Yahoo Told to Aid Imprisoned Chinese Users’ Families to Earn Congress’ Respect

Family members of imprisoned users attended the hearing, and lawmakers referred to them repeatedly. Gao Qinsheng, the mother of journalist Shi Tao, whose imprisonment first sparked congressional ire at Yahoo, sat directly behind Yang. Acknowledged by Chairman Tom Lantos, D-Calif., she kept her head lowered and face expressionless.

The chain of events that led to Yahoo turning over Shi’s information came under congressional review this summer, after documents surfaced showing that the Chinese order to Yahoo was based on a “state secrets” charge, a regular cover for persecuting dissidents. Callahan had told the committee in 2006 that Yahoo had no information on the nature of the Chinese investigation, but the company said last week that Yahoo got a bad translation of the order before that hearing, and Callahan apologized for not telling the committee for several months (WID Nov 5 p5).

Lantos called “spineless and irresponsible” Yahoo’s behavior in the Shi case. Callahan hasn’t been accused of perjury, Lantos said, but the committee’s investigation found that other Yahoo and Yahoo China lawyers knew about the state-secrets charge, a “trick phrase” for persecuting free speech, before the first hearing. Yahoo didn’t bother to ensure that the Chinese order was translated properly, Lantos said. “This was inexcusably negligent behavior at best, and deliberately deceptive behavior at worst,” he said, repeating the sentence.

“How could a dozen lawyers prepare another lawyer to testify before Congress, without anyone thinking to look at the document that had caused the hearing to be called?” said Rep. Chris Smith, R-N.J. He wanted to know if Yahoo leaders had made a “fundamental decision not to look too closely into what their employees in China were doing.” Smith is sponsor of the committee-approved Global Online Freedom Act, which would regulate U.S. Internet companies’ dealings with repressive regimes, including review of foreign requests to turn over user information (WID Oct 24 p7). “We cannot entrust the human rights of vulnerable people living under repressive regimes” to the Internet industry’s nascent code of conduct, Smith said. Yahoo said the code should be finished early next year.

Rep. Robert Wexler, D-Fla., provided Yang and Callahan a brief respite by blaming Congress for giving China most-favored-nation status and supporting its World Trade Organization bid. He asked for “self-reflection” from pro-trade colleagues, since Congress is sending billions of dollars in aid to Pakistan and Saudi Arabia, which are hostile to free speech. Rep. David Wu, D-Wash., rhetorically asked trade advocates whether the talk of promoting freedom through doing business in China was just “public relations fluff.”

Setting the Record Straight -- and Splitting Blame

Callahan emphasized that there wasn’t much Yahoo China could have done to prevent Shi’s information from going to authorities, even as he apologized repeatedly for poor coordination with Yahoo China and his own team. “There remains a basic disagreement” between Yahoo and the committee about what the charge “state secrets” means, he said. “As I understand it, the law is vague and broad, and it covers areas such as military information, the economy, and science and technology.” Yahoo China’s failure to comply could have gotten its employees arrested, Callahan said.

Callahan several times countered lawmakers’ claims that he provided “false information.” The committee’s lead investigator told Yahoo “privately” that Callahan appeared to have testified “truthfully” in 2006 with the information Callahan had at the time, he said. Callahan learned of the nature of the Shi arrest after Yahoo got a complaint from the Hong Kong Privacy Commissioner for violation of local law. “Yahoo made no effort to conceal” legal documents by the company admitting that it handed over Shi’s information on a state secrets charge, which have been available online in English in the Commissioner’s report since March.

Yang repeatedly alluded to trends in business and government to support business in China, distancing Yahoo from lone culpability. Shortly after Yahoo’s 1995 founding, “the U.S. government, including Congress, made the decision to normalize trade relations with China” and encouraged tech companies to “engage” with China. Recognizing problems in dealings with repressive regimes, Yahoo started a “cross- functional team” of senior employees to coordinate privacy and free speech issues, which also “conducted a formal human rights assessment of the impact of new products and market entry plans.” Yahoo participates with other companies in human rights discussions through the Business for Social Responsibility nonprofit and the Center for Democracy and Technology, Yang said.

Elusive Answers on Aid to Families and Future Markets

Tensions ran high when Yahoo officials gave meandering answers in response to specific questions. Asked by Lantos whether Yahoo “collaborated with the Chinese police apparatus,” Yang said, “I understand where you're coming from.” Lantos roared back that he wanted a yes or no. Yahoo didn’t have “sufficient information to determine that this was a political case,” Yang said. Yahoo supports the “goals” of Smith’s bill, but isn’t sure how to “operationalize the details” for Yahoo, Yang said. Callahan said his team was reviewing the Smith bill and will “engage further” with the committee.

Asked whether Yahoo offered to help Shi’s family, Callahan said not “directly.” Rep. Brad Sherman, D-Calif., pressed the question of Yahoo’s provision of “humanitarian needs” to families. Yahoo has offered to meet with families, Yang said. “Why would they want to meet with you, sir?” Sherman bellowed. “We will absolutely study” providing financial help, Yang said. Callahan suggested that Yahoo is open to settlement with users’ families who have sued the company in federal court in the Northern District of California. Yahoo is fighting the claims. “Settle it, I would say generously in their favor,” and Congress will appreciate that, Smith said.

Ranking Member Ileana Ros-Lehtinen, R-Fla., asked what Yahoo is doing to prevent a repetition of the Shi case as it negotiates to enter Vietnam. Companies are considering legal frameworks that would keep data out of reach of authorities, Callahan said, presumably by storing it outside certain countries. He said he wasn’t aware of any specific restrictions that Vietnam is demanding from Yahoo. “This is a good opportunity to put your beliefs in writing,” she replied, asking the company to report to Congress on preventative measures for user data abroad.

‘Red Flags’ Everywhere on Shi Order

Lawmakers pulled apart Callahan’s explanation of his belated knowledge about the nature of Shi’s investigation. “There were red flags all over the place,” starting with the origin of the order, the Beijing State Security Bureau, Smith said. Yahoo has “plausible deniability” for Yahoo China’s actions since it’s controlled by Alibaba, Smith said, comparing Yahoo to IBM in its German subsidiary’s aid to the Nazis in uncovering Jews: “They just honored a ‘lawful request.'”

China’s State Security Bureau is “the equivalent of the KGB,” and getting an order from its Beijing office is akin to a U.S. citizen getting called to the IRS, or a company getting an inquiry from the SEC, said Rep. David Wu, D-Wash. Any company would perform “very strong due diligence” in responding to such an order, he said, asking for Yahoo responses in writing about the company’s standards of due diligence. Lantos told officials to file written answers to several other questions from lawmakers, suggesting the committee will follow up with Yahoo.

Yahoo isn’t sure how many users have been imprisoned as a result of information the company has supplied, Callahan answered Rep. Joe Wilson, R-S.C. Such documents are state secrets under Chinese law, he said. Wexler asked his colleagues to understand that Yahoo and others are “engaging in a completely unfamiliar environment.”