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YAHOO! INC.’S PROVISION OF FALSE

INFORMATION TO CONGRESS

HEARING

BEFORE THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

NOVEMBER 6, 2007

Serial No. 110–129

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/
(II)

COMMITTEE ON FOREIGN AFFAIRS 

TOM LANTOS, California, Chairman 

HOWARD L. BERMAN, California 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

BRAD SHERMAN, California 

ROBERT WEXLER, Florida 

ELIOT L. ENGEL, New York 

BILL DELAHUNT, Massachusetts 

GREGORY W. MEEKS, New York 

DIANE E. WATSON, California 

ADAM SMITH, Washington 

RUSS CARNAHAN, Missouri 

JOHN S. TANNER, Tennessee 

GENE GREEN, Texas 

LYNN C. WOOLSEY, California 

SHEILA JACKSON LEE, Texas 

RUBE ́ N HINOJOSA, Texas 

JOSEPH CROWLEY, New York 

DAVID WU, Oregon 

BRAD MILLER, North Carolina 

LINDA T. SA ́ NCHEZ, California 

DAVID SCOTT, Georgia 

JIM COSTA, California 

ALBIO SIRES, New Jersey 

GABRIELLE GIFFORDS, Arizona 

RON KLEIN, Florida 

ILEANA ROS-LEHTINEN, Florida 

CHRISTOPHER H. SMITH, New Jersey 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

DANA ROHRABACHER, California 

DONALD A. MANZULLO, Illinois 

EDWARD R. ROYCE, California 

STEVE CHABOT, Ohio 

ROY BLUNT, Missouri 

THOMAS G. TANCREDO, Colorado 

RON PAUL, Texas 

JEFF FLAKE, Arizona 

MIKE PENCE, Indiana 

JOE WILSON, South Carolina 

JOHN BOOZMAN, Arkansas 

J. GRESHAM BARRETT, South Carolina 

CONNIE MACK, Florida 

JEFF FORTENBERRY, Nebraska 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

BOB INGLIS, South Carolina 

LUIS G. FORTUN ̃ O, Puerto Rico 

GUS BILIRAKIS, Florida 

ROBERT R. KING, Staff Director 

YLEEM POBLETE, Republican Staff Director 

DANIEL SILVERBERG, Counsel 

GENELL BROWN, Full Committee Hearing Coordinator 
(III)

C O N T E N T S 

Page

WITNESSES 

Mr. Jerry Yang, Chief Executive Officer, Yahoo! Inc. .......................................... 16

Michael J. Callahan, Esq., General Counsel, Yahoo! Inc. .................................... 22

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Mr. Jerry Yang: Prepared statement ..................................................................... 20

Michael J. Callahan, Esq.: Prepared statement .................................................... 26

APPENDIX 

The Honorable Sheila Jackson Lee, a Representative in Congress from the 

State of Texas: Prepared statement ................................................................... 61
(1)

YAHOO! INC.’S PROVISION OF FALSE 

INFORMATION TO CONGRESS 

TUESDAY, NOVEMBER 6, 2007

HOUSE OF REPRESENTATIVES, COMMITTEE ON FOREIGN AFFAIRS, Washington, DC. 

The committee met, pursuant to notice, at 10 o’clock a.m. in room 

2172, Rayburn House Office Building, Hon. Tom Lantos (chairman 

of the committee) presiding. 

Chairman LANTOS. The committee will come to order. 

When the news broke in August that this committee was investigating officials at Yahoo! Incorporated in connection with repression in China, CNN International carried the story, but nobody in 

China saw it. As soon as the anchors started discussing this case, 

the screen faded to black. And that is typical. State control over 

media in China, from the printing press to the airwaves to the 

Internet, is practically absolute. 

Those who manage occasionally to pierce the veil of secrecy pay 

a heavy price. Such is the case with the young journalist named 

Shi Tao who is languishing in a Chinese dungeon on a 10-year sentence because he pierced the veil and the huge United States-based 

multinational company practically led the police to his door. 

On the eve of the 15th anniversary of the Tiananmen Square 

massacre 3 years ago, the Chinese Government issued the directive 

forbidding journalists from covering anything related to this anniversary. 

In a brief second that would have a momentous impact on the 

rest of his life, Shi Tao hit the Forward button on his the Yahoo! 

e-mail account and sent the government’s message to an NGO overseas advocating for democratic change in China. 

When the Chinese Government set out to unlock the mystery of 

who had publicly disclosed this document, they went to the offices 

of Yahoo! China to provide the key. 

The flagship American company, represented by our two witnesses today, Chief Executive Officer Jerry Yang and General 

Counsel Michael Callahan, complied with the request from the Chinese political suppression apparatus and provided the necessary 

identifying information to track down Shi Tao. 

If you think our witnesses today are uncomfortable sitting in this 

climate-controlled room and accounting for their company’s spineless and irresponsible actions, imagine how life is for Shi Tao 

spending 10 long years in a Chinese dungeon for exchanging information publicly, exactly what Yahoo! claims to support in places 

like China. 
2

In February 2006 under the then-Republican majority, this committee convened the hearing on, and I quote, ‘‘The Internet in 

China: A Tool For Freedom or Suppression.’’ The hearing was 

chaired by my good friend and distinguished colleague, Representative Chris of New Jersey. Witnesses included representatives from 

the State Department, Yahoo! and Microsoft, Google, Cisco Systems, and several NGOs. 

Yahoo! had been invited to testify specifically to address the facts 

of the Shi Tao case. They did so under oath, swearing to tell the 

truth, the whole truth, and nothing but the truth. Michael Callahan, the general counsel of Yahoo!, gave sworn testimony about 

the case and Yahoo!’s operations in China. 

Mr. Callahan has not been accused of perjury. That would be the 

willful violation of an oath either by swearing to what is untrue or 

by deliberately admitting information that is material. But as general counsel for Yahoo!, he did provide false information to this 

committee in this critically important hearing 18 months ago. 

In an effort to convince this committee that Yahoo! was not a 

knowing agent of the Chinese Government repression, Mr. Callahan testified that Yahoo! had no knowledge of the facts surrounding the Shi Tao case at the time the company provided information to the Chinese authorities. 

Let me quote from what Mr. Callahan said:

‘‘When Yahoo! China in Beijing was prepared to provide information about the user who we later learned was Shi Tao, we 

had no information about the nature of the investigation. Indeed, we were unaware of the particular facts surrounding the 

case until the news story emerged.’’

Based upon a thorough investigation by the staff of this committee, we now know that while Mr. Callahan may not have known 

the relevant facts personally, other Yahoo! employees, in fact, did 

know the nature of the Chinese investigation against Shi Tao prior 

to our committee hearing. 

Specifically, the document provided to Yahoo! China on April 24, 

2004 by the Beijing State Security Bureau stated, and I quote:

‘‘Your office is in possession of the following items relating to 

a case of suspected illegal provision of state secrets to foreign 

entities, and so on.’’

Now let me deal with the—what the issue of what this means 

in a Communist police state. 

The term ‘‘state secrets’’ is commonly used in China when a 

phony criminal case is concocted against political activists. A reasonable person who receives such an order would immediately note 

that the case in question involves either a political or a religious 

dissident. 

Even an unsophisticated person operating in the context of the 

Chinese police state would know full well that ‘‘state secrets’’ is a 

trick phrase used to fabricate a phony but devastating legal case 

against an innocent person who shares our values in an open and 

free society. 
3

A key member of the Yahoo! briefing team that prepared Michael 

Callahan for his appearance before our committee had a copy of the 

Beijing authority’s document. 

Yahoo! China lawyers also had a copy of the document. 

Yet, somehow, incredibly, Mr. Callahan apparently was not informed of these critical facts and the fundamental nature of 

Yahoo!’s complicity with the persecution of Shi Tao. 

Yahoo! claims that this is just one big misunderstanding, that 

Yahoo!’s false testimony was really just a matter of an internal 

miscommunication. 

Let me be clear: This was no misunderstanding. This was inexcusably negligent behavior at best and deliberately deceptive behavior at worst. I wish to repeat this: This was inexcusably negligent behavior at best and deliberately deceptive behavior at 

worst. 

In preparing for testimony before this committee, Yahoo! did not 

seek fit to hire a translator to make sure the document upon which 

it relied for its entire defense was translated properly. Mr. Callahan never asked to see the document and the Yahoo! lawyer who 

had it, by Yahoo!’s own explanation, failed to consider the document significant even after Congress ordered Yahoo! to appear to 

answer directly on this outrage which landed an innocent Chinese 

journalist in prison for a decade. 

Yahoo!’s own lawyers in Beijing also had the document and 

pulled out its meaning. Either Yahoo! has little regard for providing complete and full information to a duly constituted committee of the Congress, or it has little regard for the issue of perfecting human rights. 

Based upon the committee’s bipartisan investigation of the 

Yahoo! testimony, we have reached the following conclusion: Yahoo! 

provided false information to Congress. Despite the sworn testimony before the committee that Yahoo! did not know the nature of 

the investigation into the Shi Tao case, Yahoo! employees did know 

that the Chinese Government wanted the information related to 

Shi Tao because of a so-called state-secrets investigation in order 

to imprison him. 

When Mr. Callahan later discovered that he had provided false 

information, he did not make the slightest attempt, not the slightest attempt, to correct the information he had given to Congress 

under oath. 

Six months after his testimony, Mr. Callahan became aware that 

some officials of Yahoo! did know the nature of the investigation 

against Shi Tao at the time it complied with the Chinese request 

for information. Despite Mr. Callahan’s explicit recognition that his 

previous testimony was inconsistent with the facts, neither Mr. 

Callahan nor anybody at Yahoo! contacted the committee orally or 

in writing to advise us that Yahoo! had provided false information 

to the committee. 

Inexcusably, there was no effort whatsoever by Yahoo! to set the 

record straight after providing false information to a duly constituted committee of Congress. 

Mr. Callahan did, however, tell his public relations operatives to 

spin the Shi Tao story in a different direction. 
4

After discovering that his general counsel had provided false information on this critical manner, Yahoo! did not conduct an internal investigation into the circumstances under which false information was provided to Congress. Yahoo! tried to sweep this grave 

transgression under the rug. No internal review of the matter took 

place. No change in company policy was instituted. Nobody at 

Yahoo! has been disciplined for providing false information to Congress. 

Key employees related to the provision of false information to 

Congress remain at their posts. 

Yahoo! had no means or possible intent to prevent Yahoo! China 

from being a willing participant in political witch hunts emanating 

from Beijing. Yahoo! incorporated no American lawyers in Beijing; 

there was no mechanism in place for Yahoo! headquarters to review Chinese efforts to ferret out individuals who wish to see a 

more open and a more democratic China. 

A company of Yahoo!’s resources and sophistication operating in 

the Chinese milieu should have taken every conceivable step to 

prevent the automatic compliance with a request from the Chinese 

police apparatus, and to this day, Yahoo! has failed to change any 

of its practices in order to prevent such collaboration in the future. 

Yahoo! Incorporated is now a minority shareholder in Yahoo! 

China. But one of our witnesses today, CEO Jerry Yang, sits on the 

board of Alibaba, the parent company of Yahoo! China. If Chinese 

police today request that information from Yahoo! China related to 

political dissidents, Yahoo! China would turn over the individual’s 

e-mail records identity, who might be subsequently sent to prison 

perhaps for 10 long years. 

My colleagues, I do not deliver these conclusions lightly. Hightech companies like Yahoo! are enormously important to the American economy as well as to the global economy, and they have 

transformed the way in which information is conveyed worldwide. 

That said, I do not believe that America’s best and brightest companies should be playing integral roles in China’s notorious and 

brutal political repression apparatus. 

I will ask our witnesses today, in light of these embarrassing, appalling facts, whether Yahoo! is now prepared to endorse legislation 

offered by Congressman Chris Smith and approved by this committee to ensure that American complicity with high-tech repression ends. 

It should be self-evident that companies cannot get away with 

providing false information to Congress. 

So today I will call on Yahoo!’s stock corporate executives to 

apologize to this committee, the Congress of the United States, and 

the American people. 

But first and foremost, I urge our two witnesses to face the family of the Chinese journalist who, as a result of Yahoo!’s actions, 

has been thrust into a Chinese prison. When he first appeared before this committee, I asked Mr. Callahan whether he had reached 

out to Shi Tao’s family to offer an apology and to provide assistance. The answer was a resounding no. 

Fifteen months later, Yahoo! has yet to provide any aid to Shi 

Tao’s family. Mr. Yang, Mr. Callahan, Shi Tao’s mother is sitting 

in the first row behind you. I would urge you to beg the forgiveness 
5

of the mother whose son is languishing behind bars due to Yahoo!’s 

actions. 

It is now my pleasure to call on my friend and colleague Ileana 

Ros-Lehtinen for any opening comments she might wish to make. 

Ms. ROS-LEHTINEN. Thank you as always, Mr. Chairman. 

The greatest threat to repressive societies and repressive regimes 

is access by their subject populations to uncensored information, 

because independent information results in independent judgment 

which leads directly to independent action. 

For that reason, these regimes can never feel truly secure without complete control over all aspects of their people’s lives, none 

being more important than the flow of facts and the exchange of 

opinion. 

Yet even with the increasingly strenuous efforts to choke off uncontrolled connections to the wider world, news sources appear, autonomous networks spring into being, and electronic walls erected 

with great effort begin to crumble. Light still manages to seep in 

through the darkest of barriers. 

Among the most threatening of these new sources is the Internet 

and the ever easier access to the rapidly growing universe of 

unfiltered data and unconstrained world views that it makes possible. The Internet’s potential to undermine the control of these regimes over information is why blocking of the Internet has become 

a vital task for the maintenance of repression from Cuba to China, 

from Syria to North Korea. 

Regimented societies, such as Cuba’s and North Korea’s, have 

largely succeeded in their efforts to quarantine this deadly intrusion by the simple means of denying any and all unsupervised access by their populations. 

In my native homeland of Cuba, a 5-year prison sentence awaits 

those who somehow manage the nearly impossible task of connecting to the Internet. If they go so far as to actually post information, the sentence increases to 20 years imprisonment. 

Yesterday, President Bush bestowed the Medal of Freedom in 

absentia to Dr. Oscada Leos Biscet, a Cuban political prisoner languishing in a filthy dark dungeon. 

When not in solitary confinement, many of Dr. Biscet’s cellmates 

in Cuba may very well have been there for crimes regarding dissemination of freedom information. 

In the year 2000, an opposition activist, Jose Orlando Gonzelez 

Bridon, Secretary General of the illegal Cuban Democratic Workers 

Confederation, was sent to prison merely for publishing unauthorized information on the Internet. Many others have since followed. 

In Syria, Ali Said al-Shahadi, an English language-speaking 

teacher, was arrested in August of last year for the crime of posting 

articles on an unauthorized Web site. He was released after 5 

months, but a steady stream of Syrians have already been imprisoned for similar online activities that the authorities deemed subversive. 

In rapidly developing countries such as China, some experts believe that extreme isolation of citizenry is not possible. Along with 

the economic development, the context between individuals and 

groups both within the country and with the outside world, they 
6

are expanding exponentially, so it can happen. However, the Chinese regime has proven that to be wrong. 

Its array of tools include an army of Orwell’s ‘‘thought police’’ 

who monitor users and block offending sites, backed up by the arrest and imprisonment of those who successfully evade the system 

of control. 

Among the most harshly targeted are democracy activists of all 

types, as well as individuals in Tibet and other areas who are seeking greater freedom from control by Beijing. Even those who have 

defied the government’s efforts to prevent news of severe threats 

to public health from being circulated, such as the deadly outbreak 

of the SARS epidemic in 2003, have been imprisoned for publishing 

‘‘state secrets.’’

As the effectiveness of these regimes’ censorship declines, the 

prospects for freedom for their peoples will increase. For this reason, the U.S. Government must actively engage in overcoming 

Internet censorship by these regimes and ensure that their populations have access to unfiltered information beyond the straitjacket of propaganda. 

But our efforts are still in their infancy. For many years, I have 

introduced and supported legislation to strengthen the ability of 

the U.S. to overcome efforts by repressive regimes to censor the 

Internet and other media. I am confident that the Global Online 

Freedom Act of 2007, sponsored by my good friend, Chris Smith of 

New Jersey, that was recently approved by this committee, will be 

an important enhancement of that effort. 

But the U.S. Government cannot accomplish this task alone. 

Only with the assistance of the private sector can these regimes’ 

efforts to censor and control the Internet be overcome. However, 

private companies operate within significant constraints and must 

walk a fine line between cooperating with the authorities in these 

countries and respecting the fundamental rights of individuals 

there and elsewhere. 

This is made more difficult by the arbitrary rules and actions of 

the various regimes and by the absence of clear international 

standards to use as guidance. 

Thus, one of the most welcome advances is the development by 

the leading Internet-related companies such as Yahoo! of a code of 

conduct for operating in repressive countries, such as China, a code 

that is being created with consultation of human rights and other 

organizations. 

Congress has an important role to play in ensuring that U.S. 

companies maintain these standards by making clear what the law 

will and will not allow these companies to do in their operations 

overseas. 

The power represented by the often quoted words that ‘‘the truth 

shall set you free’’ was dramatically demonstrated by the collapse 

of the Soviet Empire when the grip of the regimes on their societies’ connections to the outside world was finally pried loose. 

The United States was an indispensable element in that liberation, patiently working through the decades to ensure that light 

continued to pierce those walls. 

We must continue that dedication of purpose for all those who remain imprisoned, and provide them the tools by which they can lib-
7

erate themselves. And the most powerful truth, the most powerful 

of these tools, Mr. Chairman, is the truth. Let us hear some of that 

today in our hearing. 

Thank you, Mr. Chairman. 

Chairman LANTOS. Thank you very much. 

It is my pleasure now to call on my friend and colleague from 

New Jersey who chaired the original hearing on this subject, Mr. 

Smith. 

Mr. SMITH OF NEW JERSEY. Thank you very much, Mr. Chairman. 

First of all, let me begin by thanking you for your genuine, authentic, ongoing and persistent commitment to truth and the integrity of this committee in calling this hearing today, and for speaking just a moment ago, as you so often do, so eloquently and so 

boldly on behalf of victims. And that is what this hearing is all 

about, the victims. 

I have taken a great personal interest in not just this hearing 

but this entire issue. It was in large measure response to Yahoo!’s 

cooperation with the Chinese infamous secret police hunt for democracy, as it did against Shi Tao, that I called the hearing in February 2006 that you have referred to earlier, as well as the distinguished ranking member, Ileana Ros-Lehtinen. 

The committee is honored and privileged, as you also welcome 

them to have in our presence today Gao Qinsheng, mother of Shi 

Tao, and Yu Ling, wife of Wang Xiaoning, and both of these individuals have suffered enormously. In the case of Wang, he got 10 

years, just like Shi Tao. Yahoo! also participated or was complicit 

in providing information in his arrest and incarceration. And based 

on the best available information, he is being tortured. Obviously, 

torture is endemic in the Chinese system, in the laogai and with 

their secret police. That is how they get confessions. 

These individuals are joined by Harry Wu. Harry Wu some years 

ago stood right where Mr. Callahan and Mr. Yang sit, and brought 

with him five other survivors of the laogai. Mr. Wu spent in excess 

of 20 years in the laogai system. 

I will never forget when Palden Gyatso, a Tibetan Monk, brought 

in the implements that are used to torture. He couldn’t get through 

security downstairs because he was carrying cattle prods and the 

kind of implements that are used routinely, systematically, and 

with great malice and with great cruelty against political and religious prisoners in China. 

Harry told us about Catherine Ho and a whole group of survivors 

of the laogai and just what kind of horrific treatment, mistreatment, was endured by somebody once they go to the Chinese prison 

systems. They are concentration camps; we should make no mistake about it. 

Yahoo! provided, as we all know, China’s police information leading to Shi Tao’s arrest, and the words that were used were ‘‘inciting state subversion.’’ That is, he was promoting democratic reform 

on the Internet. 

For the benefit of those who weren’t at the February 2006 hearing, and we will be providing copies to members of the press so 

they can see exactly who said what and when at that hearing, we 

swore in Mr. Callahan and asked him to proceed as he would like. 
8

In his opening statement, before I or anyone else had asked any 

questions, he brought up Shi Tao and said that Yahoo! had ‘‘no information’’—let me read it so it is right from the hearing record—

‘‘had no information about the identity of the user or the nature 

of the investigation. Indeed, we were unaware,’’ he went on, ‘‘of the 

particular facts surrounding this case until the news story 

emerged.’’

This was not a casual remark. The written statement Mr. Callahan submitted to the committee said the exact same thing. 

Recently, as the chairman has pointed out, we have learned from 

Reporters Without Borders that when the Chinese police came to 

Yahoo! looking for Shi Tao, their request for information had specified that they were investigating someone who had ‘‘violated state 

secrets.’’

Unless one is incredibly naive or willfully ignorant, everyone involved with China knows that when democracy and human rights 

activists, religious believers, and members of the religious or persecuted nationalities, including Uighurs and the Tibetans are arrested, it is often for ‘‘violating state secrets.’’

