Germany halts health fund payment
Country withholds $270m after claims that billions of dollars from fund fighting killer diseases may have been misused.
Last Modified: 27 Jan 2011 10:03 GMT
The global fund says it has saved 6.5 million lives by delivering treatment for Aids, TB and malaria [GALLO/GETTY] 

Germany has said it is suspending its annual payment of $270m to a global health fund tackling the three of the world's biggest killer diseases, following allegations of corruption.

The country's development ministry said its pledge to the Global Fund to Fight Aids, Tuberculosis and Malaria would be withheld pending an inquiry into accusations that billions of dollars may have been lost from the fund and the controls to monitor it were inadequate.

"We have initiated a special enquiry and stopped all German payments into this fund until further notice, meaning that payments for 2011 have not been made yet," a spokesman for the German development ministry said.

Earlier this week the Associated Press reported that the fund's new investigative unit had found $34m in misappropriated funds due to faked invoices and forged signatures in Mauritania and Mali.

'Misleading media reports'

According to the AP news agency, 15 people in Mali have been arrested in connection with fraud. The agency also reported that the country's health minister resigned without explanation two days before the audit was made public.

But the news agency said the fund's investigators had so far only examined a tiny fraction of the $13bn grant money so far dispersed, leading to fears far more has been misappropriated.

Germany, the fund's third largest donor, is demanding it shed more light on $34m in losses and has summoned a Global Fund representative to discuss the reports.

"We obviously are looking very closely at the [donated] money now. It's the money of German taxpayers, so we have to make sure that it was rightly used,'' a ministry spokesman told the AP.

Germany's suspension follows a similar move by Sweden last year.

But the fund has said donors are over-reacting to what it says are misleading media reports, stressing that the money lost to corruption represents just 0.3 per cent of the total it has dispersed since its created.

"Germany has been kept fully informed about all the activities of our inspector general as well as the immediate and firm steps the Global Fund has taken to stop misuse and recover funds," Jon Liden, a Global Fund spokesman, told the AP.

"We believe we have pretty good controls over the money, and it's pretty exceptional what's been going on in Mali and Mauritania. These are very exceptional and sensational situations."

The Global Fund, which spends about $3bn annually, was set up in 2002 to put money directly into the hands of nations and groups fighting the three diseases, instead of going through the United Nations.

It claims to have saved 6.5 million lives by delivering AIDS and TB treatment and handing out millions of insecticide-treated malaria bed nets

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