Congress unimpressed by Yahoo apology for China dissident e-mail testimony

Congress has lambasted Yahoo again over its actions relating to the jailing of two Chinese dissidents. The House Foreign Affairs Committee held the hearing today so that Yahoo officials could explain why they previously withheld information from the government over its role in human rights violations in China. Yahoo's executive VP and general counsel Michael Callahan called Yahoo's foibles a "misunderstanding," but the committee was having none of it. "Yahoo claims that this is just one big misunderstanding. Let me be clear—this was no misunderstanding. This was inexcusably negligent behavior at best, and deliberately deceptive behavior at worst," said panel chairman Tom Lantos (D-CA).

The dispute goes back to 2002 and 2004, when Chinese citizens Wang Xiaoning and Shi Tao were imprisoned by the Chinese government for "illegally providing state secrets to foreign entities." What they had done was use Yahoo's message boards to publish information about China's persecution of pro-democracy activists (which they both were). China demanded that Yahoo hand over the IP information and e-mail records of both parties as part of Chinese law, and Yahoo complied in both cases.

After being sued by the World Organization for Human Rights USA, Yahoo's actions came to the attention of the US government, which decided to find out what all the fuss was about. Yahoo repeatedly stated that it had merely followed Chinese law by turning over the records and that it could not pick and choose which local laws to follow. The company also claimed to Congress that it didn't know what the nature of the investigation was against Shi when it handed over his information to Chinese authorities.

But Yahoo was embarrassed by human rights group Dui Hua soon thereafter, which published a translation of the Chinese government's request for Shi's information that clearly stated the nature of the investigation. This infuriated members of Congress, as it appeared to show that Yahoo had lied about what it knew. Yahoo insists that wasn't the case, though. Callahan testified that it "did not occur" to him to bring the "new" information to the committee and apologized for it, while maintaining his stance that Yahoo had no idea that the investigation was related to political activities.

Representative Chris Smith (R-NJ) appeared skeptical that Yahoo would make such a casual oversight when dealing with Congress previously. "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? This is astonishing," he said. Lantos added that Yahoo had not conducted any sort of internal investigation on the incident and that no one had been disciplined for it.

There are two issues at stake here: Yahoo's actions in complying with the Chinese government's request for data and Yahoo's previous testimony before Congress. There is no question that Yahoo should have made all possible information available to Congress when asked, and the fact that it didn't appears to be an indication of poor executive oversight or that the company had something to hide. But not everyone agrees on what should happen to Yahoo as a result of its actions. China demands that any company that wants to conduct business in the country must comply with Chinese law, and companies like Yahoo, Microsoft, and Google have willingly gone along in order to gain a foothold in the lucrative market.

Compliance with Chinese law means not only participating in China's widespread Internet censorship, but also dealing with the authorities when they come a-knockin'. With no laws in the US explicitly barring the companies from handing over the information (yet), today's testimony shows the challenges they face in trying to conduct business in a one-party state while facing pressure from advocates of human rights at home.

Rep. Smith, has proposed a bill that would make it illegal for US companies to cooperate with foreign governments that plan to use the information to repress democracy, in addition to allowing affected parties to sue the companies in the US. On that note, Callahan said that Yahoo is "absolutely" interested in settling the legal actions brought by the families of Wang Xiaoning and Shi Tao. "We absolutely will consider opportunities to do that," he said. "We've already met with counsel."