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Former IG at the Global Fund Compensated for Serious and Irreparable Harm, But Those Responsible Go Undisciplined

Bea Edwards, February 08, 2016

On February 3rd, the three-year ordeal of John Parsons came to an official end when the Administrative Tribunal at the International Labour Organization (ILOAT) ruled that the Global Fund unlawfully terminated him and caused him irreparable harm to his reputation and dignity.

Parsons was the Inspector General at the Global Fund from 2008 until November, 2012, and he had the misfortune of uncovering extensive corruption in the grants he investigated – some of which had lost as much as two-thirds of their funding to corruption. The Global Fund, founded to circumvent the bureaucracy of government-to-government aid by making grants directly to private sector partners in the developing world, did what many organizations do when confronting an unpleasant message about corruption in their operations: they shot (fired) the messenger (Parsons).

Typically, when an organization terminates any auditor, there’s a lot of explaining to do – never mind summarily dismissing the Inspector General. To avoid scrutiny, the Global Fund announced publicly that Parsons was dismissed for unsatisfactory performance. Several times, Parsons attorney, Laurence Fauth, requested that the announcement be withdrawn, and the Global Fund repeatedly refused. 

The ILOAT was definitive in finding that the organization’s conduct was inexcusable:

It is well established in the Tribunal’s case law that “international organisations are bound to refrain from any type of conduct that may harm the dignity or reputation of their staff members…In this case, there can be no doubt that the announcement in the News Release and the statement in the 28 November 2012 letter that the complainant was terminated for unsatisfactory performance conveyed to readers that the complainant was incompetent and unfit to perform the duties of the Inspector General. These communications were a serious affront to the complainant’s professional reputation and his dignity. The fact that the Global Fund sent an email to its staff members directing their attention to the News Release in circumstances where the complainant was not in a position to refute its contents further exacerbates the breach.” (para. 46).

So the Global Fund must now compensate Parsons for damages – which are substantial. Nonetheless, the senior officials responsible for retaliating against him for reporting corruption remain in place. And the amount paid to Parsons – while significant for an individual – is relatively small in comparison to what was stolen from Global Fund grants. At GAP, therefore, we’re left wondering how the Organization claims to fight fraud and corruption, when there is no deterrent for theft, even in cases where the misconduct is proven.

Frankly, the hypocrisy of the Global Fund is breathtaking on this point. Just two months ago, the Organization posted this self-congratulatory declaration on its website, the same site used by the Board to disparage Parsons after he began doing his job too well.

On International Anti-Corruption day, 9 December, the Global Fund's Office of the Inspector General is launching a campaign to raise awareness about fraud and abuse. Called 'I Speak Out Now!', the campaign is designed to encourage people to denounce any wrongdoing that prevents the medicines, health products and services from reaching those who need them.

The Parsons case shows the limits of an administrative law system, such as the ILO Tribunal, which clearly went as far as it could to protect the Inspector General. At best, the Tribunal can right the wrong done to the victim of misconduct, but it has no authority to punish the guilty. At the Global Fund, representatives of countries (and organizations) that benefit from grants sit on the board. Those who contributed to Parsons’ dismissal remain on the board, where they decide issues that directly affect their own interests. The Chair of the Audit and Ethics Committee, Graham Joscelyn, who orchestrated the campaign against Parsons, remains in place, completely unsanctioned, although the ILOAT ruling refers explicitly to his improper conduct.

It is evident in the record that the Chair of the AEC incorrectly viewed his role as encompassing the Board’s responsibilities under the By-laws in relation to the Inspector General. Relevantly, he undertook the responsibility for the complainant’s 2012 performance assessment. By inserting himself into and, in effect, managing the 2012 assessment of the complainant’s performance, the AEC Chair clearly acted beyond the scope of the authority delegated to the AEC. (Para. 40)

As is typically the case in a coordinated smear campaign like this one, there was money at stake.  A great deal of it, in fact.  The Global Fund Board and Senior Management needed Parsons to sign off on a declaration that his office operated autonomously and was not subject to interference.  The certification was needed by the US State Department, which would then relay the certification to the US Congress.  Only then would the Congress disburse the full US contribution to the Global Fund.