Where's Our Aid Money Gone? Panorama

Washington is about to host the biggest fundraiser the world has

ever seen. World leaders are gathering here to try to raise $15

billion to fight world disease. It's the celebrity-backed way to tackle

disease in the developing world. It's called the Global Fund. No-one

will be denied these life-saving treatments. And we're already signed

up. At a time of cuts, the UK's just pledged another ?1 billion. We will

be saving a life every three minutes for the next three years. But is the

Global Fund doing enough to protect our aid money? A proportion of every

tax dollar that they give can also be lost to fraud and corruption. The

main thing is to find the fraud. Panorama has evidence of delayed

reports and unpublished allegations of corruption. That is a cover-up,

the report has been suppressed. And we confront one organisation that

benefitted. Are you lying to me? I'm not lying. Well, why not tell the

truth, that it's in the report? It's not in the report.

Our aid money can change lives. Here in northern Cambodia, people are

being saved. The mosquitoes carry a deadly type of malaria. Hundreds

used to die. This matters because malaria is a

very real threat here. This region has the worst record for malaria

cases in Cambodia. Now, death rates are falling because

of a simple solution. Anti-mosquito Neds that we have

helped pay for have given people protection. This net is extremely

beneficial. For us, it helps us from contracting malaria. It is not just

stopping mosquitoes, it's for all other insects, like lice. And it's

working. Last year, nobody was killed by Malaria in these hills.

Now, much of the money that's spent here on the ground saving lives

comes from you and me, the UK taxpayer. But how it's actually

spent is decided by another organisation. A multi-billion-pound

operation called the Global Fund. Action! You can't argue about this

result. This result is measurable in millions of lives. We must all be

determined to finish the race. As you can see from this slick video,

the Global Fund has some high-profile supporters. It's an aid

organisation that's already raised $28 billion from governments and

private donors like Microsoft founder Bill Gates and the rock star

Bono. The money is used to tackle three

big killer diseases - AIDS, malaria and tuberculosis. More and more

people reach the point in their disease where they need these drugs.

The results speak for themselves in Cambodia. I mean, it has been

miraculous. I mean, you look at the numbers in the drop of TB in the

country, the drop in the cases of malaria. You look at HIV. And that

is all direct linked to Global Fund supporting these programmes.

The UK Government has already given more than ?1 billion to the Global

Fund. Two months ago, the Government announced it was giving ?1 billion

more, part of an aid budget ring-fenced from other spending

cuts. It makes us the world's second-biggest donor.

We will be saving a life every three minutes for the next three years.

Which is a massive, massive amount of people's lives. But it's not just

the lives saved. It's also the diseases prevented that's equally

important. Ten years in. 7.7 million people are alive because

of the Global Fund. That was two years ago. The Global Fund now claim

even more lives saved, 8.7 million. Let's be clear, millions have been

saved, and that's incredible. But the detail matters when you're

asking donors for billions of pounds. Even some of those who

support the Fund question the figures. I think 8.7 million lives

does represent a degree of spin. It's the Global Fund trying to make

itself look good in the eyes of donors. I think a more accurate

figure of the number of lives saved by the Global Fund alone might be

between four to five million lives saved, as opposed to 8.7 million

lives saved. We believe, and we are told, that

our numbers are actually conservative. We work with the

leading health organisations in the world that run the calculations with

us, the WHO, UNAIDS, other global health organisations. They're the

gold standard. The numbers are important because

there's a lot invested in the Global Fund's system for handing out aid.

In a nutshell, our Government gets the Global Fund to do some of its

aid work. The idea was that the private sector would take on the

lead role in the whole programme for international development around the

world. And many of the different donors, including the UK Government

Department for International Development, followed that model.

Many people think it is the best way. The Global Fund lets local

organisations manage the projects and the cash. It's less

bureaucratic, but it comes with risks. It's not the Global Fund

going out itself with its own personnel and doing things to a

country. It's giving the money so the country can do it itself. And

there is, almost by definition, greater risk in that. The risk, and

it can happen anywhere, is corruption. If you simply hand over

the cash to local governments and local organisations, then there's a

chance that the money won't reach the people it's supposed to help.

Here in Cambodia, over the last ten years the Global Fund has given

grants of more than $330 million. We know it's made a difference in

fighting those key three diseases, but there's also been corruption.

