Yahoo sued in US court for failing to keep promises to Chinese dissidents in 2007

Yahoo! failed to keep financial and humanitarian commitments made a decade ago after it admitted helping the Chinese government find dissidents who were later jailed, according to a lawsuit against the web company.

The suit brought by seven previously imprisoned Chinese dissidents and the wife of an eighth seeks to enforce promises made when the Sunnyvale, California-based company settled a 2007 lawsuit in San Francisco federal court. The complaint was filed Tuesday in federal court in court in Washington, DC.

Yahoo had pledged to give support -- legal and otherwise -- to the families of two men jailed as a result of the company sharing their email address and other information with Chinese authorities. The company also said it would create a relief fund for others imprisoned for expressing their views online.

That fund was allegedly ravaged by self-dealing, according to the revised complaint and a statement issued by the law firm that filed it.

“Of the US$17.3 million that funded the Yahoo Human Rights Trust, more than US$13 million, including US$2.6 million for a Washington, DC townhouse, has been illegally diverted for expenditures that have nothing to do with providing humanitarian assistance,” according to a statement issued by Washington-based Cohen Milstein Sellers & Toll.

Yahoo has declined to comment on the allegations.

New York-based Verizon Communications has agreed to acquire Yahoo for US$4.48 billion, which was revised lower by US$350 million after revelations of security breaches at the web company. The deal is expected to close during the second quarter.