Just like in the Soviet Union, it is a nebulous, completely elastic 

term. It is a modus operandi of dictatorship. In effect, this charge 

means nothing more than they told the truth about some misdeed 

of the Chinese Government. 

And if the Chinese Government would prefer that people not 

know something about life in China, then they make that something a state secret. The so-called state secret the Chinese Government accused Shi Tao of violating was to pass on a directive calling 

for censorship of news on the 15th anniversary of the Tiananmen 

Square massacre. 

I look over at the press sitting to our left. If any of you passed 

on that information and you were in China, you would be in prison 

for 10 or more years. 

Mr. Callahan, what you write today would certainly fetch you 15 

to 20 years. Mr. Callahan now claims that when he testified in 

2006, he did not have personal knowledge of the contents of the 

Chinese police request and that he and the company he works for 

made a good-faith effort to inform themselves of the matter about 

which he was called to testify. 

Mr. Chairman, Yahoo! lawyers have told our staffs that almost 

a dozen people prepared Mr. Callahan for his testimony. How could 

a dozen lawyers prepare another very smart and very savvy lawyer 

to testify before Congress without anyone thinking to look at the 

document that had caused my hearing to be called in the first 

place? This is astonishing. 

It is even more incredible that Yahoo! claims that after his testimony before the committee, Mr. Callahan later found out that 

Yahoo! knew that the police request had to do with state secrets. 

He forgot to inform the committee. It is one thing not to know 

something. It is another thing altogether to choose not to know. 

I would like to find out at this hearing whether the corporate culture of Yahoo!, in whole or in pertinent part, was and is shaped 

by a fundamental decision not to look too closely into what their 

employees are doing in China. 
9

Mr. Chairman, 2 weeks ago, this committee—and I thank you, 

you know—the take on this Congress is that we are not bipartisan. 

You have really shown that that is not the case. You marked up 

our bill, the Global Online Freedom Act, H.R. 275. This legislation 

was authored and put together precisely to prohibit exactly what 

Yahoo! did to Shi Tao. 

The Global Online Freedom Act would prohibit United States 

companies like Yahoo! from disclosing personally identifying information to officials of countries like China unless the Department 

of Justice determines it is for a legitimate law enforcement purpose. 

The act would require other United States companies working in 

countries like China to disclose Internet contents that they remove 

or block. We know what Google has done in becoming part of the 

state propaganda efforts. 

Dictatorships need two things to survive and prosper: A secret 

police that routinely rounds up and cruelly mistreats especially the 

dissidents, and they need to control the message, the propaganda 

message. 

The act would also create an amended Act of Freedom at the 

State Department and develop a global strategy to combat attempts from countries like China, North Korea, Syria, Vietnam and 

Cuba to transform the Internet into a tool of surveillance and repression. 

I would like to remind my colleagues and everyone here today 

that Yahoo!’s failure to provide this committee with accurate information about its sad betrayal of Shi Tao is powerful evidence that 

we cannot entrust the human rights of vulnerable people living 

under repressive regimes like China to the industry code of conduct 

that is being formulated by the IT companies. A Yahoo! code of conduct would be cold comfort to people like Gao Qinsheng, Shi Tao’s 

mother. The fact that we are here today is evidence that we need 

the Global Online Freedom Act. And, again, I think we need it 

now. 

I thank you again, Mr. Chairman, for calling this important, and, 

I would say, historic hearing. 

Chairman LANTOS. Thank you, Mr. Smith. 

It is the intention of the chair to allow every member of the committee to make a brief statement if she or he desires to do so. 

Mr. Sherman. 

Mr. SHERMAN. Yes, Mr. Chairman. Thank you for holding this 

hearing. 

I look forward to finding out what Yahoo! is doing not only for 

the one journalist in question, but for all dissidents in China. It 

seems to me that if Yahoo! is going to atone for the misinformation 

they gave to this committee, it should be more than bowing to the 

journalist’s wife, but rather strong support for the legislation Mr. 

Smith has put forward, and a large fund available to help with the 

humanitarian needs of dissidents in China. 

I think anything else is an insincere vow. 

I yield back. 

Chairman LANTOS. Mr. Rohrabacher. 
10

Mr. ROHRABACHER. I was just walking through Congress to the 

Capitol there on the way over here, and I couldn’t help but notice 

the statue of Raoul Wallenberg in the Capitol. 

I know there are heroes in this world like Raul Wallenberg, and 

America needs to be on their side. Those people who are not on the 

side of the Raul Wallenbergs, but who would facilitate the imprisoning of people like this, are not Americans. I mean, they may be 

profit-seeking people who reside here, but America has to be more 

than just searching for money and markets. There are some more 

fundamental values to being an American than that. 

It is repugnant, if not surprising, to learn that American business people in China are assisting the Chinese Communist Party 

in its brutal repression of Chinese citizens and their desire for democracy. It would be funny, if it wasn’t so sickening, that Internet 

companies which supposedly pride themselves on facilitating the 

free exchange of ideas are helping to throw in jail the very people 

who they claim to be their most loyal clients. 

And now, Mr. Chairman, we hear over and over every time we 

have these hearings about China, from the business community, 

that they believe that by being more engaged in China that they 

will in some way liberalize that country, and it will become freer 

because of their association. And now we hear that American corporations are doing just the opposite in order to gain a bit of momentary profit. 

Well, we also hear these same companies saying well, don’t control us. You know, we shouldn’t—you know, we shouldn’t have—we 

should not be the ones to control ourselves, but Congress has to set 

limitations. And then they lobby Congress in order not to set limitations, the very same people who are saying, well, we are free to 

do what we want; you have to set the fundamental policies. And 

then they lobby against, for example, the legislation. 

Chairman LANTOS. The gentleman’s time has expired. 

Mr. ROHRABACHER. Thank you very much. 

The very final thing. I have never been prouder to serve with you 

than I was today during your opening statement. 

Thank you very much, Mr. Chairman. 

Chairman LANTOS. The gentleman from Florida, Mr. Wexler. 

Mr. WEXLER. Thank you, Mr. Chairman. 

I would echo the comments of the previous speakers with respect 

to the obligation to tell the truth. Yahoo! has an obligation to tell 

the truth. They need to tell it today, and everyone needs to be accountable. 

There are broader issues, however, and I think this is also an opportunity to respectfully suggest possibly the need for some self-reflection in the context of the United States Congress. 

We are talking about complicity with human rights abuses. Well, 

today there are enormous human rights abuses going on in Pakistan and we, the United States Government, send hundreds of billions of dollars to Pakistan. We are about to consider an enormous 

arms package to Saudi Arabia and other Gulf States that don’t do 

one bit of respect for human rights. And with respect to China 

itself, the policy of this Government is that we granted China 

‘‘Most Favored Nation’’ trading status and we welcomed—the 

United States Government welcomed—China into the WTO. 
11

Now I may agree or disagree with those statements, but there is 

a level of complicity, yes, with Yahoo!, but also with this government, that ultimately is the responsibility of this Congress. 

So I would respectfully suggest if we are going to delve into these 

issues, that it is terrific that we do. Let us not just talk about one 

company. Let us talk about the role of the United States Government and whether or not we legitimately do or do not inhibit freedom or democracy and the role that the Internet plays. 

Chairman LANTOS. The gentleman’s time has expired. 

The gentleman from Ohio, Mr. Chabot. 

Mr. CHABOT. Thank you very much, Mr. Chairman. 

I want to thank you for holding this hearing, and I want to commend you on your remarks as well as the gentlelady from Florida 

for her remarks. 

She brought attention to Dr. Biscet in Cuba. And I would highly 

commend people to read an article, I believe in it is in the Wall 

Street Journal, I think it was yesterday, talking about another 

prisoner of conscience in Cuba who rots in the jail—if you want to 

call it a jail—in the most inhumane conditions under Castro. 

And one of my most frustrating things in this Congress that I 

have had is when you realize how many people rot in jails, who basically have done nothing except to try to express human rights, 

basic dignity for people around the globe. And you see it in China 

today, you see it in Cuba, you see it in Iran, North Korea, and 

Syria and many other countries. 

And the world needs to act. The freedom-loving nations of this 

world have to find some way to deal with this problem and do 

something about these people that rot in jails all over the world for 

literally trying to help others in their nations to be free. We have 

not done much about that. This committee has tried. We need to 

do much more. 

Thank you. 

Chairman LANTOS. Thank you. 

The gentleman from Massachusetts, Mr. Delahunt. 

Mr. DELAHUNT. Thank you, Mr. Chairman. And let me indicate 

that I agree with everything that has been said by my colleagues 

on the dais. 

I have heard references to a code of conduct. I would suggest that 

the issue before this committee is whether a code of conduct, to be 

policed by Corporate America, is sufficient. 

And as my ranking member on the Subcommittee on Oversight 

knows, we are reviewing corporate behavior in the country of Colombia where American corporations, one specifically, was charged 

with and paid a $25 million fine for providing or paying, making 

payments to paramilitary groups. I think my own sense is that we 

as a Congress need to define what public policy is or should be in 

terms of the relationship with Corporate America in doing business 

overseas. And with that I yield back. 

Chairman LANTOS. The gentleman from Indiana, Mr. Pence. 

Mr. PENCE. Thank you, Mr. Chairman. 

I want to associate myself strongly with the bipartisan comments 

made today about your moral leadership on this committee, and especially so today in describing Yahoo!’s behavior as ‘‘inexcusably 
12

negligent at best or deliberately deceptive at worst.’’ I think you 

summarized the sentiment of most of us on this committee. 

The price of freedom, freedom of the press, freedom of the press, 

freedom of speech, is eternal vigilance. And that is vigilance by 

people who possess political power, but it is also vigilance by those 

who possess economic power. 

And I can’t help but think today, Mr. Chairman, of the words of 

Lenin, who used to describe capitalists as dupes who would ‘‘sell 

us the ropes with which to hang them.’’ And he would no doubt describe the high-tech rope that seems to be being used to strangle 

freedom in China today among his references. 

I want to know what happened in this case. But more than that, 

Mr. Chairman, I am interested to know what Americans overseas, 

Americans who are operating in totalitarian companies, are prepared to do to hold up the ideas of freedom. 

And I especially want to acknowledge the presence of Gao 

Qinsheng, the mother of Shi Tao, and one of freedom’s heroes in 

the world, Harry Wu, who is with us in this room today. I thank 

you for your leadership and your sacrifice. You will be in my prayers, and with that I yield back. 

Chairman LANTOS. The gentlewoman from California, Ambassador Watson. 

Ms. WATSON. I want to thank you so much, Mr. Chairman, for 

your integrity, your honesty, and the example you set for all of us. 

The specific issue we are here today to discuss, allegations of the 

provisions of false information by Yahoo!’s general counsel in a 

February 2000 hearing, are serious. And I really commend the two 

of you for being here for the committee today to tell the sides of 

the stories—of this story that you interpret. 

The important issue of Internet freedom and the promotion of 

free flow of information through this most powerful medium still is 

in its infancy, and it is also at the heart of the matter that we are 

here to discuss this morning. 

It raises an important issue of how U.S.-based and -owned companies conduct their affairs in countries that operate under a set 

of laws and institutions that are not only different, but in some 

cases an anathema of our way of doing business and our notions 

of rule of law, equity, and fairness. 

So I will be very intently listening to the testimony that we get 

today so that we can raise the questions, Mr. Chairman. And based 

on the responses, we can set the policy that will lead our country 

forward. 

Thank you very much for this opportunity. 

Chairman LANTOS. Thank you. 

The gentleman from South Carolina, Mr. Wilson. 

Mr. WILSON. Thank you, Mr. Chairman. 

And ladies and gentlemen, it is really extraordinary today that 

we would have leading our committee the chairman, Tom Lantos, 

who is in America because he and his family fled from Fascism and 

from Communism, leaving totalitarian Hungary. And indeed the 

ranking member, Ms. Ros-Lehtinen, is in America because her family fled totalitarianism in Cuba. 

I know that I have been really hoping that advances in technology would promote democracy and freedom around the world. 
13

Indeed, that has been achieved in Hungary. We all are very hopeful about a free Cuba. But I want to hear today what can be done 

not to reinforce totalitarianism, but to promote the very exchange 

of concepts and ideas which I think will promote democracy and 

freedom. 

Thank you, Mr. Chairman. 

Chairman LANTOS. The gentleman from Texas, Mr. Green. 

Mr. GREEN. Thank you, Mr. Chairman, and I want to associate 

myself with all of our colleagues that talked about the issue of our 

chair and our ranking member. And the other committee I serve 

on, Mr. Chairman, is the Energy and Commerce Committee, and 

Telecommunications and the Internet Subcommittee. So I have a 

particular interest in our hearing today and what our telecom aspect in international relations is. 

But the reason we are all here is why we received false testimony earlier. 

Mr. Chairman, the Internet is an advanced technology. It should 

be a tool for good, and one that promotes our values around the 

world. American companies should, like the American Government, 

stand with those promoting freedom, rather than the police who 

seek to shut down dissidents in their best interest of democracy. 

This committee has held several hearings on the practice of American firms supporting censorship in China. 

Yahoo! turned over to Chinese police a dissident’s name, the contents of e-mails he sent to the United States, and other information 

associated with his e-mail account. The burden of sentencing him 

for leaking state secrets, citing information provided by Yahoo, is 

critical to this conviction. 

What is so troubling is what we are here today to address is that 

we now have our witness, Mike Callahan, who was called before 

the committee to testify on the case. The witness provided false testimony. I believe it has been determined that he had not knowingly 

lied to the committee, but other officials at Yahoo! knew the details 

of the case in China, including those who had briefed Mr. Callahan 

prior to the hearing. As became apparent, Yahoo! was involved in 

providing this information, and the company took proactive steps 

to determine what happened or what it knew. 

Although Mr. Callahan directed his staff to stop their denials 

that Yahoo! did not know the nature of the investigation, Yahoo! 

failed to correct this statement publicly or clarify its previous position. 

I hope the witnesses can answer why Mr. Callahan is not giving 

us the information and why there is no attempt to correct these 

false statements when it became widely known. 

Chairman LANTOS. The gentleman’s time has expired. 

Mr. GREEN. Thank you. I yield back my time. 

Chairman LANTOS. The gentlelady from California, Ms. Woolsey. 

Ms. WOOLSEY. Thank you, Mr. Chairman. 

Gentlemen, global trade should be about exporting the high 

ideals of American entrepreneurship and about the advancement 

that we are seeing. 

It should help to spread the growth of human capacity, in its 

very highest levels. Yahoo! stands for innovation and the power of 

creativity. The company and the founders are an absolute inspira-
14

tion to inventors here at home and throughout the world. That 

means Yahoo! has a huge responsibility. And that is why I, for one, 

and all of us up here are so very troubled about today’s hearing. 

How can Yahoo! live up to its commitments with the world community, not just to China or the United States, but to a world 

where we are no longer country to country, we are a globe, a world 

who is expecting the best of Yahoo!, a new generation of thinkers, 

and really make it happen? 

So that is what I am hoping to learn from the mistakes that happened in the past testimony. 

I yield back. 

Chairman LANTOS. The gentleman from Oregon, Mr. Wu. 

Mr. WU. Thank you, Mr. Chairman. 

As Congress debated granting ‘‘Most Favored Nation’’ trading 

status to China in 1999 and 2000, proponents argued that business 

engagement would open China and other closed societies, and the 

proponents of that argument won the day. And time will tell 

whether that argument was true or whether it was public relations 

fluff. 

This hearing is not about engagement or not engagement. That 

issue was decided by votes in this Congress in 1999 and 2000. This 

hearing, in a broader sense, is not about Yahoo! because there are 

other companies and other incidents which have also occurred. 

In the broadest sense, this hearing is about standards of conduct 

to guide some of our best companies operating in very difficult environments and what to do in the future. Does doing business in 

China open an authoritarian society? Does it infect China with the 

democracy bug? Or does doing business in China change the conduct of American businesses for the worse and infect some of our 

best companies with an authoritarian tick? 

I hope we can work hard together to appeal to the better angels 

of our collective nature, to determine what went wrong in this case 

and fix it, and to develop a collective approach, especially among 

high-tech companies, to do better in the future, not if, but when 

similar cases occur, wherever they occur, in China, in the United 

States, or elsewhere in the world. 

Thank you, Mr. Chairman. 

Chairman LANTOS. The gentleman from Texas, Mr. Poe. 

Mr. POE. Thank you, Mr. Chairman. Free speech is one of the 

most fundamental of all human rights, no matter where a person 

lives in this planet. 

The story of democracy in our own country began with disagreement over whether a person had the right to say something or not, 

one of the basic reasons we are now an independent country and 

not a part of the United Kingdom. 

Our Founding Fathers lived under a tyranny that controlled information and controlled the freedom to exercise one’s belief politically. And the framers of this country intended free speech to include criticism of the government and the advocacy of unpopular 

ideas. I think the right to criticize the government is a human 

right, no matter where that person lives in the planet. 

We value this right because it allows individuals to express 

themselves without interference or restraint from this Government 

and burst into and nurtured a country that not only values but pro-
15

tects independent thought and protects free speech of individuals. 

I hope that Yahoo! does the right thing and takes these rights, the 

rights of men and women all around the world, very seriously. 

I look forward to the testimony. 

Thank you Mr. Chairman. 

Chairman LANTOS. Thank you. 

The gentleman from Washington, Mr. Smith. 

Mr. SMITH OF WASHINGTON. Thank you, Mr. Chairman. 

I do think it is a very important topic for a hearing. There are 

two big questions we are trying to get at, and certainly the gentleman from Yahoo!, when we give you the chance to speak, we will 

be interested to hear your perspectives on that. 

One, how do we change the behavior of repressive regimes? It is 

not an easy thing to do. It is something we could all agree that we 

all want to do. But I think Cuba was mentioned earlier, and certainly we have taken a very, very tough tack with them for well 

over 40 years, and they are no less repressive today than they were 

over 40 years ago. 

And in other countries I think it is probably true. We have engaged too much without too much success. But it is not as simple 

as a black-and-white decision that we simply stand up to it, we will 

make it better. It is a more complex question. 

And the second is what laws can companies choose to not obey 

in China or the United States or wherever. If it is a law on the 

books in a country where they are doing business, when can they 

say we are not going to follow it? Because it is not just in China 

where these questions come up; they come up in the United States, 

they come up in Europe, where free speech is not protected in 

many instances. There are many examples of that. 

Those are two good questions. I hope we get to that, and I hope 

we get to a chance to discuss how to make progress in those two 

areas, and I thank the chairman for having this hearing. 

Chairman LANTOS. And the gentleman from Florida, Mr. Kline. 

Mr. KLINE. I would like to express appreciation for many companies, Yahoo! being one of them, for great innovation and creativity 

and science and technology. At the same time, I think we also understand technology has allowed us to expand the free expression 

of information and ideas. It could be used in a very positive way 

to better people’s lives; it could be used in a very negative way in 

the case of a government using a free expression or expression of 

information to oppress or suppress or do things, as certainly has 

been represented here in China. 

But the bottom line is what are the standards of ethics and responsibilities and obligations that businesses, that American businesses have overseas and other countries. That is the discussion 

that we are very interested in hearing what your thoughts are. I 

think many people around the country have some specific ideas. As 

was expressed today, this is going to be a very big issue as we go 

forward. 

Information and technology don’t have founders. But we as 

Americans do believe in certain standards of ethics and conduct, 

and I think that we will be very interested to make sure our American businesses uphold very high standards. 

Thank you, Mr. Chairman. 
16

Chairman LANTOS. Thank you very much. 

My understanding is the gentleman from Illinois doesn’t wish to 

make an opening statement. 

We have two witnesses today, both of whom are senior executives 

at Yahoo!, a Fortune 500 company that describes itself as the 

world’s largest global online network of integrated services. 

Michael J. Callahan who first joined Yahoo! in 1999 has served 

the company since 2003 as senior vice president, general counsel, 

and secretary of the corporation. This year Mr. Callahan became 

executive vice president. Mr. Callahan is responsible at Yahoo! for 

worldwide legal affairs and public policy. He also advises Yahoo! 

management on strategic and corporate governance issues. Mr. 

Callahan is on the register at Georgetown University and holds a 

law degree from the University of Connecticut. 

Mr. Jerry Yang in 1994 co-created the Yahoo! Internet Navigational Guide, and a year later co-founded the company. In June of 

this year, he became chief executive officer. Mr. Yang displayed a 

key role in building Yahoo! over the years. He has developed 

Yahoo!’s corporate strategy, technology vision, strategic business 

partnerships and international joint ventures. Mr. Yang holds a 

B.S. and M.S. degree in electrical engineering from Stanford. Currently he is on a leave of absence from the Ph.D. program. 

At this time, I ask Mr. Yang and Mr. Callahan to please stand 

and raise your right hand to take the oath. 

[Witnesses sworn.] 

Chairman LANTOS. Let the record show that each of the witnesses answered in the affirmative. 

We will first hear from you, Mr. Yang. 

STATEMENT OF MR. JERRY YANG, CHIEF EXECUTIVE 

OFFICER, YAHOO! INC. 

