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A group that fights disease in Africa needs to tighten controls on its expense accounts.

February 08, 2007

ALMOST NOBODY, until this week, said a bad word about the Global Fund to Fight AIDS, Tuberculosis and Malaria. A darling of royalty and rock stars, it has been seen as one of the world's most effective and important anti-poverty organizations, raising billions of dollars to fight deadly diseases in poor countries. Then on Monday, the Boston Globe reported on an internal investigation revealing that outgoing Executive Director Richard Feachem and other staff members have apparently been using a little-known bank account to pay for their business expenses.

The organization's board meets today in Geneva to pick Feachem's successor, who will start the job under a cloud of suspicion. That's a pity, because the allegations (at least so far) don't seem all that serious.

Feachem is a former UC San Francisco global health professor recently knighted by Queen Elizabeth II. The Globe story states that Feachem spent hundreds of dollars a day on limos and favored restaurants that charged between $50 and $100 a person, which is a relative bargain in some cities. His expenses will be picked apart and sensationalized by critics, but there doesn't seem to be a real "smoking gun" among his itemized expenses. Vaguely defined "back pay" to managers raises far more troubling questions.

Ordinarily, the World Health Organization oversees the Global Fund's expenses, and the separate account seemed aimed at circumventing the WHO's bureaucratic ways. There may be more to this scandal than meets the eye, but even if the intent was benign -- to act in a more nimble manner -- the appearance of a slush fund is awful.

The Global Fund gets one-third of its income from the United States; last week, the House of Representatives agreed to increase the contribution from $544.5 million last year to $724 million. Opponents of foreign aid are always eager for excuses to cut spending, and the Bush administration prefers to support its own anti-disease initiatives, so negative audits aren't helpful. Further, the Global Fund's public profile has risen in recent months thanks to (Product) Red, the brainchild of rock star Bono and Santa Monica City Councilman Bobby Shriver, in which corporations such as Gap Inc. and Motorola Inc. give some of the profits on Red-branded gear to the Global Fund.

Given the size of its operations (it has committed to spend $7 billion in 136 countries since its founding in 2001), the Global Fund's administrative expenses are relatively modest. The board should get a handle on this controversy by making governance matters a priority. The Global Fund lives or dies on its reputation -- and so do the millions of people in Africa and across the developing world who need its services.

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