Auction Proceeds Mechanism A - Internal Department at ICANN
On the topics of "Accountability" and "Best Practices", has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called "On-going costs only in Mechanism A - Management and support of ICANN's accountability mechanisms triggered by the grant distribution activity (if any.)" In terms of risk assessment, I really can't see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don't know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG - doing my best to catch up. If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report. Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions? Thank you, Anne [cid:image002.png@01D59BDA.42F5F9D0] Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [cid:image004.png@01D59BDB.ED85F520] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com<http://lrrc.com/> [cid:image006.jpg@01D59BDB.ED85F520] Because what matters to you, matters to us.(tm) ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. ?2510-2521.
Very valid points Anne. We will put these items - like the others we received - on the list of items we need to consider in our next leadership call and our CCWG AP call. In the meantime we will try to get more legal clarity about the points you raised in this email. Thank you! Erika Sent from my iPhone
On Nov 16, 2019, at 1:41 AM, Aikman-Scalese, Anne <AAikman@lrrc.com> wrote:
<image001.gif> On the topics of “Accountability” and “Best Practices”, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A – Management and support of ICANN’s accountability mechanisms triggered by the grant distribution activity (if any.)”
In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG – doing my best to catch up.
If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report.
Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?
Thank you, Anne
<image002.png> Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com _____________________________ <image004.png> Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com <image006.jpg> Because what matters to you, matters to us.™
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Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making?", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted? ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com> Sent: Friday, November 15, 2019 4:41 PM To: ccwg-auctionproceeds@icann.org Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN On the topics of "Accountability" and "Best Practices", has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called "On-going costs only in Mechanism A - Management and support of ICANN's accountability mechanisms triggered by the grant distribution activity (if any.)" In terms of risk assessment, I really can't see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don't know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG - doing my best to catch up. If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report. Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions? Thank you, Anne [cid:image002.png@01D59BDA.42F5F9D0] Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [cid:image004.png@01D59BDB.ED85F520] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com]<https://urldefense.proofpoint.com/v2/url?u=http-3A__lrrc.com_&d=DwMF-g&c=FmY...> [cid:image006.jpg@01D59BDB.ED85F520] Because what matters to you, matters to us.(tm) ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
One other note - to your final question of "Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?" From the legal perspective, we considered the interplay of the Bylaws/accountability processes with the different mechanisms and our conclusion is that, absent a Bylaws change to exclude individual grant actions from the IRP/Reconsideration processes, there still remains a risk of the use of ICANN accountability processes whether the grant disbursements are completed through Mechanisms A, B or C. With that, the need to address the scope of the accountability mechanisms through Bylaws changes exists across all three mechanisms. ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Samantha Eisner Sent: Monday, November 18, 2019 11:07 AM To: Aikman-Scalese, Anne; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted? ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com> Sent: Friday, November 15, 2019 4:41 PM To: ccwg-auctionproceeds@icann.org Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN On the topics of “Accountability” and “Best Practices”, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A – Management and support of ICANN’s accountability mechanisms triggered by the grant distribution activity (if any.)” In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG – doing my best to catch up. If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report. Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions? Thank you, Anne [cid:image002.png@01D59BDA.42F5F9D0] Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [cid:image004.png@01D59BDB.ED85F520] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com]<https://urldefense.proofpoint.com/v2/url?u=http-3A__lrrc.com_&d=DwMF-g&c=FmY...> [cid:image006.jpg@01D59BDB.ED85F520] Because what matters to you, matters to us.™ ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. 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Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylaws”. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “tranche”.) Mechanism C Re Mechanism C, when PTI was formed, the structure chosen was ICANN as sole member of a California non-profit public benefit corporation (Article 16.2). I believe actions by the PTI Board of Directors remain subject to Empowered Community accountability processes, but not to RFR and IRP, but am not sure. Can you confirm? If this is the case, could another California non-profit public benefit corporation be set up in the same manner for purposes of grant-making pursuant to Mechanism C? (I am also wondering if outside legal resources were used to set up PTI or if this was done in-house.) In other words, could another CA non-profit formed pursuant to Mechanism C be exempted from RFR and IRP, but NOT be exempted from other EC accountability mechanisms, in the same manner as the PTI formation was handled? Many thanks for your patience with respect to questions which may already have been addressed in prior deliberations of the CCWG. Anne . . From: Samantha Eisner <Samantha.Eisner@icann.org> Sent: Monday, November 18, 2019 1:13 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com>; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ One other note - to your final question of "Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?" From the legal perspective, we considered the interplay of the Bylaws/accountability processes with the different mechanisms and our conclusion is that, absent a Bylaws change to exclude individual grant actions from the IRP/Reconsideration processes, there still remains a risk of the use of ICANN accountability processes whether the grant disbursements are completed through Mechanisms A, B or C. With that, the need to address the scope of the accountability mechanisms through Bylaws changes exists across all three mechanisms. ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Samantha Eisner Sent: Monday, November 18, 2019 11:07 AM To: Aikman-Scalese, Anne; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted? ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> Sent: Friday, November 15, 2019 4:41 PM To: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [cid:image001.gif@01D59E1E.55A7DE90] On the topics of “Accountability” and “Best Practices”, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A – Management and support of ICANN’s accountability mechanisms triggered by the grant distribution activity (if any.)” In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG – doing my best to catch up. If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report. Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions? Thank you, Anne [cid:image002.png@01D59E1E.55A7DE90] Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [cid:image003.png@01D59E1E.55A7DE90] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com]<https://urldefense.proofpoint.com/v2/url?u=http-3A__lrrc.com_&d=DwMF-g&c=FmY...> [cid:image004.jpg@01D59E1E.55A7DE90] Because what matters to you, matters to us.™ ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com> wrote:
Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylaws”. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding?
