Operations of Development Aid for People to People (Dapp) Malawi and its US-based development partner, Planet Aid, have come under investigations by a group of US-based investigative journalists who suspect the organisations could be involved in money laundering.

According to allegations published online by the US-based Centre for Investigative Reporting (CIR) and PRX, millions of money meant to benefit poor Malawian farmers has been diverted to an organisation called Teacher’s Group through the Massachusetts-based Planet Aid.

CIR. through investigative work involving scores of journalists who recently travelled to Malawi, Kenya, US and Mexico, claims to have discovered that despite the US Government spending over $130 million to help farmers through Planet Aid and Dapp Malawi, on the ground there is no evidence of any work done.

The journalism centre says it has documents showing that Teacher’s Group appraised a complex in Mexico owned by a former Teacher’s Group member with more than $20 million, which was diverted from Planet Aid farmer’s project in Malawi.

“In the last decade, two high ranking Teacher’s Group members were convicted of embezzlement and tax evasion in a Danish trial. The leader, Morgens Amdi Petersen, is still wanted by the law.

“It was during that trial in 2004 that the USDA started sending multi-million dollar grants to Planet Aid, now the total tops $130 million and the US Government is continuing to send more money today.

“When Matt and Amy (journalists) went to Malawi to check on a handful of Planet Aid projects, they saw hardly any sign of that money on the ground,” says CIR.

Dapp Malawi country director Lisbeth Thompson told Nation on Sunday, the allegations were baseless and slander, and she accused former staff members of being behind the campaign to dent the organisation’s image.

“It is slander—probably initiated by grumpy former employees. These accusations are baseless,” said Thompson.

She further dismissed any links to money laundering convicts or suspects.

She added:  “The USDA programme has been thoroughly reviewed by USDA both during and after the implementation and there have been no findings. Donors, including the US Government, are strict in terms of oversights over its partners and Dapp Malawi, as well as Planet Aid, have always put high priority to ensure that all donor funds are spent properly and in line with the signed agreements and used effectively to the benefit of Malawi people.”

According to Thompson, Dapp Malawi has clean external audit reports managed by KPMG since its inception in 2005, but said she was uncooperative to the investigation because the journalists were ‘unprofessional’ in their conduct.

In a statement by Planet Aid made available through Dapp, Planet Aid described itself as Dapp Malawi’s sister organisation which entered into partnerships with US Government of which Dapp Malawi has been sub-contracted.

“The US Government is very strict in its oversight of contractors, including Planet Aid, and we go to great lengths to ensure that grant money is managed properly and used to maximum effect in places where people are in need,” reads the statement.

Dapp Malawi has been operating in Malawi as a charity since 1995, working in education, agriculture and second-hand clothes business.