Published: 9:25 pm, April 28, 2016
The views expressed in this article are those of the authors, and do not necessarily represent those of China Change. – The Editors
According to reports, Mr. Harry Wu (known as 吴弘达, or Wu Hongda, among Chinese) died suddenly on April 26, 2016, in Honduras while vacationing with friends. We wish to express our sincere condolences to his family. While the media has been inundated with obituaries and statements that celebrate Mr. Wu’s life as a human rights champion, we feel we too must say a few words in order to shed light on an investigation we have been conducting, and our preliminary findings.
We will start with the Yahoo Human Rights Fund. Yahoo was the first Western company to provide an email service in China. From 2000 to 2004, many Chinese dissidents chose to use Yahoo email out of information security reasons, because they believed that an American company, not controlled by the Chinese government, would have high ethical standards and not provide personal information and emails to the Chinese government. But Yahoo did exactly that, providing dissidents’ information to Chinese police, leading to their arrests and prison sentences, where emails were used as criminal evidence. In April, 2007, with help of Mr. Wu, two Chinese prisoners of conscience, Wang Xiaoning (王小宁) and Shi Tao (师涛) and their families brought a lawsuit against Yahoo. In November 2007, Yahoo settled the case with the two families, providing 3.2 million to each family, and establishing the approximately $17 million Yahoo Human Rights Fund (YHRF hereafter) “to provide humanitarian and legal aid to dissidents who have been imprisoned for expressing their views online.” The YHRF was entrusted to Laogai Research Foundation (LRF hereafter), which Mr. Wu co-founded in 1992 with Jeffrey Fiedler, the current Commissioner of the US-China Economic and Security Review Commission. The $17 million was transferred to the accounts of LRF in 2008. In 2009, Laogai Human Rights Organization (LHRO) was established, with Yahoo’s General Counsel on the board as the vice chairperson, to oversee the use of the YHRF. According to a LRF announcement in February 2008 (the original posting on Laogai website is unavailable), the YHRF was designed to “help victims of Chinese internet censorship and other political prisoners.”
The seven of us were all Yahoo email users from 2000 to 2003, and the court decisions of six of us quoted emails as “criminal” evidence. In total, we served 38 years and all of us suffered torture and degrading treatment (see biographies at the end).
Two among us were once on friendly terms with Mr. Wu, and four of us were beneficiaries of the YHRF. Precisely because all four of us experienced gross irregularities during the process, we have long felt the management of the fund has been problematic. The experiences of others, and the fact that so few people have benefited from the fund (fewer than 150 over eight years) confirms our belief.
Since last November, we have been conducting an investigation into the use of the YHRF; our work is based on the IRS tax filings of LRF and LHRO, documents in Chinese, and interviews with beneficiaries and others with inside knowledge. We have found:
- By the end of 2015, the balance of LRF and LHRO that can be used (excluding property assets) was about $3 million or less (we can only estimate because we have yet to see the 2015 filing of the two organizations). Furthermore, the Yahoo Human Rights Fund has ceased to exist.
- Out of the approximately $14-15 million of the YHRF that has been spent from 2008 to 2015, only about $700,000 was used to provide humanitarian aid to Chinese dissidents, or less than 5% of the fund spent. Most of the $700,000 was distributed between 2008 to 2010, and from 2013 to 2015, the portion used for humanitarian relief was less than 2%.
- There are widespread irregularities in the distribution of the mere $700,000. So much so that, short of opening the books of LRF, we are not sure that the LRF indeed distributed this amount to political prisoners and their families. The irregularities include but are not limited to:
- In some cases, applicants were asked to fill out blank applications;
- In other cases, applicants were not asked to fill in application forms, nor provide receipts upon obtaining the funds;
- Amounts smaller than those approved were remitted;
- The application process was intentionally made difficult. To begin with, the Laogai.org website, or its Chinese site called Gauncha (观察), does not even provide the announcement of the humanitarian assistance program and the application form in Chinese;
- Many who clearly met the criteria for assistance were rejected, and many more never heard back from LRF after submitting applications;
- There are more examples that we will not list for the time being.
