An investigation into accusations of financial irregularities by the China Youth Development Foundation, which oversees charity Project Hope, has been launched by the Central Disciplinary Inspection Commission and Communist Youth League. Officials from the disciplinary commission have approached Liu Yang, the former foundation accountant who has made accusations about Project Hope's investments. The committee has collected documents from her, according to a source. The Project Hope accusations have caused alarm among members of the Standing Committee of the Politburo, the highest decision-making body. Ms Liu said a senior government official had told her it was 'a major economic case with very strong political implications'. 'It affects the reputation of our party and country,' she quoted the official as saying. The upcoming investigation into the accounts and financial management of the foundation is expected to spread out to the provincial level of the foundation. According to allegations, a few local units of the foundation lent money from donations to the foundation headquarters in Beijing in the hope of earning interest. The foundation lost a lot of money through risky investments, according to its 1997 audit report and former staff members. Such lending and borrowing activities are banned by government regulations. Project Hope has denied any wrongdoing. The charity's goal is to safeguard the educational rights of children in poor areas. Using Chinese and foreign materials it promotes primary education in poverty-stricken areas. A Guangzhou-based newspaper has also started an investigation into the continuing street sales of post cards and greeting cards in the name of Project Hope. The sales are made by schoolchildren. The postcards cost 15 yuan (HK$14) and the children receive 25 per cent of that. The children are hired by a local company, Yangtse River Investment, according to the News Express. The company signed a contract with Guangdong's Project Hope office and Guangdong Youth Development Foundation to undertake 'semi-commercial' activities in the name of Project Hope, according to the Guangdong Youth Development Foundation. Tan Xiaolian, who is in charge of the foundation, said the activities were 'absolutely legal and in accordance with government regulations'. As well as students receiving 25 per cent, a middle man at Yangtse River Investment took six yuan of the net profit and the rest went to Project Hope. Li Zhiping, a lawyer at the firm Lingnan Law and an associate professor at Zhongshan University, Guangdong, said he believed Project Hope, as a charity programme, should not engage in profit-making ventures. He said it should disclose all details about the cost of the postcards, their distribution and the money that went to the students. According to government regulations, charity foundations are not allowed to engage in any profit-driven activities, operate enterprises or invest directly.