A group of Chinese activists today alleged Yahoo failed to properly oversee a $17 million fund created a decade earlier to aid Chinese dissidents, according to court documents.

In 2007, Yahoo admitted to providing Chinese authorities with the identities of several of its users. This disclosure led to the jailing of two activists, both for writing emails that drew the ire of government officials. The activists each received a 10-year sentence.

Yahoo, for its part — or at the urging of its PR department — sought to settle litigation against the company by providing the families of each jailed Yahoo user with $3.2 million. Then, the company set aside more than $17 million for the creation of a humanitarian fund to help Chinese activists and their families in what might be the most transparent PR move ever.

This fund, the plaintiffs allege, was horribly mismanaged. According to court documents, the expenses piled up while little aid was provided to the fund’s intended recipients.

Harry Wu, a former Chinese prison labor camp detainee himself, was tapped to manage the fund. With little oversight from top brass at Yahoo, Wu spent the money on expensive real estate — including a $2.5 million townhouse in Washington DC — no-show positions for his wife and associates, and a $60,000 raise for himself. Wu also spent more than $800,000 from the fund to defend himself from a series of lawsuits accusing him of sexual harassment or misuse of federal grants, according to the court filing.

All told, only $700,000 of the earmarked $17 million made its way to Chinese dissidents or their families. It’s thought that $3 million remains in the fund.

Wu died last year at 79.

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