The settlement comes on the heels of a Yahoo apology to the members of the House Committee on Foreign Affairs. Executive Vice

President Michael Callahan blamed his faulty testimony that Yahoo didn’t know why information was requested by the Chinese government on an inaccurate translation.

Yahoo has aided the government in two separate cases by providing email records to Chinese authorities. The records were used in court to convict two dissident journalists.

The lawsuit held Yahoo responsible for their wrongful jailing. Shi Tao is the more famous of the political prisoners, receiving 10 years in jail for divulging "state secrets" abroad. Wang Xiaoning was jailed in 2002 simply for writing and distributing political writings.  

Yahoo CEO Jerry Yang and general counsel Michael Callahan have been requested to attend a House Committee on Foreign Affairs meeting over Yahoo’s role in the incarceration of a journalist in China.

Callahan will have to tread softly before Congressman Tom Lantos, who chairs the Committee on Foreign Affairs. He and fellow Committee members are none too pleased with the idea that Callahan gave incorrect information to them in February 2006 regarding Yahoo’s role in the chain of events leading to journalist Shi Tao’s ten-year jail sentence.

The Chinese journalist had been found guilty of passing state secrets; in this case, he passed a memo out of the country that had come down from the central government, concerning what reporters could and could not write regarding the Tiananmen Square massacre in 1989, as the anniversary of that tragedy approached.

Callahan’s 2006 testimony claimed Yahoo had no knowledge of why Shi was being investigated; Yahoo had complied with a law enforcement request for details about a Yahoo Mail account. However, evidence emerged about the case in July 2007, documenting Yahoo being informed of the investigation in April 2004.

Congressman Chris Smith, also on the Foreign Affairs committee, blasted Yahoo over its previous testimony before the Committee:

“Last year, in sworn testimony before my subcommittee, a Yahoo! official testified that the company knew nothing ‘about the nature of the investigation’ into Shi Tao, a pro-democracy activist who is now serving ten years on trumped up charges. We have now learned there is much more to the story than Yahoo let on, and a Chinese government document that Yahoo had in their possession at the time of the hearing left little doubt of the government’s intentions,” said Congressman Chris Smith (R-NJ). “U.S. companies must hold the line and not work hand in glove with the secret police.”

As we noted in July regarding Callahan’s testimony, we think Yahoo will try to demonstrate that its Hong Kong business unit received the Notice of Evidence Collection, and its damning statement, but did not share the Notice with Yahoo China. Callahan’s previous testimony showed him being very careful in citing a separation between those two operations.

Now he and Yang just have to convince Lantos of this.

Congressman Investigating Yahoo’s China Claims

After Reporters Without Borders (RSF) revealed a translated police document about the investigation of Shi, Yahoo denied its executive, Michael Callahan, lied to Congress about how much Yahoo knew about Beijing’s aims.

The translation by Dui Hua quickly circulated beyond the RSF. It has not been dismissed as a mistranslation or a fake.

The document puts Yahoo in a bad light, making its protestations of not knowing why Beijing wanted information about Shi’s Yahoo Mail account ring hollow.

With some of those denials coming from Callahan in a February 2006 appearance before the House Foreign Affairs Committee, Tom Lantos , the Committee’s chair, wants Yahoo to explain the discrepancy. From an AP report:

“For a firm engaged in the information industry, Yahoo sure has a lot of secrecy to answer for,” said Lantos, a Democrat. “We expect to learn the truth and to hold the company to account.”

Lantos said that “covering up such a despicable practice when Congress seeks an explanation is a serious offense.”

Jim Cullinan, a Yahoo spokesman, expressed disappointment that Lantos “is rushing to judgment on this issue, because the facts will support Yahoo’s testimony to Congress.”

Here is what Callahan told Congress as part of his February 2006 testimony:

Let me take this opportunity to correct inaccurate reports that Yahoo! Hong Kong gave information to the Chinese government. This is absolutely untrue. Yahoo! Hong Kong was not involved in any disclosure of information about Mr. Shi to the Chinese government.

In this case, the Chinese government ordered Yahoo! China to provide user information, and Yahoo! China complied with Chinese law. To be clear - Yahoo! China and Yahoo! Hong Kong have always operated independently of one another. There was not then, nor is there today, any exchange of user information between Yahoo! Hong Kong and Yahoo! China.

Here’s what the memo from Beijing State Security Bureau said on April 22, 2004:

Beijing Representative Office, Yahoo! (HK) Holdings Ltd.:
According to investigation, your office is in possession of the following items relating to a case of suspecting illegal provision of state secrets to foreign entities that is currently under investigation by our bureau. In accordance with Article 45 of the Criminal Procedure Law of the PRC, [these items] may be collected. The items for collection are:

Email account registration information for huoyan1989@yahoo.com.cn, all login times, corresponding IP addresses, and relevant email content from February 22, 2004 to present.