Mr. YANG. Chairman Lantos—you would think I would know 

how to operate a mike. 

Chairman Lantos, Ranking Member Ros-Lehtinen, members of 

the committee, I am Jerry Yang, co-founder and board member of 

Yahoo! Inc. since its inception in 1995, and since last June, this 

June, 4 months ago, as chief executive officer. 

I appreciate the opportunity to come before you today to address 

our role as a global business in the complex human rights and 

other issues at stake, and our commitment to free expression and 

privacy. 

Before I begin what I hope will be an ongoing and constructive 

dialogue about the roles and responsibilities of companies and the 

U.S. Government on these issues, I would like to make two points 

clear at the outset: First, Yahoo! has been open and forthcoming 

with the committee at every step of this investigative process. We 

have answered every question, provided every requested piece of 

information, and worked with you in good faith. Mike will talk 

more about the facts in a minute. 

I, in turn, look forward to a productive and working relationship 

with all of you as we collectively tackle this very difficult set of 

broader issues. 

Second, Yahoo! is a company committed to doing the right thing 

to protect human rights globally. We are a company founded on 
17

openness and an exchange of information and trust. And we deeply 

believe—believe deeply in freedom of expression and privacy. 

On a personal level, this very serious human issue at stake 

caused me great concern. I have invested my professional life in 

this company, and I believe in the Internet and its present power. 

I also know that governments around the world have imprisoned 

people for simply speaking their mind online. That runs counter to 

all of my personal and professional beliefs. 

I want to take a moment to recognize the families of the dissidents who sit behind me, and I want to say that we are committed to do what we can to secure their freedom. And I want to 

personally apologize to them for what they and their families are 

going through. 

Since this is my first opportunity to meet with many of you, I 

would like to share a bit about myself and our company. As with 

all of us, our life experiences change our perspectives, our beliefs, 

and our vision for the future. 

Like many who came to America with the hope of a better life 

and opportunity, my mother brought my family here from Taiwan 

when I was 10. We settled in California, and I grew up like many 

other American boys, playing sports, studying hard and devoting 

my time to my family. I also did this with a keen appreciation at 

an early age that this is the land of opportunity and freedom and 

the many opportunities America offered. I believe then, as I believe 

now, that this country is a beacon of freedom for the rest of the 

world. 

I dedicated long hours to studies, and I was fortunate to attend 

Stanford University, where I focused on electrical engineering, and 

while there the World Wide Web and Internet began to take off. 

And my fellow graduate student David Filo and I, while messing 

around on the Internet, became fascinated with its incredible 

power and the opportunity it presented to people everywhere. 

We also recognized and realized the vastness of information on 

the Internet would be overwhelming without a sensible system to 

organize it. That is essentially how Yahoo! was born. What started 

out as a simple list of interesting Web sites has evolved into one 

of the world’s most popular Internet destinations. 

When we founded Yahoo! in 1995, we wanted to create a business and expand access to information to improve people’s lives. 

Today with nearly 14,000 employees operating in over 20 countries, 

we have more than 500 million people around the world use Yahoo! 

per month, roughly half of all the Internet users globally. 

Yahoo!’s communication tools, like Yahoo! Messenger and Yahoo! 

Mail, which is the most popular Web-based mail service in the 

world, helped friends, families, workers, colleagues and people to 

share interest, communicate and stay connected in unprecedented 

ways. Our many services also help people to find, keep up with, 

comment on, even create content around the latest in news, finance, politics, education, sports, lifestyle and many other developments around the world. 

Our company is centered around empowering our customers. We 

never lose sight of the fact that our success as a business is built 

upon the trust we maintain with our community of global users, in-
18

cluding citizens from around the world, our advertisers, publishers 

and business partners. 

I would like to take a minute and give you some context about 

our global business and our entry into foreign markets, including 

China. As our young company grew quickly in the late 1990s, the 

United States Government, including Congress, made the decision 

to normalize trade relations with China. Since then, across Democratic and Republican administrations, the U.S. Government has 

encouraged American businesses, including technology companies 

like ours, to engage with China in an enormous market and one 

focused on modernization. With this backdrop, Yahoo! made the 

choice, like many other companies across many other industries, to 

engage in the Chinese market by establishing local operations providing services to Chinese citizens. 

To provide historical perspective, at the time we entered the 

market in China, China was just emerging from decades of closure 

to the outside world. Even as recently as the mid-’90s, very few 

Chinese people had telephones in their homes. All media, as it was 

mentioned, was controlled by the state, and there was no platform 

for public discussion or news or social issues. 

Today despite broad limitation on discussion of sensitive political 

subjects, Chinese citizens know more than ever before about local 

public health issues, environmental causes, politics, corruption, 

consumer choice, job opportunities and even foreign affairs. Much 

of this change is due to the Internet. There are now over 150 million Internet users in China, second in number only to the United 

States, and with double-digit growth rates over the last 3 years. An 

estimated 16 million bloggers are active in China today. There are 

approximately 500 million mobile phone subscribers in the country. 

Let me take you back a little bit into the Internet industry in 

late 1999 and the early years of the 2000, 2001. You have an Internet industry that was very dynamic going through the boom and 

the bust of the Internet cycle, as well as, in China, a country that 

was going through its growth rate. 

We operated in China for about 6 years, and we decided to focus 

our strategic direction on leveraging the best local Chinese management and expertise and entrepreneurship. Therefore, in the 

summer of 2005, we announced the sale of Yahoo! China to a Chinese company called Alibaba in exchange for 40 percent stake in 

Alibaba. While I hold one of the four board seats on the parent 

company, we are now a minority shareholder and do not control 

Alibaba or Yahoo! China’s day-to-day operations. Alibaba is a leader in e-commerce and electronic payments in China and runs the 

Yahoo! China business. 

In addition to the clear business opportunities in China and 

other emerging markets, we know the presence of technology companies in markets abroad can have a transformative effect on people’s lives and local and national economies. Access to information 

has and will continue to change what people know about the world 

around them. For a company founded on the principle of increased 

access to information, these markets hold enormous promise. These 

markets also present companies like ours with challenges in areas 

of free expression and privacy. 
19

As I said earlier, we take these issues very seriously as a company. Let me describe to you some of the concrete steps we have 

taken independently as a company and also in working with our 

industry peers and human rights groups. To begin, I should note 

that I personally met with senior State Department officials, Members of Congress and others to discuss these issues of freedom, expression and privacy. 

In the last year Yahoo! has established a cross-functional team 

internally of senior employees worldwide to coordinate our efforts 

to address privacy and freedom of expression issues. This team consists of employees from a variety of disciplines and departments, 

including our legal, public, government relations, privacy, community affairs, law enforcement, compliance, security, emerging markets and operational and engineering. 

Members of this team also consult with the U.S. Government 

agencies and outside professionals and authorities including experts at academic institutions. This team, learning from our experience in China, also conducted a formal human rights assessment 

of the impact of new products and market entry plans, designing 

strategies that limit risks around challenges of freedom of expression and privacy in new markets. 

We’ve also supported independent research on these tough 

human rights issues involving technology and the Internet. Last 

year Yahoo! funded a Knight Fellowship at Stanford University to 

bring in journalists from countries where freedom of press is limited. The first journalist was from Pakistan, and this year’s Yahoo! 

Fellow is from Zimbabwe. We also funded a Yahoo! International 

Fellowship on Global Values and Technology at Georgetown University School of Foreign Service. 

For the past year and a half, we have been actively engaged in 

a formal human rights dialogue, co-facilitated by two nonprofits, 

Business for Social Responsibility in San Francisco and Center for 

Democracy and Technology here in DC. This is a formal process to 

design an industry code of conduct with other leading global Internet technology and communication companies. We’re working closely with a number of the most prominent human rights groups. 

Also included in the formal groups are academics and socially responsible investors. We’re all focused on protecting and promoting 

free expression and privacy in the on-line world. These diverse 

groups of NGOs, companies and others made a public commitment 

to create a set of global principles and operating procedures on 

freedom of expression and privacy to guide company behavior when 

faced with laws, regulations and policy that interfere with human 

rights. 

The group’s goal also includes creating an implementation, accountability, and governance framework, as well as a forum for 

sharing ideas. The companies are driving to complete this human 

rights code of conduct in early 2008. 

We also believe governments ultimately have the most leverage 

in this field. The State Department’s engagement and support 

through their global initiative, including the Global Internet Freedom Task Force announced in February 2006, reinforces our belief 

that governments, through trade relationships, bilateral or multilateral forums, and other diplomatic means, should be a powerful 
20

force of creating a global environment where Internet freedom is a 

priority and where people are not in prison for expressing their political views on line. 

We have been and will continue to be actively engaged for the 

long term. As a company entering its teenage years now, with hundreds of millions of users, and human stakes more challenging 

than ever, we know that we must work collectively to find approaches that maintain engagement in markets like China and also 

put companies in the position to act responsibly. 

Mr. Chairman, I hope my testimony helps to illustrate some of 

the global challenges and even opportunities American companies 

face in the markets abroad. I also hope you understand our commitment to work in good faith with the committee and the deep belief among Yahoo! employees in free expression and privacy. I 

would like to express my own personal commitment to human 

rights. I understand, I respect and share the committee’s intense 

interest in these issues and welcome your collective efforts to help 

address them. 

Thank you. I look forward to answering questions you may have. 

[The prepared statement of Mr. Yang follows:]

PREPARED STATEMENT OF MR. JERRY YANG, CHIEF EXECUTIVE OFFICER, YAHOO! INC. 

Chairman Lantos, Ranking Member Ros-Lehtinen and members of the Committee, I am Jerry Yang, co-founder and board member of Yahoo! Inc. since its inception in 1995, and since this past June, Chief Executive Officer. I appreciate the 

opportunity to come before you today to address our role as a global business, the 

complex human rights and other issues at stake, and our commitment to free expression and privacy. 

Before I begin what I hope will be an ongoing and constructive dialogue about the 

roles and responsibilities of companies and the U.S. government on these issues, I 

would like to make two points clear at the outset. 

First, Yahoo! has been open and forthcoming with this Committee at every step 

of this investigative process. We have answered every question, provided every requested piece of information and worked with you in good faith. I, in turn, look forward to a productive working relationship with all of you as we collectively tackle 

the difficult broader issues. 

Second, Yahoo! is a company committed to doing the right thing and to protecting 

human rights globally. We are a company founded on openness, the exchange of information and user trust, and we believe deeply in free expression and privacy. 

On a personal level, the very serious human issues at stake cause me great concern. I’ve invested my professional life in this company, and I believe in the Internet 

and its incredible power. I also know that governments around the world have imprisoned people for simply speaking their minds online. That runs counter to all my 

personal and professional beliefs. 

Since this is my first opportunity to meet with many of you, I would like to share 

a bit about myself and our company. As with all of us, our life experiences shape 

our perspectives, our beliefs and our visions for the future. 

Like many who came to America with the hope of a better life and opportunity, 

my mother brought me here from Taiwan as a child. We settled in California, and 

I grew up like any other American boy, playing sports, studying hard, and devoting 

time to my family. I also did all this with a keen appreciation at an early age of 

the freedoms and opportunities offered in America. I believed then, as I believe now, 

that this country is a beacon of freedom to the rest of the world. 

I dedicated long hours to my studies and was fortunate to attend Stanford University, where I focused on electrical engineering. While there, the World Wide Web 

began to take off, and my fellow graduate student and friend David Filo and I became fascinated by the Internet’s incredible power and the opportunity it presented 

to people everywhere. We also realized the vastness of the information on the Internet would be overwhelming without a sensible system to organize it. That is essentially how Yahoo! was born. What started as a simple list of interesting websites 

has evolved into one of the world’s most popular Internet destinations 
21

When David and I founded Yahoo! in 1995, we wanted to create a business and 

expand access to information to improve people’s lives. Today, more than 500 million 

people around the world use the Yahoo! network per month—roughly half of all 

Internet users globally. 

Yahoo!’s communication tools, like Yahoo! Messenger and Yahoo! Mail—the most 

popular e-mail service in the world—help friends, families, work colleagues and people who share interests, communicate and stay connected in unprecedented ways. 

Our many services also help people find, keep-up with, comment on, and even create 

content around, the latest in news, finance, politics, education, sports, lifestyle, and 

other developments from around the world. 

Our company is centered on empowering our customers. We never lose sight of 

the fact that our success as a business is built upon the trust we maintain with our 

community of global users, including citizens around the world, advertisers, publishers, and business partners. 

I’d like to give you context on our global business and our entry into foreign markets, including China. As our young company grew quickly in the late 1990s, the 

U.S. government, including Congress, made the decision to normalize trade relations 

with China. Since then, and across Democratic and Republican administrations, the 

U.S. government has encouraged American businesses—including technology companies—to engage with China, an enormous market and one focused on modernization. 

With this backdrop, Yahoo! made the choice like many other companies across many 

other industries to engage in the Chinese market by establishing local operations 

and providing services to Chinese citizens. 

I should note for the Committee that Yahoo! Inc. no longer operates a local subsidiary in China. In 2005, Yahoo! Inc. sold its Yahoo! China operations and in exchange became a shareholder in a Chinese company called Alibaba. We own approximately 40 percent of Alibaba. Alibaba now has management control over the 

Yahoo! China business. While I hold one of four seats on the board of the parent 

company, we are a minority shareholder and we do not control Alibaba or Yahoo! 

China’s day-to-day operations. 

In addition to the clear business opportunities various American companies recognize in China and other emerging markets, we know the presence of technology 

companies like Yahoo! in markets abroad can have a transformative effect on people’s lives and on local and national economies. Access to information has and will 

continue to change what people know about the world around them. For a company 

founded on the principle of increased access to information, these markets hold 

enormous promise. 

These markets also present companies with challenges in the areas of free expression and privacy. In response to these challenges, let me describe to you some of 

the concrete steps we’ve taken independently as a company and then also in working with our industry peers and also with human rights groups and others. 

I have personally met with senior State Department officials, Members of Congress and others to ask for help with this challenge. 

In the last year, we established a cross-functional team of senior Yahoo! employees worldwide to coordinate our efforts to address privacy and freedom of expression 

issues. This team consists of Yahoo! employees from a variety of disciplines and departments, including our legal department, public and government relations, privacy, community affairs, global law enforcement and compliance, security, emerging 

markets and our international operations. 

Members of the team also consult with U.S. government agencies, like the State 

Department, and outside professionals in the field, including experts at academic institutions. This team, learning from our experiences in China, also conducted a formal human rights assessment of the impact of new products and market-entry 

plans, designing strategies that limit risks around challenges to freedom of expression and privacy in new markets. 

We’ve also supported independent research on these tough human rights issues 

involving technology and the Internet. Last year Yahoo! funded a Knight fellowship 

at Stanford University to bring in journalists from countries where press freedoms 

are limited. The first journalist was from Pakistan, and this year’s Yahoo! Fellow 

is from Zimbabwe. We also funded a Yahoo! international fellowship on global values and technology at Georgetown University’s School of Foreign Service, and the 

first Yahoo! Fellow recently began her academic work. 

For the past year and a half, we have been actively engaged in a formal human 

rights dialogue co-facilitated by two non-profits—Business for Social Responsibility 

in San Francisco and the Center for Democracy & Technology in Washington, D.C. 

This is a formal process to design an industry code of conduct with other leading 

global Internet, technology and communications companies. We’re working closely 

with various NGOs, including the most prominent human rights groups. Also in-
22

cluded in this formal group are academics and socially responsible investors. We’re 

all focused on protecting and promoting free expression and privacy in the online 

world. 

This diverse group has made a public commitment to creating a set of global principles and operating procedures on freedom of expression and privacy to guide company behavior when faced with laws, regulations, and policies that interfere with 

human rights. The group’s goals also include creating an implementation, accountability and governance framework—real teeth—as well as a forum for sharing ideas. 

The companies are driving to complete this human rights code of conduct in early 

2008. 

We believe governments, because of their enormous leverage, have a vital role to 

play independently, teaming with other governments and international institutions, 

and working with companies. The State Department’s engagement and support 

through their global initiatives, including a Global Internet Freedom Taskforce or 

GIFT announced in February 2006, reinforces our belief that governments—through 

trade relationships, bilateral and multi-lateral forums, and other diplomatic 

means—should be a powerful force for creating a global environment where Internet 

freedom is a priority and where people are not imprisoned for expressing their political views online. 

We continue to believe in engagement in markets like China. Why? Today, despite 

broad limitations on sensitive political subjects, Chinese citizens know more than 

ever before about local public health issues, environmental causes, politics, corruption, consumer choice, job opportunities, and even some foreign affairs. According 

to a 2007 Pew Internet study, there are 137 million Internet users in China—second 

in number only to the United States—with double digit growth rates over the last 

three years. An estimated 16 million bloggers are active in China today. The Internet drives innovation across sectors, including in science, medicine, business, and 

journalism just to name a few. 

Information is empowering in both ordinary and extraordinary ways. It can be 

disruptive or even revolutionary. It’s the single greatest reason certain governments 

fear open use of the Internet and the free flow of information. We also know we 

must work collectively to find approaches that maintain this engagement in markets 

like China and also put companies in the position to act responsibly. 

Mr. Chairman, I hope my testimony helps illustrate some of the global challenges, 

and even opportunities, American companies face in markets abroad. I also hope 

you understand our commitment to continue to work in good faith with the Committee and the deep belief among Yahoo! employees in free expression and privacy. 

I would like to express my own personal commitment to human rights. I understand, respect, and share this Committee’s intense interest in these issues, and welcome your constructive efforts to address them. 

We have been and will continue to be actively engaged for the long-term. As a 

company entering its teenage years now, with hundreds of millions of users, and 

with the human stakes more challenging than ever, we remain fully committed to 

protecting human rights in the business world’s most challenging markets. 

Thank you. I look forward to answering any questions you have today.

Chairman LANTOS. Mr. Callahan. 

STATEMENT OF MICHAEL J. CALLAHAN, ESQ., GENERAL 

COUNSEL, YAHOO! INC. 

Mr. CALLAHAN. Thank you, Mr. Chairman. 

Chairman Lantos, Ranking Member Ros-Lehtinen, and Congressman Smith and members of the committee, I’m Mike Callahan, executive vice president, general counsel and secretary of Yahoo!. Mr. 

Yang has described for you the opportunities and challenges that 

Yahoo! faced when entering the China market and Yahoo!’s approach to human rights issues going forward. 

I welcome the opportunity to address directly the allegations that 

have been lodged against Yahoo! concerning my testimony in February 2006. Obviously following my first opportunity to testify to 

Congress in February 2006, to have the result be to come back to 

this committee to explain my prior testimony is not how I would 

have liked things to come out. I am not proud of that fact, and I 

do welcome the opportunity to discuss with you today. 
23

I understand that my testimony in 2006 has caused confusion 

about what Yahoo! knew and didn’t know about the contents of a 

demand for information that Yahoo! China received from the Chinese Government in the Shi Tao case. This confusion and my statements at the 2006 hearing stem from a lack of information on my 

part, which I sincerely regret. 

At the time of my testimony in 2006, it was my understanding 

that the Shi Tao demand did not contain specific details of the investigation, including no details regarding the name, profession, activities or charges under investigation, and that is how I testified. 

I now know that the demand did contain additional information; 

that the investigation related to ‘‘state secrets.’’ If I had had this 

additional information, I would have made it clear that we were 

aware of the general law in question, though not the specific nature of the case and not the political nature. 

I apologize to you today, Mr. Chairman, as I have previously 

apologized to you and to the staff, and I apologize now to the full 

committee for not coming back to the committee once I realized in 

October 2006 that the demand did contain this additional information. 

There are major disagreements over whether the reference to 

state secrets was significant enough to tell Yahoo! anything material about the case. I believe that while my testimony should have 

been more precise, the fundamental point remains unchanged, that 

we did not know the case related to a journalist, we didn’t know 

it was dissident activity, and we did not know this was a political 

case when Yahoo! China was required to provide the demanded information. 

But again, it is clear that this prior testimony has caused a great 

deal of concern expressed obviously by you, Mr. Chairman, and by 

other members, and by the staff, and I sincerely regret that I didn’t 

have the full information to make the facts completely clear in my 

prior testimony. 

Beyond this concern over my prior testimony, the underlying 

issue here from our perspective is it better for United States Companies to engage in China or to disengage? I recognize that some 

may disagree, but our view is that engagement in China is the better course. That is why Yahoo! opened local operations in China. 

A by-product of opening local operation, however, is that local 

companies are subject to local law. I cannot ask our local employees 

to resist lawful demands and put their own freedom at risk even 

if in my personal view the local laws are overbroad. And while I 

am no expert in Chinese law, it is my understanding from consulting with lawyers who are experts in this area that the Chinese 

law regarding disclosure of state secrets is just that, overbroad. 

And as I understand it, the law is vague and broad, and it covers 

such areas as military information, economic information, and 

science and technology, as well as being used to prosecute political 

dissidents. 

