Yahoo Sued Over Support Fund for Dissidents

In 2007, U.S. tech company Yahoo set up a $17 million fund to support persecuted Chinese dissidents and their families following fierce congressional criticism of its surrender of user data to Chinese authorities, which aided around 60 prosecutions. Two of the most prominent cases involved democracy advocate Wang Xiaoning and journalist Shi Tao, who remained in prison until 2012 and 2013, respectively. Each of their families received $3.2 million from under the 2007 settlement, while the larger fund was placed under the control of celebrated activist and 19-year labor camp inmate , who died last year.

At The New York Times, Andrew Jacobs reports a newly filed lawsuit over Wu’s alleged mismanagement of the fund, and Yahoo’s failure to prevent it.

A group of Chinese political activists filed a lawsuit in federal court against Yahoo on Tuesday, saying the company failed to properly oversee a $17 million fund it created a decade ago to help Chinese writers, democracy advocates and human rights lawyers persecuted for standing up to the country’s government.

The lawsuit, filed in the United States District Court in Washington, accuses Yahoo senior executives of turning a blind eye as the fund’s manager, Harry Wu, illegally spent millions of dollars on high-end real estate, inflated staff salaries and a museum documenting the history of forced labor camps in China.

According to the lawsuit, Mr. Wu, a veteran Chinese dissident who died last April, spent less than 4 percent of the money on humanitarian aid.

The lawsuit demands that Yahoo replenish the trust, which has been significantly depleted.

[…] “In standing idly by while it knew the money was being squandered, Yahoo abandoned its responsibilities to the fund’s beneficiaries, who have risked their lives speaking out for political reform in China,” said Times Wang, a lawyer with the firm. [Source]

The activists—Hu Depu, , Li Dawei, Wang Jinbo, Ouyang Yi, Xu Yonghai, and Liu Fenggang—previously made their case soon after Wu’s death in a statement published at China Change:

[…] Yahoo was the first Western company to provide an email service in China. From 2000 to 2004, many Chinese dissidents chose to use Yahoo email out of information security reasons, because they believed that an American company, not controlled by the Chinese government, would have high ethical standards and not provide personal information and emails to the Chinese government. But Yahoo did exactly that, providing dissidents’ information to Chinese police, leading to their arrests and prison sentences, where emails were used as criminal evidence. […]

The seven of us were all Yahoo email users from 2000 to 2003, and the court decisions of six of us quoted emails as “criminal” evidence. In total, we served 38 years and all of us suffered torture and degrading treatment (see biographies at the end).

[…] The Yahoo Human Rights Fund was intended for the entire community of Chinese political prisoners. It is a community that has long suffered humanitarian disasters caused by cruel persecution at the hands of the Chinese Communist Party, simply for their ideals and work toward helping build a free China. They suffer enormously and are in great need of financial relief, given that their activism often costs them their only source of income. Such relief is hard to come by from inside China. That the $17 million Yahoo Human Rights Fund (it would be over $18 million if including investment revenue from interest and dividends) has been abused, misused, and even embezzled is not only shocking, but inflicts direct damage on the Chinese dissident community. [Source]

The NYT’ Jacobs covered this and other aspects of Wu’s “tarnished legacy” in August last year, noting a 2011 lawsuit over Wu’s attempts to claim part of the separate payments to families, and accusations of domestic abuse and sexual assault. Jacobs quoted Morton Sklar, a lawyer for the families in 2007, on both Yahoo and Wu’s attitudes towards that year’s settlements:

Mr. Sklar said Yahoo had hoped its fund would help repair its public image, but also serve as a reservoir of money for settling future claims from other Chinese dissidents — an arrangement that critics said was legally and ethically questionable. “They saw the fund as their get-out-of-jail-free card,” Mr. Sklar said. “But Harry Wu saw the money as his own personal fund, to benefit his own activities.” [Source]

An obituary in The Economist in May had been more charitable, focusing on Wu’s activism and “the overwhelming hunger the laogai had left in him: hunger to play with fire, taunt the system, dig deep.” Later that month, Melissa Chan and Isaac Stone Fish described his “complicated and contradictory legacy” at Foreign Policy:

That [2011] lawsuit, and the criminal accusations by other parties that followed, tarnished Wu’s legacy as a tireless advocate who revealed the atrocities inside China’s massive system of labor reform camps to the world. It also alienated many in the human rights community. Chinese activist Shi Qing, who served a seven-year prison sentence for his activities in the 1989 pro-democracy protests in China, first heard about Wu in the late 1990s. Shi and other activists “really admired him for his work exposing the horrors of the laogai to the outside world,” he told FP. “But the Harry Wu of the later years, I pity, grieve for, and even loathe.” [Source]