Germany to halt payments to global fund

Germany’s development ministry has announced that Germany will halt all of its scheduled payments to a global health fund worth $21.7 billion until it gets answers about allegations of corruption raised by the Associated Press in a series of articles.

Germany will withhold its pledge of 200 million euro to the Global Fund to Fight AIDS, Tuberculosis and Malaria. Germany has promised to resume funding only after it launches a full investigation into the corruption being turned up by the fund’s own investigators, according to Businessweek.

"We obviously look very closely at the (donated) money now," a ministry spokesman told the Associated Press. "It's the money of German taxpayers, so we have to make sure that it was rightly used."

The spokesman said that Germany was demanding to know more about the $34 million in losses that are being attributed to forged documents, improper bookkeeping and widespread fraud. Germany has summoned a Global Fund representative to address the allegations.

The AP recently reported that the fund’s new investigative unit found contract money wasted through corruption. Germany is the fund’s largest donor behind the U.S. and France and has pledged 600 million Euro for 2011-2013.

Dirk Niebel, the German development minister, told BusinessWeek that he believed the allegations in the AP articles required a thorough investigation. Niebel has been known to have been less enthusiastic about the Global Fund than Heidemarie Wieczorek-Zeul, his predecessor.

"I take the allegations of corruption and breach of trust carried by media against the Global Fund very seriously and I expect that the fund will promptly clear them up," Niebel said, according to Businessweek. "I have halted all further payments to the fund until it is fully cleared up."

In November, Sweden said that it was suspending its donation of $85 million until the fund fixed its outstanding problems. Last week, the fund’s executive director, French immunologist Dr. Michael Kazatchkine, flew to Stockholm to reassure Swedish officials that the problems would be fixed.