Thursday, June 15, 2006

KAMPALA, Uganda — Uganda, which continues to win praise from President Bush and others as a model of success battling AIDS, is reeling from the disclosure that top officials, their relatives and colleagues siphoned off tens of millions of dollars in grants from the Geneva-based Global Fund.

Money went to charities that did not exist, into the personal bank accounts of government employees and even to fund a nationwide campaign to scrap term limits so that President Yoweri Museveni could run for a third term in office.

The most prominent official named was Jim Muhwezi, who served as health minister until being sacked last month. Two other senior ministry officials, Alex Kamugisha and Mike Mukula, also were named, with a recommendation that they be further investigated.

“This is the big leagues,” said Justice James Ogoola, when asked to compare this week’s American scandal over hurricane relief to the findings of a 10-month investigation that he just completed.

“This was assistance for people who were dying, who had absolutely no hope. This is exactly what the Global Fund was created for. The money came, and people were diving in for the kill,” said Justice Ogoola, the top judge in Uganda’s High Court.

Since its creation in 2002, the Global Fund to Fight AIDS, Tuberculosis and Malaria has committed $5.1 billion in grants to more than 130 countries to fight the three diseases that kill more than 6 million people each year. As of last year, the United States had given the fund $1.49 billion, according to the fund’s Web site.

In addition to contributions from governments, rock star Bono and other celebrities have helped raise hundreds of millions of dollars from corporations and private charities such as the Bill & Melinda Gates Foundation.

The disappearance of a large amount of money first became public in August, when the fund abruptly suspended a $200 million grant. Mr. Museveni responded by appointing Justice Ogoola to investigate, and the fund lifted the suspension three months later.

“We didn’t hold a single in-camera session. It was all public hearings, and we did that quite deliberately, so the people of Uganda could see with their own eyes what was going on,” the judge said.

Immaculately dressed in a dark suit, he sat ramrod straight behind a huge mahogany desk, his hands folded as he answered a reporter’s questions with a soft, deep voice.

Between September and April, he and a panel of investigators interviewed 150 witnesses and reviewed more than 500 exhibits, mostly documents.

“The government did everything they could to facilitate the inquiry. They set it up and never interfered,” Justice Ogoola said.

The probe yielded a barrage of banner headlines, unprecedented live radio and television coverage and constant chatter on talk shows.

A preliminary report given to Mr. Museveni in a public ceremony May 31 and published in the Daily Monitor newspaper three days later recommends criminal investigation of “three personal assistants” for forgery and other crimes.

A final copy of the report is being bound and prepared for public release shortly, one official said.

The investigation uncovered typical tokens of corruption, including brand-new luxury cars and junkets to exotic cities, such as Paris and Oslo.

The scandal centered on a newly created organization within the Health Ministry, known as the Project Management Unit (PMU), which funneled $47 million from the fund to about 400 private organizations, known as nongovernmental organizations (NGOs).

Many of the NGOs existed only on paper.

PMU paid grossly inflated salaries to its 15 professionals and 20 support staff, who often doubled their take-home pay with generous and largely undocumented expense allowances.

Much of the money disappeared into personal bank accounts of PMU employees and final grant recipients, who sometimes wrote large personal checks to their supervisors.

A bank that received nearly $20 million wired from Geneva in U.S. dollars skimmed about $245,000, by using an artificially low exchange rate.

In all, about $37 million of the money remains unaccounted for.

“You could count the number of honest recipients with two hands, and even they were not without sin,” Justice Ogoola said, his face cringing ever so slightly as he spoke.

Problems have surfaced with other recipients of Global Fund money, including Burma, which has been cut off completely. Local newspaper reports tell of similar problems accounting for money in Kenya.

The Global Fund disbursement was poorly conceived in the first place, said Onapito Ekomoloit, the press secretary for Mr. Museveni.

“The message was vague. It was for workshops, and people were cooking up all kinds of numbers and books to justify the money. It was just talk. Talk, talk, talk, and anybody could claim the capacity to do it,” Mr. Ekomoloit said.

It could have been worse, as less than 25 percent of a $200 million grant had been disbursed.

Future money from the Global Fund is earmarked for HIV, malaria and tuberculosis drugs, Mr. Ekomoloit said.

“It will be much easier to keep track of,” said Justice Ogoola.

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