The Moral Dilemma of (RED): What To Do When You Know Your Donations Are Being Stolen

January 24, 2011 at 5:38 pm 2 comments

The Associated Press is reporting that as much as two-thirds of some of the grants given out by the Global Fund to Fight AIDS, Tuberculosis and Malaria–the charity supported in part by Bono’s (Product) Red initiative–is being pocketed by corrupt government officials. So bad is the situation that Sweden, one of the fund’s largest contributors, is suspending its $85 million annual contribution until the problem is addressed.

The news is unsurprising to anyone who has followed the history of celebrity-backed efforts to ease the misery of Africa. We know, for instance, that the Ethiopian thug Mengistu Haile Mariam swiped millions of dollars donated by western do-gooders at Live Aid and used it to finance the army that was inflicting harm on precisely the people the charity was intended to help. Other examples are legion.

This raises a moral dilemma for brands that participate in (Product) Red. Do they ignore the breathtaking corruption and accept it as the cost of doing business in Africa’s kleptocracies? Can they in good conscience urge consumers to buy products with the promise that part of the profits will go to charity without disclosing that an even larger part of the profits may go to purchasing cars, motorcycles and other playthings for dishonest bureaucrats, as it did in Djibouti (to name but one example)?

There is no doubt that some people have been helped by (Product) Red. Nor is there any question that all decent men and women wish to alleviate the suffering caused by AIDS, tuberculosis and malaria. The thorny issue is this: Does the charity, by allowing billions of dollars to be stolen, actually prop up the bad governments that are largely responsible for the plight of their people in the first place? How many hospitals have not been built, how many pharmacists have no drugs to dispense because a crooked health minister wanted  a Mercedes-Benz, because a dictator wanted his own Versailles?

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2 Comments Add your own

  • 1. Angela Prout  |  January 25, 2011 at 12:16 am

    I work at (RED) and I wanted to address some of the points raised here as there seems to be some inaccuracies.

    Firstly the fraud outlined in Associated Press report did not involve (RED) money, which the Global Fund confirmed publicly earlier today. (RED)-funded grants represent the best performing programs within the Global Fund’s extensive portfolio of AIDS grants in Africa. To date (RED) has generated over 160 million dollars and impacted 5 million people – the Associated Press findings do not change that.

    Secondly, 100% of the money generated by (RED) partners and events is channeled to the Global Fund and dispersed in several countries in Africa – this does not include Djibouti as referenced in your article.

    And what needs to be stressed, and as was mentioned in the AP report, is that it was the Global Fund themselves who reported the findings of this alleged fraud, and that they are not new revelations. It’s because of the Global Fund’s transparency and their zero tolerance for corruption that these findings were made in the first place. Furthermore, they took immediate action – they suspended/terminated grants, fought to get the money returned (the bulk of it has been) and are working to bring those who committed the fraud to justice. We applaud The Global Fund for this innovative and entrepreneurial best-practice in handling these types of situations, it is one of the very reasons we partnered with them when we first formed (RED).

    Also important to note was this fraud was found in just four countries – while the Global Fund works in more than 145 countries around the world — and the amount of money at question is a tiny amount of the more than 13 billion that is saving lives each day.

    This type of corruption is disturbing especially when it’s a matter of life and death, but we can’t let it derail the incredible work the Global Fund does on a daily basis.

    The Global Fund remains the leading financer of global health programs in the world with with approved funding of US$ 21.7 billion. To date, programs supported by The Global Fund have saved 6.5 million lives through providing AIDS treatment for 3 million people, anti-tuberculosis treatment for 7.7 million people and the distribution of 160 million insecticide-treated nets for the prevention of malaria – they are truly making a difference. You can take a look at the Global Fund’s response to AP report on their website here http://www.theglobalfund.org/en/pressreleases/?pr=pr_110124 and they are also accepting comments and questions on their Facebook page at http://www.facebook.com/globalfund

  • 2. scottj1898  |  January 25, 2011 at 12:42 am

    Thanks, Angela. I appreciate your passion and wish you well in your work, the aims of which no one can argue against.

    You point out that the corruption has only been discovered in a small fraction of the countries in which the Global Fund to Fight AIDS, Tuberculosis and Malaria operates. It is also true that only a fraction of the the countries in which it operates have been audited. Unfortunately, in many of them corruption is de riguer. To argue otherwise is folly. The idea of a zero tolerance policy towards corruption in the countries in which (RED) must necessarily operate, while laudable, is almost certainly not achievable. And since no comprehensive audit of funds has been completed, it’s probably best to avoid claiming broad success when returns from the earliest-reporting precincts don’t look good.

    The claim that 100% of the money generated by (RED) partners and events being channeled to the Global Fund for dispersal among African charities appears to be false. Gap, for example, donates 50% of all (Product) Red profits to the Global Fund, not 100%. Starbucks donates a nickel to the Fund every time the Red Card is used in a transaction. I am relatively confident that five cents does not comprise the entirety their profits on a single product they sell.

    You’re quite right to point out the (RED) has raised $160 million. It is interesting, however, to look at the size of the advertising expenditures that have been required to generate this sum. Some, myself included, would argue that it is far too high. It raises the question that Patrick West grapples with in “Conspicuous Compassion”–is it more important to make a difference or to be seen by others as interested in making a difference?

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