Over the past 3 months, Yahoo! and I personally have cooperated 

fully with your staff regarding its inquiry into my testimony before 

this committee in February 2006, and I explained why I testified 

as I did. In a series of meetings we actively engaged with your staff 

to explain the detail surrounding the demand Yahoo! China re-
24

ceived from the Chinese Government for certain information regarding the user we had later learned was the journalist Shi Tao. 

I came to Washington to meet with the committee staff in early 

October, and I presented my understanding of what happened and 

answered your questions. Additionally at the staff’s request, a regional counsel from Hong Kong made a special trip to Washington 

for an additional meeting with the committee staff. 

Following these meetings I understand that the committee’s lead 

investigator has expressed privately to our attorneys that he was 

satisfied I did not intend to mislead the committee, and I had testified truthfully in February 2006 as to the information I had at the 

time. Because of your concern, I would like to take this chance to 

go into the details of what happened. 

I first learned of Yahoo! China’s role in the Shi Tao case after 

the press reports in September 2005. The press reported that Shi 

Tao had been convicted of divulging state secrets abroad, and that 

the verdict stated Yahoo! Hong Kong had provided the Chinese authorities with the information in this case. Prior to those press reports, I was not aware of the Chinese Government demand for information in this case, and I was not directly involved in or informed of Yahoo! China’s response to the law enforcement order. 

After the press reports, Yahoo! employees contacted employees at 

Yahoo! China to determine what happened in the case. Yahoo! 

China confirmed that it had responded to a lawful demand for information concerning the Yahoo! China subscriber with the user ID 

that was listed in the verdict. As far as I know, this response was 

handled directly by Yahoo! China’s Beijing office upon determining 

that it met the applicable legal requirements. From that point forward, Yahoo! publicly acknowledged that Yahoo! China had responded to a lawful order for information concerning the user ID 

that was listed in the verdict. 

In February 2006, I testified before two subcommittees of the 

committee along with several other Internet companies in the hearing entitled, The Internet in China: A Tool for Freedom or Suppression, called by Congressman Smith. In my testimony I stated when 

Yahoo! China in Beijing was required to provide information about 

a user who we later learned was Shi Tao, ‘‘we had no information 

about the identity of the user or the nature of the investigation. Indeed we were unaware of the particular facts surrounding this case 

until the news story emerged.’’

It may help to take a step back and explain my perspective of 

the purpose of my February 2006 testimony. At the time of the 

hearing, there were press reports and public concerns suggesting 

that Yahoo! China was cooperating knowingly and voluntarily with 

the Chinese Government to target dissidents. These were very serious and very inaccurate allegations. 

In my testimony I tried to make clear that when Yahoo! China 

responded to the lawful demand for information, it did not know 

the identity of the user and did not know that the person targeted 

was a reporter or that it involved political activism. That was my 

point in making the statements in my prior testimony. The point 

is unchanged by that additional information I now know. And I 

also emphasized my understanding that failure by the Yahoo! 

China operation in Beijing to comply with these lawful orders from 
25

government authorities may have subjected local employees of that 

company to civil and criminal penalties, including imprisonment. 

Chairman LANTOS. Why do you insist on repeating the phrase 

‘‘lawful orders’’? These were demands by a police state to make of 

an American company a co-conspirator in having a freedom-loving 

Chinese journalist put in prison. By what judgment do you call 

these orders lawful? These are the orders of a police state demanding cooperation of an American company. 

Mr. CALLAHAN. Yes, Mr. Chairman. And we sincerely regret the 

consequences, as you point out, of the Yahoo! China operation having complied with those orders. 

Chairman LANTOS. So will you continue to use the phrase ‘‘lawful 

orders,’’ or will you just be satisfied saying ‘‘orders’’ or ‘‘requests’’? 

Mr. CALLAHAN. I can refer to it that way if you like, Mr. Chairman. 

Chairman LANTOS. No. I’m asking you whether you consider it 

lawful to have the Chinese Communist police demand that Yahoo! 

become a co-conspirator in sending a Chinese journalist to prison. 

Mr. CALLAHAN. I’m sorry, I didn’t understand what you were saying before. It is my understanding that under Chinese law these 

are lawful. I understand that they do not meet the norm certainly 

of what the United States would consider to be lawful, but my understanding is that they were lawful orders in China, recognizing 

the distinction between that and your point, sir. 

Chairman LANTOS. Please proceed. 

Mr. CALLAHAN. Thank you. 

At the time of my testimony, I did not know that the order referenced a state secrets investigation. I realized that only in October 

2006, 8 months after appearing before your subcommittees. And 

though the reference to state secrets is not information I had at the 

time at the February 2006 hearing, in my view this additional information does not support that Yahoo! provided false information 

to Congress. 

Please let me describe to the full committee, as I did to some of 

the committee staff several weeks ago and to some members of the 

committee previously, how I became aware of this new information. 

In response to a complaint, the Hong Kong Privacy Commissioner’s 

Office had opened an investigation into whether Yahoo! Hong Kong 

had disclosed the information demanded in this order in violation 

of certain privacy regulations in Hong Kong. 

In October 2006, I reviewed draft materials prepared for response by Yahoo! to this investigation, and I noted a statement 

that the order referenced state secrets. When I inquired about the 

language, a regional lawyer in Hong Kong indeed confirmed that 

the order said state secrets. 

Mr. Chairman, I was surprised to hear this additional information, as I have expressed to your staff, because it was different 

than my understanding from February 2006. Although I did not 

understand the reference to state secrets to reveal the investigation 

was for pro-democracy activities, nonetheless I recognized in October 2006 that this was additional information about this case. 

Once I became aware of the additional information, Yahoo! made 

no effort to conceal it. Indeed, shortly thereafter, over 1 year ago, 

Yahoo! filed a sworn statement with the Hong Kong Privacy Com-
26

missioner under my signature that included a direct reference to 

the fact that this order contained the state secrets language appearing in the demand. Furthermore, the Commissioner’s subsequent report publicly issued in March 2007 references the state secrets language appearing in the order as well, as well as the language from my submission in October 2006. I believe this report 

has been publicly available on line and in English since March 

2007. And in addition, Yahoo! stated publicly after October 2006 

that the case involved the state secrets investigation. 

It is clear from the company’s continuing action that there was 

never an intent or plan to conceal this information, Mr. Chairman. 

And this includes my prior testimony. 

Please let me once again express my regret that in October 2006, 

when I realized the state secrets language was included in the 

order, that it did not occur to me to contact the committee about 

this information. Given what I now know about the misunderstanding and the concern created, I deeply regret that I did not 

think to contact you. I have apologized for that oversight to you, 

Mr. Chairman, through the committee staff and directly, and I 

have reiterated it publicly here today. 

Engagement in China raises difficult and complex issues and 

issues upon which there should be serious debate. As a company 

founded on openness and user trust, we are committed to free expression and privacy. We continue to believe that engagement in 

China is the better course, and that disengagement would not further the goal of a more open and informed society in China. I hope 

that this hearing provides an opportunity to address these important issues. 

I would be happy to answer your questions, sir. 

[The prepared statement of Mr. Callahan follows:]

PREPARED STATEMENT OF MICHAEL J. CALLAHAN, ESQ., GENERAL COUNSEL, YAHOO! 

INC. 

Chairman Lantos, Ranking Member Ros-Lehtinen, former Chairman Smith, and 

Members of the Committee, I am Michael J. Callahan, Executive Vice President, 

General Counsel and Secretary of Yahoo! Inc. Mr. Yang has described for you the 

opportunities and challenges that Yahoo! faced when entering the China market and 

Yahoo!’s approach to human rights issues going forward. I welcome the opportunity 

to address directly the allegations that have been lodged against Yahoo! concerning 

my testimony in February 2006. 

I understand that my testimony in 2006 has caused confusion about what Yahoo! 

knew and didn’t know about the contents of a demand for information that Yahoo! 

China received from the Chinese government in the Shi Tao case. This confusion, 

and my statements at the 2006 hearing, stem from a lack of information on my part, 

which I sincerely regret. At the time of my testimony in 2006, it was my understanding that the Shi Tao demand contained no information regarding the specific 

details of the investigation, including no details regarding the name, profession, activities, or even charges under investigation, and that is how I testified. I now know 

that the demand did contain additional information—that the investigation related 

to disclosure of state secrets. If I had had this additional information, I would have 

made it clear that we were aware of the general law in question though not the specific nature of the case and not the political nature of the case. And I apologize to 

you today, as I have apologized to your staff a few weeks ago, for not coming back 

to the Committee once I realized in October 2006 that the demand contained this 

additional information. 

There remains a disagreement over whether the reference to ‘‘state secrets’’ was 

significant enough to tell Yahoo! anything material about the case. I believe that 

while my testimony could have been more precise, the fundamental point of my testimony remains unchanged—we did not know that the case related to a journalist, 
27

dissident activity, or that it was a political case when Yahoo! China was required 

to provide the demanded information. 

But again, it is clear that this prior testimony has caused a great deal of concern 

among some members of the Committee and its staff, and I sincerely regret that 

I did not have full information to make the facts completely clear in my prior testimony. 

Beyond this concern over my prior testimony, the underlying issue here from our 

perspective is whether it is better for U.S. companies to engage in China or to disengage. I recognize that some may disagree, but our view is that engagement in 

China is the better course, and that is why Yahoo! opened local operations in China. 

A byproduct of opening local operations, however, is that local operations are subject 

to local law. I cannot ask our local employees to resist lawful demands and put their 

own freedom at risk, even if, in my personal view, the local laws are overbroad. And 

while I am no expert in Chinese law, it is my understanding from consulting with 

lawyers who are experts in this area, that Chinese law regarding disclosure of state 

secrets is just that—overbroad. As I understand it, the law is vague and broad, and 

it covers areas such as military information, the economy, and science and technology. 

Over the past three months, Yahoo! and I have cooperated fully with your staff 

regarding its inquiry into my testimony before this Committee in February 2006 

and explained why I testified as I did. In a series of meetings, we actively engaged 

with your staff to explain the details surrounding the demand Yahoo! China received from the Chinese government for certain information regarding a Yahoo! 

China user in China who we later learned was the journalist Shi Tao. I came to 

Washington to meet with the Committee’s staff in early October, and I presented 

my understanding of what happened and answered your questions. Additionally, at 

the staff’s request, a Yahoo! regional counsel working in Hong Kong made a special 

trip to Washington for an additional meeting with the Committee’s staff. Following 

those meetings, I understand that the Committee’s lead investigator stated privately 

to our attorneys and consultants that he was satisfied that I did not intend to mislead the Committee and that I testified truthfully in February 2006 as to the information I had at the time. 

I welcome the opportunity to present to the Committee the information that I 

shared privately with your staff—namely, my full understanding of the facts surrounding the Shi Tao order and my February 2006 testimony. 

A. Events Leading to the February 2006 Hearing 

I first learned of Yahoo! China’s role in the Shi Tao case after the press reports 

in September 2005. The press reported that Shi Tao had been convicted of divulging 

state secrets abroad, and that the verdict stated that Yahoo! Hong Kong had provided the Chinese authorities with information in the case. Prior to those press reports, I was not aware of the Chinese government’s demand for information in the 

Shi Tao case, and I was not directly involved in—or informed of—Yahoo! China’s 

response to this law enforcement order. 

After the press reports of the Shi Tao conviction, Yahoo! Inc. employees contacted 

employees at Yahoo! China, to determine what had happened in the case. Yahoo! 

China confirmed that it had responded to a lawful demand for information concerning the Yahoo! China subscriber with the user ID that was listed in the Shi Tao 

verdict. As far as I know, this response was handled entirely by Yahoo! China’s Beijing office upon determining that the demand met applicable legal requirements. 

From that point forward, Yahoo! Inc. publicly acknowledged Yahoo! China had responded to a lawful order for information concerning the user ID that was listed 

in the Shi Tao verdict. 

On February 15, 2006, I testified before two subcommittees of this Committee, 

along with several other Internet companies, at the hearing titled ‘‘The Internet in 

China: A Tool for Freedom or Suppression.’’ In my testimony, I stated: ‘‘When 

Yahoo! China in Beijing was required to provide information about a user, who we 

later learned was Shi Tao, we had no information about the identity of the user or 

the nature of the investigation. Indeed, we were unaware of the particular facts surrounding this case until the news story emerged.’’

It may help to take a step back and explain my perspective of the purpose of my 

February 2006 testimony. At the time of the hearing, there were press reports and 

public concern suggesting that Yahoo! China was cooperating knowingly and voluntarily with the Chinese government to target dissidents. These were very serious—

and very inaccurate—allegations. In my testimony, I tried to make clear that, when 

Yahoo! China responded to the lawful demand for information concerning the user 

we later learned from the press reports to be Shi Tao, it did not know the identity 

of the user, that the person targeted was a reporter, or that the case involved polit-
28

ical activism. This was my point in making the statements in my prior testimony, 

and the point is unchanged by the additional information I now know. I also emphasized my understanding that failure by the Yahoo! China operation in Beijing to 

comply with lawful orders from government authorities may have subjected the Chinese employees of that company to civil and criminal penalties, including imprisonment. 

B. Events After the February 2006 Hearing 

At the time of my testimony, I did not know that the order referenced a ‘‘state 

secrets’’ investigation. I realized that only in October 2006, eight months after appearing before your subcommittees. Although the reference to state secrets is not 

information that I had at the time of the February 2006 hearing, in my view this 

additional information does not support the contention that Yahoo! provided false 

information to Congress. 

Please let me first describe to the full Committee, as I did to the Committee’s staff 

several weeks ago and to some members of the Committee previously, how I became 

aware of this new information. In response to a complaint, the Hong Kong Privacy 

Commissioner opened an investigation of whether Yahoo! Hong Kong had disclosed 

the information demanded in the Shi Tao order in violation of certain privacy regulations in Hong Kong. In October 2006, I reviewed draft materials prepared for response by Yahoo! to this investigation, and I noted a statement that the order referenced a ‘‘state secrets’’ investigation. When I inquired about this language, our regional lawyer in Hong Kong confirmed that the order said ‘‘state secrets.’’

Mr. Chairman, I was surprised to hear this because that was different from my 

understanding at the time of my February 2006 testimony. 

Although I did not understand the reference to ‘‘state secrets’’ revealed that the 

investigation was for pro-democracy activities, nonetheless, I recognized in October 

2006 that it was additional information about the Shi Tao case. Once I became 

aware of this additional information about the Shi Tao case, Yahoo! made no effort 

to conceal it. Indeed, shortly thereafter—over one year ago—Yahoo! Inc. filed a 

sworn statement with the Hong Kong Privacy Commissioner under my signature 

that included a direct reference to the fact that this ‘‘state secrets’’ language appeared in the demand made upon Yahoo! China by the government. Furthermore, 

the Commissioner’s subsequent report publicly issued in March 2007 clearly references this ‘‘state secrets’’ language appearing in the order, as well as the language 

from our submission. I believe this report has been publicly available online and in 

English since March 2007. In addition, Yahoo! stated publicly after October 2006 

that the case involved a ‘‘state secrets’’ investigation. It is clear from the company’s 

continuing actions that there was never an intent or plan to conceal this information in any way, and this includes my prior testimony. 

Please let me once again express my regret that in October 2006, when I realized 

that this ‘‘state secrets’’ language was included in the order, it did not occur to me 

to contact the Committee about this additional information. Given what I now know 

about the misunderstanding and concern created, I deeply regret that I did not 

think to contact you, and I have apologized for that oversight to you, Mr. Chairman 

through the Committee’s staff, and I have reiterated it publicly here today. But, in 

my view, this is not, Mr. Chairman, the provision of false information to Congress. 

I understood the fundamental point of my February 2006 testimony remains the 

same today: The order did not reveal the name of the individual, that the case targeted a reporter, or that the investigation was related to political activities. 

Engagement in China raises difficult and complex issues—issues upon which reasonable minds can differ, and issues worthy of serious debate. As a company founded on openness and user trust, we are committed to free expression and privacy 

globally. We continue to believe that engagement with China is the better course, 

and that disengagement would not further the goal of a more open and informed 

society in China. I hope that this hearing provides an opportunity to address these 

important issues. 

I would be happy to answer your questions.

Chairman LANTOS. I want to thank both of our witnesses for 

their testimony, and I would like to begin with you, Mr. Yang. 

I described in some detail, and I trust with some clarity, what 

in our view Yahoo! did wrong. Yahoo! collaborated with the Chinese police apparatus in the imprisonment of a freedom-loving Chinese journalist. Did you agree with that? 

Mr. YANG. Mr. Chairman, I—I—I understand where you’re coming from. We——
29

Chairman LANTOS. No, I’m not asking you to understand where 

I’m coming from. I am asking you: Do you agree with my characterization of what Yahoo! did? 

Mr. YANG. I think Mr. Callahan was clear in that——

Chairman LANTOS. No, I’m asking you, not Mr. Callahan. 

Mr. YANG. I—what I—I—what Mr. Callahan said was clear, was 

that we believe that, based on the information we have at the time 

of the order and subsequently, we did not have sufficient information to determine that this was a political case. And you have to 

just allow us to describe to you that. 

Chairman LANTOS. Could you put the microphone closer to you? 

Mr. YANG. Yes, sorry. 

As Mr. Callahan detailed both at the time of the order as well 

as subsequently, until very recently, we feel until the case came 

out in the news, we did not have sufficient information to know 

that this was a political case. We have a local operation. We have 

chosen to engage—that is an issue fundamental to all of this—that 

we’ve chosen to engage. We have employees on the ground that will 

comply with what looks like, subject to ideological debate, what are 

legal orders from the government. And we did not know at the time 

and until it was surfaced in the post prosecution documents that 

this was a political case. 

Chairman LANTOS. In my opening statement, Mr. Yang, I said 

the following, this—namely Yahoo!’s behavior was inexcusably negligent behavior at best or deliberately deceptive behavior at worse. 

Do you agree with that characterization? 

Mr. YANG. I think we made some errors in preparing and obviously gathering the facts for the February ’06 testimony. I think 

that we could have done that better, and we are not proud of that. 

We have apologized for providing information at the time that we—

and we didn’t know we had full information. And I feel that we’re 

having a dialogue now about how to move forward and understand 

the impact of government-to-company as well as multiparty discussions with our industry peers. And my interest, Mr. Chairman, I 

do believe it is very important that we figure out how to move forward here as a country and as well as an industry. 

Chairman LANTOS. What is your view, Mr. Yang, of the fact that 

once Mr. Callahan discovered that he provided a duly constituted 

congressional committee with wrong information, inaccurate information, he failed or anyone else at Yahoo! failed to advise the congressional committee that the original testimony given under oath 

was inaccurate? 

Mr. YANG. Mr. Chairman, I think we’ve recognized that inaccuracy in our testimony, and we have apologized for not providing 

that update to the committee. I would say we made no effort to 

conceal it. We filed it in the Hong Kong Privacy Commission, a filing in October of ’06. 

Chairman LANTOS. It is not the Hong Kong Privacy Commission 

that held the hearing, it is the Foreign Affairs Committee of the 

United States Congress that held the hearing, and it was the Foreign Affairs Committee of the United States Congress which was 

misled by your chief counsel. Once your chief counsel discovered 

that he misled this committee, was it his responsibility, was it 
30

Yahoo!’s responsibility to set the record straight with this committee? 

Mr. YANG. We should have come back to the committee with the 

facts. All I’m saying is that we made no effort to conceal it, and 

that as we——

Chairman LANTOS. You made no effort to reveal that fact. 

Mr. YANG. As we studied the order and really asked ourselves 

the questions of whether we considered state secrets to be political 

or not, we were certainly made aware that the state secrets is a 

very broad and vague set of things. And I—as I say, we—we—we 

clearly should have come back to the staff and to the committee 

and updated the committee. 

Mr. CALLAHAN. Mr. Chairman, if I may. 

Chairman LANTOS. Please. 

Mr. CALLAHAN. I take responsibility for the fact that we did not 

come back to talk to the committee. 

Chairman LANTOS. Has it occurred to you at the time that you 

should do that? Has that been a subject of discussion within the 

Yahoo! community, or it never occurred to anybody to say, ‘‘Hey, 

we misled the committee; now we know that we misled the committee, so we better advise them that the original testimony given 

under oath was totally misleading.’’? 

Mr. CALLAHAN. There was not a discussion about——

Chairman LANTOS. At no time was there a discussion? 

Mr. CALLAHAN. No, sir. And I should have realized that would 

cause a significant amount of concern and to come back to the committee. And I regret that I did not do that, but I did not come to 

a decision of whether we should come back, should we not come 

back. It didn’t occur to me to do so, and I sincerely regret that, and 

I wish that I had. 

Chairman LANTOS. I understand. 

Was there any Yahoo! employee with whom you were discussing 

this matter once you discovered that you gave misleading and false 

information under oath? How many people were involved in these 

discussions with you, Mr. Callahan? 

Mr. CALLAHAN. I recall there were two others on the legal staff 

that were involved in the Hong Kong Privacy Commissioner submission, and that’s who I asked my questions of when I noticed the 

state secrets language. 

Chairman LANTOS. So there were just three of you who were involved in this? 

