Yahoo Senior Counsel to Be Grilled by Congress Over China Disclosure

By Scott M. Fulton, III, BetaNews

October 17, 2007, 12:24 PM

Stepping up his rhetoric against Yahoo yesterday, the chairman of the US House Foreign Affairs Committee, Rep. Tom Lantos (D - Calif.), said he has issued requests for CEO Jerry Yang and senior vice president and general counsel Michael Callahan, to appear before the committee on November 6. Their purpose there will be to answer allegations and respond to evidence Rep. Lantos says he will present that Callahan made false statements to Congress in February 2006, regarding whether Yahoo turned over private customer data about a Chinese journalist to Chinese government authorities.

"Our committee has established that Yahoo provided false information to Congress in early 2006," reads a statement from Rep. Lantos last night. "We want to clarify how that happened, and to hold the company to account for its actions both before and after its testimony proved untrue. And we want to examine what steps the company has taken since then to protect the privacy rights of its users in China."

Specifically, the case involves Chinese journalist Shi Tao. Two years ago, as the independent Dui Hua Foundation learned, Chinese police requested private information on Tao from Yahoo. The Foundation managed to acquire copies of Yahoo's response, which included private communications and personal data (PDF available here). Tao was tried for charges of taking notes in a meeting where he was not authorized to take notes, and sentenced to ten years' imprisonment, for what a committee member calls "trumped up charges."

"We have now learned there is much more to the story than Yahoo let on," stated Rep. Christopher Smith (R - N.J.), "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. US companies must hold the line and not work hand in glove with the secret police." In February 2006, Smith served as the chairman of the subcommittee at whose meeing Callahan allegedly gave false testimony.

In a statement to BetaNews this afternoon, Yahoo's global director of public affairs, Tracy Schmaler, called Lantos' and Smith's accusation "grossly unfair and mischaracterizes the nature and intent of our past testimony."

Schmaler goes on to assert her company's opinion that the Foreign Affairs Committee as a whole actually believes Yahoo was being truthful, and that these two members' contentions - although they're high-ranking members - "revolves around a genuine disagreement with the Committee over the information provided.

"We had hoped that we could work with the Committee to have an open and constructive dialogue about the complicated nature of doing business in China," Schmaler told BetaNews this afternoon. "All businesses interacting with China face difficult questions of how to best balance the democratizing forces of open commerce and free expression with the very real challenges of operating in countries that restrict access to information. This challenge is particularly acute for technology and communication companies such as Yahoo."

She added that Yahoo is in participation with other companies to develop a global code of conduct for US firms engaging in business and other interactions with foreign countries, including China, and that the US Dept. of State is involved in this process.

She then went on to suggest that the November 6 hearing should involve all of these "stakeholders" in international business, not just Yahoo. "It is our hope that the Committee will approach the hearing in that same constructive spirit," she told BetaNews.

Lantos' statement yesterday stopped short of suggesting that a subpoena should be issued, and also omitted any use of the word "contempt" - or, for that matter, "charges." While Schmaler's response indicated that Yahoo will participate in next month's hearings, it also appears to try to stave off Lantos elevating the subject to the next level: criminal proceedings.