annan, French first lady Carla Bruni-Sarkozy and Microsoft founder Bill Gates, whose Bill and Melinda Gates Foundation gives $150 million a year.
At about the same time, the Seattle Times reported fraud losses at another global health project:
Health Alliance International (HAI), which was begun in 1987 by North American doctors and nurses to support the fledgling government in Mozambique, has played a leading role in HIV treatment.
Focused on strengthening health systems of impoverished and fragile nations, it was awarded the Doris Duke Charitable Foundation's Africa Health Initiative grant, a seven-year $10 million program to help government-run health facilities use data to improve services. The UW departments of Global Health and Industrial Engineering are partners in that project.How Big Is Corruption?
All but 7 percent of its funding came from the U.S. government, and more than 90 percent of its work was in Mozambique, according to HAI's 2009 annual report. Gloyd said the alliance increased the number of people receiving antiretroviral drugs from about a couple dozen in 2003 to more than 50,000 this year.
In late 2009, the alliance applied for what would have been its biggest grant ever — $100 million in funding from USAID over the next five years.
Early last year, its application was selected as the best technical proposal. But in the midst of the administrative review in June, a tipster reported problems in an organization employed by HAI.
One such program hired local community organizations in Mozambique for home-based nursing care and delivery of basic medical kits. The alliance did an internal audit and discovered irregularities.
'Their own accounting for those kits was quite inadequate, and that came back to bite us,' Gloyd said.
HAI shared the findings with USAID and put forth a plan to resolve the issues. But at the end of August, USAID rejected the group's grant application.
There was actually considerable dispute about the significance of the fraud discovered at the Global Fund. On one hand, the losses were a very large proportion of the grants investigated. On the other hand, the total amounts were a very tiny proportion of the total of the fund's outlays. As summarized by William Savedoff in the Center for Global Development's Global Health Policy blog:
While readers might finish the AP article mistakenly thinking that $14 billion has been stolen (that is, two-thirds of $21.7 billion), it would also be a mistake to read the Global Fund press release and believe that only $34 million is gone.
What we’re missing is a way to assess how representative these cases may be. If the Global Fund’s detection system is 100% effective, then these cases are isolated and it is a tiny problem. If the detection system only picks up 50% of cases, then instead of a tiny problem, we’ve got a small one. But if the detection system only finds 5% of cases then—despite the mistaken deduction from the AP article—we really would have a massive billion-dollar corruption problem.
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.
At any case, the Global Fund has promised "new anti-corruption measures," per the AP again.
A $21.7 billion global health fund and the U.N.'s main development arm launched new anti-corruption measures Friday in the wake of intense scrutiny from donors and stories by The Associated Press detailing fraud in their grants.
Chief among The Global Fund to Fight AIDS, Tuberculosis and Malaria's new measures are plans to create a high-profile panel of experts to examine the fund's ability to prevent and detect fraud in its grants.
'Programs supported by the fund have saved seven million lives and are turning back the three disease pandemics around the world,' said the fund's executive director, Dr. Michel Kazatchkine. He said the fund has 'zero tolerance' for fraud and corruption and was 'responding aggressively when instances of fraud or misappropriation are detected.'
That is nice, but I submit these stories are a reminder of how anechoic health care corruption is, and how few and ad hoc are the few efforts made to fight it. Much of the coverage of the corruption affecting the Global Fund had a breathless quality as if the authors were shocked, shocked that there could be corruption in health care.
In fact, many people more distinguished than yours truly have been warning about health care corruption for years. In particular, in 2006, Transparency International's Global Corruption Report, asserted in its executive summary, " the scale of corruption is vast in both rich and poor countries." It also noted how diverse is health care corruption:
In the health sphere corruption encompasses bribery of regulators and medical professionals, manipulation of information on drug trials, the diversion of medicines and supplies, corruption in procurement, and overbilling of insurance companies. It is not limited to abuse by public officials, because society frequently entrusts private actors in health care with important public roles. When hospital administrators, insurers, physicians or pharmaceutical company executives dishonestly enrich themselves, they are not formally abusing a public office, but they are abusing entrusted power and stealing precious resources needed to improve health.