Mr. CALLAHAN. As it relates to the——

Chairman LANTOS. In discussing this whole matter. I mean, your 

testimony before this committee initially was a matter of some interest within Yahoo!. 

Mr. CALLAHAN. I’m sorry, sir, I misunderstood that question. 

Chairman LANTOS. Now, when it became apparent to you and to 

others at Yahoo! that you gave misleading information, false information, did any of the people who were participating in these discussions raise the point that you should have come back to this 

committee to correct the misleading information? 

Mr. CALLAHAN. We did not have a discussion about coming back 

to the committee, sir. 

Chairman LANTOS. At no time? 
31

Mr. CALLAHAN. I wish that we had, and I wish that I had come 

back to the committee. 

Mr. Yang, why is it that after craven cooperation with the Chinese state security apparatus, the provision of false information to 

Congress, the failure to correct the record with this committee after 

all this, the only person punished is an innocent journalist who has 

been sentenced to jail for a decade? No one else has been punished 

in this case except the innocent. Explain to me. 

Mr. YANG. Mr. Chairman, as I have said in my statement, I—

I—I deeply regret the consequences of what the Chinese Government has done to our dissidents. My heart goes out to the families. 

I also looked at this matter, and, again, I was not involved in the 

original testimony, and I obviously was aware of what happened 

last year, but I really don’t believe that our employees acted in a 

way that was meaning to conceal or mislead or there was an intent 

to deceive, and those were the bases in which we look at our employees. It is not to say that we haven’t tightened up our process, 

it is not to say that we need to do a whole lot better in the future. 

You have shown reliance upon something that we need to do a 

whole lot better and improve in the future. So I understand and 

take your comments very, very seriously. But at the end of the day, 

I feel everybody was doing the best they can given the situation, 

which I just have to highlight it is a difficult situation in an environment that is very fluid. And I don’t feel anybody was trying to 

do anything wrong, they were doing the best they can. 

Chairman LANTOS. This committee approved legislation unanimously that will prohibit American high-tech companies from providing personal information to politically oppressive governments 

such as the Government of China. Isn’t this just the type of leverage that Yahoo! needs to fight against future Chinese Government 

requests for information about political dissidents? Do you welcome 

the ability, should this legislation become law, to tell the Chinese 

that American law prohibits you from complying with such requests from Chinese authorities, Mr. Yang? 

Mr. YANG. I think we welcome, as I said in my statement, any 

government to government. 

Chairman LANTOS. That is not my question. 

Mr. YANG. I think that the Congress, the executive branch, can 

do a lot to——

Chairman LANTOS. That is not my question, Mr. Yang. Let me 

rephrase it so you will answer the question I’m asking. 

What I’m asking is as follows: This committee unanimously approved legislation that will prohibit American high-tech companies 

from providing personal information to politically repressive governments such as that of China. Isn’t this the type of leverage 

Yahoo! and others need to fight against similar Chinese Government requests for information against political or religious dissidents? Wouldn’t you welcome the ability in future, once this legislation becomes a law, to tell the Chinese that American law prohibits you from complying with their requests? This is my question. 

Mr. YANG. I welcome—as you know, I support the goals of the 

bill. I do think—don’t think I understand the details of how to 

operationalize a bill for companies like ours. But I think it is the 

thesis and the theme of the committee around human rights and 
32

around repressive regimes is something that I understand and support, but I don’t know the details. 

Chairman LANTOS. Mr. Callahan, would you like to expand on 

that? 

Mr. CALLAHAN. Yes, certainly, Mr. Chairman. And thank you, 

Mr. Smith. I had reviewed the bill following the last committee 

hearing when it was introduced, and it has been some time since 

I looked at the new, and I have not reviewed in detail the new 

version that has come out, but I know members of our team are 

doing so. And to reiterate the point that Mr. Yang made, the engagement with United States Congress around a bill that looks to 

the important issues of censorship and to day of disclosure, these 

are the two challenges going forward that are part and core of that 

human rights dialogue that we mentioned, but also engagement 

with the State Department. And we very much would look forward 

to engaging with the committee on that bill. Again, I don’t know 

enough about the details as I sit here today, but our staff is in the 

process of reviewing it and indeed encouraged. 

Chairman LANTOS. Now, as I recall, during the course of the first 

hearing, which is almost 2 years ago now, a year and a half plus, 

I asked you whether Yahoo! has reached out to the family of this 

courageous freedom-loving journalist. What have you done to help 

them since he is in prison? And as I recall, you said, ‘‘Nothing,’’ 

that Yahoo! had done nothing to assist the family. Have you done 

anything since? 

Mr. CALLAHAN. We have not reached out directly to the family. 

Chairman LANTOS. Mr. Yang, would you explain to me why after 

all this time has expired, and as a Member of Congress, as your 

representative, in a public hearing almost 2 years ago, what have 

you done to help this family whose breadwinner is in prison? You 

still have done nothing to attempt to help them. 

Mr. YANG. Mr. Chairman, I feel that we—um—that Yahoo! are 

most interested in making sure we can secure somehow the freedom of the dissidents that we were involved in. 

Chairman LANTOS. I’m sorry, I didn’t hear you. 

Mr. YANG. We are very focused on understanding how we can be 

helpful in securing the freedom of the dissidents that we were involved in. 

Chairman LANTOS. That is not the question. The question I am 

asking, Mr. Yang——

Mr. YANG. I want to be——

Chairman LANTOS. Almost 2 years ago I asked your chief counsel 

what has Yahoo! done to reach out to the family and to help the 

family whose breadwinner your behavior put in a Chinese prison. 

Now, in February 2006, Mr. Callahan said, ‘‘Nothing.’’ Another 18 

months have passed by, and the answer is you have still done nothing. Can you explain why? 

Mr. YANG. What I was trying to say, Mr. Chairman, was that 

while we have not directly met 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, 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 I’ve been in many different dia-
33

logues, but I welcome the opportunity going forward and to meet 

with the family, to reopen as I have understood this case. Since I’ve 

become CEO in June, it is one of my priorities to understand how 

I can be open to help. 

And I want to thank you, Chairman Lantos, for having them 

here today, and I do hope this does bring a level of dialogue that 

we haven’t had. It is not because we don’t want to help them; it 

is obviously a very complicated issue. But I thank you. 

Chairman LANTOS. Why is it such a complicated issue to help a 

family whose breadwinner has been imprisoned because of Yahoo!’s 

cooperation with the Chinese police? What is so complicated about 

that? 

Mr. YANG. Mr. Chairman, as I said to you, I think that Yahoo! 

should do more. I personally should do more. 

Chairman LANTOS. You couldn’t do less, you couldn’t do less. 

Mr. YANG. I take your point, and we will do more as we go forward in helping and understanding what is our role in this. 

Mr. CALLAHAN. If I may, sir. 

Chairman LANTOS. Yes. 

Mr. CALLAHAN. In addition to the efforts that Mr. Yang described, we have advocated with human rights groups and with the 

State Department specifically for the release of the dissidents in 

question. 

Chairman LANTOS. That is not help to the family. You are not 

viewed as the champion human rights advocates in the world in 

view of this episode, so your chiming in with people who are devoting their lives to human rights is not that impressive. 

My question was a very specific question: Why hasn’t this gigantic corporation of enormous wealth reached out to the family to 

help the family? And I have no answer. I just get equivocation. 

Mr. CALLAHAN. We have pursued advocacy through other channels, but not directly through the family, sir, you are right. 

Chairman LANTOS. Ms. Ros-Lehtinen. 

Ms. ROS-LEHTINEN. Thank you so very much, Mr. Chairman. 

You use the words ‘‘police state,’’ and that certainly applies to 

China, Cuba, North Korea, Syria, Myanmar, and you discussed—

our witnesses discussed—censorship and data collection as being 

two of the biggest obstacles in relation to the freedom of information and the right of privacy. 

When you decide to engage with repressive regimes like the ones 

the chairman noted and I have mentioned, what conditions do 

these regimes place on your company? How much freedom do companies such as Yahoo! have regarding the demand for information 

by authoritarian governments in light of the Chinese case? Also 

what will you do or not do in the future should other repressive regimes make similar demands? 

For example, I understand you’re negotiating with the Vietnamese Government for entry into that country. What specific requests are you making of the Vietnamese regime to prevent a repetition of the Shi Tao incident? In what other countries that we 

normally refer to as authoritarian regimes or totalitarian governments are you engaged in or will you be engaged in? And what conditions are you placing on those governments or those governments 

are placing on you to ensure that information is not given to those 
34

regimes which will cause imprisonment, harassment, or great hardship for the families? And how often and to what extent do Chinese 

authorities demand information on individual users? How isolated 

is this case? 

The phrase ‘‘state secrets,’’ as I said, is too slippery. In Cuba everything is a ‘‘state secret,’’ and people are jailed for giving information on ‘‘state secrets.’’ A ‘‘state secret’’ is whatever the regime 

deems it to be, anything and everything. Castro’s health is a ‘‘state 

secret.’’

Is there information that Yahoo! will not provide to the Chinese 

authorities? Has this case caused you to change your practices in 

China and elsewhere? How has it changed? What will we expect 

from companies such as yours as you, in your phrase, choose to engage with these repressive regimes and possibly cause great harm 

to religious activists, human rights dissidents, opposition leaders, 

student groups, anyone who has a thought that runs contrary to 

these authoritarian regimes? So it is a host of questions that I have 

that I would appreciate your answering. 

Mr. CALLAHAN. Certainly. Thank you for the questions. 

When our company established operations in China, my understanding of the regime from a legal perspective at the time was 

that in order to get the license to operate in that country, the company had to agree to comply with Chinese laws, which included 

censorship, which was a subject of Mr. Smith’s hearing, and other 

companies were involved, and it also included compliance with law 

enforcement demands. Whether that regulation was specific as to 

what kinds of law enforcement demands, I’m not aware of that. I 

think it was general compliance with Chinese law. 

And looking ahead, what you mentioned and what I described in 

an earlier remark, the two key challenges—and I think it is part 

of Representative Smith’s bill, and it is also part of the human 

rights dialogue—is just what you identified, Congresswoman. It is 

date of disclosure and it is censorship. And as I understand, the 

way Yahoo! is looking forward at this issue, and not just Yahoo!, 

because there are other leading companies that are a part of this 

dialogue, it is how can we structure operations in other markets 

that are known to be restrictive of free expression or personal privacy in order to be able to operate in those markets, because we 

do believe there are benefits, and obviously there is a business opportunity, too, but to either segment data through its access to the 

data or through operational or legal frameworks that would place 

it out of the reach of those law enforcement authorities. 

For obvious reasons, about negotiations or plans that may be 

looking at other markets, and you mentioned Vietnam, it is better 

if I talk in broad strokes about how that might occur, and just 

what you’ve identified is that, which is as companies think about 

the future, we’ve learned lessons from the past. 

And Jerry mentioned the internal group of executives who focus 

on this issue at Yahoo, and I expect that probably the other leading 

companies that are involved in this as well, and perhaps the telecommunications companies also are thinking just about this issue, 

which is as new markets open up, how can we address that? And 

I think the committee’s bill is one step; the GIFT at the State Department is another step. But, frankly, I think it was another 
35

member in their opening statement asked, what is the company’s 

responsibility in this? 

I made this point in the February 2006 hearing, and I would like 

to make it again today, which is we haven’t come here to throw out 

this problem and say, ‘‘Someone else has to deal with it.’’ We recognize that as some of the industry’s leaders, we have an obligation 

and opportunity to try to effect change here. Has the past been perfect? Obviously not, given the situation that we’ve talked about. 

But I would like to think that there is a real opportunity with the 

collaboration that’s ongoing between the human rights groups and 

the leading companies in partnership with the Congress on the new 

bill, in partnership with the State Department to try to make real 

progress on these issues. 

Ms. ROS-LEHTINEN. Although you say you prefer to answer it in 

broad terms, what about the case of Vietnam? What restrictions 

are being placed on you? What information are you going to have 

to comply to that regime? How similar are these repressive regimes 

and the conditions that they place? 

Mr. CALLAHAN. My understanding is—we’re in the process of 

evaluating that. I’m not aware of what the specific restrictions 

would be; however, I am aware of certainly press reports. And I 

think, if I’m not mistaken, a subcommittee of this subcommittee is 

having a hearing on Vietnam this afternoon. So I’m not exactly 

aware of what specific restrictions, but obviously have seen the 

press reports about similar concerns. 

Ms. ROS-LEHTINEN. And you would think that based on the committee’s interest with the case in China that we would like to have 

that not repeated elsewhere, so it would be helpful if you could let 

us know what you will be doing with these repressive regimes. And 

certainly Mr. Smith’s bill gives you the opportunity to say to these 

governments, we can’t give you that information. We will be in—

not in compliance with U.S. laws. And I would think that you 

would welcome such a restriction because it would get you out of 

legal problems in the U.S., and at the same time you would sleep 

better at night because you would know that you would not be giving an authoritarian regime information that they will then use to 

harass, imprison, prosecute, persecute people who are just speaking 

out for freedom and democracy. 

In what other countries do you operate that you sign such agreements about complying with not divulging—not giving information 

on—or having to give information on who the users are that the 

regime could then use to harass those dissidents? 

Mr. CALLAHAN. As for China, I think, as the chairman mentioned, that we had merged our operations, so Yahoo! China is not 

controlled by Yahoo! Inc. anymore, but that is obviously one significant market where the legislation as proposed would have an impact on our industry. 

Ms. ROS-LEHTINEN. So you have China and you have Vietnam. 

Are you operating in Vietnam already, or are you in negotiations? 

Mr. CALLAHAN. I believe it is a current—a work in progress, I 

don’t think firmly established yet. 

Ms. ROS-LEHTINEN. This is a good opportunity for you to put 

your beliefs in writing and make sure that you don’t find yourself 

in this situation again. 
36

What other regimes? 

Mr. CALLAHAN. I’m not aware of other markets that we are operating in that have similar restrictions, but I think one of the enlightening parts of the entire episode around Yahoo! and China and 

dissident activity is that there are many markets around the world 

where the information industry like Yahoo!, and Google, and Microsoft and other companies are not yet operating, but may someday 

in the future. 

Ms. ROS-LEHTINEN. One more question. Saudi Arabia is a very 

repressive regime. 

Mr. CALLAHAN. Yes. 

Ms. ROS-LEHTINEN. I’m trying to get a sense of what other countries do, and it is so difficult for you to tell me what other regimes 

are you dealing with and what information must you provide to 

those governments. 

Mr. CALLAHAN. We are not currently operating——

Ms. ROS-LEHTINEN. Not in any of the Middle East countries? 

Mr. CALLAHAN. No, we don’t have operations there. Certainly as 

we look ahead as an industry and as a company, as part of the 

framework that we’ve talked about with the other companies and 

also legislative and State Department efforts, I agree with what 

you said. This is a very good opportunity for our company and others to learn from the lessons of the past. 

Ms. ROS-LEHTINEN. We look forward to getting more details 

about your agreement with Vietnam, and we hold you to your 

word, and we will follow through with that agreement on Vietnam. 

Mr. CALLAHAN. Thank you. 

Ms. ROS-LEHTINEN. Thank you, Mr. Chairman. 

Chairman LANTOS. Mr. Sherman. 

Mr. SHERMAN. Thank you. 

Mr. Chairman, when the issue is taxation, the companies are 

here to tell us that the Internet should be a bastion of freedom. 

When we consider the Global Online Freedom Act, we are told by 

the companies, not that kind of freedom. 

I’ve got a couple of quick yes/no questions. Mr. Callahan, you discovered that, as to your testimony on Shi Tao, that there were 

some inaccuracies in your testimony in February 2006. Are you 

currently aware of any other material inaccuracies in the testimony 

that you gave this committee February ’06? 

Mr. CALLAHAN. No. We are obviously concerned about the prior 

testimony and the concern that was created, and to the extent we 

do have other issues, I absolutely would bring it to the committee, 

sir, yes. 

Mr. SHERMAN. And you have brought nothing else. So as of now, 

after careful review of your testimony, you are not aware of any 

other material inaccuracies? 

Mr. CALLAHAN. That’s correct, and we are looking at other areas. 

Mr. SHERMAN. Let me ask both witnesses, if either of you become 

aware that your testimony here today is materially inaccurate, will 

you bring that information to the attention of this committee in 

writing? 

Mr. Yang, it is a yes/no question. 

Mr. YANG. Yes. I think——

Mr. SHERMAN. Yes. 
37

Mr. Callahan? 

Mr. CALLAHAN. Yes. 

Mr. SHERMAN. Mr. Chairman, I think you showed considerable 

generosity in accepting Mr. Callahan’s explanation of what a 

harsher chairman would have said was a reason to pursue a perjury investigation. Unfortunately I didn’t hear any generosity from 

our witnesses when it came to those who had been imprisoned in 

China. We had heard the witnesses say they regret the effects of 

their action, and we’re told—I think I saw Mr. Yang bow to the victims of his company’s actions. But we’re not just concerned with 

Shi Tao, we also have three others who are in jail now because, in 

part, of the actions of Yahoo!, Mr. Wang, Mr. Cheng and Mr. Li. 

Let me ask Mr. Yang—well, let me preface this. One of the most 

hypocritical things you can do is refuse to do what you are able to 

do and say—and distract us by talking about what’s not in your 

power. You do not have within your power the ability to free Shi 

Tao, Mr. Wang, Mr. Cheng or Mr. Li, but you do have it within 

your power right now to tell this committee that Yahoo! will meet 

their humanitarian needs. Sir, are you willing to see Yahoo! meet 

the humanitarian needs of any one of these four prisoners? 

Mr. YANG. Congressman Sherman, I appreciate your comments, 

and I understand your point of view. I feel we have—we understand we were involved in Mr. Wang and Mr. Shi Tao’s cases. 

Quite frankly, we don’t know what we don’t know, so there might 

be more. I just said to——

Mr. SHERMAN. Sir, I asked you a very simple question. Are you 

going to meet their humanitarian needs? Or are you going to come 

before this committee and say, ‘‘Don’t hold us accountable for meeting their humanitarian needs because we will continue to pontificate ineffectually,’’ advocating your freedom, where the chairman 

indicates that your pontification is of only slight interest? 

Mr. YANG. I just said to the chairman of the committee I am very 

open to understanding how we can be helpful. 

Mr. SHERMAN. I told you how you can be helpful. You can meet 

their humanitarian needs. Give me a yes or no, are you going to 

do it, or are you not going to do it? 

Mr. YANG. I’m willing to consider it, Mr. Congressman. 

Mr. SHERMAN. You’re willing to consider it. That’s a ‘‘no’’ by any 

other standard. You are going to go home tonight and go to sleep 

knowing that these four individuals are in prison, knowing that 

you could do something to meet their humanitarian needs, and try 

to distract the committee by saying, well, you will come here and 

advocate their release. Well, I will, too, but I don’t think that’s 

going to lead to their release. 

Do you have any further comment, Mr. Yang? 

Mr. YANG. Congressman Sherman, I would just say that we certainly understand that we are involved in two. You named four, 

and I don’t mean to agree or disagree with that. I don’t want to 

answer the question with regards to necessarily all four because 

I’m not sure of our involvement in all four. What I am saying is 

I am very open——

Mr. SHERMAN. Will you—now you’re shifting off and saying you 

don’t want the other three. Well, you certainly know about the one 
38

that brought you here. Are you going to meet his family’s humanitarian needs——

Mr. YANG. We’re going to do our best. 

Mr. SHERMAN [continuing]. Or have you not studied that case 

enough? 

Mr. YANG. We know we are involved in two and believe we are 

going to do the best we can to understand what that means and 

have offered to meet with the families——

Mr. SHERMAN. You offered to meet with the families? Why would 

they want to meet with you, sir? You have led the imprisonment 

of their relatives, and you have come before a committee and said 

you will not help. Why would they give you that dignity? 

Mr. YANG. We have been clear and respectfully told the committee that we believe our role was not knowing and not intentional. We understand that we have responsibilities as a global 

company when these things happen. We regret what’s happened. 

Mr. SHERMAN. You have a responsibility, but not to do anything 

substantive. You have a responsibility to come here before this 

committee, but not to do anything that you’re capable of doing. 

Mr. YANG. Congressman Sherman, I did not say we won’t do anything. I am very deliberate in making sure that you understand 

that we will——

Mr. SHERMAN. Well, you haven’t done anything yet, you’re not 

willing to commit to doing anything now, and you’re going to leave 

this room, and I’m supposed to think you’re going to decide to do 

something next week? 

Mr. YANG. Congressman, maybe we’ll disagree on what we have 

done and what we haven’t done. 

Mr. SHERMAN. No, no, no, we are in full agreement on what you 

have done and what you haven’t done. You have taken action that 

has led to the imprisonment of you say two, I say four individuals. 

You have advocated their freedom after taking action that has led 

to their imprisonment, and you have come before this committee to 

say, ‘‘I will provide not 1 penny to meet their humanitarian needs.’’ 

As of now you are committed to not 1 penny. So we’ve got clear 

agreement on the facts. Are there any facts that I stated that you 

disagree with? 

