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An online scandal underscores Chinese distrust of state charities



BEIJING » The photographs of the alluring young woman landed like hand grenades in the world of Chinese philanthropy.

One showed her wearing sunglasses and leaning on the hood of a white Maserati. Another revealed her closetful of Hermes handbags. Yet a third showed her sipping a drink in a business-class cabin on an airline flight.

None of it was outrageous by the standards of China's nouveau riche. What ignited a firestorm was the fact that the woman, Guo Meimei, 20, appeared to hold a senior position at the Red Cross Society of China, a government organization that is the country's largest charity. Under the name "Guo Meimei Baby," she had boasted on her microblog that her title was "commercial general manager" at the Red Cross, a claim that had apparently been verified by Sina, the Internet company hosting the microblog.

At the same time, she posted photos and entries detailing her jet-set life, writing of the orange Lamborghini she drove in the south (her "little bull") and the white Maserati she had in Beijing (her "little horse").

Since an Internet user pointed out the scandalous posts in late June, Guo and the Red Cross have been the most talked-about subjects on the Chinese Internet. The Red Cross of China, which has no relationship to its international namesake, has denied any ties to Guo, whom some Internet users speculate got her title because she is the mistress or relative of a top Red Cross official. The police are investigating her. Some Chinese news reports said Monday that Guo was the girlfriend of Wang Jun, a much older man who organizes charity drives for the Red Cross.

Some people fear the scandal and the accompanying increase in suspicions of corruption in charities could deal a major blow to philanthropy here, even as some officials increasingly rely on nonprofit groups to deal with growing social needs like health care and education.

‘'People have had doubts for a very long time," said Jia Xijin, director of the Nongovernmental Organization Research Center at Tsinghua University in Beijing. "The issue is public trust or accountability of charities, the accountability of philanthropy organizations in China."

Philanthropy is only beginning to develop here. As more and more Chinese enter the middle and upper classes — Forbes this year listed 115 billionaires in China, up from 64 last year — some are looking to do good through charity donations. The Sichuan earthquake in 2008 led to a rise in civic consciousness, and the next year the government recorded $8 billion in donations.

Flashy philanthropists have emerged, like recycling magnate Chen Guangbiao. Still, there have been questions raised about whether wealthy Chinese are too stingy, a topic that came up when Warren Buffett and Bill Gates flew to Beijing last year to encourage philanthropy. Some say many Chinese are reluctant to donate their wealth for fear that the money will end up in a corrupt organization.

That fear is a mostly rooted in the government's insistence on controlling charity work and promoting its own vast organizations, while setting limits on the activities of private foundations. So large state-run charities, especially the Red Cross, are suspect in the eyes of many Chinese.

Those groups have wide latitude in soliciting donations from the public, and are designated by the government to be focal points of charity collection during times of disaster, when people are looking for any outlet to help the needy. Official figures published in February 2009 showed that the Red Cross collected more than $735 million in donations after the Sichuan earthquake, even though some prominent people, like real estate tycoon Wang Shi, advised against giving to the group.

Many Chinese do not trust the Red Cross because of its special legal status — it is one of 25 large organizations that register with an office that answers to both the Communist Party and the State Council, China's cabinet. Virtually all other nonprofit groups in the country are supposed to register with the Ministry of Civil Affairs, which counts 420,000 such entities on its rolls.

‘'They get public financial support, their staff is paid by the government and their function is to serve as an agency of the government," Jia said.

The group also has affiliated organizations that are not legally registered at all — one example that has emerged during the Guo Meimei scandal is a shadowy group called the Red Cross of the Commercial Sector, about which there is little information.

In general, only the Red Cross and a smaller government organization, the Chinese Charity Federation, can ask for public donations, Jia said. During times of crisis, like the Sichuan and Yushu earthquakes, the government might allow other groups to raise money, but officials always put the Red Cross on the frontlines of charity drives.

Feng Lun, a real estate mogul who started a charitable foundation under his company, the Vantone Group, said in an interview that the state-run organizations "don't have transparency and aren't efficient enough," largely because they lack managers with professional experience running charities.

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