It further stated how serious the consequences of corruption may be:
Corruption deprives people of access to health care and can lead to the wrong treatments being administered. Corruption in the pharmaceutical chain can prove deadly....
The poor are disproportionately affected by corruption in the health sector, as they are less able to afford small bribes for health services that are supposed to be free, or to pay for private alternatives where corruption has depleted public health services.
Corruption affects health policy and spending priorities.
On this blog, our limited resources make us focus mainly on the US, and sometimes other English-speaking countries. Yet we now have in our archives some amazing stories that document various forms of corruption, including numerous allegations of corporate misbehavior ending in legal settlements, outright fraud, and other crime. Also, as we have noted before, the US Institute of Medicine has defined conflicts of interest
Conflicts of interest are defined as circumstances that create a risk that professional judgments or actions regarding a primary interest will be unduly influenced by a secondary interest.
Given that Transparency International's definition of corruption is
abuse of entrusted power for private gain
One can easily argue that in health care, conflicts of interest defined as above create risks of abuse of power by health care professionals influenced by the private gains provided by their secondary interests. On Health Care Renewal, we have provided a massive set of examples of individual and institutional conflicts of interest. There is evidence that about two-thirds of medical academics(1) and academic leaders(2) have significant conflicts of interest. The huge prevalence of conflicts suggests the risk of major corruption.
Corruption and Conflicts of Interest as Anechoic
So what we all should be shocked, shocked about is how little has been done to fight health care corruption, whether in Mozambique or the US.
Note that the Gates Foundation is a major donor to the Global Fund. It has a number of disease or condition specific initiatives, and a global health policy and advocacy initiative. But it has no initiative to fight corruption and conflicts of interest, or, to put it in positive terms, to promote accountability, integrity, transparency, honesty and ethics.
The Doris Duke Charitable Foundation funds Health Alliance International. It funds medical research, and has a specific focus on African health care research. However, it also has no initiatives to fight corruption and conflicts of interest, or improve accountability, integrity, transparency, honesty and ethics in health care.
In fact, one could look in vain for any initiatives about or funding for anti-corruption, or pro-accountability, integrity, transparency, honesty and ethics by any major US charity with health care interests.
One can find very few significant efforts to discuss, teach about, or research ways to fight corruption, or to promote accountability, integrity, transparency, honesty and ethics by academic health care institutions. (See this post for how difficult it was to find academic institutions' initiatives to resist conflicts of interest.) One can count the conferences, meetings, symposia, and courses on such topics on one's fingers. When I last looked, I could count only a single course on fighting corruption at any US medical or public health school ( at Boston University, by Prof Taryn Vian).
Given the scope of corruption, we should be shocked, shocked at how anechoic it is, and how our respected health care institutions, particularly academic institutions and health care charities have ignored the problem.
So will the Global Fund's losses to corruption inspire the Gates Foundation or any of its major donors to start an anti-corruption initiative? Or even have an anti-corruption symposium? So will the Health Alliance International's losses so inspire the Doris Duke Charitable Foundation? Will these cases inspire any foundation, or academic health care organization to do anything to fight corruption and conflicts of interest, and to promote accountability, integrity, transparency, honesty and ethics in health care?
I am not holding my breath, but I live in hope.
Of course, one reason we started Health Care Renewal was to make these issues less anechoic. So hear we go again.
PS - If anyone in our vast audience does know about any additional anti-corruption or conflict of interest, or pro-accountability, integrity, transparency, honesty and ethics initiatives, courses, meetings relevant to health care, please let me know and I will do my best to disseminate the information.
1. Campbell EG, Gruen RL, Mountford J et al. A national survey of physician–industry relationships. N Engl J Med 2007; 356:1742-1750. (link here)
2. Campbell EG, Weissman JS, Ehringhaus S et al. Institutional academic-industry relationships. JAMA 2007; 298: 1779-1786. (link here)