- In January, 2011, Yu Ling, the wife of Wang Xiaoning, brought a lawsuit against Harry Wu, LRF, LHRO, and Yahoo Human Rights Trust, for extorting Yahoo’s payment to her and her husband, listing 47 counts against, mainly, Harry Hongda Wu. According to No. 54 (page 17-18) of the Complaint, “Defendant Wu converted to his own use….one million dollars of Plaintiffs’ monies, which was to be held in trust, and transferred said funds into his own name, when he purchased an annuity in his own name from Trans America Capital Builders.” The Complaint also reveals how Harry Wu tried to control the payments to the two political prisoners from the very beginning, and is worth reading in its entirety for all the revelations it makes. The case was settled in April, 2011.
- During 2008 to 2015, LRF was plagued by one lawsuit after another, and its legal fees alone during this period are close to, or exceed (again, we haven’t seen the 2015 filing), one million dollars.
- We discovered more than one fraudulent asset transfer on the tax filings of LRF where a sum was transferred to a related organization, but there was no record of receiving that transfer on the other organization’s tax forms—this is regardless, for the time being, whether the transfer was appropriate or legal, and whether it was approved by the Board.
- The YHRF has been used for the operations of the Laogai Museum in Washington, DC, including to pay the salaries and benefits of executives and employees, museum installations, rent, real estate purchases, extravagant traveling expenses, large legal fees, and an assortment of other costs. The museum, according to former employees, has been sparsely visited and its educational programs nominal, little more than Mr. Wu giving a short lecture to an occasional touring student group. Over the past eight years, LRF has published merely a handful of reports and other publications. LRF’s research work has been slim, and in terms of quantity, quality, and thoroughness of reports, far from that of other, smaller rights organizations with much less funding.
- Yahoo’s General Counsel, first Michael Callahan, and then Ron Bell, has been the vice chairperson of the LHRO that oversees the Yahoo Human Rights Trust (Mr. Wu was the chairperson). According to its tax filing, it is responsible for reviewing and approving LRF’s operational budget and programs; it is responsible for reviewing and approving applications for humanitarian assistance, and “such decisions will be recorded in the corporation’s corporate record book before any money is disbursed.” But our findings indicate that neither the General Counsel, nor the boards of LHRO and LRF, have exercised their fiduciary duties. According to our investigation, the boards were not unaware of the misconduct of Mr. Wu, but they chose to look the other way instead of confronting him, let alone implement standard practices. We learned from a former employee that Yahoo’s current General Counsel Ron Bell even flew to Washington, D.C. in 2014 to voice his displeasure at the fact that so little of the funds had been used for humanitarian assistance. But he didn’t seem to do anything to correct the matter, since subsequently nothing changed.
At the end of February, we sent a letter to Mr. Ron Bell, essentially providing the same findings we are presenting here, though with somewhat fewer details. In a reply in March, he refused to address our concerns, citing confidentiality, and he said that our holding him partially accountable for the misuse of the YHRF is “misplaced and lacks merit.”
- A former LRF employee told us that the IRS investigated LRF between 2013 and 2014 and found its books chaotic, among other irregularities, almost revoking its tax-exempt status. In the end, LRF was given a fine.
- We’re unable to identify a date, but as far as we know, before Mr. Harry Wu’s passing, the humanitarian assistance had already ceased entirely.
Our investigation is no doubt very limited for understandable reasons, and we believe that our findings are merely the tip of the iceberg. Even though Mr. Wu suddenly died while outside the United States, at such an unusual time, the Laogai Research Foundation is still here, the Laogai Human Rights Organization is still here, and the two boards are still here. So is Yahoo!
