Charity scandal rocks China's Red Cross

Potentially embezzled funds from the organisation may have paid for keeping a board member's mistress.

A photo posted on the internet in Beijing last week shows 'Guo Meimei Baby', who claims to be the general manager of Red Cross Commerce.
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BEIJING // A pretty young woman, fast cars and lavish lifestyles - the story of "Guo Meimei Baby" as she calls herself has all the elements of a trashy novel or television drama.
Instead of being a harmless fantasy, this tale of alleged corruption, which has gripped China in recent weeks, threatens to derail the work of the country's biggest charity.
The controversy centres on photographs Ms Guo posted of herself online, accompanied by her claim to be a commercial general manager for the Red Cross Society of China (RCSC).
The pictures show the young woman draped across expensive sports cars, enjoying drinks in the business class section of an aeroplane and clasping expensive handbags.
The Chinese branch of the Red Cross has denied it has links to Ms Guo, who in turn later insisted she was not employed by the charity.
However, a board member of an organisation that runs campaigns for the Red Cross in China has resigned amid allegations Ms Guo was his mistress and that the young woman's luxury lifestyle may have been paid for by funds embezzled from the organisation.
Such was the outrage generated by Ms Guo's boastful depiction of her lifestyle, first posted on her microblog last month, that at one stage, more than half a million blog posts were reportedly being written about the issue a day.
It risks though becoming much more than a storm in an online teacup, since state media have reported that up to 90 per cent of people polled have said they may refuse to donate to the RCSC in future.
According to the official Xinhua news agency, total donations to charity by Chinese people increased by almost 30 per cent in 2010, reaching 70 billion yuan (Dh39.8 billion), compared to 54 billion yuan the previous year.
RCSC is China's largest charity and has been involved in high-profile rescue efforts following natural disasters, including earthquakes.
Yet in a country where the voluntary sector is heavily controlled by authorities keen to avoid the development of alternative power structures, the charity has strong ties to the government, which appoints its key officials.
It is part of the International Federation of Red Cross and Red Crescent Societies, although the latest concerns over its use of funds are not linked to its partners in other countries.
China's National Audit Office has recently highlighted a series of failings in how the RCSC uses funds and, in a bid to deal with public outrage, the organisation has said it will appoint outside monitors.
"We will humbly listen to different opinions, strengthen our sense of responsibility ... and strive to enhance the Red Cross Society's credibility in society," the RCSC said in a statement.
In a further attempt to stem its loss of support, the society has promised to make public what money it receives and how funds are spent.
The organisation was also the centre of controversy in April after its Shanghai branch spent 9,859 yuan (Dh5,601) on a restaurant meal for staff.
While insisting the money came from funds provided by the government to run the organisation, an official at the time acknowledged the meal "seriously violated relevant regulations and smeared the image of the Red Cross Society of China". Afterwards, the group promised to reveal publicly how it spent money. Some have seen the latest affair as symptomatic of the wider corruption problems that have tainted government and commerce in China.
"It's not just the government, not just business, not just the high-ranking officials ... irregularities, corruption, all these things are just part of daily life," said Ding Xueliang, a professor and political analyst at Hong Kong University of Science and Technology.
"It's also the case that the so-called social charity organisations are ... very murky, very obscuring, very unaccountable."
The worst thing about the controversy, he said, was that the amount Chinese citizens gave to charities would be "very badly affected".