Monday, July 12, 2010

MassiveGood, Praised by UN's Ban, Bill Clinton & Douste-Blazy, Called MassiveScam, $525,000 Spike Lee Film Yields $200,000

By Matthew Russell Lee, Exclusive

UNITED NATIONS, July 11 -- To raise money for the fight against AIDS and other diseases during the purchase of an airplane ticket: it sounds like, or as the UN calls it, “MassiveGood.”

Back on March 4, UN Secretary General Ban Ki-moon praised the program, and made the first donation. Inner City Press asked Ban's envoy on “innovative finance for development,” Philippe Douste-Blazy, about how the program would be transparent. Rather than directly answer, Douste-Blazy handed out copies of his book.

After four months and $11 million dollars in spending, including $525,000 for a 60 second Spike Lee promotion film featuring brief appearances by Samuel Jackson, Susan Sarandon, Paul Auster and a recording of former President Bill Clinton's voice, questions have arisen. Inner City Pressasked the UN on July 8

Inner City Press: UNITAID allocated $22 million to something called the Millennium Foundation, which is also headed by Mr. Douste-Blazy, for this thing called MassiveGood, where for every plane ticket people were going to click. It was estimated that it would raise hundreds of millions of dollars [but] it’s raised much, much less than that. Given that Ban Ki-moon was the first clicker and used the UN platform to promote this idea, what does he think about the article and of the use of $22 million that should have gone to, actually, antiretrovirals, to pay Spike Lee to do an ad for something that’s raised so little money? And what is Mr. Ban Ki-moon going to do to clean up this scandalous use of funds?

Associate Spokesperson: We’ll check with our colleagues dealing with this about what kind of response there is on that.

The following afternoon, this response was proffered:

Date: Fri, Jul 9, 2010 at 2:22 PM
Subject: Your question on MASSIVEGOOD
From: UN Spokesperson - Do Not Reply
To: Matthew Lee

Our colleagues at UNITAID wish to stress that MASSIVEGOOD is a private-public partnership in the first stages of development.

Three months after the initiative was launched at the United Nations, MASSIVEGOOD has raised $200,000 in micro-contributions from travelers and corporate donations, a figure which is completely in line with the original fundraising projections.

UNITAID adds that it is already seeing an impressive number of donation “clicks” coming from travelers this summer, only four weeks after its operational launch. The Millennium Foundation will be holding its operational launch in the USA this October and it is sure to be fully deployed throughout the travel industry there.

Once fully deployed in the USA and in several European countries, MASSIVEGOOD will allow travelers to make a micro-contribution towards the three health-related Millennium Development Goals, as is already the case in Spain. The Millennium Foundation will continue to secure partnerships within the travel and tourism industry, and to ultimately ensure that each of us who travel can help the world reach the Millennium Development Goals.

It all sounds very nice. But consider:

- the Millennium Foundation (MF) is headed by Philippe Douste-Blazy. It has been established in Nov. 2008 as a private Swiss Foundation. Its purpose is to collect "voluntary contributions" (i.e., donations) to support global health initiatives. The key idea is to encourage travel agents, individual travelers and corporate companies to routinely donate a small sum of money (2 €, 2 $ or 2 £ per ticket) each time they book an airplane ticket online, thanks to the cooperation of the main companies part of the Global Distribution System (GDS). The MF was created with the assumption that those main companies - top three being Sabre, Travelport and Amadeus - would fully cooperate with the above-mentioned donation scheme. Under a set of favorable assumptions, a McKinsey report was predicting the scheme could raise a fair amount of money, in the few hundreds of millions $ per year.

- Philippe Douste-Blazy, UN Secretary General Ban's Special Adviser on "innovative financing", has lobbied for such a donation scheme given his close ties with the travel industry (notably French businessman Jean Francois Rial). As Chairperson of UNITAID Executive Board, he came to realize that certain governments, notably the US government, would never support UNITAID and implement an airline tax similar to the French tax himself had created when he was a member of the French government. UNITAID is a big UN procurement agency for HIV/AIDS drugs hosted by the World Health Organization in Geneva.

