Yahoo Settles With Shi Tao, Chinese Dissidents' Families

Twenty-one months after a Yahoo senior executive admitted to Congress his company probably should not have turned over private information on one of its customers in China to the Chinese government without first having checked to see what that phrase "State Secrets" meant in the telegram, Yahoo has settled a dispute with that customer's family, along with the families of two other dissidents with claims against the company.

"Plaintiffs and defendants hereby jointly stipulate to dismissal with prejudice of all claims made in this action," reads a company statement this morning, "based on a private settlement understanding among the parties." Not much else was said other than that Yahoo also agrees to pay the families' court costs.

Yahoo's action may have been prompted by questioning before Congress last week that stopped just short of an inquisition. There, CEO Jerry Yang and SVP Michael Callahan were forced to sit one row in front of the family of Shi Tao, while being asked to account for why it immediately informed Hong Kong privacy officials but not the US government or the families, when the company learned it had failed to inform Congress that some Yahoo staffers actually did know the meaning of the "State Secrets" request.

Callahan had appeared before Congress in February 2006 and was asked to account for Yahoo's actions at that time. He told Rep. Tom Lantos (D - Calif.) that Yahoo had not yet made amends with dissidents' families. Last week, he and Yang were compelled to say they hadn't done anything more in the intervening months.

"We have not reached out directly to the families, sir," Yang told Rep. Lantos on November 6.

"Mr. Yang, would you explain to me why, after all this time has expired, and after a member of Congress asked your representative in a public hearing almost two years ago, 'What have you done to help this family whose bread-winner is in prison?' you still have done nothing to attempt to help them?" Lantos pressed on.

"Mr. Chairman, I...I feel that we...at Yahoo are most interested in making sure we can secure, somehow, the freedom of the dissidents that we were involved in. We are very focused on understanding how we can be helpful in securing the freedom of the dissidents that we were involved in."

"That is not the question!" shouted Lantos, who would accept no public relations language about having laser-like focus on the understanding of anything. "Eighteen months have passed by," he continued (he was off on the math a bit), "and the answer is, you have still done nothing. Can you explain why?"

"What I was trying to say, Mr. Chairman," Yang responded, his voice creaking at points like an un-oiled hinge, "was that, while we have not directly met with the family - and it is my honor to meet them today - we have been doing work more broadly, and I understand, your point is well taken, but as I said - and let me be precise - I'm interested in making sure that we are trying to do our best to help secure the freedom of these prisoners, and that involves many different means and...many different dialogs, but I welcome the opportunity going forward to meet with the family, to be open. It is one of my priorities to understand how I can be open to help."

It was one of the more spectacular failures of marketing euphemisms in defense of corporate actions, and in the wake of that, a settlement with the families was perhaps inevitable.