The Global Fund came here to do an in-depth investigation in 2011. A

year ago, it said its report would be out in the coming weeks. When we

were in Cambodia two months ago, the report still hadn't been published.

This obviously is not in the interest of the programmes. The

development partners in Cambodia are not happy with it. I think even the

Global Fund is not happy with it, that this report has been pending

for so long. We were leaked a copy of the unpublished investigation

report from inside the Global Fund. It is an uncomfortable read for

donors, including UK taxpayers. For starters, it says deals worth $20

million for mosquito Neds were won through improper commissions. The

detail in this report is extraordinary. It says that

officials at the National Malaria Centre saw commissions, which are

effectively kickbacks and bribes, as a compulsory component of the

procurement process. And that it was a requirement imposed by senior

government officials. Two senior officials are said to

have taken more than half a million dollars in improper commissions.

With AIDS funding, there was a similar story. An official issuing

contracts admitted taking a 15% commission on every deal.

Tia Phalla is chair of the group that oversees Global Fund spending

in Cambodia. In some of the HIV programmes, we understand that it

was effectively a 15% rate. I have no information about that. But

doesn't that make you very nervous? That's in the area that you look

after. And it's essentially a 15% rate. You've gone very quiet, that

seems to me to be quite shocking. No, no, no, I'm not shocking. You

know, the problem is, like, you know, how can you come with some

picture that I don't know you know? You must have seen it in the report.

Sir? The problem, as you know, as we talked from the beginning, is that

needs to be confirmed, that needs to be confirmed.

The same leaked, unpublished report also said another organisation has

questions to answer. It's a Cambodian health organisation

called MEDiCAM. Investigators say what they found here was evidence of

misuse or misappropriation of tens of thousands of dollars. And just so

we're clear, misappropriation means theft. This was what the report

said. Double billing of staff posts, double billing of computer equipment

and consultants who were charged to donors but were never used. Dr Sin

Sumony runs MEDiCAM. He seemed confident the allegations of

corruption wouldn't be in the final report. I understand that

investigators found evidence of serious corruption here at MEDiCAM.

No, no, no, no, no. Now, let's be clear, as I understand it, they're

quite specific, we're talking about people who are doing jobs that have

been charged to different people. Computers that were bought and then

double billed, accounts that weren't right. This is what the evidence is

on MEDiCAM, as I understand it. What do you say about that? No, nothing,

there is nothing of that. Investigators even found evidence of

apparently falsified documents on Dr Sumony's own office computer. That

the investigators found documents altered to make it look like $10,000

had been spent, but in fact nothing had been spent. No, there is nothing

like that. Just to be clear, you were telling me definitively. Very

clear, very clear, definite. I think if you keep going like this

interview, I prefer that we stop right here.

You might think a report like this would be a disaster for the Global

Fund. In fact, this is at the heart of what the Fund is supposed to

offer. Transparency and zero tolerance of corruption. This

investigation was part of the Global Fund's promise to protect taxpayers'

money. And it was this man's job to find and expose fraud. John Parsons,

a former director at the UK's National Audit Office, was the

Global Fund's Inspector General. I think the Office of Inspector

General under Parsons had a reputation for going out to country

level, to the field, which is of course the best way to audit. You

can't audit organisations by sitting in headquarters. Mr Parsons seemed

to find a lot of fraud. In 2010, he published a series of reports.

Corruption became a global story. The Global Fund Against AIDS,

Tuberculosis and Malaria has announced new financial safeguards

following allegations of corruption. Rooting out corruption was exactly

what the fund's biggest donor wanted. The United States had

insisted on an independent Inspector General. But rather than donors

feeling reassured that fraud was being hunted down, all this honesty

caused panic. Donors including the European Union suspended payments.

People were scared to spend, you know, so three stories about fraud

basically turned off the money totally. It had a huge chilling

effect. So, I think it's been quite a negative experience and it hasn't

helped create incentives for more rigorous fraud prevention. A year

ago, the man whose investigations prompted the bad publicity was

fired. The Global Fund says John Parsons was sacked for

unsatisfactory performance. They said there had been three critical

reviews of his work. Bernard Rivers founded an organisation that

monitors the Global Fund. It is my understanding that Parsons was

sacked because he was not a good manager and not a good leader. I

dealt with him many times, I criticised him and his office in

print many times, I concluded when the board finally fired him that the

board had done the right thing. But, just a year before he was

fired, the work of Mr Parsons and his team had been praised by an

independent report, which called it...