- Mr. Dousteblazy has used his position as UNITAID Chairperson to have UNITAID granting a substantial budget ($22 million) for the creation of the MF, while we was simultaneously taking up the presidency of the newly created entity (thus cumulating the two presidencies : UNITAID, MF). This entered into force in Nov/Dec. 2008 with the establishment of the MF, recorded by the Swiss government, and the first wire of funds from UNITAID to the MF.

UN's Ban and Bill Clinton click, return and accountability not shown

- the MF quickly recruited his own secretariat, starting with a Director General, another Frenchman named Bernard Salome. An Executive Board of the MF was set up, with representatives of most countries already involved in UNITAID (notably France and the UK), but also representatives of prominent NGOs (Oxfam). The MF's HQ was officially located in Geneva, in the commercial zone by the city airport.

- the MF has designed its collecting scheme on 2 main tasks : i/ having the GDS companies developing the software enabling their customers (e.g., travel agencies) to make the routine online donation ; ii/ launching massive media and advertisement campaigns in targeted countries representing a great potential of air travelers : the US and selected European countries (Germany, Switzerland, UK, Spain).

Eighteen Months Later, This is the Situation

- approximately half of the UNITAID grant, i.e. 11 M$, has been spent or engaged. The MF spends an additional 500,000 $ a month minimum. At the current pace of spending, most insiders think the MF will run out of funding by end 2010, Q1 2011

- the donation scheme ("Massivegood") has been launched in 2 countries only : the US (early March 2010) and Spain (1 June 2010)

- the donation situation is dire : after 4 months targeting the US market (i.e., the key market), the amount of donations is about 14,000 $, and only a few hundreds of people have donated. Some sources actually suspect those donors to be employees of one of the GDS companies partner to the donation scheme, inviting its staff to make a donation to get the process started.

- none of the main GDS companies (Amadeus, Travelport, Sabre) has implemented the online donation software with its own customers (travel agencies), for various (legal, technical) reasons. It seems that as little as 5 out of 150,000 travel agents in the US have individually and voluntarily responded to the call for donation.

- in 2009, the MF has contracted an advertising consortium (led notably by French advertising firm Fred & Farid) for its media and ad campaign, labeled "Massivegood". According to sources, the contract would amount to 9 M$. Today, at least 3 M$ have been spent for the Massivegood campaign and the US launch in particular. A very big expenditure ($525,000) has been the making of a 60 second promotional movie by Movie Director Spike Lee, featuring brief appearances by Samuel Jackson, Susan Sarandon, Paul Auster and a recording of former President Bill Clinton's voice. This (fairly ordinary) movie has generated little interest on the Internet.

To summarize : 11 M$ of HIV/AIDS funding have already evaporated, and more is at risk ; the launch of the Massivegood brand on the most critical market (US) has been a failure ; unable to ensure the dissemination of the donation software, the MF seems irreversibly unable to achieve the two elements of its initial strategy, i.e. organizing a vast network of online donations through the GDS companies, and promoting its brand vis-a-vis the citizens and travelers in key countries.

Beyond the incompetence, the most striking and shocking factor is that UNITAID funding should legally be used to scale up access to HIV/AIDS and malaria drugs for the poorest countries. Today, UNITAID, the Global Fund against HIV/AIDS and all organizations fighting global pandemics are struggling with declining resources. How many doses of anti retrovirals, how many bed nets against malaria, how many packs of therapeutic food could have been bought with those wasted 11 M$ ? Is it worth waiting for the remaining 11 M$ to disappear into thin air ?

And so informed sources want to know:

- is the UN Secretary General Ban aware of the failure of the Massivegood scheme ? Why did he decide to support it by making publicly the first online donation himself on March 4th ? Was he briefed on the fact that the software wasn't ready ? Does he intend to keep Mr. Dousteblazy as his Special Adviser ? Does he intend to take full responsibility for his adviser's initiatives ? Would his attitude have anything to do with his wish to retain French support in view of a second mandate ?

