Yahoo, as mentioned by Matt, is the place to start. But let’s not stop there. Lets report sites with paid links in other directories as well. Heck, anybody who suspects that a DMOZ editor has been paid off for a link should report that to Google as well.
But wait… why not report Google’s own Text Link Ads? Since Google won’t disclose their algorithm to us how do we know if those links aren’t passing link value? While we are at it, why don’t we report any site in Google AdWords as well. I don’t recall Matt giving a distinction between paid “editorial” links and paid “ad” links.
Let’s make Google sorry they ever even thought about this. Report ALL paid links today!
< /end rant >
Just an aside, does it ever strike you as funny that Google wants webmasters to offer full disclosure on their linking policies, but refuse to provide similar disclosure to how their algorithm counts links? A bit of hypocrisy, eh?