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Yahoo! human! rights! fund! called! a! sham!! $13m! of! $17m! wasted!
Lawsuit says Purple Palace's China fund was just 'window dressing'
The shriveled husk of Yahoo! has once again been dragged into court, this time over allegations the company mishandled millions of dollars earmarked for humanitarian aid.
A complaint [PDF] filed in the Washington DC US District Court on Tuesday alleges that the Yahoo! Human Rights Fund Trust, a charity the erstwhile search giant established in 2007 to aid Chinese dissidents, has been squandering millions of dollars to enrich its trustees.
The complaint, backed by seven Chinese nationals who were held as political prisoners, alleges that just 4 per cent of the $17.3m Yahoo! committed to the campaign when it settled a 2007 human rights suit actually goes toward helping jailed dissidents in mainland China.
"A breathtaking majority of the Yahoo! Trust corpus – upwards of $13 million – has been systematically and unlawfully depleted in less than 10 years on expenditures having nothing to do with providing humanitarian assistance to imprisoned Chinese dissidents," the suit claims.
According to the complaint, the overwhelming majority of the money has gone towards personally enriching the members of the Trust's board of directors through exhorbitant salaries and personal expenses. The suit alleges that members of the board have been redirecting funds towards their own interests in China and the US, and as a result just $700,000 of the $17.3m cash pile was actually spent on the core mission of the fund.
While this was going on, it is said that Yahoo! turned a blind eye to the profiteering and in some cases even opposed calls by shareholders that the alleged mismanagement of the fund be investigated.
"From the beginning, the Yahoo! Defendants' management of the Yahoo! Trust highlighted the cynical reality that Yahoo! used the group as window-dressing: it wanted to benefit from the creation of the Yahoo! Trust, but had no interest in fulfilling its actual mission or complying with its terms and the obligations that came with it," the suit reads.
"And Yahoo! did benefit, enormously."
The suit claims that one dissent's family was awarded $3.2m by the fund, but a trustee tried unsuccessfully to browbeat the Chinese family into donating $1m back to the Yahoo! fund. The same now-deceased trustee is also accused of using the Trust's funds to set up a $1m annuity for himself by claiming to be a dissident's cousin.
Yahoo! declined to comment on the matter. ®