Saturday, September 03, 2011

China acts on anger over charity scandals

This photo posted on the Internet in Beijing on July 5 shows 'Guo Meimei Baby', as she calls herself, next to one of her many cars. She is the general manager of the Red Cross' commercial arm, and netizens say she is the girlfriend of Mr Wang Jun, who organises fund-raising drives for the Red Cross. -- PHOTO: AGENCE FRANCE-PRESSE
BEIJING: When tennis star Li Na wanted to donate half a million yuan (S$95,000) of her Roland Garros championship prize money last month, she decided not to do it through the Red Cross Society.
By Grace Ng, China Correspondent

After seeing China's largest charity recently embroiled in controversy over its management and alleged abuse of donations, she chose to donate the money directly to a home for the elderly in her home town of Wuhan.

'I really hoped I would be able to help them, so in the end I decided to handle everything myself,' she told the People's Daily, when explaining why she did not let a charity manage her donation.



'I really hoped I would be able to help them, so in the end I decided to handle everything myself.'

Tennis star Li Na, explaining why she did not let a charity manage her donation

Coming after a spate of scandals at three major charities in the past two months, Ms Li's move has dealt a fresh blow to the credibility of beleaguered state-run charity groups. It has also added to growing pressure on the government to speed up the introduction of a law to make them more accountable.

A charity law - China's first - was first mooted in 2005, but suffered many delays. The latest setback came late last year, when China's top legislature postponed a review of the draft law until an unspecified time this year, citing a 'lack of practical experience of charity work and difficulties in balancing the interests of different groups'.

But the authorities now seem to be responding to the public outrage sparked by the latest scandals.

Last week, the government announced a proposed law requiring charity and government organisations to make public a detailed breakdown of how they source and use donation funds - a sign that the charity law is back on the top leaders' priority list. This rule may become part of the Charity Act when it is passed.

Last Saturday, the Ministry of Civil Affairs also announced that charity organisations would be put under its direct supervision. In the past, they were administered by different government bodies, causing confusion.

Ministry spokesman Xu Jianzhong said a series of laws would be issued to manage China's charities 'in the near future', to restore the public's trust in the sector after the Red Cross scandal broke.

In June, netizens raised an outcry after seeing photographs posted online by Ms Guo Mei Mei, 20, general manager of the Red Cross' commercial arm, of her Maserati luxury car and Hermes designer bags. They believe she is the girlfriend of Mr Wang Jun, who organises fund-raising drives for the Red Cross.

The National Audit Office has since issued a report listing five financial problems it uncovered at the Red Cross.

This month, the China-Africa Hope Project, which raises money to build schools in Africa, came under fire when a local newspaper found that it was a private enterprise and was deducting 10 per cent of donations for management fees.

The charity is headed by 24-year-old Lu Xingyu, the daughter of a prominent businessman, Mr Lu Junqing.

And last week, the well-established China Charity Federation was accused of selling invoices to get cash.

The cases, seen as examples of how donations are being abused, have led to many people being less willing to give to state-controlled charities. Donations dropped nearly 90 per cent to 840 million yuan in the June to August period, compared to the earlier three months.

Prominent scholars, such as Chinese Academy of Social Sciences' Professor Yu Jianrong, are among tens of thousands of netizens who say they will boycott charities like the Red Cross if reforms are not made soon. 'If it does not initiate reform to build an open system, it will lose all credibility with the people,' Prof Yu said on his Chinese microblog.

State media have also weighed in, with editorials urging new legislation for the charity system.

'With the state dominating its affairs, the charity industry in China has already become a monopoly industry, which... is becoming increasingly rigid and resistant to reform,' said the China Daily.

But analysts noted that there are still issues to be ironed out.

Tsinghua University's Professor Deng Guosheng said: 'The level of consensus on issues (hindering the charity law from being passed) is higher than before, but there are still quite a lot of questions, such as how to reach a common understanding on basic principles like public welfare and charity.'

Additional reporting by Lina Miao