It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC.
*Fundamental ByLaws Changes*
It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25).
*Mechanism B*
In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “tranche”.)
*Mechanism C*
Re Mechanism C, when PTI was formed, the structure chosen was ICANN as sole member of a California non-profit public benefit corporation (Article 16.2). I believe actions by the PTI Board of Directors remain subject to Empowered Community accountability processes, but not to RFR and IRP, but am not sure. Can you confirm? If this is the case, could another California non-profit public benefit corporation be set up in the same manner for purposes of grant-making pursuant to Mechanism C? (I am also wondering if outside legal resources were used to set up PTI or if this was done in-house.) In other words, could another CA non-profit formed pursuant to Mechanism C be exempted from RFR and IRP, but NOT be exempted from other EC accountability mechanisms, in the same manner as the PTI formation was handled?
Many thanks for your patience with respect to questions which may already have been addressed in prior deliberations of the CCWG.
Anne
.
.
*From:* Samantha Eisner <Samantha.Eisner@icann.org> *Sent:* Monday, November 18, 2019 1:13 PM *To:* Aikman-Scalese, Anne <AAikman@lrrc.com>; ccwg-auctionproceeds@icann.org *Subject:* Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
*[EXTERNAL]* ------------------------------
One other note - to your final question of "Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?"
From the legal perspective, we considered the interplay of the Bylaws/accountability processes with the different mechanisms and our conclusion is that, absent a Bylaws change to exclude individual grant actions from the IRP/Reconsideration processes, there still remains a risk of the use of ICANN accountability processes whether the grant disbursements are completed through Mechanisms A, B or C. With that, the need to address the scope of the accountability mechanisms through Bylaws changes exists across all three mechanisms.
____
Samantha Eisner
Deputy General Counsel, ICANN
12025 Waterfront Drive, Suite 300
Los Angeles, California 90094
USA
Direct Dial: +1 310 578 8631 ------------------------------
*From:* Samantha Eisner *Sent:* Monday, November 18, 2019 11:07 AM *To:* Aikman-Scalese, Anne; ccwg-auctionproceeds@icann.org *Subject:* Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted?
____
Samantha Eisner
Deputy General Counsel, ICANN
12025 Waterfront Drive, Suite 300
Los Angeles, California 90094
USA
Direct Dial: +1 310 578 8631 ------------------------------
*From:* Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com> *Sent:* Friday, November 15, 2019 4:41 PM *To:* ccwg-auctionproceeds@icann.org *Subject:* [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
On the topics of “Accountability” and “Best Practices”, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A – Management and support of ICANN’s accountability mechanisms triggered by the grant distribution activity (if any.)”
In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG – doing my best to catch up.
If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report.
Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?
Thank you,
Anne
*Anne E. Aikman-Scalese*
Of Counsel
520.629.4428 office
520.879.4725 fax
AAikman@lrrc.com
_____________________________
Lewis Roca Rothgerber Christie LLP
One South Church Avenue, Suite 2000
Tucson, Arizona 85701-1611
lrrc.com [lrrc.com] <https://urldefense.proofpoint.com/v2/url?u=http-3A__lrrc.com_&d=DwMF-g&c=FmY...>
Because what matters
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Becky - That’s what we agreed upon but in the light of Anne’s points raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone
On Nov 19, 2019, at 3:33 PM, Becky Burr <becky.burr@board.icann.org> wrote:
Anne,
I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes.
