Health fund launches panel to reassure donors

The Associated Press
Wednesday, March 16, 2011; 4:40 PM

GENEVA -- A global health fund besieged by criticism after finding its grant money was being used corruptly has turned to an ex-president of Botswana and a former high-ranking U.S. Republican to reassure its donors.

The Global Fund to Fight AIDS, Tuberculosis and Malaria announced Wednesday it has tapped former Botswana President Festus Mogae and ex-U.S. Health and Human Services Secretary Michael Leavitt to lead an outside panel that will examine its finances.

The United States has contributed more than $5 billion to the Geneva-based fund, France has contributed $2.4 billion, Britain almost $1.4 billion, and Japan, Germany and the European Commission have each given more than $1.2 billion.

But after The Associated Press reported in January that the fund's investigators were finding high percentages of some grants eaten by corruption, as documented in the fund's internal watchdog reports to its board members, Germany and other countries said they wanted additional assurances from the fund before releasing pledged money.

A Republican-controlled U.S. House appropriations panel has also proposed a $450 million cut in contributions to the fund - which the fund's supporters say would hurt millions suffering from the diseases.

The fund has demanded the return of $34 million and this month suspended a $13.91 million grant to Mali, but hopes the high-level panel of outside experts will provide the extra assurances its jittery donors are looking for.

The fund has been operating as a relatively transparent financing mechanism, hiring internal auditors and investigators and outside audit firms to provide checks and balances and then making much of that information public on its Web site. But faced with a public backlash, officials have begun more closely examining what information they provide to the public.

"The appointment of this panel is part of the Global Fund commitment to ensuring our financial controls are the most robust possible, and that donor investments go directly to fighting AIDS, malaria and tuberculosis," said Dr. Michel Kazatchkine, a French immunologist who heads the fund as its executive director.

"Sound financial controls and anti-corruption protections are essential elements in our continued ability to save millions of lives, and to facilitating social and economic development in the more than 140 countries we support," he said in a statement.

The choice of an ex-president from a diamond-rich nation often seen as beacon of democratic hope in Africa and a popular former three-term Republican governor from Utah, who also was former President George W. Bush's environmental chief, is a two-pronged bid to ensure cooperation from African grant recipients and gain legitimacy with Republicans in U.S. Congress questioning the fund's programs. The fund had also considered some other prominent Republicans.

"The Global Fund is the world's most powerful tool in the fight against AIDS, TB and malaria and the American people are rightly proud of its success," Leavitt said in a statement released by the Geneva-based fund whose board of directors have approved $21.7 billion in grants and disbursed $13 billion of that so far.

"It will be my job as co-chair of this independent review to make certain that the Global Fund's financial controls meet high standards of professionalism and that, if necessary, improvements are made to increase the fund's ability to improve lives," he said.

The fund - created as an alternative to the bureaucracy of the United Nations in 2002 - said Mogae and Leavitt will spend several months examining its finances before recommending ways to improve them.

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