The Financial Times and Dow Jones report that Yahoo! is now apologizing for not telling the full truth to Congress at the February 2006 hearing where Yahoo! was taken to task for its role in the conviction of Chinese journalist Shi Tao. However Yahoo! insists that they did not intentionally misinform Congress: Rather, senior Yahoo! executives who can't read Chinese were badly briefed by local employees who do read Chinese.

Yahoo! CEO Jerry Yang and senior VP and general counsel Michael Callahan have been ordered back to Capitol Hill next week to explain themselves.  In advance of what is sure to be a rough day for Yahoo! on the Hill, Callahan is talking to journalists about Yahoo!'s perspective on the whole situation.

Callahan says that in February 2006 he was not aware that the Chinese-language police order requesting Shi Tao's account information had specified that it was a "state secrets" case. In his February 2006 testimony Callahan told Congress that Yahoo! had "no information" about the nature of the case. In July the Dui Hua Foundation, a human rights organization, released a full English translation of the original police order citing "illegal provision of state secrets to foreign entities" as the "crime" being investigated. This revelation triggered congressman Tom Lantos to order a congressional investigation of the situation, followed by his conclusion that "Yahoo provided false information to Congress in early 2006."  While Yahoo! says that they hadn't intentionally provided false information in February 2006, executives in Sunnyvale did discover in October last year that the Yahoo! Beijing office actually did have more information about Shi Tao's case than Callahan had earlier claimed. But Yahoo! executives did not broadcast this realization or seek to correct their testimony. As Dow Jones reports:

Yahoo said that Callahan found out about this fact in October 2006, but that he forgot to inform the committee.

"I neglected to directly alert the Committee of this new information and that oversight led to a misunderstanding that I deeply regret and have apologized to the Committee for creating," said Callahan in the statement.

It said that a Hong Kong-based lawyer for the company made the decision at the time not to pass the specific information about the Chinese government's request to executives at Yahoo's Sunnyvale, Calif., headquarters.

A spokeswoman refused to name the lawyer, but said he was still with the company.

Oops!

Last month I speculated that something like this might have happened. Based on my own observations over the years about the relationship between the local China offices of multinational companies and their headquarters back in the U.S., it's not uncommon for crucial pieces of information to get lost between local employees and headquarters - thanks to language barriers and different cultural perspectives on what is or isn't important, among other reasons.  It's a wise move on Yahoo!'s part to stop being defensive and admit to being human.

I'd also like to share something that somebody recently pointed out to me. If we had been reading the Hong Kong Privacy Commissioner's report on the Shi Tao case a little more carefully when it came out in March, we would have paid more attention to this paragraph on pages 17-18:

"6.11    Yahoo! China was not made aware of the exact nature or details of the investigation by SSB [State Security Bureau], but the Order from SSB stated that it was in respect of a criminal investigation into "illegal disclosure of state secrets overseas."
(Click here for the full PDF report.)

Thus, information about the inaccuracy of Callahan's congressional testimony has actually been out in public, in English, since March. It's just that pretty much everybody - except Yahoo! executives and the Hong Kong privacy commissioner's office of course - seems to have overlooked it. Myself included.   Oops!