When Bill Clinton signed the MOU with the Australian Government on 22 February 2006 he said a few words to the crowd of business people who'd gathered at the Lowy Institute to mark the occasion.
PRESIDENT CLINTON: Thank you very much. Well, Foreign Minister, I can't wait for your memoirs to come out. Thanks Margaret (JACKSON, chair of the Asia Pacific Business Coalition on HIV/AIDS), thank you. I'd also like to thank the Director General of AusAID, Bruce Davis and the people who run our Clinton Foundation HIV/AIDS initiative, Ira Magaziner who conceived and organised the whole thing, and Ruby Shang who represents us here in Asia.
Ruby Shang was the President of the Caterpillar earthmoving dealership in Vietnam, Vtrac. Her husband Anthony Salzman - or as he prefers to be known Mr Vietnam - is a US citizen.
Salzman had some dealings with Clinton in "opening up" the Vietnamese economy. At one stage he was apparently worth quite a bit until he and Caterpillar had a falling out. In 2011 Caterpillar sued himover a failed dealership agreement, claiming Salzman still owed Caterpillar $12M for equipment he'd purchased.
His wife Ruby was everywhere for Clinton. China, Vietnam, Singapore, PNG and Australia with a range of impressive Clinton Foundation job titles, ranging from advisor to director of the board in climate change, health and the Clinton Global Initiative.
Maybe Ruby had too much on her plate with the Clinton Foundation to find the time to sell graders and backhoes.
Ruby would feature prominently in Clinton's plans for New Guinea.
First a little background.
At the UN World Summit in September 2005, then Prime Minister John Howard announced plans to double Australia's aid program by 2010 to $4 billion.
There was big money available from the Australian Government in 2006 and it seemed to have difficulty in spending it well. A review of Australia's aid effectiveness noted:
“Non–state donors are increasingly influencing international aid behaviour as their share of total aid flows to developing countries increases … the ratio of almost one private dollar for every two dollars of official aid is significantly higher than a decade ago when the ratio was closer to one to five.”
Not only have well–known NGOs such as World Vision and Oxfam grown, but completely new non–government donors have also emerged such as the Bill and Melinda Gates and Clinton Foundations. These have brought with them new resources and ways of doing business, including more attention to results.
Downer's remarks at the MOU signing give some sense of the government's thinking:
I would like to talk briefly now about what the Government is currently doing to reverse the spread of HIV/AIDS. Eighteen months ago, I announced a significant increase in Australia's contribution to the fight against HIV/AIDS in the region: through the aid program, the Australian Government is committing $600 million in assistance to HIV/AIDS activities in the decade to 2010: most of this support is directed to activities in the Asia Pacific by way of bilateral assistance. Clearly, the Australian Government is already investing heavily in the battle against HIV. But if we are to deepen and strengthen the Australian response, we must look for new opportunities and partnerships to build on what has been achieved. Our partnership with the Clinton Foundation will build on the Foundation's impressive track record to provide practical assistance with procurement, supply chains and health system strengthening.
It's not clear whether Downer knew this at the time - but the Clinton Foundation was already accessing our $600M, particularly in Papua New Guinea.
On 29 October, 2005, the Clinton Foundation HIV/Aids Initiative Inc signed a Memorandum of Understanding with the PNG Government.
We don't (yet) have a copy of that 2005 agreement, however we do have a copy of an MoU superseding it in 2011.
What's clear is that by October 2005, Papua New Guinea already had access to the Clinton negotiated prices for HIV and related drugs and Australian aid money was funding those purchases.
THE CLINTON FOUNDATION WAS ALREADY REPORTING ITS EXPANSION INTO ASIA BEFORE THE AUSTRALIAN AGREEMENT
Clinton made much of his 2005 agreement with PNG in the Clinton Foundation 2005 Annual Report.
The Clinton Foundation HIV/AIDS Initiative (CHAI) greatly expanded the scale, intensity, geographic, and programmatic scope of its global efforts in the fight against HIV/AIDS in 2005. By year’s end, the Initiative had increased the number of people accessing AIDS treatment drugs under CHAI’s agreements by nearly 300%, from 61,000 on treatment at the end of 2004 to over 240,000 on treatment by the end of 2005. CHAI also increased the number of partner countries and members of the Procurement Consortium who can purchase AIDS medicines and diagnostic equipment at CHAI’s reduced prices to 55.
DRAMATICALLY EXPANDING TREATMENT
Working in close partnership with governments, other non-governmental organizations, and the private sector, CHAI strives to make treatment for HIV/AIDS more affordable and to implement large-scale integrated care, treatment, and prevention programs that are helping to turn the tide of the pandemic. CHAI’s efforts to increase access to HIV/AIDS care and treatment led to dramatic geographic and programmatic expansion in 2005. By the end of 2005, the number of people accessing antiretroviral medicines (ARVs) purchased under CHAI agreements increased fourfold from the end of 2004. Over the course of the year, CHAI entered into partnerships with the governments of Cambodia, Vietnam, Papua New Guinea, and Ukraine to assist in the implementation of large-scale HIV/AIDS care, treatment, and prevention programs.
So if Clinton was already committed by an MOU to "assisting the government of Papua New Guinea in the implementation of large-scale HIV/Aids care, treatment and prevention programs", what did Australia or the people of PNG stand to gain out of the 22 February 2006 MOU with Australia?