The only risk-mitigation strategy within the Global Fund that has

worked. Panorama has discovered there was a lot more going on behind

the scenes. We've been told inspectors felt under pressure to

change the way they work. In public, the Fund was promising

zero tolerance on corruption. But, in private, we understand the

Inspector General was being put under pressure to water down his

reports. Documents from inside the Global

Fund show the inspectors felt they were being undermined. Saying they

were repeatedly told not to look so deep. One said... The organisation,

while parading transparency and openness, in practice views

disclosure of results as negative, harmful and unwanted.

Was there an attempt after 2011 to keep corruption quiet? No, no, quite

the opposite. It would actually be a silly reaction. Because the worst

thing you can do in this world today is try to hide things and be

non-transparent. You have got to pursue and be honest and open and

that's why we have pursued transparency and accountability so

much. The issue of independence came to a

head when the Inspector General stood his ground. The United States

only releases all the cash if it is satisfied that the inspector is

independent and free to do his job. John Parsons felt unable to say he

was. A whistle blowing organisation has investigated some of the claims

surrounding his dismissal. He was told that he should soften up

reports, that his site visits should be curtailed. He should be a little

bit more lenient in the conclusions that he drew and that was pressure

brought to bear on his office. Then he's asked to certify that his

office is acting independently and he says no.

Without Parsons confirming that his office was independent and undue

influence, the money from one of the fund's biggest donors would be at

risk. At least $250 million was on the line. If the United States

withheld the cash it would be hugely damaging to the Fund. Pressure was

growing. John Parsons wrote to his bosses complaining about harassment,

intimidation and retaliation. It is clear that your true intention is to

weaken the function, simply because you don't like what we find and

report upon. The following morning he was sacked. Even some Fund

supporters were shocked. This is somebody, whose job was to

ferret out waste and abuse and he did a very good job of it. It was

embarrassing to the fund. And you know conveniently letting go of the

person who exposed these problems was you know based on the evidence

at the time akin to a hatchet job. Simply not true. It's simply not

true but from what I have seen the decision was entirely based on

performance and the inspector general's office since he left has

actually published more reports, has started more investigations and is

better staffed than when he was there. Those are the facts. After Mr

Parson's dismissal, that vital US funding was approved. He's now

taking legal action for unfair dismissal and defamation. But the

Global Fund is fighting the case. Tonight, world leaders are in

Washington. The Global Fund wants to raise $15 billion. But should

donors, like the UK taxpayer, be worried about their investment?

A proportion of every tax dollar that they give can also be lost to

fraud and corruption. The main thing is to find the fraud. Fraud will

exist. It's that we know how to find it and then that it's transparently

shared with the world and those that are responsible are prosecuted.

Remember that leaked report into corruption in Cambodia that was

expected a year ago? - well the official report was finally

published last month. Panorama can reveal there are

significant differences between what the investigators wrote in the

unpublished version and what the Global Fund now tells the world.

For example, the unpublished report recommended the three organisations

involved in the corruption should be banned for up to five years. That

was gone from the published version. And remember MEDiCAM? Evidence in

our leaked report suggested they were involved in four counts of

corruption. In the published report, there's only one count left. Page

148. It fails to mention the $105,000 supposedly spent on

consultants. When inspectors tracked many of them down, they discovered

these individuals had not been hired to perform consulting work and did

not receive the payments recorded. It looked like a scam. The Global

Fund only lost $20,000 because most of the consultants were paid for by

the UK taxpayer. It cost us $80,000. MEDiCAM's boss denies the

allegations against his organisation. Well, let's just

choose one example, did you or did you not? You tell me, this is your

chance. Did you or did you not bill more than $100,000 for consultants

who didn't do any work for you at all? No. That didn't happen? No,

that did not happen. Are you lying to me? I'm not lying. Well, why not

tell the truth that's in the report? It's not in the report. We don't

know, at the moment, what is the finalisation on the report. We have

to see the finalisation report. That was filmed before the Global Fund's

report was published. When it was, there was also no mention of the

apparently falsified documents being found on Dr Sumony's computer.

The fact that a report for a country that is a major recipient of funds

of grants is suppressed for almost a year and then apparently the version

that is to be released is somewhat less detailed than the original

version, that is a cover up. The report has been suppressed. The

Executive Director of the Global Fund agreed to an interview in

Washington last Friday. We'd told him we wanted to ask about the

Inspector General and the Cambodian report. But when I put the

questions, he said he couldn't answer all the points. He didn't

know why Cambodian allegations had been removed. I would imagine

because they found out they were inaccurate or shouldn't be included.

