Congress Searches for Answers From Yahoo

Nov. 6, 2007— -- Executives from Internet giant Yahoo Inc. testified before a congressional panel Tuesday, defending the company's actions that led to the jailing of a dissident journalist in China.

Yahoo China turned over documents relating to Shi Tao, a dissident journalist, at the request of the Beijing State Security Bureau.

Shi Tao was later sentenced to 10 years in prison for pro-democracy efforts after the documents showed evidence of his online activity.

Yahoo Faces Fire From Congress

Yahoo CEO and co-founder Jerry Yang and general counsel Michael Callahan told the House Foreign Affairs Committee that they regretted the company's decision to turn over the records but noted that the company had acted in compliance with an official request under Chinese law.

Yang and Callahan also apologized to the committee with regard to Callahan's previous testimony at a subcommittee hearing in February 2006.

At that time, Callahan testified under oath that the company did not know the information provided to the Chinese government would be used in a case against a dissident journalist in a political case.

Subsequent investigations by committee staff uncovered that the Chinese State Police's request for information involved "state secrets," a term committee chairman Rep. Tom Lantos, D-Calif., said was a "trick phrase" used to fabricate a case against innocent individuals.

Committee members criticized Yahoo for not correcting the record after the discrepancy was discovered in October 2006.

Lantos blasted the Yahoo officials, calling the facts "embarrassing and appalling." He added that the case was "no misunderstanding. It was inexcusably negligent behavior at best and deliberately deceptive behavior at worst."

He urged them to apologize directly to the mother of the jailed Chinese journalist who was seated in the front row of the hearing, directly behind the witnesses.

When they bowed to her she returned the gesture but began to cry in her seat.

China Restricts Information Flow

Yahoo first expanded into the Chinese market in 1999. It later sold the majority share of Yahoo China to giant Chinese company Alibaba in 2005.

Yahoo Inc. maintains only a minority 40 percent share of Yahoo China, a fact Yang and Callahan repeatedly said means they are unable to control policies like turning over information to the communist Chinese government.

Yang insisted his company was committed to "free expression" and "privacy," adding that the company was committed to protecting human rights.

"As a person, I feel terribly. I feel I have some responsibility," Yang, who was not CEO at the time of the incident, said.

He said the experience has taught the company it needs to consider human rights abuses when making business decisions.

Callahan said he was "not proud of the fact" that his February 2006 testimony was found to be incorrect, saying he took full responsibility for not informing the committee of the new information.

He nevertheless insisted that it was not a deliberate attempt to mislead the committee.

Callahan maintained that he was unaware that the company knew the identity and profession of the individual whose data was turned over to the Chinese State Police.

Rep. Lynn Woolsey, D-Calif,, said, "You guys have set a very poor example for your employees and the rest of the industry."

"You have power, use it!" she shouted.

Rep. Christopher Smith, R-N.J., has introduced legislation, unanimously approved by the committee, to combat "Internet abuse of democracy advocates and religious suppression."

The Yahoo executives said that no employee had been punished for either turning over the documents or for preparing the incorrect February 2006 testimony.

When the Yahoo executives promised to provide answers to the committee, Lantos shouted, "Look into your own soul and see the damage" caused to the journalist and his family, adding that their conscience should be their guide, before angrily gaveling the hearing to a close.