Mr. YANG. Mr. Sherman, I would just say that we are understanding and we want to make sure that our involvement in helping with the dissidents is something that we can really have an impact. And we believe——

Mr. SHERMAN. Sir, you are one of the richest companies in the 

country, and you don’t know whether you can provide for the humanitarian needs of a couple of families? Do you have a report to 

make to shareholders that you are near bankruptcy and can’t take 

on the smallest additional cash flow problem? 

Mr. YANG. I understand what you are asking, and we will absolutely study it, and make sure that we understand how to help 

them. It is my commitment to you and the committee that we will 

do that. 

Chairman LANTOS. The gentleman’s time has expired. 

Mr. Smith. 

Mr. SMITH OF NEW JERSEY. Thank you very much, Mr. Chairman. 
39

Let me just say one thing you can do right away, and I appreciate you saying you will look into it and you want to be helpful. 

As you know, there’s a case in the Northern District Court in California. The plaintiffs are Shi Tao and Wang Xiaoning and others, 

and you can settle that in a very favorable way to the families. It 

is not like there is not a pending court case that is directed at 

Yahoo!. You can settle it; you can announce today that you will 

work with and not in an adversarial position vis-a`-vis the families. 

I would implore you to do that, to provide some sense of providing 

for their well-being. So you have a case right now in court and, it 

is my understanding, Yahoo! is going to be contesting. So settle it 

and settle it, I would say, generously in their favor. That would be 

one way you could convey to the committee and I think to your 

shareholders, the American people, and especially to the victims 

that you want—you recognize that there are true victims because 

of this complicity. So perhaps you could answer that first. 

Mr. CALLAHAN. Thank you, Congressman Smith. 

We absolutely will consider that. I think it is obviously an ongoing piece of litigation, but we absolutely would be open to opportunities to do that. I think we have already met with the counsel for 

the plaintiffs, and our outside counsel has done that and will continue to do that and follow up on that. 

Mr. SMITH OF NEW JERSEY. Again, I would say to you that this 

could never make it whole, but it would be a very important gesture on the behalf of Yahoo! to take this step forward. And I think 

it would provide leadership for others who are similarly offended. 

One of the aspects of our bill is that it provides the right of an 

individual who has been offended, particularly when personal or 

identifying information has been disclosed, to sue, because it is important that a victim have recourse through our courts to get some 

kind of compensation to make it whole. 

So, again, you have a case with very few people and others who 

are sitting in this committee room, the wife of and the mother of 

two victims who each got 10 years in a harsh, cruel prison in 

China. You can settle that tomorrow, if you would like. And I 

would tell you—and I am sure the committee would back this 

fully—that that would send a very clear and unambiguous message 

of true concern for their well-being. All of us can express concern 

verbally and orally, but it would seem to me that a settlement of 

that suit would express it tangibly. 

Let me ask you, if I could, Mr. Callahan—and I do take you at 

your word, that you apparently did not know when you appeared 

before our committee that this was a political show trial, but there 

were red flags all over the place. 

I have a copy of the actual verdict, and it makes it very clear 

that Yahoo! provided the information, rather that the original information emanated from Contemporary Businesses News, a newspaper in Hunan. I mean, there are red flags all over the request 

that was made that someone, clearly—and the state secrets, we all 

know what that is all about. That is about the public security police, which we all know are the enforcers of the political regime. 

They are the ones; they are the secret police. So any time they 

make any request, I think there ought to be a red flag as high as 

it can be hoisted that there is a problem with that request. 
40

So my first question, in addition to the other, if you wanted to 

elaborate on it, who were the ones at Yahoo! who knew about this 

request—you were improperly briefed, it would appear, but there 

were people who did know. Were they reprimanded? Did they get 

promoted at Yahoo!? 

If you did know at the time what you know now regarding these 

individuals, like Shi Tao, would you deny their request in China 

today if the police made that request? And are there any similar 

requests being made as we meet? Are we going to discover 6 

months from now somebody else has been thrown into the prison 

or about other individuals under circumstances that approximate 

what happened to Shi Tao? 

You talked, Mr. Yang, about tightening up the process. If you 

could elaborate, does that mean disclosure of information is denied 

to the security agents when they make that request? Are there any 

examples of that? 

You might recall, Mr. Callahan, when I asked you during the 

hearing in February 2006 how many times and how many people 

have been investigated, prosecuted and incarcerated because of information provided by Yahoo! to Chinese officials. If you could provide that to us today. You said, at the time, that information would 

violate Chinese law. 

Well, that begs too much, and that certainly begs the question, 

it seems to me, that you can’t even tell us how many times Yahoo! 

has cooperated with the officials to put people in prison, whether 

it is wittingly or unwittingly. We all know the consequences. They 

go to jail; they are tortured. You can take that to the bank. Once 

they are in jail, they will be so cruelly treated. And Harry Wu 

knows that so well, having lived through it. 

I do have some additional questions, but maybe you could start 

on those. 

Mr. CALLAHAN. As to whether or not there are current law enforcement demands at Yahoo! China, because of the operational situation I mentioned, we wouldn’t be aware of that at this time. 

But——

Mr. SMITH OF NEW JERSEY. Could I just interrupt? 

In Hong Kong’s debut of Alibaba, the AP is reporting that the 

stock is sizzling. It has gone up three times its asking price, or 

something of that order. Great amounts of money are being made. 

As you said, Mr. Yang, 40 percent of ownership is still vested in 

Yahoo!, if I heard you correctly, 39 to 40 percent, whatever it might 

be—a major, although minority, major shareholder. 

I said at the time, 2 years ago, almost 2 years ago, that it does 

give you a plausible deniability to say, ‘‘Oh, our affiliate is doing 

it, but not us.’’ You still are major shareholders. But it, again, says 

too much. 

And I put it out, Mr. Chairman, during the horrific Holocaust, 

IBM Germany, with some help from IBM United States, were providing the whereabouts of the Jews throughout all of Europe, especially in Germany, in Poland and elsewhere. They just honored a 

lawful request that was being made of them and said, ‘‘Oh, who do 

you want to know about now?’’, and they gave them lists of Jews 

who then went to the concentration camps. 
41

There certainly is a parallel here, and I don’t think it is in any 

way hyperbole to suggest that people are being tortured and mistreated today because of that complicity and that cooperation. 

So, Alibaba is not a dodge. It has plausible deniability; it has 

surface appeal. But it seems to me that there is still—if you really 

care about the victims, really care, if it was your wife or your husband or your child, would the model then fit? ‘‘Oh, it is Alibaba,’’ 

or ‘‘We are just complying with a lawful request.’’

Chairman LANTOS. The gentleman’s time has expired. 

Ms. ROS-LEHTINEN. Mr. Chairman, is it possible, just because it 

is Mr. Smith’s bill, the Global Online Freedom——

Chairman LANTOS. I will be happy to return to Mr. Smith, but 

I want my other colleagues to have a chance. 

Ms. ROS-LEHTINEN. Thank you. 

Chairman LANTOS. Ms. Woolsey? 

Ms. WOOLSEY. Thank you, Mr. Chairman. 

I am sitting here listening to all of this, because I knew everybody ahead of me would ask a lot of the wonderful major questions 

that have to be asked. 

But I have a human resources hat on. I grew up through telecom 

in a start-up company as the human resources manager. So I am 

looking at the culture of Yahoo!, and it is absolutely clear—I mean, 

my company that I was a part of was successful but not anything 

like what you are doing. It is hard to hold on to your culture as 

an organization when you grow as fast as you are growing. 

And so, as part of that culture, I mean, are you paying attention 

to the difference between making money and doing the right thing? 

I mean, you can let go—that can just go out the window so quickly. 

So one of the ways, for me, of judging the sincerity of your statements today—and Mr. Smith asked this, so I will follow up, because I really want the answer. Who has been held accountable in 

your organization for not—not who by name—but have individuals 

been held accountable for not giving you the information you needed when you came here before us? 

Mr. CALLAHAN. Yes, Congresswoman. The individuals involved 

have apologized. They obviously feel terrible that that had happened, that Mr. Yang and I are here today to explain my prior testimony. 

I have been very open with the fact that preparation should have 

been done better. As the responsible executive for the preparation 

in February 2006, I take responsibility for that, but I don’t try to 

share with this committee that I am proud of what the outcome 

was. I wouldn’t—I am not pleased to be back here to talk about my 

prior testimony. 

Ms. WOOLSEY. So, now, do they get to prepare you for this one? 

I mean, there is something about a start-up culture that doesn’t see 

the value of the House of Representatives. Is that part of it? 

Mr. CALLAHAN. No, not at all, Congresswoman. We took our 

preparation very, very seriously. We had retained very strong outside counsel at Covington & Burling. We worked with both inside 

and outside advisors to Yahoo!. I can only say that I wish it had 

been done better and that I wish I had all of the facts. 

Ms. WOOLSEY. I know you have told us that, but wishing and 

doing are—when you have a company culture, it starts from the 
42

top and it goes down. So you guys have set a pretty poor example, 

not just for your employees but for the rest of the industry that is 

successful and wants to be, as you are. 

When you talk about disengagement with China not furthering 

the goal of a more open and informed society in China, I find that 

very contradictory with the fact that we can’t ensure that the Internet industry can provide them with freedom of expression and privacy. I mean, what good are we doing them if we are just making 

money off of the people in China but they still don’t have freedom? 

What does that solve, Mr. Callahan? 

Mr. CALLAHAN. I do think that, notwithstanding the issues 

around my prior testimony, that it is my firm belief that the industry as a whole, and Yahoo! in particular, has done good in markets 

where free expression—even a censored Internet and opportunities 

for communication, in my opinion, do provide benefits. 

But as I mentioned earlier, I share your concern about the prior 

preparation. 

Ms. WOOLSEY. Well, as part of your company culture, it better be 

really clear to people that they can express themselves but they 

could get in trouble. They have to know that. 

And one of my other thoughts—and, Mr. Yang, maybe you could 

help with this one. When we are trading partners—and Yahoo! is 

a huge trading partner with China—doesn’t China benefit as well? 

The Chinese businesses and the Government, aren’t they benefiting 

financially from your partnership? Or are they just letting you in 

for the good of their heart? 

Mr. YANG. Congresswoman, I would comment by saying that I 

think there is a drive in China to become a more market-based 

economy. And I think if you look at the Internet industry, China—

most of the leading companies in the industry are Chinese companies. And what I will say is our participation in that market, both 

while we were there as an operating company and now as an investor, perhaps, ironically, is the reason we are here discussing this. 

I would say that if it weren’t for American companies there and engaging and participating and going through the challenges—we 

admit and have been very open about our challenges there. These 

are the discussions that I think are, to date, are being held. 

Ms. WOOLSEY. Then what I would like to say—because I am 

going to get cut off; my time is running out—if we are important 

to them, I would suggest that we withhold what we are doing until 

they do the right thing with these dissident folks that they have 

put in prison—prisoners. That you have you have the power; use 

it. 

Chairman LANTOS. The gentlewoman’s time has expired. 

Mr. Rohrabacher? 

Mr. ROHRABACHER. Thank you very much, Mr. Chairman. 

Again, I would like to—I say this so often, how much I admire 

your leadership of this committee. And, again, I have never been 

more proud to be with you than today. 

You mentioned, Mr. Callahan, you kept talking about how sorry 

you were about the inaccuracies in your testimony. And you just 

stated that the people who work for you, who briefed you, who, obviously, if we are taking everything at face value, did such a miserable job, about how they apologized. 
43

Were any of those people who set up this scenario for you and 

put you through all of this, were any of them fired? 

Mr. CALLAHAN. No, sir, they were not. 

Mr. ROHRABACHER. Okay. And given corporate culture what it is, 

you think that that sends the right kind of message to your employees or other corporate leaders if someone who made a mistake 

of this magnitude would not lose their job? 

I don’t think you can take people’s apologies, even this apology 

you are giving us today, seriously if your corporation has not even 

fired those who were responsible for this ‘‘mistake.’’

Again, Mr. Smith mentioned if the Chinese were to make a similar demand today, or the Vietnamese or another totalitarian government, would your corporation say no to that? 

And I know you have set up this legal way of saying, ‘‘Well, 

somebody else has the responsibility, because now it is Yahoo! 

China. We are only going to make a profit from that, but we are 

not going to take any responsibility for that.’’

Is it your corporate position that you will say no to requests of 

authoritarian governments when they ask for such help in the future? 

Mr. CALLAHAN. Compliance with local law in markets like China 

or Vietnam or others that may restrict free expression is complicated for a couple of reasons. First and foremost, if I was——

Mr. ROHRABACHER. So the answer is, you will comply. 

Mr. CALLAHAN. No, sir. 

Mr. ROHRABACHER. I mean, that is a yes or no question. Are you 

going to comply with requests from authoritarian governments like 

China in the future if they have similar requests for cooperation in 

order to suppress a dissident? 

Mr. CALLAHAN. I am sorry. I was trying to explain some of the 

complexity around the issue, which is——

Mr. ROHRABACHER. I know about the complexity. I want to know 

what your position your company has. 

Mr. CALLAHAN. The position is that, as we look forward into 

other markets—and you mentioned Vietnam, and there may be 

others in the future—we are looking at ways to operationally and 

legally structure the entity so they would not be placed in a position to do that. 

Mr. ROHRABACHER. So the answer is yes, you would cooperate by 

setting up a Yahoo! Vietnam who will then cooperate with the tyrant, a Yahoo! China, but you will profit from those corporations 

nonetheless. But you have shielded yourself from this type of moral 

responsibility that you are being held accountable for today. 

Mr. CALLAHAN. I—sir——

Mr. ROHRABACHER. Let me go on. 

Mr. Yang, you use the word ‘‘we’’ a lot. When you were asked direct questions about you, you kept using the word ‘‘we.’’ Was that 

the corporate ‘‘we,’’ or are you talking about your family or other 

people? 

Mr. YANG. If you can refer to——

Mr. ROHRABACHER. You have used the word ‘‘we’’ when answering specific questions about yourself. 

For example, let me just ask you this. You obviously are a person 

of great wealth. I don’t know if it is proper for me to ask, but you 
44

are probably a billionaire several times over. But yet today you 

have been unable to answer, rather, whether you, as a person, will 

help people who were hurt during your acquisition of billions of dollars for your own family. 

Now, are you personally—do you believe that you are personally 

responsible in some way for the actions of those corporations, especially Yahoo!, if they have committed crimes that have hurt other 

individuals? Are you personally responsible at all? 

Mr. YANG. Thank you, Congressman. Let me try to do this as 

precise as I can. 

Mr. ROHRABACHER. You have to hurry. 

Mr. YANG. I understand. 

Mr. ROHRABACHER. You could give me a yes or no on this, as 

well. 

Mr. YANG. I do wear two hats. And I, as a person—and I just 

I have to remind people that I was very involved in the company 

but I was not the CEO at the time. But as a person, I feel that, 

terribly—I forget the way you asked the question—I feel I have 

some responsibility. I personally would like to help. 

Mr. ROHRABACHER. How you feel is irrelevant. How you feel is 

irrelevant. 

Mr. YANG. You asked me if it was ‘‘we’’ or ‘‘I.’’ It is ‘‘I’’ personally, 

rather than the company. I want to make sure that is clear. The 

company clearly needs to do what I think we ought to do now that 

I am CEO. 

Mr. ROHRABACHER. What about you personally? Should you do 

that? 

One last question. Have you personally met with President Hu 

or some of the top leaders of China? 

Mr. YANG. I believe I have shaken President Hu’s hand once. 

Mr. ROHRABACHER. Have you been in meetings with President 

Hu or some of the top leaders of China? 

Mr. YANG. No. 

Mr. ROHRABACHER. So you have never been in a meeting? 

Mr. YANG. We were in a greeting line, sir. 

Mr. ROHRABACHER. Okay. 

Has your company, then—have you personally or has your company ever brought up the issue of human rights with the top leaders in official meetings between your company and the leader of 

China? 

Mr. CALLAHAN. If I can jump in, Congressman. Prior to the February 2006 hearing, representatives of Yahoo! did meet with highranking Chinese officials to express our concern about this issue 

and to ask for release. 

Mr. ROHRABACHER. We are not talking about this issue. We are 

talking about human rights. 

Mr. CALLAHAN. The human rights issue and the dissident activity. 

Mr. ROHRABACHER. One last note, and I respect that I only have 

a little bit of time. 

Today we have heard testimony that you believe things are actually getting better in China. And let me just note that I don’t know 

if you two are religious people or not, if you have any religious convictions or not, but there are people who believe in God who are 
45

being thrown into prison and tortured because of that in China. 

The Falun Gong are being arrested by the thousands and tortured 

in China. And there is a lot of evidence to suggest that China is 

not going in the right direction. 

And it must demoralize the people who want to take China in 

the right direction to see Americans, American corporations, making billions of dollars off of China trade and not bringing up and 

not standing clearly for the side of the freedom-lovers rather than 

the oppressors. 

Chairman LANTOS. The gentleman’s time has expired. 

The gentleman from Oregon, Mr. Wu. 

Mr. WU. Something didn’t feel right when I first heard about this 

hearing—and, Mr. Callahan, you contacted me, and it was the first 

I paid attention to this, although I had heard about the prior hearings. The former dean of my law school said when something 

doesn’t feel right in your gut, keep on digging until—keep on 

digging. 

And about 11 o’clock p.m. last night, I found a New York Times

story that really set the bells ringing in my head. The entity that 

contacted Yahoo! China was the Beijing State Security Bureau. It 

was the Beijing State Security Bureau. And that set of words 

makes me think that Yahoo!’s entire defense in this case just 

doesn’t hang together. 

You all are saying the law was unclear, and we have to obey 

local laws, and we didn’t know. I mean, that is the core of your defense. But, as you know, there are several different state security 

apparatuses in China. One is the Public Security Bureau, and that 

is, like, you know, the cop on the street. But the Beijing State Security Bureau, the Guoanbu—as opposed to the Gonganbu—the 

Guoanbu is the equivalent of the KGB. And, fortunately, we don’t 

have something like that here in the United States. And this was 

not just any office of the Guoanbu. This was the Beijing office of 

the Guoanbu. 

The closest that I can analogize this as to an American situation 

is if one of my constituents got a call from the IRS and said, ‘‘We 

would like you to come in and bring some documents with you,’’ 

and the reaction was that is business as usual and it doesn’t set 

off a whole bunch of alarm bells and red flags. From a corporate 

perspective, it would be as if you received an inquiry from the SEC 

or the Department of Justice, and you didn’t bring that to the attention of the board of directors and set off a whole bunch of bells. 

So I have a whole set of questions about corporate procedure 

which I will line out orally, and then ask the staff to present it 

with more precision in writing. And I would like to have your answers in writing. 

What are the standards of due diligence for answering questions 

to this committee and the Congress? What due diligence did you all 

perform in this case, and what will you do in the future? Did you 

form a separate unit to investigate what the corporation did? Did 

you inform the board of directors of either Yahoo! China or Yahoo! 

USA? Did the board look into forming an independent panel to look 

into this matter? And if not, why not? 

And I think that I am very, very concerned about what your internal procedures are, because the whole defense here seems to 
46

hang on ‘‘the law is vague, and we didn’t know,’’ but the fact of the 

matter is that there are 1.3 billion people in China. And if there 

is anything that I learned in my trips to China from 1978 to 1989, 

and then once again when I was in Congress, is that just about any 

child who is over the age of 5 will hit the red button, will poop in 

their pants if they get an inquiry from the Guoanbu, the State Security Bureau. And a corporate entity would react very, very 

strongly and perform very strong due diligence to find out what 

went on and to respond appropriately. 

And then I guess the last follow-up question I have for you is, 

there are allegations that Yahoo! has a liaison officer with the 

State Security Bureau, and I would like to know if that is true or 

not. 

The question I would like Mr. Yang to answer is: What have you 

all learned from this episode? And if the same thing happened 

again tomorrow, what, if anything, would you do differently? 

Mr. CALLAHAN. Thank you, Congressman Wu, for the questions. 

Taking your second question first, I am not aware of any liaison 

officer that Yahoo! has ever had to the SSB. 

In terms of the preparation process for the February 2006 hearing, we retained outside counsel, as well as we worked with a team 

of inside lawyers and others who were advising and preparing for 

the hearing. I was prepared with draft testimony, and we obviously 

worked through possible questions and issues to make sure we 

could understand those. And it was my understanding at the time 

that the team had, in fact, done all of the due diligence and gotten 

all of the documents. 

Mr. WU. But, Mr. Callahan, I think that I would like to know 

with precision exactly who was asked what all through the chain, 

not just at the corporate high level, 35,000-foot level, but also going 

back all the way to where the document came over the transom 

into the company. 

Chairman LANTOS. You will have to submit those answers in 

writing, because we have to move on. 

Mr. WU. Would it be all right if Mr. Yang were permitted to answer? 

Chairman LANTOS. Yes. 

Mr. YANG. Thank you, Congressman Wu. 

We clearly learned we need to do a better job in congressional 

testimony. We clearly understand the seriousness and the gravity 

of these concerns and these issues. 

