China warns of harsh punishment for quake aid graft

BEIJING (Reuters) - China on Thursday warned that it would come down hard on anyone who stole, misappropriated or misused the billions of yuan in aid that has flowed to the southwest of the country following a deadly earthquake.

Last week's 7.9 magnitude quake, which centered on populous but poor Sichuan province, has killed at least 50,000 people, and prompted an outpouring of generosity at home and abroad -- some 21.4 billion yuan ($3.08 billion) in donations at last count.

But China has a serious problem with corruption, so serious that the Communist Party has warned it threatens its rule. Barely a day goes by without some lurid new story of graft appearing in the normally staid state-run media.

To ensure this will not be a issue for quake relief efforts, the Ministry of Finance said it would work with several other departments, including the Communist Party's Central Committee for Discipline Inspection, to nip the problem in the bud.

"Severely punish as soon as it's discovered serious illegal behavior like diverting, withholding, misappropriating, fraudulently applying for or waste of disaster aid and corruption," the ministry said in a statement on its website (www.mof.gov.cn).

"Keep up the battle and do not fear exhaustion, strengthen supervision over the use of earthquake disaster relief funds to ensure relief work progresses forcefully, properly and effectively," it added.

The government has already warned people wanting to donate to earthquake victims to guard against high-tech scams after a flurry of emotive text messages hit mobile telephones seeking assistance, asking only that funds be deposited in private accounts.

($1=6.959 Yuan)

(Reporting by Ben Blanchard; Editing by Jeremy Laurence and Alex Richardson)