Via ABC News:

Even Elmo can’t escape charges of corruption in Pakistan.

The United States has cancelled funding for a $20 million project that brought Sesame Street to Pakistan after allegations that funds were being misused by a Pakistani puppet theatre.

The project was a co-production between U.S.-based Sesame Workshop, and Rafi Peer Puppet Workshop, based in Lahore. Newspapers reported today that Rafi Peer was allegedly using the money given by the U.S. to pay off old debts, and rewarded lucrative contracts to sources. Other allegations include building a fancy residential complex featuring swimming pools with the U.S. funds.

In a statement to the Associated Press, a spokesperson for Rafi Peer denied the allegations, saying the U.S. ended its participation due to a lack of funds. The U.S. embassy declined to comment on the reasons for cutting the funds.

“Rafi Peer is proud of its association with the project and of the quality of children’s educational television programming created within Pakistan as a result,” the group said in an emailed statement.

The program, called Sim Sim Hamara, or “Our Sim Sim,” launched to much fanfare in December, with plans to run for a full three seasons. It featured Elmo and a cast of local Pakistani characters, including a young girl in a lead role. Other characters included Munna, a 5-year old boy who played the table drums, Baily, a donkey who loved to sing, and Haseen O Jameel, a crocodile living in a well.

It also features set complete with houses, a school, and a restaurant that serves Pakistani cuisine.

In a country where one third of all young children do not attend school, the show was supposed to raise literacy, education, and tolerance. Now, its future is in jeopardy. Rafi Peer says it is looking for alternate sources of funding, for now leaving the colorful cast of characters with nowhere to play and no songs to sing.