Allegations of corruption that directly the UK taxpayer have

disappeared before it gets to the final report. Are you concerned

about that? Depends on what the Inspector General says. I can't tell

you that because I'm not involved in that process. Yesterday, the fund

told us the Cambodia report was delayed because fresh evidence

emerged a year ago. On the corruption allegations being

removed, it said reports were limited to Global Fund grants and

confirmed facts. The UK Government says it was warned

about potential losses at MEDiCAM, but wasn't given the details.

Obviously, I will ask the Global Fund but this is not something I'm

aware of. You're aware of it because you've seen a report that I have not

seen. While we were in Cambodia, we obtained another report from inside

the Global Fund. It was about corruption in Africa - an alleged

ten million euro scam. But this is the terrifying bit. It left nearly

two million people, who thought they were protected, still at risk from

malaria. It was in Burkina Faso. A company

with apparently no experience of supplying mosquito nets won the

contract to provide two million. The local company took ten million euros

but bought cheaper nets from China which hadn't been properly treated

with insecticide. The investigation was finished a year ago, but the

report still hasn't been released. Are you worried by that? A year

since that report was concluded and you still don't know about it? I am

worried if there is verified corruption that we don't know about

yet. I can't comment on that because I don't know. I haven't seen the

report. The Fund replaced the nets and says the Burkina Faso report

will be published when the investigation is complete and its

standards of disclosure remain exceptionally high.

If the Global Fund is imperfect in delaying for three months publishing

something, naughty Global Fund, but more naughty the other donors who

probably would never publish that stuff at all.

Panorama has discovered that other Global Fund reports haven't been

published. The investigations are also into corruption and were

started more than a year ago but they have not been released.

The official expression is potential value at risk. It's an estimate of

the Global Fund money that could be lost to fraud. In Burundi, $2.7

million. In the Democratic Republic of Congo,

3.3 million. In Ghana, six million. And in Niger, $15 million. So, why

haven't the figures been published? Well, unfortunately, there was a

significant backlog from the previous inspector general that the

current inspector general is working through. They started more than a

year ago? You will have to ask the inspector general because it's an

independent function. All I know is the inspector general waits until

they have verification and accuracy of data, there's a due process that

they need to go through. So, where does this leave donors to the Global

Fund, including British taxpayers, who have just invested another ?1

billion. You know, this is a huge amount of money and you need to make

sure that money from the British taxpayer on my behalf is being spent

wisely, rightly, etc, etc. What really matters is firstly that the

Fund exposes these things itself, which it has, and secondly that it

acts on them. And, in Cambodia, we found an

example that shows why transparency is so important.

It's Dr Sumony again. His organisation might have been accused

of stealing taxpayers' cash a year ago but the aid money is still

flowing. Is MEDiCAM still getting money from

the Global Fund? After this ongoing investigation, we currently got the

second phase. How much is that? This year is 700

over 720,000. So, you have got another $720,000. Ahem. Is that

right, even if it is just allegations, should you be given

that amount of money, it's not, it seems to me like not learning the

lessons. I don't think so. I think, number one, we did not commit that

corruption. Number two, there has been a lot of system that, through

the Global Fund support, that their financial management system has

improved. Despite the allegations, Dr Sumony remains on the Global

Fund's management committee in Cambodia. His organisation is still

getting the Fund's cash and he is deciding who else gets it. The

Global Fund suspended contracts with two companies who admitted paying

improper commissions. It says there is now greater scrutiny. It is

recovering stolen funds from MEDiCAM but wants to protect services. We

don't want to punish the wrong people. As soon as we have an

alternative for those individuals, that they don't life-saving services

disrupted, then we can take action. That's zero tolerance, that's zero

tolerance. Donors like the Bill and Melinda

Gates Foundation say the Global Fund is one of the smartest investments

they can make to save lives. And we have seen the sort of

difference it makes to millions of lives - which is why it is so

important the money gets through. Corruption damages trust and makes

fools out of donors. But its real impact is felt in places like this

because life-saving care is stolen away. The Global Fund is today

trying to raise another $15 billion. Everyone agrees with the good work.

We just need to be sure that the money gets to the people who need

it.