First of all, we urge the two organizations’ boards to take their fiduciary responsibilities seriously, take actions to clean up the problems left behind by Mr. Wu, and do so in a transparent manner. These two organizations are tax-exempt charities serving the public interest, and they must be held accountable by the public.
We urge the media to investigate the use of Yahoo funds and the death of Mr. Wu—issuing an obituary is not the end of the story. Rather, it is the beginning of the story. We urge the US judiciary, law enforcement, and the IRS to conduct investigations and audits of LRF, LHRO and the abuses of the Yahoo Human Rights Fund, clarifying facts, identifying the responsible parties, auditing the funds, recovering the YHRF as much as possible, and making reasonable and transparent arrangements for the funds through consultation with the community of Chinese political prisoners.
Finally, we hope such investigations receive the attention and the help of the U. S. Congress and human rights organizations.
The Yahoo Human Rights Fund was intended for the entire community of Chinese political prisoners. It is a community that has long suffered humanitarian disasters caused by cruel persecution at the hands of the Chinese Communist Party, simply for their ideals and work toward helping build a free China. They suffer enormously and are in great need of financial relief, given that their activism often costs them their only source of income. Such relief is hard to come by from inside China. That the $17 million Yahoo Human Rights Fund (it would be over $18 million if including investment revenue from interest and dividends) has been abused, misused, and even embezzled is not only shocking, but inflicts direct damage on the Chinese dissident community.
Though most of us are far away in China, we believe that the rule of law will prevail in the U. S. and that justice will be done.
Everything we write in this statement is based on verifiable facts. It is our belief that our appeals to the American media, judicial system, Congress, and the public will be echoed widely by the community of Chinese political prisoners.
He Depu (何德普), Beijing, contact person, hedepu123@gmail.com
Yang Zili (杨子立), Shenzhen
Li Dawei (李大伟), Tianshui, Gansu province
Wang Jinbo (王金波), Beijing
Ouyang Yi (欧阳懿), Suining, Sichuan
Xu Yonghai (徐永海), Beijing
Liu Fenggang (刘凤刚), Canada
Beijing Time, 10pm, April 28, 2016
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Biographies of the Seven Political Prisoners (in the order of their arrest):
Yang Zili was on March 13, 2001, along with three others, detained on suspicion of “subversion of state power.” This case became the well-known “New Youth Study Group.” The crimes cited in the judgement include “using the Internet to publicize essays, and preparing to organize a website and online publication,” as well as “using the Internet to publicize” articles of political commentary. On May 28, 2003 Yang was sentenced to 8 years imprisonment by the Beijing Municipal Intermediate People’s Court; the Beijing Supreme People’s Court upheld the sentence after appeal on November 6, 2003.
Li Dawei was detained on April 15, 2001, on charges of subversion of state power. The judgement against him said that his “criminal” activities included using the Internet to publicize an open letter, and “using the Internet” to send letters to activists outside of China, as well as using the Internet to collect information, etc. The Tianshui Municipal Intermediate People’s Court in Gansu Province sentenced Li to 11 years imprisonment on July 17, 2003.
Wang Jinbo was detained on May 24, 2001, for inciting subversion of state power. On December 4, 2001, Wang was sentenced to four years imprisonment by the Linyi Municipal Intermediate People’s Court in Shandong Province. The court verdict makes clear that Wang was made a criminal for his speech.
