A recent investigation by the Global Fund has discovered the apparent theft of over EUR 113,000 by Raoul Fransen, a former executive director of International Civil Society Support (ICSS), a Netherlands-based Civil Society Organisation.
A renowned HIV/AIDS advocate, Mr Fransen was accused of systematically employing various fraudulent practices such as creating falsified payment requests, making unsupported bank transfers, and abusing access to corporate bank accounts and a corporate credit card with extensive unsupported and personal expenditure in diverting the funds.
In its latest report published January 24, the Office of the Inspector General (OIG) of the Global Fund said the former executive head committed the fraud within a period of two years between 2018 and 2020.
These embezzled funds were among over EUR 550,000 in suspicious transactions undertaken by the individual, which involved multiple donors’ funds from three parties, the investigation found.
Who is Fransen?
Although the OIG of the Global Fund in its report did not particularly mention Raoul Fransen as the former executive head complicit in the fraud, a check by PREMIUM TIMES was quick to connect the dots.
Until this revelation was made public, Mr Fransen, a Dutch national, had built an envious and inspirational track record as far as global health advocacy goes.
In an interview published by The Lancet in December 4, 2004, Mr Fransen narrated how he once worked for a rent-a-car company but was fired after his employees discovered he was HIV-positive.
Inspired by this, he channeled his energy more on global campaigns for better living for people with HIV.
In 2003, he co-founded ‘Young Positives’, an international advocacy network of young people living with HIV/AIDS, where he has actively supported community-led programmes for HIV patients and would later use as a conduit pipe to siphon global fund’s money, according to the report.
Mr Fransen worked as a policy adviser for health-care institutions, and then became policy officer at the Dutch AIDS Fund, dedicated to improving the Dutch response to HIV/AIDS.
With such a track record and having served as a senior policy adviser for the ICSS since inception in 2006, there were high hopes when Mr Fransen was in January 2019 announced as new executive head of the organisation following the stepping down of Peter Van Rooijen, the pioneer head of the organisation.
“The best way of expressing how I feel is being proud”, Mr Rooijen had said of his successor, adding that: “Raoul and I have worked side-by-side for over 20 years… Raoul has become a unique leader in our field who combines professionalism with a deep knowledge of the role of communities and people living with HIV in the response. I am delighted that he, as a young leader, will guide ICSS into the future.”
That future would soon hit troubled waters. Mr Fransen was only head of the ICSS for about roughly a year as his employment in the organisation was terminated in May 2020 following several allegations of fraud by the Global Fund.
Connecting the dots
Global Fund is a funding mechanism that pools the world’s largest financial donations for the prevention, treatment and care of AIDS, Tuberculosis, and malaria.
At the heart of interventions of the Global Fund’s activities are civil societies, and communities living with and impacted by the three diseases who largely serve as implementers of Global Fund grants.
According to the OIG report, Mr Fransen’s ICSS is one of three CSOs complicit in this investigation – two suppliers and one board constituency.
A supplier of advocacy activities for Global Fund, ICSS, a non-profit NGO that facilitates key global civil society and community networking organisations with a focus on HIV received EUR 337,560 from the Global Fund between 2019-2020 under various purchase orders, representing 20 per cent of ICSS’s donor revenue during this period.
The second supplier, the Global Coalition of TB Activists (GCTA) which provides international TB advocacy services, was awarded a US$140,250 grant by the Fund for long term capacity development. The funds were paid in two tranches in 2018 and 2019 and represented 76 per cent of GCTA’s donor funding in the period.
The communities delegation which represents individuals living with HIV and affected by TB and malaria at the Global Fund Board received EUR 188,219 in funding in 2019-2020 under the Global Fund Constituency Funding Policy, the report said.
Aside being a Global Fund supplier, ICSS served as ‘Recipient Organisation’ for the Communities Delegation and managed its finances, including the funding received from the Global Fund.
ICSS maintained a segregated bank account for the Communities Delegation, separate to its own operating account. Mr Fransen, the accused ICSS’ former head, was an account signatory of both accounts. The individual also served as Chairman of GCTA, essentially as an unofficial Fiscal Host, and was sole signatory of GCTA’s bank accounts.
Findings of OIG report
In July 2020, the Office of the Inspector General (OIG) said it received multiple allegations of financial irregularities in accounts connected to ICSS.
“ICSS self-reported that their former Executive Director (hereafter: ‘the former ED’) allegedly made multiple unsupported payments, which only came to light after they were terminated from their position. The individual had worked with ICSS since 2010 and was ED from January 2019 until their employment was terminated in May 2020”, the report said.
The OIG subsequently launched an investigation covering financial transactions made between 2018 and 2020.
The OIG found “extensive suspicious transactions linked to the former ED (Executive Director, Mr Fransesn), including falsified payment requests, suspicious bank transfers to their [his] own accounts, extensive use of money transfer agents, and frequent unsupported cash withdrawals and credit card payments.”
According to the report, he transferred funds embezzled from ICSS through GCTA bank accounts, “misrepresenting them as Global Fund grant funds to disguise their [his] illicit nature”.
“This finding provides the details of over EUR 550,000 in suspicious transactions which the OIG identified in the parties’ co-mingled bank accounts…”, it said.
“Between April and October 2019, the former ED used falsified payment requests to divert EUR 31,971 from ICSS in six transfers to “Young and Positive”, a civil society foundation which the former ED had established in 2003, and which they effectively controlled. These payment requests contained inconsistencies and evidence of falsification. No activities as described on the payment requests could be confirmed to have taken place, nor a valid contractual relationship between ICSS and “Young and Positive” identified,” the OIG reported.
ICSS paid EUR 101,971 to accounts controlled by the former ED, based on falsified payment requests, it said.
The OIG found approximately EUR 113,000 of Global Fund resources were embezzled as a result of the overall suspicious transactions.
Why does it matter?
This is far from the first time the Global Fund would accuse recipients of its grants of fraud and mismanagement, a situation that has a dwindling effect on donor countries thereby negatively impacting progress in the fight against AIDS, TB and Malaria across the world.
The Global Fund is a financing mechanism rather than an implementing agency. It is a pool where countries, public and private institutions donate money for disbursement according to HIV, TB and malaria burden of countries.
Following reports by the Associate Press in 2011 that there was vast corruption in some programmes financed by the Global Fund, Germany, Sweden and Ireland were among top contributors that at the time (2011) blocked any financing until the corruption problems were resolved.
Other cases of abuse of funds, corruption and mismanagement in a series of grants forced the Global Fund to suspend or terminate the grants after such dealings became public in Uganda, Zimbabwe, Philippines, and Ukraine.
Nigeria, which has a Global Fund commitment of more than $2 billion since 2003, is among African countries accused of mismanagement of funds by the OIG report.
In the 2021 OIG report, a Nigerian firm, Zenith Carex, was blacklisted by Global Fund for an alleged $3 million fraud.
Beyond looted funds, the OIG report had noted that “doctoring and or inflating of health figures, statistics and surveys” by corrupt officials have made programmes geared towards combating several diseases more or less, a mirage.
What’s Next for ICSS?
Although the Global Fund did not categorically blacklist ICSS from future dealings, it noted that several “red flags” were missed by the organisation and its external accountants.
“Based on the findings of this report, the Secretariat will finalize and pursue from the relevant entity/entities an appropriate recoverable amount from the non-compliant expenditures identified in this report”, the OIG said.
A check for the ICSS website shows that the company is “permanently closed”.
Calls and messages to a company number displayed on the website were neither responded to nor returned.
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