That's a good question.
For the first six months after the MOU was signed nothing happened. No money flowed from Australia to the CHAI under the terms of the agreement. The PNG Department of Health continued buying HIV drugs under the CHAI agreement and life went on its way.
In July 2009 an Independent Completion Report (an independent review) of funding to the Clinton HIV/Aids Initiative in PNG conducted an extensive field and desktop review of the program.
It described the history:
In February 2006, the Australian Government and the CHAI signed a Memorandum of Understanding. Under the agreement, the Australian Government through AusAID is to provide funding up to $25 million over four years, complemented by funding from the Clinton HIV/AIDS Initiative.
Under the MOU, AusAID agreed to fund CHAI to work with public health authorities in three countries including Papua New Guinea to scale-up treatment and care for people living with HIV and AIDS. The other countries were Vietnam and China, with an option to extend the initiative to other countries. Indonesia is the fourth country to be included.
In PNG, AusAID is supporting the CHAI to improve access to HIV and AIDS treatment. Total agreed funding is $11,080,000 for the period August 2006-2009.The goal of the CHAI in PNG is to work with the National Department of Health (NDoH) to improve clinical, laboratory and management capacity in Papua New Guinea to enable an expansion of access to antiretroviral treatment for HIV positive people.
The commencement date for funding of August 2006 is significant.
ULTRA VIRES INCORPORATION OF THE CLINTON FOUNDATION HIV/AIDS INITIATIVE INC
All foreign corporations are required to register with the PNG corporate regulator prior to doing business in PNG.
There is no record of the Clinton Foundation registering as a foreign corporation in PNG.
On 21 August, 2006 Ruby SHANG gave notice to the PNG companies regulator that she intended to apply for the incorporation of a PNG domiciled association called the William J. Clinton Foundation HIV/Aids Initiative - PNG.
On 23 August 2006 Ruby Shang attended on the PNG companies regulator with an unsworn statutory declaration form and a clipping from the newspaper advertising her intention to apply under Section 2 of the Incorporated Associations Act for the incorporation of the CHAI Association PNG Inc.
From the date of the advertisement, one month must elapse before the Regulator is empowered to incorporate the Association.
One of the matters the Regulator must consider is whether or not the Association's rules/objects meet the requirements of the Act.
SCHEDULE 1 – Matters to be Provided for in the Rules of an Association.
1. The name of the association.
2. The objects and purposes of the association.
3. The qualifications (if any) for membership of the association.
4. The donations or subscriptions (if any) to be made or paid by members of the association.
5. The names, constitution, membership and powers of the general committee, board of management or other governing authority of the association (in this item referred to as “the committee”) and–
(a) the election or appointment of members of the committee; and
(b) the terms of office of members of the committee; and
(c) the grounds on which, or reasons for which the office of a member of the committee becomes vacant; and
(d) the filling of casual vacancies occurring on the committee; and
(e) the quorum and procedure at meetings of the committee; and
(f) the quorum and procedure at meetings of sub-committees appointed by the committee.
6. The quorum and procedure at general meetings of members of the association and of sub-committees appointed by any such meeting or constituted or established under the rules of the association.
7. The time within which, and the manner in which, notices of meetings and notices of motion are to be given, published or circulated.
8. The sources from which the funds of the association are to be or may be derived.
9. The manner in which the funds of the association are to be managed and, in particular, the mode of drawing and signing cheques, drafts, bills of exchange, promissory notes and other documents for and on behalf of the association.
10. The intervals between general meetings of members of the association, the manner of calling general and special meetings and the requisite notices of meetings of the association.
11. Whether the accounts of the association are to be audited annually or more frequently, the manner of appointing and removing auditors and the powers and duties of auditors.
12. The manner of altering and rescinding the rules and of making additional rules.
13. Provision for the custody and use of the seal of the association.
14. The manner in which the objects or purposes of the association may be altered.
15. The form, custody and use of the common seal of the association.
16. The custody of books, documents and securities of the association.
At 8.38AM on 24 August 2006 Ruby Shang delivered to the Regulator this copy of the Clinton Foundation's articles of association from Arkansas in 1997. They bear no relationship to the requirements of the PNG Incorporated Associations Act.
At 10:03AM on 24 August 2006 the Clinton Foundation HIV/Aids Initiative - PNG Inc was unlawfully incorporated.
PNG's Incorporated Associations Act 1966 is explicit. There is no lawful means to incorporate an association without a meeting of the committee to authorise the application and there must be Rules in accordance with the Act - as well as a one month waiting period after the notice of intention to incorporate is advertised.
The Registrar acted unlawfully as a public official in incorporating the Clinton Foundation HIV/Aids Initiative - PNG Inc in that
It did not meet any of the prescribed qualifications for incorporation set out in the Act
“the prescribed qualifications for incorporation” in relation to an association, means–
(a) that the association–
(i) is formed; or
(ii) is being formed; or
(iii) is operating,
for the purpose of–
(iv) providing recreation or amusement; or
(v) promoting commerce, industry, art, science, religion, charity, pension or superannuation schemes or other objects useful to the community; and
(b) that the association will apply its profits (if any) or other income in promoting its objects; and
(c) that the association will prohibit the payment of any dividend or payment in the nature of a dividend to its members;