Should Big Lottery fund oligarch's projects? #biglf

For some global issues, it can be argued that there's a case for enlightened self interest.  HIV/AIDS for example respects no national boundaries and with some of the highest rates of infection to be found on Europe's doorstep, it makes sense to support an initiative that will lead to positive change.

In 2008 for example Big Lottery part funded a project in Ukraine to support families of children living with AIDS in partnership with foundations run by Sir Elton John and Elena Franchuk, the daughter of former president Kuchma and wife of oligarch Viiktor Pinchuk

In February 2013 Pinchuk joined the Giving Pledge, an initiative started by Warren Buffet and Bill Gates which has encouraged some of the world's most wealthy people to donate half of their fortunes to social causes.  

In 2006, as a self sustaining social enterprise, P-CED delivered a strategy proposal to Ukraine's government with the primary focus of reforming childcare. It said:

"We see a staggering array of social problems arising directly from poverty, including but not limited to tens of thousands of children in orphanages or other state care; crime; disrespect for civil government because government cannot be felt or seen as civil for anyone left to suffer in poverty; young people prostituting themselves on the street; drug abuse to alleviate the aches and pains of the suffering that arises from poverty and misery; HIV/AIDS spreading like a plague amidst prostitution, unprotected sex, and drug abuse; more children being born into this mix and ending up in state care at further cost to the state; criminals coming from poverty backgrounds, ending up as bandits, returning to communities after prison, with few options except further criminal activity. These are all part and parcel of the vicious negative cycle of poverty, and this threatens to destroy Ukraine, if Ukraine is defined in terms of people rather than mere geographic boundaries. "

A similar message comes from Anne Aslett of the Elton John Foundation in 2008:

"Children currently infected and affected by HIV/AIDS in Ukraine predominantly come from lower socio economic backgrounds where drug use and commercial sex work are prevalent.  They lack access to quality healthcare and education, psychological and emotional support and even basic needs in some instances.  There are currently no systems to support disclosure of a parent or child’s HIV status to the child, nor models of support for HIV+ adolescents. 

The stigma associated with HIV exposes children to discrimination and rejection (10% of children born to HIV+ mothers are abandoned to state institutions). These children are at risk of impeded access to quality education, health care, and even basic needs, which in turn puts them at higher risk for unemployment, diseases, and poverty in later life, or living as street children, estimates of which range from 60,000 to 300,000.  Without adequate social assistance from the government and society at large for these children, a vicious cycle result"

The difference is that the lottery funded project focusses on those families affected by HIV/AIDS whereas the social enterprise project saw poverty and the consequence of street children as a major contributor to the spread of disease. The focus was to place all children in loving family homes thereby reducing the risk of new exposure,  as a strategy to end 'vicious cycle' we both refer to.

We didn't seek assistance from Big Lottery, being unaware of their international commitment but we were submitting a proposal for BBC Village SOS. We learned that we failed to demonstrate sufficient stakeholder support.

Our childcare proposal was however taken to many other organisations which included USAID , the British Council, Erste Bank and the EU. None of these were able to offer support of any kind  Ukraine's government on the other hand, had adopted our major recommendations which incuded doubling the adoption allowance and pledging to create 400+ rehab centres for disabled children.

As I reported recenty even PM David Cameron was pettioned for support in the investment strategy to place children in loving family homes, a strategy he now reads back to us when he talks of how government will support impact investing .

Over the last decade there have been hundreds of millions of dollars of international development funds poured into the cause of tackling HIV/AIDS yet the rate of infection has soared. Today, more than two thirds of those infected are unable to access treatment. 

One might wonder why lottery funding is needed at all. There's no disclosure of the amount donated. Sir Elton is clearly a wealthy man and Elena Franchuk is renowned for having purchased on of London's most expensive homes at a cost approaching £100 million including extensive alterations.

The Times runs a story today on how husband Viktor Pinchuk used his relationship with Franchuk to benefit from state privatisation and reminds us of his relationship with Clinton Blair and Sir Elton. There is is a court case of the privatisation of Ukraine's largest steel mill. In the 'Death Camps' report, it was suggested that the proceeds from the sale should be directed toward Ukraine's orphans, as the excerpt at the end of this article will show.   

