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Anatomy of a Scandal

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WASHINGTON -- Digging in the garden of a health official in Mali, investigators discover more than 30 counterfeit "stamps" used to validate fraudulent invoices to the Global Fund to Fight AIDS, Tuberculosis and Malaria. The inspector general of the fund reports serious corruption in the programs of four countries -- Mali, Mauritania, Zambia and Djibouti. A breathless Associated Press story concludes that "as much as two-thirds" of some Global Fund expenditures are being misspent. Germany and Sweden suspend their support. Some conservatives run with the story, which reinforces their preconceptions about foreign aid and fits the need for budget cuts. After all, in this view, two-thirds of Global Fund money is thrown down a rathole of corruption.

When scandals fit pre-existing ideological narratives, they assume a life of their own. This particular narrative -- the story of useless, wasted aid -- is durable. It is also misleading and might be deadly.

The current Global Fund controversy illustrates the point. The two-thirds figure applies to one element of one country's grant -- the single most extreme example in the world. Investigations are ongoing, but the $34 million in fraud that has been exposed represents about three-tenths of 1 percent of the money the fund has distributed. The targeting of these particular cases was not random; they were the most obviously problematic, not the most typical. One might as well judge every member of Congress by the cases currently before the ethics committee.

The irony here is thick. These cases of corruption were not exposed by an enterprising journalist. They were revealed by the fund itself. The inspector general's office reviewed 59,000 documents in the case of Mali alone, then provided the findings to prosecutors within that country. Fifteen officials in Mali have been arrested and imprisoned. The outrage at corruption in foreign aid is justified. But this is what accountability and transparency in foreign aid look like. The true scandal is decades of assistance in which such corruption was assumed instead of investigated and exposed.

The Global Fund has a difficult challenge. It gathers resources from governments, foundations and individuals, but relies on local partners to implement programs. When providing relatively expensive commodities -- anti-retroviral treatments or combination drugs for malaria -- through relatively unsophisticated structures, there are opportunities for corruption. So the fund audits every grant it makes, requires measured outcomes, cuts off ineffective programs and encourages whistleblowers. It was the United States -- the fund's largest supporter -- that pushed in 2005 for the appointment of a strong inspector general to fight fraud. He is now doing his job. It would be difficult to make similar claims of accountability for most domestic programs in America.

The response of the fund to these cases of corruption has been, so far, serious. With fraud concentrated in training programs, all training activity has been suspended. Tighter expensing procedures are being implemented. The fund is double-checking expenditures in high-risk countries. It is also proposing an independent review of its financial control mechanisms. The corruption in places such as Mali is not representative, but it is also not unique. There will, no doubt, be more cases exposed and more reforms needed.

But American policymakers should keep two things in mind. First, the fund is not expendable. It currently supports about two-thirds of the global effort against malaria and tuberculosis, and about a quarter of the fight against HIV/AIDS. Since 2002, it has helped detect and treat 7.7 million cases of TB, distribute 160 million insecticide-treated nets and put millions of people on AIDS treatment. These are not the results of a fundamentally dysfunctional program.

Second, the fund is the primary method by which America spreads the burden of encouraging global health to other nations. About a third of its funding comes from the United States. The rest is raised elsewhere. If the fund was diminished or discontinued, American health commitments around the world would need to dramatically increase -- at least if we want to avoid complicity in a global tragedy.

In a scandal, the first response is anger. In global health, corruption kills. The most important response, however, is to make sure the right people get punished -- not an African child who needs a bed net, or the victim of a cruel and wasting disease. They had no part in the controversies surrounding the Global Fund, but depend, unknowingly, on their outcome. An overreaction to corruption can also cost lives.

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