As I have said, we believe that our China experience has taught 

us that, as we think about markets and different market entries, 

we need to conduct both business and operational but also more 

human rights and other types of assessments. We, as Mr. Callahan 

has talked about, are more rigorous around that. And I would say 

that we need to make sure that we can and should have better a 

process to understand the nature of law enforcement, to the extent 

we can. 

And I would just say that not everything is knowable. Sometimes, in retrospect, we certainly can find out what has happened, 

so we now understand what kinds of things we can put in place 

so that we don’t find out after the fact necessarily. 
47

So we have learned a lot, and I really do think that this kind of 

discussion helps us be a better company, and I appreciate that. 

Chairman LANTOS. The gentleman from South Carolina, Mr. Wilson. 

Mr. WILSON. Thank you, Mr. Chairman. 

And thank you for being here today. 

I actually have a very positive hope for the people of China. My 

dad served in the Flying Tigers during World War II. He served 

in Kunming and Seyoung. And I have been very grateful to have 

the opportunity to visit China several times, and what an extraordinary country. But it could be even better, indeed, if they had a 

fully free political system. And I hope somehow that the evolution 

continues. And, certainly, you are in a position to help promote an 

evolution toward a fully free country where people would feel free 

to communicate with each other. 

As we discuss this issue—and I was called away to another meeting—but I want to know how often and to what extent do Chinese 

authorities demand information on individual users? 

Mr. CALLAHAN. I don’t know the specifics on that, sir, but we obviously are aware of the case that we have been discussing here. 

Mr. WILSON. And——

Chairman LANTOS. You will submit the answer in writing once 

you find out from your colleagues in the committee. 

Mr. CALLAHAN. Yes. We will look into that. 

Chairman LANTOS. No. You are directed to answer that question 

in writing once you consult with your colleagues who know the answer. 

Mr. CALLAHAN. Thank you, Mr. Chairman. 

There is, if I may point out, there is a challenge to answering 

that question, because we no longer control Yahoo! China. And the 

legal complexity of the fact that those documents themselves, as I 

understand it, are considered to be confidential and state secrets 

of themselves, it may be difficult to get those. But I obviously will 

do the best I can. 

Mr. SMITH OF NEW JERSEY. Will the gentleman yield? 

Mr. WILSON. Yes. 

Mr. SMITH OF NEW JERSEY. That is precisely the answer, or certainly you said, ‘‘It is my understanding, sir’’—you were speaking—

‘‘that those records are prohibited from being disclosed under Chinese law because they are demands from Chinese law enforcement.’’

What have you done to change that? I mean, you said that almost 2 years ago. And we still, as the chairman has pointed out, 

we want that information: How many times, how often, who is 

going to jail in whole or in part because of Yahoo! or Alibaba’s complicity? 

Mr. CALLAHAN. Recognizing that there is the complexity that you 

note, Congressman Smith and Congressman Wilson, I have asked 

our outside counsel to conduct that kind of investigation, and we 

will do the best we can. And to be sure, Mr. Chairman, to your directive. 

Mr. WILSON. Thank you. 
48

And, Mr. Yang, you are certainly an international model of a person who has been very creative, phenomenally successful, and you, 

indeed, embody the American dream. 

Is there a technology which can be developed which would promote privacy that can be established in closed societies, whether it 

is Cuba, Syria, China? Is there such technology that can be developed where privacy can be promoted? 

Mr. YANG. Congressman Wilson, I think you are asking a question that is at the heart of the spread of the Internet and our debate here, about whether we are doing more to open societies 

versus than closing them. The irony is the same tools that help 

open up societies and same tools that enable a blogger and the 

same tools that access to billions of documents online can be produced, whether it is by us or by governments within the countries 

and the industries themselves, to do both. And I think we certainly 

advocate and want to do more to promote the freedom, and our 

deep belief is that. But, certainly, technology has and can be used 

in both ways. 

Mr. WILSON. Well, with your extraordinary abilities and with the 

research capabilities that your so-well-respected company has, I 

just, again, hope the best for using technology to promote freedom 

and democracy as opposed to oppression. 

And I, again, appreciate so much the efforts of our chairman and 

ranking member at this committee today. Thank you very much. 

I yield the balance of my time. 

Chairman LANTOS. The gentleman from Florida, Mr. Wexler. 

Mr. WEXLER. Thank you, Mr. Chairman. 

I think the more this hearing goes on, to me it suggests just how 

important the issues that are being talked about are and the dilemma that both the committee and companies face. 

As to what precipitated this hearing, it seems to me none of us 

are perfect. We all make mistakes. You made mistakes. Glaring 

ones. You have come here; you have acknowledged them; you have 

apologized for them. I think that should be acknowledged by us. 

And you have said that you are in the process of learning lessons 

of the past and, I presume, applying them. 

Respectfully, however, the question that the chairman asked, in 

terms of what has been done with respect to the family that has 

been victimized, and then the response, which is ‘‘nothing,’’ is a bit 

chilling. It is a bit chilling to me because, given the sensitivity of 

these circumstances, it would seem to me that there would have 

been an overreaction of sorts to try to respond in any appropriate 

way. 

I am not the CEO of a company, and I don’t pretend to know how 

to run a company. And, Mr. Yang, I have nothing but enormous respect for what you have accomplished. 

It would seem to me that, as you consider lessons learned, that 

one of the things you might consider is the fact that Yahoo! is not 

an insignificant company, that there are equities involved in terms 

of what benefit you bring to China, and how much Yahoo!, as a 

company, stands to gain by engagement in China. And there are 

also, of course, equities that the Chinese will judge in terms of 

what value Yahoo! being in China presents to the Chinese. 
49

And it would seem to me entirely appropriate that the CEO of 

Yahoo! can engage in a very high-level, significant discussion with 

Chinese authorities and lay out what Yahoo! is comfortable doing 

and not doing, in terms of the lessons of this experience. 

And I would think it would be greatly beneficial to this committee if, rather than taking a somewhat backseat approach, that 

if Yahoo! engaged directly with the Chinese Government on these 

very issues. I don’t think it is Yahoo!’s responsibility—and I think 

I may certainly be in the minority here—I don’t think it is Yahoo!’s 

responsibility as an individual company to determine the answers 

to all of these questions. 

But given the facts of these circumstances and the position that 

you have found yourselves, it would seem to me reasonable that 

this type of engagement occur directly and use your own marketability to effect positive change. 

And unless I missed it here, we have not heard that directly 

today. And it would give me some positive feedback if I heard that 

the company, after self-reflecting on what lessons have been 

learned, was engaging in this type of activity. 

I would like to repeat, if I could, Mr. Wu’s question, because I 

think it goes to the heart of where we stand today. And that is, 

if I may, if the same set of circumstances were presented to the 

company in China today that precipitated this whole affair, what 

would the response be today? Understanding that you are not the 

majority shareholder, but what would the company’s response be 

today? 

Mr. CALLAHAN. As to Yahoo! China, obviously the company that 

controls that would make that decision, as to China. But let me say 

that, as to future markets and as we look ahead, I would hope that 

we would have a structure in place and, as an industry, a framework in place or perhaps legislation in place that would accomplish 

just what you have noted, Congressman, that we would be able to 

resist these demands or have the data not be accessible. 

But to your direct question, China is a different situation for us. 

But looking ahead, we certainly have learned from this and are 

working hard with industry peers and others to try to address 

these issues going forward. 

Mr. WEXLER. Just for the record, Mr. Chairman, the state secret 

statute in question, if I understand it, is, in fact, a very broad statute that, in fact—if my understanding is correct—that the State 

Security Bureau in China, in effect, designates whatever it wishes 

to designate as a state secret. So if that bureau designates the color 

of my eyes as a state secret and then someone asks what is the 

color of Wexler’s eyes and then somebody talks about it, then that 

person could be in violation of the state secret statute. 

Now, that doesn’t give anyone here any cover, in my mind, but 

in fairness, I think it needs to be brought out that companies like 

Yahoo!, as well as the Congress, in engaging in China on their 

homeland turf, are engaging in a totally unfamiliar venue. And 

these companies are going to have to chart their course. 

And I would hope—and I will stop at this, Mr. Chairman—that 

the lesson learned from this process is that simply nonengagement 

is not good enough and that companies like Yahoo! need to be far 

more proactive than they apparently have been in trying to antici-
50

pate the horrific consequences that, at times, will occur from what 

otherwise would have been normal business behavior. 

Chairman LANTOS. Thank you very much. 

Much of the testimony sort of reveals that, while technologically 

and financially you are giants, morally you are pygmies. 

This testimony this whole morning has been an appallingly disappointing performance. I simply cannot begin to tell you how disappointing Mr. Yang’s and your testimony was. The attempt to obfuscate, divert, to describe this as a dialogue—this is a congressional testimony, under oath, precipitated by the outrageous behavior of the company. And apparently not much has been learned in 

the process. 

The gentleman from Florida, Mr. Bilirakis. 

Mr. BILIRAKIS. Thank you, Mr. Chairman. 

And I would like for both to answer this. I have two questions, 

quick questions. 

Is your reluctance to commit any type of assistance to the family 

of the jailed dissident linked to the possibility of a negative reaction from the Communist Party? 

And the second question is Federal records show that Yahoo!, 

Inc., has spent millions of dollars in recent years to lobby Congress 

on a host of issues. 

What role did Yahoo, Inc., and its affiliates play in lobbying the 

Congress regarding the Global Online Freedom Act and other 

pieces of legislation dealing with online freedom and privacy? And 

if you don’t know the specifics, what role would you have had 

Yahoo! play in this effort? 

Mr. YANG. Congressman, I appreciate the question. 

I have said today and in the past that we are concerned about 

the release of these dissidents. And I understand the moral call for 

myself personally, as well as the company, to do more, and we will 

try to do more. 

But to your point, I do think the safe release of the dissidents 

is of key concern for us. 

Mike, do you want to talk about the——

Mr. CALLAHAN. Certainly. 

Sorry. I was just asking for some assistance to answer your question, sir. 

As far as I am aware, Yahoo! has not lobbied directly regarding 

the Global Online Freedom Act. There may be trade associations 

that we are members of that have expressed an opinion on it. I am 

not aware of what their opinion was. We are a member of CCIA. 

We are not actively lobbying on this piece of legislation. 

But as I mentioned to Congressman Smith, we absolutely would 

look forward to the opportunity to address it. 

Mr. BILIRAKIS. The first question, the dissidents, the first question, can you answer that as well? 

Mr. CALLAHAN. Do you mind repeating the question, sir? 

Mr. BILIRAKIS. Okay. Is your reluctance to commit any type of 

assistance to the family of the jailed dissident linked to the possibility of a negative reaction of the Communist Party? 

Mr. CALLAHAN. I think as Mr. Yang had expressed previously, 

there are some complications to direct action either——

Chairman LANTOS. Would you share with us those complications? 
51

Mr. CALLAHAN. Sir, I am not an expert on this topic, but I do believe that—for example, I understand that when there was recognition of one of the journalists for receiving a journalism reward, my 

understanding is that the location of incarceration was changed to 

be substantially worse, related to where the person’s family lives. 

So there is some concern and reluctance, I think, based on that 

point, not in terms of complications of doing direct action. 

In terms of the Communist Party, I wouldn’t be able to comment 

on that, sir. But I think there are complications related to the individuals, I think. 

Chairman LANTOS. The gentleman from New York, Mr. Crowley. 

Mr. CROWLEY. Thank you, Mr. Chairman. 

It has been a very enlightening hearing, quite frankly. And I remember, I guess it was some—almost 19 or 20 months ago, 21 

months ago, we had the initial hearing on this. 

Mr. Callahan, I will start with you. I wasn’t here for your testimony, but I found, in terms of your response to some questions 

about your past testimony—and I think, as far as I am sitting here 

listening to you, you come across as forthright and as earnest and 

contrite, in terms of your own shortcomings and those of the employees below you. And I wanted to state that for the record. 

I am not as familiar with Mr. Yang, and this is the first time I 

have heard his testimony. 

A question that—I have been sitting here talking to my friend, 

Mr. Wu, and it is kind of formulating as it is going along. If the 

Chinese Government were to come to—and this is not necessarily 

for Mr. Callahan, maybe for Mr. Yang. 

If the Chinese Government were to come to you, or the State Security Bureau, and say, ‘‘You will lose your license to conduct business in China unless you provide information to us about activities 

taking place on your service in the United States,’’ what would 

your reaction be? ‘‘You can’t do business in China unless you tell 

us about activities taking place in the United States.’’ What would 

your reaction be? 

Mr. YANG. That we can’t do business in China unless we what? 

Mr. CROWLEY. Unless you provide the Chinese Government information about activities taking place in the United States about certain individuals or information they would require. What would the 

position of your company have been then, understanding now that 

there are certain firewalls that have been created? 

Mr. YANG. I would say if it is information about U.S. matters, I 

believe that we wouldn’t have to provide that information. 

Mr. CROWLEY. If they said to you, ‘‘Your failure to provide to information would result in the revoking of your license,’’ what would 

you say then, to do business in China? 

Mr. YANG. Again, I am not sure if I understand it. I think that 

if it is not within—if they’re making up a new law to say that, or 

what is——

Mr. CROWLEY. State secret police or whoever says, you know, I 

can’t tell you, it’s a secret. 

Mr. YANG. I think that we, if we know it’s a specific issue and 

that has certain specificity to it that clearly involves the U.S. or 

matters that we understand are interpreted to be under the 

scope—and, again, this is on-the-ground interpretation—we would 
52

clearly make sure that we understand the nature of it before either 

complying or not complying. 

Mr. CROWLEY. I think the complexity of your answer is probably 

demonstrative of the complexity of the world we are living in 

today—something that can be declared a secret, the color of my 

eyes, the color of the suit that I am wearing, the conversation you 

can or can’t have, whether or not you can communicate with your 

government in fear of losing your opportunity to do business somewhere. I think, really, it’s almost like a new form of espionage that 

is taking place, cyber espionage, that the secret police are engaged 

in. 

I don’t envy the position that you are in. I think that part of the 

side here is, if you are not doing it, someone else will step in your 

shoes and do that for them. 

Let me just switch just for a moment and ask Mr. Callahan, if 

you could, what steps have you all taken in terms of meeting with 

human rights groups, listening to their concerns? And what further 

steps are you taking in terms of communicating with the Chinese 

Government about your concerns as a corporation as well? 

Mr. CALLAHAN. Certainly, with respect to the meetings with 

human rights groups, as part of the industry group, which includes 

several other leading companies including others that testified at 

the hearing in February 2006, which Mr. Yang mentioned was facilitated by the Center for Democracy and Technology in the 

Berkman Center at Harvard, there are several human rights 

groups—I believe Amnesty International and Human Rights in 

China are associated with that effort. And representatives of my 

team—our head of International Legal—are a part of that core 

group. They have regular meetings, I believe weekly conference 

calls. And there is a lot of activity around that effort, and that’s 

a participatory——

Mr. CROWLEY. Has that increased since your testimony over a 

year ago? 

Mr. CALLAHAN. Yes. And I would say that in—Congressman 

Smith, in the prior hearing, deserves the credit for getting the industry to move on this issue; that the entire human rights dialogue 

around the new framework started after the February 2006 testimony, and, as Mr. Yang mentioned, is expected to roll out after the 

first of the year. 

And I recognize comments of others in the industry were maybe 

just as good as that. But I do think it has been a lot of progress. 

In addition to the dialogue with the human rights groups, there 

has been an ongoing dialogue with the State Department and the 

Global Internet Freedom Task Force that was established there. 

Mr. Yang has met with senior members of the State Department, 

as well. 

And then, previous to that, there were meetings between a highranking Chinese Government official and a member of my team to 

express concerns about this issue, as well. 

Chairman LANTOS. The gentleman’s time has expired. 

Mr. CROWLEY. Mr. Chairman, if I could make one point, and that 

is Mr. Yang is of Chinese descent, and I would hope that he would 

have some unique insight in terms of the history that has tran-
53

spired of his own people in terms of yearning for the freedom of 

those within Communist China. 

But I would also like to point out, as it pertains to Mr. Smith’s 

legislation, it is my understanding that it would require Yahoo! or 

any other company doing business in China to report to our State 

Department when they have an inquiry from the secret police. Is 

that correct? 

Mr. SMITH OF NEW JERSEY. That is correct. 

Mr. CROWLEY. I think that is a very well part, portion of this bill. 

And I yield back. Thank you. 

Chairman LANTOS. The gentleman from Illinois, Mr. Manzullo. 

Mr. MANZULLO. Thank you very much. 

This is all very interesting. Sometimes you have to scratch your 

head, because at one time knowledge was discovered and now it’s 

invented; to try to keep up with the technology is astounding. 

Mr. Callahan, what if the Department of Justice here in the 

United States asked you to reveal the screen name and information 

about somebody here in the United States? What would be your response to that? 

Mr. CALLAHAN. Sir, we, on a global basis, we obviously respond 

to law enforcement demands in compliance with law but also in 

compliance with our privacy policy and our terms of service. So any 

interaction with the Department of Justice would be on that basis. 

Mr. MANZULLO. So would that mean you would turn over the information? 

Mr. CALLAHAN. If the information was backed up with proper 

legal process and similar to the way the company works in other 

markets. 

Mr. MANZULLO. So it would be in the form of a search warrant? 

Mr. CALLAHAN. There is a significant amount of complexity to 

law enforcement compliance globally. And we absolutely—our firm 

policy is to work with law enforcement consistent with the law, in 

compliance with the law and our privacy policy. We don’t get into 

all of the specifics. And then, as not being the expert in it, I would 

be loath to sort of discuss all specifics. But, in general, that is our 

policy. 

Mr. MANZULLO. But you have a policy, you have a procedure for 

when that subpoena comes; is that correct? 

Mr. CALLAHAN. Yes, sir, that’s correct. 

Mr. MANZULLO. From what I can tell here, in listening to this 

testimony, is that the correct information did not come to you from 

China before you testified. Is that correct? 

Mr. CALLAHAN. That’s correct. 

Mr. MANZULLO. What happened? Can you elaborate on that? 

Mr. CALLAHAN. My understanding of the situation—and, obviously, we spent some time looking into it—is that a member of the 

briefing team had information in question, made a good-faith judgment that they did not consider it to be material or significantly 

new information or different than in terms of providing circumstances or details of the case. 

And I understand, in hindsight, given the concern that has been 

caused by the fact that I testified that we had no information about 

the nature of the investigation, that that judgment is, while made 

in good faith, was the wrong——
54

Mr. MANZULLO. I guess my question is: Did you actually see the 

communication that came from the Chinese Government with your 

own eyes? 

Mr. CALLAHAN. No, sir. I don’t recall asking for or reviewing 

those documents. 

Mr. MANZULLO. Then who did? Was it your lawyers here, or was 

it the lawyers in China? 

Mr. CALLAHAN. My understanding was that—obviously, the document was at the China office and that a member of the briefing 

team, which is a part of our legal team, regional counsel in Hong 

Kong, also had that information. 

Mr. MANZULLO. So they never sent you a word-for-word translation of what would be the equivalent of our search warrant. Is 

that correct? 

Mr. CALLAHAN. My team sent—no, sir. What I was told, in preparations, was that I did not—we did not have the specific details 

or nature of the investigation. And, obviously, we have subsequently found out that the order did, in fact, say state secrets. 

And——

Mr. MANZULLO. So that person with your company in China 

knew the information, but, either through negligence or intentionally or whatever word would be used under the circumstances, 

you were unaware that this was coming from this particular Chinese agency. Is that correct? 

Mr. CALLAHAN. I was not aware of the specific details, and my 

understanding was that the order didn’t share any information 

about the case. And my understanding, again, is that the person 

who had the information made that good-faith judgment. 

Mr. MANZULLO. Why would that person make a good-faith judgment when it was their job simply to report to you what the 

communique ́ was? Was this a lawyer back in China that was doing 

that? 

Mr. CALLAHAN. I believe that the legal team at Yahoo! China had 

the document because they had responded to the demand from the 

Government. And then, as part of the preparation, other information was gathered by members of the team, but it did not make its 

way up the chain. 

Mr. MANZULLO. So it was sloppy investigation by your part? 

Mr. CALLAHAN. I absolutely agree, sir, that my preparation could 

have been done better. 

Mr. MANZULLO. Mr. Callahan, if you had the equivalent of a 

search warrant that came from the Beijing State Security Office in 

your hand when you testified on February 15, 2006, would you 

have said more than what you did at that time? 

Mr. CALLAHAN. Absolutely, sir. 

Mr. MANZULLO. What would you have said? 

Mr. CALLAHAN. If I had had that information, I would have wanted to share it with the committee, that, in fact, we did know what 

the order had said. I would have absolutely done that. And I wish 

that I had had that information to be clear in my prior testimony. 

Mr. MANZULLO. There is a further problem that is coming down 

the line, it is that when you no longer have a controlling interest 

in that new company, Alibaba. So, if a similar request came today, 

you wouldn’t even know about it. Is that correct? 
55

Mr. CALLAHAN. That is correct. 

Mr. MANZULLO. Is there something that you can do with regards 

to your relationship with Alibaba? Because you still own all of the 

software, don’t you? 