It could be argued that the funds could be put to better use in tackling some of the UK's social problems, while investing in chidcare reform is a "full cost recovery" strategy.

There was a lot of publicity  surrounding Sir Elton's attempts to adopt an HIV positive child from Ukraine. This was resisted by the Ministry of Family Youth and Sport who were trying to clean up a system where corruption was endemic     

It was back in 2006, when our efforts were brought to the attention of Yuri Pavlenko, Minister of Family Youth and Sport in the Tymoshenko government. A journalist drew his attention to our 'Death Camps' report.  He also makes a  point about the need for our kind of activity:and what we'd called on other business to support.  3 years later, Sir Richard Branson, speaking at the Davos Ukrainian Lunch hosted by Viktor Pinchuk,  would call in business to focus more on social problems in the presence of the ubiquitous Blair and Clinton.   .         

"Socially responsible business is important factor in reformation of the system. The Ministry negotiated with leading companies of Ukraine regarding financial aid for the implementation of the reforms and was given strong support in its efforts from the business circles. Joint actions of Ukrainian local authorities, the central authorities and the socially responsible businesses make possible implementation of the abandoned kids’ protection."

Big Lottery doesn't see things the same way regrettably. In a recent interview for Pioneers Post BLFs Dawn Austell says

"The opportunity for social investment is smaller and the appropriateness of it is limited "

Yet there's little constraint when it comes to the dumping of unspecified funds into overseas projects where there's a track record of failing to to deliver to benficiaries.  .    

Ukraine's oligarchs need no support from us, as was pointed out in the 'Death Camps, For Children' report

"Excuses won't work, particularly in light of a handful of oligarchs in Ukraine having been allowed to loot Ukraine's economy for tens of billions of dollars. I point specifically to Akhmetov, Pinchuk, Poroshenko, and Kuchma, and this is certainly not an exhaustive list. These people can single-handedly finance 100% of all that will ever be needed to save Ukraine's orphans. None of them evidently bother to think past their bank accounts, and seem to have at least tacit blessings at this point from the new regime to keep their loot while no one wants to consider Ukraine's death camps, and the widespread poverty that produced them..

It is to the credit of the new regime that, at least, one of the most glaring and egregious thefts of state property has been reversed vis-a-vis the reprivatization of Kryvorishtal Steel company. I argued on Maidan a year ago that this reprivatization was appropriate if the state could get at least $3 billion for the sale as a one-time windfall, then intake taxes annually on profits. Otherwise, it would be to the state's long-term advantage to hold the property as it produced a steady $600 million a year in profits. Akhmetov and Pinchuk, in an insiders' deal that was clearly rigged in their favor, had managed to pay only $800 million for the company in the initial privatization, a fraction of what it was really worth on the open market. When the reprivatization controversy was coming to a boil a year ago, speculation was that it might bring around $2 billion or maybe even as much as three times the rigged purchase price of $800 million. Nobody seemed to believe it could bring $3 billion dollars that I proposed as a minimum bid price. The actual price under what was widely hailed as an open, honest, and transparent bid and sale process: $4.8 billion, or six times what Akhmetov and Pinchuk paid.

Now Ukraine has an extra $4 billion in national budget just from that one correction alone. Which, in turn, is far more than enough to permanently solve Ukraine's orphanage problems as well as create a nationwide poverty relief program to prevent such problems in the future. Most of these kids come from situations deriving from poverty. This money should be put exactly where it belongs, helping people who have been left with little or nothing due to massive pilfering and looting of Ukraine’s national wealth to start with. $4 billion represents only a small, partial recovery of misappropriated resources, but is enough to bring badly-needed relief. Roughly $800 million in year one is the largest expenditure for childcare reform, with annual recurring costs of about $325 million. If Ukraine’s government gets serious about helping these kids in internats and death camps, it is very likely that large donor organizations will also be willing to help out."