Twenty-year-old “Guo Meimei Baby” has thrown the Red Cross Society of China into a credibility crisis.
An organization bearing the name “China Red Cross Commerce Association” (CRCCA) was forced to halt all activities on July 1, when a financial audit was initiated after the young woman, claiming to be its general manager, flaunted her luxurious lifestyle on her microblog.
Meimei’s Sina microblog went viral after she posted pictures of herself leaning on a white Maserati, saying she also owned a Lamborghini, a luxury villa, and a dozen Hermes handbags.
The ensuing Internet storm is threatening to suck China’s Red Cross into a black hole.
Meimei’s blog exploded all over the Internet. Many Chinese bloggers confirmed her identity as general manager of CRCCA had been verified by Sina, the Internet provider hosting the microblog. People suspected that her fortune is related to a misuse of donation money by the Red Cross Society.
The Red Cross Society of China responded twice on its website claiming that there is no CRCCA and no general manger by the name Guo Meimei, and on June 26 Meimei apologized on her microblog, saying she fabricated her title. But netizens were not convinced. Why did she steal the Red Cross’s name instead of some other organization’s, some wanted to know.
On June 29, the secretary general of the Red Cross Society, Wang Rupeng, admitted to Beijing News that CRCCA did exist and was established with the consent of the Red Cross Society of China.
Wang said the CRCCA’s mission is to organize public relations and fundraising events in the commercial sector, as well as establish corporate level Red Cross associations. Additionally, the CRCCA maintains its own accounting of donations, and the link between Red Cross Society of China and CRCCA is strictly one of operational supervision; there is no connection in terms of administration, human resources or accounting, Wang said.
China Times reported that after extensive investigations by many netizens, Guo Meimei was thought to have links to a for-profit company, China Red Cross Bo’ai Asset Management Ltd. Corp., which organizes charity drives for the Red Cross Society of China.
Bo’ai once announced plans to open 30,000 Red Cross Bo’ai community service centers by 2015. The 3 billion yuan project is administered by the Red Cross Society of China and contracted out to CRCCA.
Some civil administration system insiders said that Meimei is very likely associated with the Bo’ai community service center project.
On July 3, Weng Tao, the legal representative of Bo’ai said that Meimei is the girlfriend of their former member of the board, Wang Jun, and that he gave the Maserati and the Hermes handbags to Meimei.
Wang resigned from his position after the scandal, Weng said.
Weng also stated that Meimei appointed the title of general manager of CRCCA to herself. She thought the Red Cross was a famous name after she heard Wang talk about it.
Weng’s remarks were widely quoted by media, thereby successfully disassociating Meimei from any connection to the Red Cross.
But that was not the end of it. On July 5, Meimei denied on her microblog that Wang was her boyfriend.
A mere two hours later, Weng replied on his blog: “I don’t know Guo Meimei. But Wang Jun told me that Guo Meimei is his girlfriend.”
Corruption and State Control
Whether or not Meimei’s “work” has any direct relationship to the Red Cross Society of China remains a mystery. But Meimei’s boasting about her wealth obtained through a connection to the Red Cross has once again brought out people’s mistrust of the Chinese Red Cross and Chinese charities’ handling of donation funds, as well as their anger toward corrupt officials.
Because all large charities in China are state controlled and operated, the public has no way to monitor them.
Chinese media started examining the differences between the Chinese and the international version of the Red Cross. Some media revealed that every level of the Red Cross Society of China is administered by the corresponding Chinese Communist Party (CCP) committee. Although it claims to be a nonprofit organization, it is in reality a governmental organization.
The Red Cross Society of China has been plagued by numerous scandals, including collecting up to 15 percent management fees from donation money, charging referral fees and kickbacks.
Last month China’s National Audit Office published audit results saying there were nearly 2.2 million yuan unaccounted for on Red Cross books. The year 2010 alone had 1.94 million yuan donations unaccounted for. Another 4.2 million yuan was improperly used.
Some netizens did their own research into the handling of earthquake disaster relief donations for Wenchuan and Yushu. In general they found a lack of transparency regarding the donation money. They also found that the Red Cross Society of China often pledged funds for the purchase of emergency goods to vendors that had personal relationships with some Red Cross official.
According to the 2010 donation audit results for the 2008 Yushu earthquake by the National Audit Office, as of July 9, a total of 10.66 billion yuan were donated, but only 814 million yuan were used for Yushu earthquake emergency relief. The remaining 9.84 billion yuan were swallowed up by the Qinghai provincial government.
Chinese media have also reported that the Red Cross Society of China and a construction company are in a joint venture to build senior apartments in Beijing. Some of the apartments have already sold at astronomical prices of 14,000 yuan per square meter.
Netizens question why the Red Cross Society is involved in a real estate project, who could afford such high prices, and how the profits were distributed.
China Central TV editor, Cheng Jian, recently wrote on his microblog that he once approached the Red Cross Society of China for help in raising funds to buy books for needy children in western China. The Red Cross wanted 15 percent of the funds raised as a service fee, or else they would not help, Cheng said.
Han Han, China’s most popular blogger said that Chinese charities are unperturbed by scandals because they are state-owned organizations. No matter how hot it gets, they are not afraid; they know their last resort is always to kill public opinion.
On July 4, the secretary-general of the Red Cross Society of China, Wang Rupeng, told Chinese media that they have plans to launch an online tracking system to provide more transparency regarding the handling of donations. The system should be ready by the end of July.
Yet, despite officials’ efforts to put out the fire, the general public remains unconvinced and increasingly disillusioned and angry.
Seven thousand people responded to a Sina poll that asked, “Would you donate to the Red Cross Society of China after the Guo Meimei scandal?”
Ninety percent said, “No.”