Yahoo Sued For Mishandling Millions Of Dollars Meant For Humanitarian Aid

A lawsuit filed Tuesday by a group of formerly imprisoned Chinese dissidents alleges that Yahoo mishandled millions of dollars intended for humanitarian aid.

The lawsuit, filed with the United States District Court for the District of Columbia, claims Yahoo executives allowed a trust fund manager named Harry Wu to use more than $17 million intended to aid Chinese political prisoners to pay for real estate projects, staff salaries and legal expenses.

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The specifics of the lawsuit date back to 2002, when the Chinese government requested the email records of two political dissidents from Yahoo. The company complied, and those records were used in a case that resulted in the two activists receiving 10 years in jail for crimes against the state.

The crimes committed by the dissidents included a journalist forwarding an email in which he was instructed not to cover the anniversary of Tiananmen Square to an overseas newspaper and another dissident writing pro-democracy comments on a Yahoo groups site.

Yahoo was sued by the families of the two political prisoners, and came to a settlement in 2007. The settlement was for an undisclosed amount, and Yahoo agreed to establish a trust that would provide relief funds for Chinese political dissidents who are imprisoned for speaking out against the government online.

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According to the lawsuit filed Tuesday, which includes eight plaintiffs—seven former prisoners and the wife of a prisoner—the money set aside by Yahoo to create that fund was barely used for its intended purpose.

The Yahoo Human Rights Trust Fund contained $17.3 million but according to the lawsuit, more than $13 million of that was used on “expenditures having nothing to do with providing humanitarian assistance to imprisoned Chinese dissidents.” Just $700,000 went to providing direct humanitarian aid, the suit alleges.

The rest was used by trust fund manager Harry Wu, primarily for his personal projects.

The lawsuit claims that the foundations run by Wu spent more than $4 million on purchasing property around Washington, another $1 million on salaries paid to Wu and his wife and hundreds of thousands more on legal fees and expenses amassed over the last 10 years.

Much of the money set aside for the Yahoo Human Rights Trust Fund were diverted to the Laogai Human Rights Organization and the Laogai Research Foundation, both apparent shells of non-profit organizations run entirely by Wu with essentially no traceable presence, including no website or phone number for contacting the organizations.