Monday, February 05, 2007

Allegations of Lavish Spending by Leaders of Global Fund to Fight AIDS, Tuberculosis, and Malaria

The Boston Globe just published a story about allegedly lavish spending by the leadership of the Global Fund to Fight AIDS, Tuberculosis, and Malaria. The fund is a large non-governmental organization (NGO), a foundation under Swiss law, that spends billions to fight infectious disease in less-developed countries.

The Boston Globe article was based on an internal report by the Fund's Inspector General, and a separate investigation by the World Health Organization (WHO). The article focused on spending by the Fund's outgoing director, Dr Richard G A Feachem. The report apparently said that his spending entailed "potential risks," and "could be perceived as unnecessarily lavish by donors." Details included spending "between $91 and $930 a day for limousines in London, Paris, Rome, Washington, and San Francisco, averaging $376 a day," also he spent "typically $50 to $100 per person" on meals, and also spent money on such things as renting a suit of clothes ($225). The report also included "flowers for staff members," "$8780 for a boat cruise on Lake Geneva in Switzerland," etc. Thus, it concluded, "senior management failed to convey and reinforce the need for careful and prudent use of donor funds."

The Globe article also noted that Feachem's pay is relatively high for a leader of a public health organization whose mission is to help people in poor countries. Feachem got $320 K a year, tax-free, which included a $70 K housing subsidy.

Furthermore, "Global Fund leaders went to great lengths to keep both reports secret. The full board was not given copies of the inspector general's report, according to members. They said they were allowed to read WHO's report for just a few hours in a room and could not keep copies."

The Globe article quoted Allan Rosenfield, dean of Columbia University's Mailman School of Public Health, "The board has allowed this to happen. They should be held accountable as well." Also, said Willem Landman, CEO of the Ethics Institute of South Africa, "I'm familiar with the cost of limousines in New York City, but this is beyond the pale."

Spokespeople for the Global Fund disputed the Globe's allegations. The Fund's web-site also has a rebuttal posted. Spokesman Jon Liden said, "when you read through the entire report, it becomes clear we are dealing with a report of extraordinarily poor quality in terms of accuracy, context, and fairness." Keep in mind, however, that he is referring to the report by the Global Fund's own Inspector General, not the Boston Globe news article. Lieve Fransen, Deputy Chairwoman of the Fund's board, defended keeping the report secret, "making these reports public would undermine people's dignity, credibility, right to defense, and would undermine the credibility of the Global Fund."

In my humble opinion, for the leaders of an NGO whose mission is to fight infectious diseases in poor countries to use the organization's money for limousines, expensive restaurants, and relatively lavish salaries does not engender confidence in their dedication to the organization's mission. Neither does the leadership's criticism of the work of their own Inspector General, and their attempts to keep his report secret.

The inclination of leaders of many health care organizations to put their own pocket-books and comfort ahead of the organization's mission seems to be an important reason why health care is so expensive, yet produces relatively so little value for the amount spent. It is particularly grievous when people who are already disadvantaged receive poor value for what little is spent on them.

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