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Wall Street Journal
Global Health Fund Chief Steps Down
Betsy Mckay
January 25, 2012
Wall Street Journal - January 25, 2012

The executive director of the Global Fund to Fight AIDS, Tuberculosis, and Malaria is stepping down more than two years ahead of schedule, following criticism of the organization's financial and management practices and some cutbacks in funding.

Michel Kazatchkine, who has headed the major financier of global health programs for five years, will step down March 16, he said in a letter posted on the Global Fund's website.

But Dr. Kazatchkine, a well-regarded French physician, has faced criticism of his stewardship of the 10-year-old public-private Geneva-based organization, which has raised $22.6 billion from the U.S. and other countries in addition to private donors such as the Bill & Melinda Gates Foundation for AIDS drugs, anti-tuberculosis treatments, and insecticide-treated bed nets for malaria prevention in 150 countries.

A high-level panel issued a report last year calling for major changes in the way the fund operates, concluding that it must improve risk management, simplify grant application processes, and place greater emphasis on results. The panel was formed to investigate the fund's practices after its own inspector general uncovered misuse of some grant money in four countries.

In November, the fund was forced to cancel a planned round of fresh funding after determining that it was well short of funds, due in part to a slowdown in donor contributions in the global financial crisis, but also due to its own overly optimistic projections and forecasting.

The Global Fund named Gabriel Jaramillo, a retired bank executive, to head the organization for a year until a new executive director is appointed. Mr. Jaramillo, a native of Colombia and a citizen of Brazil, was chairman and chief executive officer of Sovereign Bank, a Boston-based wholly owned subsidiary of Spain's Banco Santander SA. He served on the high-level panel that assessed the Global Fund's fiduciary controls and oversight. He will assume his new role Feb. 1.

Mr. Jaramillo will be charged with implementing changes called for by the panel on which he served. "We will start with a reorganization that emphasizes simplicity, discipline and rigor, with grant-management as the core activity of the institution," Mr. Jaramillo said in a statement.

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