To manage the fund, Yahoo partnered with Harry Wu—a noted Chinese dissident turned powerful anti-China activist—and his nonprofit, the Laogai Research Foundation. But Wu grossly mismanaged YHRF, spending less than $650,000—or 4%—of the fund’s total $17.3 million on support for online dissidents, according to the current lawsuit. One year, YHRF allegedly spent $0 on what was meant to be its primary purpose. (Some defendants contest these calculations.)
This is the best summary I could come up with:
While the lawsuit is largely focused on what happened in the past, the plaintiffs are also concerned about the future of people like them; they’re asking the court to force Yahoo to set up a new humanitarian fund with the same general purpose as YHRF, but made explicit and ironclad: to provide financial support specifically for Chinese dissidents imprisoned for online speech.
And the publicly known violations grossly underrepresent the true situation, according to Yaqiu Wang, Freedom House’s research director for China, Hong Kong, and Taiwan, given the increasing opacity of the country’s court system and the high levels of self-censorship there.
In July, for instance, a judge in California ruled that a long-running lawsuit against Cisco can move forward and determine the company’s responsibility in building China’s internet surveillance apparatus—work that allegedly led to the arrest, detention, and torture of the plaintiffs and their family members.
At a congressional hearing in 2007, Representative Tom Lantos, chairman of the House Foreign Affairs Committee, memorably scolded Yahoo’s founder, Jerry Yang (then serving as interim CEO), along with the company’s general counsel, Michael Callahan: “While financially and technologically you are giants, morally you are pygmies.”
To resolve the mounting crisis and to settle a highly publicized lawsuit brought by Shi Tao’s mother and Wang Xiaoning’s wife, the company promised to conduct human rights impact assessments before entering international markets and to fund internet freedom fellowships at Georgetown and Stanford Universities, among other actions.
They detailed the “gross irregularities” they had experienced when they requested money from YHRF and said the fund’s cash “has been abused, misused, and even embezzled.” That fact, they wrote, “is not only shocking, but inflicts direct damage on the Chinese dissident community.” This led to separate investigations by Foreign Policy and the New York Times, which ultimately brought more attention to the failures of Wu and of Yahoo to make good on their promises.
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