An investigation by the BBC has revealed that millions of dollars in famine relief aid money, including the money raised from the charity supergroup Band Aid and the Live Aid concert held by Bob Geldof, was "siphoned off" by Ethiopian rebels to buy weapons.  One rebel said that at least US$ 95 million (£63 million) from — Western governments and private charities — was diverted into rebel coffers. 
This was also noted in a declassified Central Intelligence Agency assessment of the famine situation titled Ethiopia: Political and Security Impact of the Drought, in which the report states, "Some funds that insurgent organizations are raising for relief operations, as a result of increased world publicity, are almost certainly being diverted for military purposes." 
During the 1984–1985 famine, Ethiopia was fighting Eritrean and Tigray rebels in those two northern provinces, although Eritrea has since gained its independence. Since the countryside was out of the government's control, aid was brought in from neighboring Sudan. Some aid came in the form of food, while other aid came as cash which would be used by the aid agencies to buy grain from Ethiopian farmers.
Rebels would disguise themselves as traders and merchants to get their hands on the currency. "I was given clothes to make me look like a Muslim merchant. This was a trick for the NGOs," said Gebremedhin Araya, a senior member of the Tigray People's Liberation Front (TPLF).
—Ethiopia: Political and Security Impact of the Drought, a CIA reportOne such aid worker that brought the grain was Max Peberdy, who worked for the charity Christian Aid. Peberdy is seen in a photo with Araya buying grain. 
Araya said that only some of the sacks were filled with grain; the rest were filled with sand.  The transaction was overseen by a member of the Relief Society of Tigray (REST), the humanitarian wing of the TPLF.  The money was then given to TPLF leaders, including chairman Meles Zenawi, who has been Prime Minister of Ethiopia since 1991.  Zenawi has not commented on the allegations.
Peberdy disputes the claims that he was duped, saying, "As far as we were concerned and as far as we were told by REST, the people we were dealing with were merchants."  He added, "It's 25 years since this happened, and in the 25 years it's the first time anybody has claimed such a thing."
However, an exiled TPLF commander who lives in the Netherlands, Aregawi Berhe, is backing Araya's story.  He said the group got their hands on over US$100 million (£66 million) of which 95% went to buy weapons and build up a hardliner Marxist party inside the rebel movement.  The remaining five percent would go to famine victims.  Berhe told the BBC that the group would put on a "drama" to get the money.  Berhe said, "The aid workers were fooled."
In response to the allegations, the charity Christian Aid issued a statement saying, "There are allegations in the story which are against all of Christian Aid's principles and our initial investigations do not correspond to the BBC's version of events."
—Gebremedhin Araya, senior TPLF memberNick Guttmann, who is director of emergency relief operations for the group, says the "story has to be put into context".  "We were working in a major conflict, there was a massive famine and people on all sides were suffering," Guttmann said, adding, "Both the rebels and the government were using innocent civilians to further their own political ends." 
Bob Geldof, the Irish rock star who help organized Live Aid, said, "We are talking about a disgruntled, exiled general.  The essence of the report also is not just about Live Aid.  It's that all monies going into Tigray — that would be Oxfam, Save the Children, UNICEF and Christian Aid — somehow, we were all duped and gulled.  And that's simply not the case.  It just didn't happen."

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BBC: Ethiopian famine aid 'siphoned off' to buy weapons according to rebels, report