Mr. CALLAHAN. The business is operated by Alibaba, and I have 

personally impressed upon their management team that we wanted 

them to follow the sort of law enforcement procedures that would, 

you know, only respond to demands that they have to. 

But to your point, sir, we wouldn’t be notified if, in fact, the 

Yahoo! China operation, as it currently exists, received those documents. 

Mr. MANZULLO. Does that come up for renewal, your licensing 

agreement with Yahoo! and Alibaba? Or is that a lifetime——

Mr. CALLAHAN. I am not familiar directly with the terms in the 

agreement. 

Mr. MANZULLO. If that came up for renewal, the licensing agreement, would you consider what happened here today, and make 

sure that the software was so configured or that the terms of your 

contract with Alibaba were so stated that you would be made 

aware of future requests, and that the request would not be honored? 

Mr. CALLAHAN. I think, as we have the opportunity to look at our 

relationship with that company, being informed by all of these proceedings and the knowledge that we have learned about this kind 

of activity in China, that would be absolutely something that we 

would want to address. 

Mr. MANZULLO. Thank you. 

Chairman LANTOS. Would you submit all of that to the committee so we can ascertain whether, in fact, Yahoo! has any continuing control capability? 

Mr. CALLAHAN. Certainly, I would be willing to look into those 

agreements, sir. 

Chairman LANTOS. That is not my question, that you are willing 

to look into those. Will you submit those to the committee? 

Mr. CALLAHAN. Certainly. I will look at the agreements and submit them to your requests, sir. 

Chairman LANTOS. The gentleman from Massachusetts, Mr. 

Delahunt. 

Mr. DELAHUNT. Thank you, Mr. Chairman. Thank you for calling 

this hearing. I think this is very significant and very important. 

You know, Mr. Callahan indicates that he would consider—I 

would suggest to the chair that the committee submit legislation 

that takes it out of the decision-making process of Mr. Callahan. 

And I understand that there is a conflict, an inherent conflict. He 

has a responsibility to shareholders. We have a responsibility to 

the American people. 

The transfer of the software, as described by Mr. Manzullo, in 

terms of Alibaba and Yahoo!, there ought to be conditionality, so 

that if it is a transfer without the kind of safeguards to protect dissidents and others, then there ought to be some sanction or some 

penalty on the transferor. That would be my recommendation. 

I found it interesting that Mr. Callahan, in response to the question posed by the chair about complications, was suggesting that it 

was concern about the victim in this case. 
56

Mr. Callahan, is that what the complications are about, concern 

for the victim? Or is it concern about liability and establishing a 

precedent in other cases? 

Mr. CALLAHAN. What I was referring to, sir, in the question to 

the chair was about individuals, sir, yes. 

Mr. DELAHUNT. I want to be really clear about this. The chair 

posed to you a question about direct action, about contact with the 

victims in this case, relative to a possible settlement, and your response is that it’s out of your concern for the victim and the victim’s family that you are not taking that step. Am I portraying that 

accurately? 

Mr. CALLAHAN. With all due respect, sir, no. I was responding to 

a question from Congressman Bilirakis about, was the concern of 

complications of reaching out to the families related to activity or 

concern about the Communist Party. And then the chair respectfully asked if I would explain the complications, and it was sort of 

a response to both. 

Mr. DELAHUNT. Well, explain; let’s go down that road again. Explain what the complications are. 

Mr. CALLAHAN. As I mentioned to Chairman Lantos, as I understand it, when one of the dissidents that we were talking about 

today, Mr. Shi Tao, was recognized with the journalism award 

some time this past year, an assignment of his incarceration was 

changed to be materially farther from——

Mr. DELAHUNT. Is that the complication, or are there other complications? 

Mr. CALLAHAN. I was merely referencing that, sir, as an example 

of why I understand——

Mr. DELAHUNT. What are the other complications then, Mr. Callahan? 

Mr. CALLAHAN. I was referring to that as an example, sir. I am 

not aware of any other complications, and we certainly, I think, as 

Mr. Yang has mentioned, that we will consider that and look at opportunities to try to do as the chairman as asked. 

Mr. DELAHUNT. Well, I mean, you have members of the family 

sitting here behind you. You are to consider it right now, and I 

don’t think there’s any reason for any delay. Clearly they have the 

best interest of their family member, and I would dare say that it 

would go a long way to assuage the hurt, and pain, and anguish 

that all of them have experienced if you and Mr. Yang turned 

around, had a conversation with them in private, and allowed them 

to express their views. 

With that I yield back. 

Mr. CALLAHAN. Yes, sir. 

Chairman LANTOS. Mr. Smith. 

Mr. SMITH OF NEW JERSEY. Thank you very much, Mr. Chairman. 

Let me just begin on the victims who really have been harmed, 

maybe irreparably. Again, I want to suggest and ask you, Mr. Callahan, because obviously your office plays the lead role in the court 

case of Wang Xiaoning, Shi Tao, Yu Ling, and as yet unnamed 

plaintiffs v. Yahoo! Inc. and Yahoo! Hong Kong. Obviously, some of 

the remedies would be the best efforts to get the detainees out of 

jail, stop the disclosure policy, and identify all others detained af-
57

fected by Yahoo!’s disclosure policy. I’ve asked you a number of 

times; we need that information, at least the number. That can’t 

be a state secret for which Yahoo or Alibaba could be punished. 

And then to provide certain monetary award for legal needs as well 

as humanitarian needs of the families, that could be settled today, 

certainly by week’s end, and I would again ask you to do so. 

Secondly, Mr. Yang, if you could tell us exactly what you’ve done 

on the Alibaba award to protect people like Shi Tao so we don’t 

have more cases like that in the future. 

Let me ask you again to support our Global Online Freedom Act. 

It has been my experience with human rights legislation that very 

often that at the time of the hearing, and I say this with respect, 

there is an earnestness to try to find some consensus, but after the 

fact the lobbying arm, especially in association, goes into overdrive 

to kill the bill. 

I’ve had so many of my human rights bills killed in the Senate 

with holds over the years, including the Ethiopian Human Rights 

Act, the Vietnam Human Rights Act, and legislation dealing with 

child labor. Many have gone on to become law, but it was not without Herculean efforts. It is always a group of corporate Americans 

who step up and say, That can’t happen, and they kill it. 

I would say that our minimum corporate standards, Title II in 

the bill, which is the essence of the bill, actually protects you, actually will give you, like the Foreign Corrupt Practices Act, the ability to say, Okay, we don’t have to provide bribes to government officials to do business because it is against U.S. law. It is a Great 

Wall to protect corporate America from being complicit. I know you 

don’t want to be involved with this, I can see the anguish you feel 

for Shi Tao and others. This would give you a legal safeguard so 

that complicity becomes very, very remote in terms of its probabilities. 

I would also ask you again as you go into Vietnam, a couple of 

years ago I meet with Vu Thu Ha, the wife of Dr. Pham Hong Son 

in Hanoi. I offered a resolution on Dr. Son’s behalf. At first he got 

13 years, then 5 years; now he’s under house arrest. 

When I met with his wife, the secret police were one table away 

taking her picture. She, on her way to meet Ambassador Marine 

in Hanoi, was actually hit by a car. They were sending a message 

that they didn’t like his or her democracy promotion. But what was 

his crime? He took from the United States Embassy, Hanoi, our 

Embassy in Hanoi, an essay called What Is Democracy?; translated 

it in Vietnamese, posted it on the Net, sent it to friends, but also 

sent it to Communist Party officials. That’s how open and transparent the guy is. But the clenched fist of the Vietnamese Government comes pounding down on his head, 13 years. We made a big 

deal as did other human rights activists. It was reduced to 5, and 

now thankfully—not thankfully, he should be free—he is under 

house arrest. 

We don’t want any kind of complicity in that. That’s what this 

is all about. Again, I’ve told you before, I have a Yahoo! account. 

I think the Internet is a great, great potential, but if it is used by 

a repressive regime, obviously it becomes a tool in their tool box 

to hurt the dissidents and the best and bravest and brightest of a 

country. 
58

We will not see a matriculation to democracy like we saw in 

Eastern Europe. If the Internet is used to find and capture and incarcerate all of the dissidents, they are the ones who bring freedom 

and hope, which means you will do more business, not less, going 

forward. So if you could answer those questions, I would deeply appreciate it. 

Mr. YANG. Congressman Smith, I’ll—first by saying that I thank 

you and welcome the efforts that you are doing on the Global Online Freedom Act. I feel that to hear it firsthand today is extremely 

important for our understanding, and obviously we understand the 

process of trying to understand all sides of a bill, but as a CEO of 

Yahoo!, I want to let you know that I think it’s definitely one of 

the things that Congress can do to help facilitate, if not help clarify, what our roles are for companies. So I welcome that, and I look 

forward to some good debate about the implementation and the 

ability to compete. 

I would just say that I think we’re in a—not only sequencing of 

events has led us here, but also in an industry at a time in our 

world that I think is very interesting and, in fact, sometimes challenging. My own personal view, if you allow it, is that I think when 

companies operate, and when we have the government basically 

really creating an economic environment for us to—to—to go into 

places, and whether it’s Vietnam or China, and China has more 

history for us than Vietnam coming up, I’ve learned now—and 

thank you for the opportunity to speak in front of you today—to 

really be more thoughtful and understand all the issues better. 

I, frankly, will tell you that in 1999 when we went into China, 

it was a young company going into a young market, and the consequences are big if we don’t really think through it. So I think to 

many of your members’ points today, we learned we need to be a 

lot more deliberate and will take more responsibility both morally 

and ethically. 

At the same time I think that the challenges are not—I understand that as a group and as a group of companies and individuals 

and as a group of Americans, we can do more, and I truly do believe the power of doing things together. 

So thank you for opening the bill up, and I think that is something that we really do look forward to understanding more and 

help understand how we can do more business. 

Mr. SMITH OF NEW JERSEY. And if you did endorse it, that would 

be very helpful. 

Chairman LANTOS. Mr. Wu. 

Mr. WU. Thank you, Mr. Chairman. 

Mr. Callahan, we spent about 1 hour and 15 minutes, 1 hour and 

a half talking, and that’s an unusual amount of time in this institution for personal meetings. And I, quite frankly, came away with 

a very positive impression of you, and I have nothing but admiration for a very successful company. And it is in that vein that I’m 

going to offer you the opportunity to answer again one of the questions that I asked earlier. And I want to say first that you are currently under oath, and the other person whose testimony I’m about 

to mention, that testimony is covered by the False Statements Act, 

18 U.S.C. 1001, where material misrepresentation to a congressional investigator is a crime. 
59

In answer to a committee investigator’s question, Mr. Eugene 

Lao, I believe the counsel for Asia or general counsel for Asia, 

counsel in Hong Kong, said to committee staff that Yahoo!—that 

Yahoo! has two liaison officers or designated points of contact, one 

with the State Security Bureau, Guoanbu, and another liaison officer or designated point of contact; the other with the Gonganbu or 

the Public Security Bureau. You said in your earlier answer that 

there are no liaison officers with the State Security Bureau, the 

Guoanbu. Would you care to answer that question again? The two 

statements seem to be diametrically opposed, and I would hate to 

be in a situation where a few months from now we are holding this 

hearing again about contradictions from different parts of the organization. 

Mr. CALLAHAN. Yes, sir. When I answered your question before, 

I obviously had no knowledge of the testimony or the meeting that 

Mr. Lao had had, and to my knowledge until you just said that 

today, that’s the first that I’ve heard of that, sir, of liaison officers, 

to answer your question. I was not aware of that, and certainly not 

aware that Mr. Lao had said that in that meeting, which I was not 

a part of, as you know, and there are others here who were. 

Mr. WU. So is there someone in the room who can inform you 

now whether Yahoo! has a designated point of contact or liaison officer, one with the Gonganbu, the Public Security Bureau, and one 

with the Guoanbu, the State Security Bureau. 

Mr. CALLAHAN. I’m not aware of anyone here in the room that 

does, but I will absolutely find out the answer to that question, 

Congressman, and get back to you on that. 

Mr. WU. Are you retracting your earlier answer? 

Mr. CALLAHAN. Well, I was not aware of the fact that—I have no 

knowledge that this officer or liaison office does exist and so—but 

I absolutely will check on it. 

Mr. WU. Mr. Callahan, if you have no knowledge, then why did 

you answer that none existed? 

Mr. CALLAHAN. My belief is that none did exist, sir. I’m sorry to 

create a misimpression. 

Mr. WU. Well, don’t—it seems to me that for any answer, as general counsel of the corporation, there should be a factual basis for 

your answer to a congressional committee. 

Mr. CALLAHAN. Yes, sir. 

Mr. WU. So are you saying that you answered that question 

without a factual basis for that answer? 

Mr. CALLAHAN. I’m sorry. Congressman, having not participated 

in the meeting with Mr. Lao, I wasn’t aware that he had indicated 

that there is an office as you described, and as I mentioned, that 

was the first I heard of it. And I am more than willing to work and 

understand what the facts are and come back with an answer, direct answer, to your question. 

Mr. WU. As described to me by the committee staff, I think they 

actually intentionally interviewed you and Mr. Lao separately. 

Mr. CALLAHAN. Yes. 

Mr. WU. And—but that returns us to your prior answer. 

Mr. CALLAHAN. I——

Mr. WU. And the reason for offering an answer for which may 

be incorrect——
60

Mr. CALLAHAN. Yes, sir. 

Mr. WU [continuing]. But at least for which you now assert you 

have no factual basis, which is what got us here to this point in 

the first place. 

Mr. CALLAHAN. Sir, I apologize if I say this badly. I would like 

to correct the prior answer that I gave that there is no liaison office. I wasn’t aware—I’m sorry. 

My counsel is indicating——

Mr. WU. Take as much time as you want. 

Mr. CALLAHAN. Apparently my prior answer was that I was not 

aware of such an office, and I am not aware of such an office. 

Mr. WU. You have got a good counsel there. 

Mr. CALLAHAN. Obviously I will find out the right answer to this 

question and be happy to get back to you on all the facts, Congressman Wu. 

Mr. WU. I look forward to the answer to the questions I just 

asked and the questions that I asked previously. 

Mr. CALLAHAN. Yes, sir. 

Mr. WU. I yield back to the chairman. 

Chairman LANTOS. Before closing this meeting, I want to do two 

things. I want to express my deep appreciation to the extraordinary 

staff work lead by Peter Yeo and the rest of the bipartisan staff 

which prepared this hearing. 

I want to express respectful solidarity with members of the family. We will be there with you and for you irrespective of what 

Yahoo! will do. And before I close, I would like to turn to my friend 

and colleague from Florida. 

Ms. ROS-LEHTINEN. Thank you for your kindness, Mr. Lantos. 

I know that Mr. Callahan was about to answer Mr. Smith’s question regarding the lawsuit settlement, and I wanted to give you the 

opportunity to answer. 

Mr. CALLAHAN. Thank you. 

Congressman Smith, as I expressed earlier, and I think as Mr. 

Yang has expressed, we absolutely will look at the opportunity as 

you suggest. I understand the importance to the committee and understand the importance to the issue, and I will commit to consult 

with our counsel about it. 

Chairman LANTOS. It is mainly important to the committee, gentleman, but it ought to be a great deal more important to your own 

conscience. Don’t accommodate the committee. Look into your own 

soul and see the damage you have done to an innocent human 

being and to his family. That is what you should respond to. Don’t 

propitiate the committee. It will make no difference to the committee what you do, but it will make you better human beings if 

you recognize your own responsibility for the enormous damage 

your policies have created. That should be your guide. 

This hearing is adjourned. 

[Whereupon, at 1:29 p.m., the committee was adjourned.] 
(61)

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

PREPARED STATEMENT OF THE HONORABLE SHEILA JACKSON LEE, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF TEXAS

Thank you, Mr. Chairman, for convening today’s important hearing. We all share 

a concern for the state of human rights and democracy in China, and we rely upon 

the expert witnesses who come before our committee to provide us, in good faith, 

with accurate and reliable information. If they knowingly fail to do so, this committee will take steps to follow up. I would like to thank Mr. Jerry Yang, Chief Executive Officer, and Michael J. Callahan, Esq., General Counsel, both of Yahoo! Inc., 

for appearing before our committee today. 

Throughout its history, the People’s Republic of China (PRC) has made a concerted effort to manipulate and limit the free flow of information, stifling the dissemination of dissident viewpoints. Though the advent of Internet technology initially presented a challenge to government control, and it has broadened access to 

news and facilitated mass communications, China has one of the most sophisticated 

content-filtering Internet regimes n the world, and continues to stifle online expression. 

Though many in the United States have argued that, together with increasing 

economic openness, the growth of the Internet in China can play an important role 

in facilitating political liberalization in China, some private U.S. companies have 

been charged with aiding or complying with Chinese Internet censorship. On February 15, 2006, this Committee, then known as the International Relations Committee, held a hearing on this issue, listening to testimony from witnesses representing the State Department, Yahoo!, Microsoft, Google, and Cisco Systems, as 

well as several NGOs. 

Mr. Callahan, you testified at this hearing, entitled ‘‘The Internet in China: A 

Tool for Freedom or Suppression.’’ As Chief Counsel for Yahoo! Inc., your testimony 

centered on Yahoo’s policies in China, as well as on the particular case of Shi Tao, 

a Chinese journalist and writer who was arrested for disclosure of state secrets and 

sentenced to 10 years in prison. 

Shi Tao was arrested and imprisoned after Yahoo! China provided key information to the Chinese government. Shi, an editor at Contemporary Business News in 

Hunan province, had attended an editorial meeting where government officials read 

an internal document outlining media restrictions that would be in place before the 

15th anniversary of the 1989 Tiananmen Square crackdown, to occur in June 2004. 

After the meeting, Shi sent copies of his notes via his personal Yahoo email account 

to a pro-democracy group in the United States. 

Subsequently, the Chinese government used a subpoena-like document to request 

information from Yahoo that enabled state security authorities to identify Shi, and 

then to arrest him in 2004 convict him in 2005. Shi Tao is now serving a 10 year 

prison sentence. 

Jerry Yang, co-founder and senior executive of Yahoo, has confirmed that his company gave information to the Chinese authorities. Mr. Yang has characterized his 

company’s actions as part of the legal burden of doing business in China. 

When Mr. Callahan testified before this committee last year on this case and 

other issues of Internet freedom in China, he stated, ‘‘When Yahoo! China in Beijing 

was required to provide information about the user, who we later learned was Shi 

Tao, we had no information about the nature of the investigation. Indeed, we were 

unaware of the particular facts surrounding the case until the news story emerged.’’

This Committee now knows that, while Mr. Callahan may not have personally

known the nature of the Chinese investigation into Shi Tao, Yahoo! Inc. employees 

did know. A key member of the Yahoo briefing team that prepared Michael Cal-
62

lahan for his testimony before the committee had a copy of the subpoena-like document, which read ‘‘Your office is in possession of the following items relating to a 

case of suspected illegal provision of state secrets to foreign entities . . .,’’ during 

the hearing preparations. In addition, Yahoo! China lawyers had a copy of the document. A ‘‘state secrets’’ investigation is the term commonly used by the PRC against 

political dissidents. 

Because Mr. Callahan was testifying as an officer of Yahoo! Inc., Yahoo! itself provided false information to the United States Congress and must be held accountable 

for its actions. Because the terms employed by the Chinese government, when they 

asked for information on Shi Tao, are commonly recognized as those used against 

political dissidents, Yahoo! Inc. should have used some discretion in their provision 

of information that cost Shi Tao a 10 year jail sentence, which he is currently serving. 

If Mr. Callahan truly did not know the nature of the government’s inquest at the 

time he made his statement before this committee, it would have been his responsibility to contact the Committee and inform them that the company had provided 

false information upon learning the truth. However, the Committee has not been 

contacted by any member of Yahoo! Inc., either orally or in writing, to inform the 

Committee that Yahoo had provided false information to the Congress. Yahoo! Inc. 

has failed to take responsibility, before this Congress and the American people, for 

its mistakes. 

In addition, even after discovering its error, the company has not conducted an 

internal investigation into the circumstances that led to the provision of false information to the U.S. Congress, nor has it disciplined anyone within the company for 

their part in the provision of false information. Perhaps the most irresponsible action, or in this case inaction, on the part of Yahoo! Inc is that to date Yahoo! China 

has still not changed its policies to avoid the repetition of this issue. Should the Chinese government today ask for information regarding an investigation on ‘‘state secrets,’’ Yahoo! China would again comply. 

Mr. Chairman, the facts clearly illustrate that Yahoo! Inc. provided false information to Congress in sworn testimony. Even if the witness testifying before the Committee, Mr. Callahan, did not know the nature of the Chinese government’s requests, it is clear that his company did. Yahoo! Inc. had full knowledge that the investigation by the Chinese government was likely done to suppress opposition, and 

the company still cooperated with the government. Yahoo! Inc must take responsibility for its actions, for the 10 year sentence Shi Tao is now serving as well as the 

provision of false information to the Congress of the United States of America. 

Thank you, Mr. Chairman. I yield back the balance of my time.

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