Report: Corruption Plagues Charity Backed By Bono

As much as two thirds of some grants lost or misspent

By Sara Dover
|  Sunday, Jan 23, 2011  |  Updated 1:53 PM PDT
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NEW YORK - NOVEMBER 08: Singer Bono attends the 2010 Malaria No More Benefit at The IAC Building on November 8, 2010 in New York City. (Photo by Amy Sussman/Getty Images)

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Celebrity do-gooder Bono can't be happy about this: the nonprofit he is raising millions of dollars for is plagued with fraud.

As much as two thirds of grants donated to celebrity-supported Global Fund to Fight AIDS, Tuberculosis and Malaria have been lost in corruption, the Associated Press found.

The findings are a major blow to U2 frontman's goals for (Product) Red, the global charity  brand he co-launched that donates a large portion of its proceeds to the organization to fight and raise awareness about AIDS.

Forged documents and improper bookkeeping indicate that a large percentage of the money in the $21.7 billion development fund was lost or embezzled, investigators told the Associated Press. And so far, the inspector general's office has only examined a fraction of the $10 billion spent since the organization began in 2002.

The (Product) Red logo can be found on products by Converse, Apple, Nike, Hallmark and others. Gap advertises that the clothing line donates 50% of its profits from (Product) Red-branded swag directly to The Global Fund.

"When you buy a (Product) Red product, the company gives money to buy pills that will keep someone in Africa alive," Bono said in a statement in 2006, when the brand launched. "The idea is simple, the products are sexy, and people live instead of die."

An investigation into the nonprofit found that 67% of money raised for an anti-AIDS program in Mauritania was squandered, as was 36% of funds for a program to fight tuberculosis and malaria in Mali. 30% of money spent on African country Djibouti was allegedly lost or pocketed.

U.N. secretary general Kofi Annan, French first lady Carla Bruni-Sarkozy, and Microsoft's Bill Gates back the organization as well, with the Bill and Melinda Gates Foundation forking $150 million a year. The Global Fund is hailed as an alternative to the bureaucracy of the United Nations.

Currently, the fund is putting a freeze on donations to programs that were discovered to be corrupt and demanding that misspent money is returned.

"The messenger is being shot to some extent," fund spokesman Jon Linden told the Associated Press. "We would contend that we do not have any corruption problems that are significantly different in scale or nature to any other international financing institution."
 

Selected Reading: MSNBC, (Product) Red, The Global Fund

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