DAVOS, Switzerland – The head of the $22.6 billion Global Fund to Fight AIDS, Tuberculosis and Malaria has abruptly resigned, part of a shakeup in its top management since revelations about corruption and misspending severely rattled some of its biggest donors.
Dr. Michel Kazatchkine, a French clinical immunologist who has served as executive director of the global health fund for the past five years, announced Tuesday that he will resign in March. The shakeup resulted from an internal review to address problems highlighted in Associated Press stories last year.
Following the AP articles about the fund's losses, some donors withheld funding, and the fund scaled back its spending.
Foreign Minister Alain Juppe of France, the fund's second-largest donor after the United States, said in a statement he "deeply regrets" the doctor's resignation and hailed his "remarkable work" over nearly five years.
Last year, the fund's board decided to create a new general manager position after the fund was forced to cancel its plans to expand its programs by more than $1 billion when its budget projections dropped.
The panel also found unhealthy friction between Kazatchkine and the fund's internal watchdog, Inspector General John Parsons, who has come under pressure as his team of investigators and auditors documented the losses.
Kazatchkine, in a statement released by the fund, cited as a reason for his unexpected departure the board's decision to create the new position of general manager. He said he concluded he should not continue under these circumstances.
The resignation came on the eve of the World Economic Forum meeting in Davos, which played a role in its creation a decade ago. A dinner for the public-private fund is planned Thursday with U.N. Secretary-General Ban Ki-moon and major backers Bill Gates and the Bill & Melinda Gates Foundation.
On Feb. 1, Gabriel Jaramillo, a former chairman and CEO of Sovereign Bank, will take over as general manager. The fund described his job as "a newly created position intended to oversee a process of transformation as it accelerates the fight against the three pandemics by focusing on its management of risk and grants."
Jaramillo, a Brazilian citizen who hails from Colombia, has recently served as a special adviser to the U.N. on malaria and was part of the panel that reviewed the Global Fund's operations.
The Geneva-based fund was set up in 2002 as a new way to coordinate world efforts against the diseases and to speed up emergency funds from wealthy nations and donors to the places hardest hit. It currently pays for the treatment of around half the developing world's AIDS sufferers.
Outside of its donor nations and celebrity backers, the biggest private donor is the Bill & Melinda Gates Foundation, which has pledged $1.15 billion and provided it with $650 million so far.
The fund created the outside panel in March to address concern among donors after Associated Press articles in January 2011 about the loss of tens of millions of dollars in grant money because of mismanagement and alleged fraud.