He Depu was summoned by police on November 4, 2002; he was 85 days later formally arrested and charged with the crime of inciting subversion of state power. The evidence used in trial was almost solely composed of the contents of his email communications and “provocative” articles published online or with his signature. The court verdict repeatedly quoted from evidence obtained by the the Beijing municipal Public Security Bureau’s “Public Information Cyberspace Security Division.” On November 6, 2003, He Depu was sentenced to 8 years imprisonment by the Beijing Municipal First Intermediate People’s Court. After completing his sentence in 2011, He Depu published the article “The Darkest 85 Days,” in which he described the torture he suffered in secret detention from November 4, 2002 until January 27, 2003. He was locked in a small room with no windows and forced to lay in a fixed posture on a wooden bed; between four and six guards were positioned around him 24 hours a day, watching him. He could not move, could not change the position of his body, could not sit down, could not speak, and could not shower, change his clothes, or shave. Every movement that he made, including scratching an itch, first required gaining permission. In the 8 years of jail that followed, He Depu was tortured innumerable times. In November 2005, Manfred Nowak, the United Nations’ Special Rapporteur on Torture, saw He Depu in the Beijing No. 2 Prison (an impossibility in today’s China), and in his subsequent report on torture in China specifically emphasized that he was “left with a deep impression” by the torture that He Depu had suffered.
Ouyang Yi was detained by the Chengdu Municipal Public Security bureau on December 5, 2002. The evidence referred to in his court verdict includes: an open letter to the central leadership of the Chinese Communist Party in October 2002, sent to friends via email, and “sent using email to overseas websites and propagated online.” On March 1, 2004, the Chengdu Municipal Intermediate People’s Court, in Sichuan Province, sentenced Ouyang Yi to 2 years imprisonment for the crime of inciting subversion of state power.
Xu Yonghai and Liu Fenggang are of the same case. They were arrested in Hangzhou and charged with “suspicion of illegally providing state secrets and information for those out of borders” on October 13 and November 9, 2003, respectively. The charges against them related to an investigative report they had compiled on the persecution of Christian house churches around China. The verdict said that this investigation had “been provided to foreign personnel through email.” On August 6, 2004, the two individuals were sentenced respectively to 2 and 3 years imprisonment.
Apart from Liu Fenggang, who has left China, the remaining six are still active in the defense of human rights in China; they are still subject to government surveillance, summonses, and interrogation. Xu Yonghai, the pastor in a house church in Beijing, is often harassed by the government as well.
A formal request for an investigation of the Laogai Research Foundation’s alleged mishandling of the Yahoo Human Rights Fund should indeed be filed with relevant government organizations such as the U.S. Department of Justice (and/or state or local equivalents) and perhaps a charity watchdog organization. Filing a civil suit, perhaps with the aid of pro bono lawyers, might be one method of locating some of the missing funds and having them transferred to a charity organization with a good record for disbursing funds fairly and with transparency.
Wrong agency – if there was an abuse of this fund that can be documented (being careful here – long considered an antagonist of Harry Wu due to his numerous factual misstatements), the IRS/Treasury is the place to look for misuse of funds.
Jim Feinerman
Georgetown University Law Center
[…] lawsuit was filed on behalf of eight dissidents in China who said that the Yahoo executives who sat on the board of the humanitarian fund did not do enough […]
[…] lawsuit was filed on behalf of eight dissidents in China who said that the Yahoo executives who sat on the board of the humanitarian fund did not do enough […]
[…] lawsuit was filed on behalf of eight dissidents in China who said that the Yahoo executives who sat on the board of the humanitarian fund did not do enough […]
[…] lawsuit was filed on behalf of eight dissidents in China who said that the Yahoo executives who sat on the board of the humanitarian fund did not do enough […]
[…] lawsuit was filed on behalf of eight dissidents in China who said that the Yahoo executives who sat on the board of the humanitarian fund did not do enough […]
[…] 这起诉讼是由八名中国异见者提出的，他们说，该人道主义援助基金会的委员会中有雅虎高管，但他们却对吴先生不适当的、挥霍性的支出遏制不力。诉讼是由专门从事涉嫌侵犯人权案件的华盛顿律所Cohen Milstein Sellers＆Toll提交。 […]
[…] 这起诉讼是由八名中国异见者提出的，他们说，该人道主义援助基金会的委员会中有雅虎高管，但他们却对吴先生不适当的、挥霍性的支出遏制不力。诉讼是由专门从事涉嫌侵犯人权案件的华盛顿律所Cohen Milstein Sellers＆Toll提交。 […]