Brazil probes $10 million embezzled from Red Cross

by Anastasia Moloney | @anastasiabogota | Thomson Reuters Foundation
Monday, 28 July 2014 19:20 GMT

A man counts betting money while watching the round of 16 soccer match for the 2014 World Cup between Brazil and Chile, during a gathering in a home in the upper class neighborhood of Lago Sul in Brasilia, June 28, 2014 . REUTERS/Ueslei Marcelino

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An audit commissioned by the Brazilian Red Cross reveals $10 million of its humanitarian funds were embezzled. Brazilian authorities are investigating

BOGOTA (Thomson Reuters Foundation) - Brazilian authorities are investigating the embezzlement of 10 million dollars of humanitarian funds from the Brazilian Red Cross.

The ongoing investigation comes after an audit, commissioned by the Brazilian Red Cross last year, which revealed millions of dollars in voluntary contributions and donor funding had been siphoned off.

“The funds collected from two years of campaigning by the Brazilian Red Cross from 2010 to 2012 for four campaigns, including Somalia, the Japan tsunami, floods in Rio de Janeiro and a national dengue campaign did not reach where they were supposed to go. The funds were diverted,” said Paulo Roberto Costa, secretary general of the Brazilian Red Cross.

“The audit showed that a total of $10 million of funds from 2010 to 2012 were diverted,” Costa told Thomson Reuters Foundation by phone from Rio de Janeiro.

The audit carried out by an international company, which was paid for by the Geneva-based International Federation of Red Cross and Red Crescent Societies and the International Committee of the Red Cross, lasted 16 months and delved into the financial records of 10 of the 23 Red Cross offices across Brazil as well as its main office in Rio de Janeiro, Costa said.

“I have given the results of the audit to the Brazilian police and judicial authorities and investigations are underway to see what sanctions will be placed on those people allegedly involved in the diversion of those funds,” he said.

The audit showed a Brazilian non-governmental organisation, Instituto Humanus, received $7 million from the Brazilian Red Cross between 2010 and 2012 without providing third party service receipts for this period, according to recent reports in Brazilian newspaper Folha de S.Paulo.

The NGO is registered under the name of Alzira Quirino da Silva, who is the mother of the then vice-president of the Brazilian Red Cross, Anderson Marcelo Choucino, the newspaper reported.  Alzira Quirino da Silva told Folha newspaper via email that she is unaware of the auditing report and for that reason is unable to comment.

Following the corruption scandal, the Brazilian Red Cross said it has tightened its oversight of how donor funds are managed.

“In response to the audit, we have changed our statutes, have a new management, ethics committee and accountability and transparency processes to make sure this does not happen again,” said Costa.

“All those people involved in the diversion of funds do not now work at the Brazilian Red Cross and our committee members of the Red Cross in Brazil have also changed,” he added.

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