- what is Mr. Douste-Blazy reaction in front of this situation ? Does he consider resigning from his position of Chairperson of UNITAID Executive Board for having distracted resources of this organization ? How could he plea ignorance as he chaired both organizations (the grantor and the grantee) ? Did he consider he exerted objective control and defended UNITAID's interest ? Can he display the exact and detailed account of all travel expenses incurred by UNITAID and the MF for him to "promote" the Massivegood scheme ? He is supposedly an unpaid UN adviser ("one dollar contract") : who pays for his income,secretariat and office(s) located in Paris, not in Geneva ? Some say the Paris office rent would be as high as 10,000 € a month : is it correct ? Is Mr. Dousteblazy using this office only for UN or MF related purposes, or for his participation to French politics ?

-Why was Mr. Salome, like Douste-Blazy a Frenchman, appointed Director General without any transparent and competitive process, post publication and selection panel ? Why is the amount of his salary not published or disclosed even to the members of the MF Board ? What is the amount of travel and other expenses incurred by the MF on Mr. Salome's behalf ? Could this complacent situation have something to do with the fact that Mr. Salome is a former adviser and very close friend to Bernard Kouchner ?

- why did WHO, UNITAID's hosting entity, validate the "transfer" of $22 million from a UN HIV/AIDS fund to a non-UN, opaque private entity such as the MF, entirely created from scratch and specifically designed for a dubious fund-raising scheme, without raising questions or demanding guarantees ? Especially since this operation did not enter into UNITAID's legal purposes ? Would it have something to do with the fact that the WHO lawyer in charge of this scrutiny process (Ms. Donna Catliota) has been recruited by the MF as a lawyer immediately after she validated the transfer of funds from UNITAID to the MF ? And why did such an obvious conflict of interest remain unnoticed by WHO upper management ?

- what is the level of administrative expenses of the MF ? how many people are actually employed by the MF : some say 25 staff, is it true ? it is true that at least 6 of them perceive net salaries in excess of 10,000 € a month after tax ? The MF website mentions that the MF has its offices in Geneva but also maintains a "satellite office" in Paris : what are the expenses linked with this Paris office ? How many people do work in Paris for the MF ? Some say that the Geneva office, actually located inside the airport zone, is a "ghost office" : how many people do actually work there on a daily basis ? And above all, why does a private Swiss law foundation have an office in Paris, while planning operations in the US or Spain and not in France ? Would it have something to do with the possibility for some French, Paris-based staff to evade from French tax laws, receiving tax-free salaries under Swiss laws while enjoying Paris ?

- why did Mr. Douste-Blazy prefer to use UNITAID funding for the MF/Massivegood scheme instead of leveraging private philanthropic funds or even turning to (development) banks to provide the seed funding ? After all, the McKinsey study had predicted a certain potential for the donation scheme (under a set of precise assumptions though) : with appropriate guarantees, the initial capital could have been borrowed and reimbursed as quickly as a 2 or 3 years. Why then distracting UN HIV/AIDS funding ? Would it have something to do that Mr. Douste-Blazy wanted to avoid any external scrutiny over "his" scheme, be it from a philanthropist, a bank or a UN body, whereas such scrutiny could have prevented the current mismanagement of funds ?

- how was the advertisement company for the Massivegood campaign chosen ? Was there a competitive tender for the 9 M$ contract ? Why was a French company chosen, notwithstanding the fact that the donation scheme had to be launched in the US primarily ? Did the French company enjoy early information and contact from the MF and its Chairperson, ahead of the contract ? How does the firm explain the mediocre success of its campaign in the US ?

- why did Director Spike Lee bill the MF 525,000 $ for such a short promotional material ? Was it non-profit ? Did he and all the actors involved work pro-bono ? What is the detail of expenses incurred by this movie ? How does he explain the movie has generated so little interest ?

- are the CEOs of the main GDS companies (Amadeus, Travelport, Sabre) aware of such financial mismanagement by the MF ? If yes, is it why they have refused to cooperate further with the MF, notwithstanding the fact that they had signed a letter of intent ? If yes, again, why then didn't they alert political and administrative authorities?

And what of Bill Clinton, Paul Auster, Spike Lee, Samuel L. Jackson and Susan Sarandon.

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