As we noted in our previous article, Callahan’s position hinges on whether or not Yahoo China and Yahoo Hong Kong shared this memo. That would mean Yahoo China received a separate request, per Callahan’s testimony, for information on Shi.

It looks like Callahan will have to bring a copy of that separate request to Lantos and the Foreign Affairs Committee, and say they didn’t know the local security apparatus also dropped by the HK Holdings office with one as well.

Journalist advocacy group Reporters Without Borders has been in a running feud with Yahoo over actions by China’s government against reporters. Those actions, including the jailing of Shi Tao, featured evidence against Shi obtained from Yahoo.

RSF furiously denounced Yahoo each time revelations of this cooperation, particularly in the cases of Jiang Lijun, Li Zhi, and Shi, emerged from court documents. The organization recently found more information about the Shi case that has them accusing Yahoo’s Mike Callahan of lying to Congress:

Yahoo! executive Michael Callahan told a US congressional committee in February 2006 that his company had been told nothing about the content of the investigation into Shi Tao which the Chinese authorities began in 2004. But in fact, China’s Department of State Security sent Yahoo! a document dated 22 April 2004 explaining that the authorities wanted information about an Internet user suspected of “illegally providing state secrets to foreign institutions.”

Callahan testified before the House Committee on Foreign Affairs in February 2006. The Chinese Law Prof blog listed an excerpt of his testimony, which is no longer available from the Committee’s website:

Let me take this opportunity to correct inaccurate reports that Yahoo! Hong Kong gave information to the Chinese government. This is absolutely untrue. Yahoo! Hong Kong was not involved in any disclosure of information about Mr. Shi to the Chinese government.

In this case, the Chinese government ordered Yahoo! China to provide user information, and Yahoo! China complied with Chinese law. To be clear – Yahoo! China and Yahoo! Hong Kong have always operated independently of one another. There was not then, nor is there today, any exchange of user information between Yahoo! Hong Kong and Yahoo! China.

Yahoo provided this statement from a company spokesperson in response to a request for comment on RSF’s allegations:

"Mr. Callahan’s testimony to Congress last year was accurate and forthright. Mr. Callahan also clearly and directly condemned punishment of any activity recognized as free expression, whether in China or anywhere else in the world."

The Chinese Law Prof blog entry said if Callahan’s testimony was accurate, which Yahoo asserted to WebProNews today is the case, "the court is either dissembling or using forged evidence."

The PDF presented by RSF shows Beijing’s State Security Bureau addressed its Notice of Evidence Collection to ‘Beijing Representative Office, Yahoo! (HK) Holdings Ltd.’ This seems to indicate the request arrived at a Yahoo Hong Kong office in Beijing.

It is possible that the Beijing office knew of the request, but the Hong Kong-based office of Yahoo HK Holdings did not, or at least never informed Callahan of the request. There doesn’t appear to be a logical reason for Callahan to lie to the House Committee on this point, since Yahoo always claims it has to comply with local law enforcement requests.

It’s still odd to see such a contrast between the request RSF revealed, and Callahan’s testimony.

UPDATE: Rebecca MacKinnon has a link to Callahan’s full testimony from February 2006.

The Good Morning Silicon Valley blog posted a brief note on a couple of people using Yahoo Video’s recently released upload service. One video came from a lawyer for imprisoned Chinese journalist Shi Tao, brought to viewers in crystal clarity from ABC News.

Also, a video by the brother of imprisoned journalist Li Zhi, also from ABC News, appears in a Yahoo Video search for Yahoo China. The producers of both videos have helpfully provided translation via subtitles of both men’s speeches, which we’ve excerpted as follows.

“Yahoo didn’t only give information about Shi Tao, it has done the same to many others,” said Shi Tao’s lawyer. “Does Yahoo have to absolutely obey Chinese law? In fact, it has the right to decide. That’s to say that if (Yahoo) finds there is a contradiction between the law and the protection of human rights, for example freedom of communication and expression, then Yahoo has the right not to comply.”

“My brother is in jail because of you,” said Li Zhi’s brother. “His health wasn’t great before he was imprisoned, he had hepatitis. Since he’s been in jail, he’s caught pleurisy because of doing hard labor.

“This has just torn our family apart. He’s been found guilty under Chinese law, although when you look at his file, I’m convinced he’s innocent. Your company is the reason all of this has happened.”

Yahoo CEO Terry Semel came in for some criticism today when the Wall Street Journal’s “D: Notebook” blog cited his remarks defending the company’s actions in China. Much has been made of Semel’s response to a question of whether Yahoo would have appeased Nazi Germany as it did China.

It’s probably fairer to present Semel’s comments as noted in the blog before the Nazi question, which we’ll do here, and allow the reader to decide what he might mean:

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David Utter is a staff writer for WebProNews covering technology and business.