World News

Mercy Corps says more than $600,000 lost in Congo aid scam

DAKAR (Reuters) - International aid agency Mercy Corps on Thursday said it believed over $600,000 was siphoned from its emergency cash programme in eastern Democratic Republic of Congo in a scam that could have targeted other aid groups.

Mercy Corps, which supports vulnerable communities in Congo with cash, vouchers and other aid, launched an internal investigation in 2018 after detecting signs of fraud, a spokesman said.

It has since “terminated team members who were involved, complicit or who failed to report knowledge of potential corruption,” a spokesperson said, estimating that some $639,000 may have been gone astray.

Mercy Corps, which is headquartered in Portland, Oregon, said it has pushed for a sector-wide response after its investigation found that other humanitarian groups running cash programmes in eastern Congo may have been affected by similar fraud.

UK’s Department for International Development (DFID), who contributed to the pool of funding used by Mercy Corps, declined to comment.

An unpublished review funded by DFID found “exaggerated reports of displacements, collusion between aid workers and local communities, and distributions of aid to ineligible beneficiaries,” according to reporting by The New Humanitarian news agency.

DFID was informed about the allegations in January 2019, a source from the UK government said, and immediately withdrew funding from the pool, which closed down some months later.

Mercy Corps established new fraud mitigation measures and tightened controls before resuming cash and voucher programmes in Congo in early 2019, the group said.

Corruption is endemic in the vast central African state. An aid worker with knowledge of DFID’s review said there was a need to balance the risks of fraud against the urgency for rapid responses in emergency situations.

Some studies suggest losses from cash-transfers are around 2% on average, compared with up to 50% for some other forms of aid, according to the Cash Learning Partnership, a network of humanitarian groups focusing on cash and voucher assistance.

Reporting by Hereward Holland; Editing by Alessandra Prentice and Toby Chopra