THE BLOG
08/27/2014 02:15 pm ET Updated Oct 27, 2014

Who's Next as the Top Cop at the Global Fund?

Just recently, Martin O'Malley, the third Inspector General in three years at the Global Fund to Fight AIDS, Tuberculosis and Malaria, announced he would step down in December, cutting short a six-year commitment to the quasi-private, intergovernmental organization based in Geneva.

Under O'Malley's auspices, production in the Office of the Inspector General (OIG) has fallen. The OIG has not released a single new audit in a year despite a disclosure policy that obliges the office to issue its reports to the public. Similarly, the investigation reports released were a legacy from the tenure of John Parsons, who was forced out nearly two years ago.

So what's going on there? The Global Fund does not seem to be able to keep a senior oversight official in office.

Here at the Government Accountability Project, where we work with whistleblowers, when we see this phenomenon, we know the deal. High turnover in the ethics office or the investigation unit -- particularly at the top -- means the people responsible for anti-corruption measures at the organization are in an impossible position. They are the window dressing of accountability that management was forced to adopt as a matter of political expediency. After signing on, however, they find they're not actually supposed to deliver. They then shut down and devote themselves to ethics webinars and travel. Or, if they decide to really do their jobs anyway, they're dismissed, as Parsons was.

The OIG at the Global Fund, which is responsible for audits of grants and projects and investigations of fraud and corruption, is especially ill-fated because of this. It is the unhappy task of the Inspector General to inform the Global Fund board and management about where things have gone wrong. For John Parsons, the situation was unmanageable. Half of the board of directors, to which he reported, consisted of delegates from beneficiary countries where corruption tended to contaminate public health programs. They were not going to support an Inspector General who disrupted the status quo.

In fact, neither management nor the board was going to rock the boat. After touting itself for years as the answer to corruption in the international aid industry, the Global Fund cannot entertain the possibility that its new model of aid efficiency through private organizations may not be any better than the old one through governments.

The fact that the Global Fund's quasi-private delivery system for health care aid suffers from the same "resource leakage" that the public system did has been a problem for a while now. When a string of damning but detailed and accurate OIG reports were published by the OIG under Parsons, however, the Global Fund's boosters took to the airwaves to flack their integrity.

For example, this past January Global Fund mega-donor Bill Gates issued his annual letter to the staff of his Foundation and appeared on Stephen Colbert's late-night television show to discuss it. The letter focused -- just as Bill and Melinda do -- on using data to track results in fighting disease around the world. Gates stressed to Colbert the use of data at the Global Fund in tracking the impact of grants and projects designed to battle diseases in the developing world. Colbert, whose humor often consists of making the embarrassing observation that no one with social skills would mention, cocked his head at Gates and remarked. "Here's the problem I have with that. If you track the data, you see where you're doing well, you see where you don't do well, you know if you're getting better or worse. Whereas if I keep no record of what I do, I can always assume I've succeeded."

Gates laughed indulgently and replied, "There was some of that in the past." The implication here is that data-based grant-making, such as that practiced by Gates through the Global Fund, is a big part of the solution to disease among the world's poor. And that old problem of inefficiency and corruption? Well, that's in the past because now we have data -- and we track our results.

At the same time, Gates did acknowledge that corruption is a problem in international aid programs -- and specifically at the Global Fund. But he claimed that small-scale corruption is equivalent to a nominal tax on aid, and it has to be tolerated. And here's the problem we all have with that: the corruption uncovered by Parsons in the Global Fund grants he examined was much more than a small tax on aid. It rose to 60 percent of some grants investigated.

As Stephen Colbert pointed out, it's hard to argue with data.

Moreover, the Global Fund keeps losing the official who's supposed to collect the data. O'Malley, who will depart after serving less than two years, replaced Norbert Hauser, the interim IG who stepped in after John Parsons was fired in November 2012 by the conflicted board. Parsons arrived in 2008 and took over from Deloitte and Touche, which operated under the notional oversight of the Director of the World Health Organization. D&T came in to fill the void left by the departure of Ibrahim Zeekah, the Global Fund's first Inspector General. Zeekah resigned citing health reasons around February 2007, after the Boston Globe cited an unpublished report of his showing that then Global Fund Executive Director Richard Feacham used an obscure private bank account to "incur excessive and lavish expenses on the Global Fund's tab."

In fact, Deloitte and Touche itself, which succeeded Zeekah in the Inspector General function, was a dubious actor. The firm conducted what one insider describes as an exceedingly expensive, not very good, and widely ignored research-y paper about the areas that might be covered by the IG, without really giving guidance on how the OIG should actually work. For approximately one-year of this exercise, the Global Fund paid D&T about $900,000.

In this series of data collectors, only John Parsons really spent enough time as the GF IG to actually accomplish anything. Unfortunately for him, when he got enough data to track results, the results turned out to be not so impressive as Gates and the Global Fund wished they were. John Heilprin of the Associated Press documented Parsons' reports about the Global Fund: "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."

Two years later, in November 2012, after enduring challenges to his authority, increasing harassment, and finally a protracted battle for the autonomy he needed to conduct investigations, Parsons was dismissed by the board. Then came Hauser, then O'Malley, and now? Who knows? And who in their right mind would take a job with this history behind it?

The U.S. Congress, which appropriates over $1 billion annually for the Global Fund, ought to look into this. U.S. taxpayers willingly finance treatment and prevention of disease both in this country and in poor countries, but this is beginning to look like systemic corruption. If they're allowed to know about it -- assuming someone is collecting data -- they're not going to fund that.

Bea Edwards is Executive & International Director of the Government Accountability Project, the nation's leading whistleblower protection organization. She is also the author of The Rise of the American Corporate Security State.

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