Please correct me if I am wrong, Sam.
Becky
On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylaws”. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding?
It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC.
Fundamental ByLaws Changes
It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25).
Mechanism B
In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “tranche”.)
Mechanism C
Re Mechanism C, when PTI was formed, the structure chosen was ICANN as sole member of a California non-profit public benefit corporation (Article 16.2). I believe actions by the PTI Board of Directors remain subject to Empowered Community accountability processes, but not to RFR and IRP, but am not sure. Can you confirm? If this is the case, could another California non-profit public benefit corporation be set up in the same manner for purposes of grant-making pursuant to Mechanism C? (I am also wondering if outside legal resources were used to set up PTI or if this was done in-house.) In other words, could another CA non-profit formed pursuant to Mechanism C be exempted from RFR and IRP, but NOT be exempted from other EC accountability mechanisms, in the same manner as the PTI formation was handled?
Many thanks for your patience with respect to questions which may already have been addressed in prior deliberations of the CCWG.
Anne
.
.
From: Samantha Eisner <Samantha.Eisner@icann.org> Sent: Monday, November 18, 2019 1:13 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com>; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
[EXTERNAL]
One other note - to your final question of "Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?"
From the legal perspective, we considered the interplay of the Bylaws/accountability processes with the different mechanisms and our conclusion is that, absent a Bylaws change to exclude individual grant actions from the IRP/Reconsideration processes, there still remains a risk of the use of ICANN accountability processes whether the grant disbursements are completed through Mechanisms A, B or C. With that, the need to address the scope of the accountability mechanisms through Bylaws changes exists across all three mechanisms.
____
Samantha Eisner
Deputy General Counsel, ICANN
12025 Waterfront Drive, Suite 300
Los Angeles, California 90094
USA
Direct Dial: +1 310 578 8631
From: Samantha Eisner Sent: Monday, November 18, 2019 11:07 AM To: Aikman-Scalese, Anne; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted?
____
Samantha Eisner
Deputy General Counsel, ICANN
12025 Waterfront Drive, Suite 300
Los Angeles, California 90094
USA
Direct Dial: +1 310 578 8631
From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com> Sent: Friday, November 15, 2019 4:41 PM To: ccwg-auctionproceeds@icann.org Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
<image001.gif>
On the topics of “Accountability” and “Best Practices”, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A – Management and support of ICANN’s accountability mechanisms triggered by the grant distribution activity (if any.)”
In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG – doing my best to catch up.
If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report.
Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?
Thank you,
Anne
<image002.png>
Anne E. Aikman-Scalese
Of Counsel
520.629.4428 office
520.879.4725 fax
AAikman@lrrc.com
_____________________________
<image003.png>
Lewis Roca Rothgerber Christie LLP
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Erika, Becky, et al, Proposed Final Report and Consensus I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à-vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persons other than applicants could file an RFR or an IRP in relation to ICANN’s handling of the grant-making process.) The Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this. In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discussions in relation to a ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.) To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability to Sunset” is important in relation to the principle of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds. Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “directly proposed” by the CCWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4. Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments. Choice of Mechanism and Survey Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows: (1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranches”. (2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches” for grant-making purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’s accountability than do RFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think anyone would want the EC powers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budget” aspect of an overall line item for grants within the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t think the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.) (3) To preserve the EC powers as to Budget, it would seem “cleaner” to place the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s oversight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities. I appreciate any observations other CCWG members may have that will help bring me up to speed. Thank you, Anne Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [cid:image001.png@01D59ECC.D58DE1A0] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com<http://lrrc.com/> [cid:image002.jpg@01D59ECC.D58DE1A0] Because what matters to you, matters to us.™ From: Erika Mann <erika@erikamann.com> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr <becky.burr@board.icann.org> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com>; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Becky - That’s what we agreed upon but in the light of Anne’s points raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone On Nov 19, 2019, at 3:33 PM, Becky Burr <becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> wrote: Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylaws”. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “tranche”.) Mechanism C Re Mechanism C, when PTI was formed, the structure chosen was ICANN as sole member of a California non-profit public benefit corporation (Article 16.2). I believe actions by the PTI Board of Directors remain subject to Empowered Community accountability processes, but not to RFR and IRP, but am not sure. Can you confirm? If this is the case, could another California non-profit public benefit corporation be set up in the same manner for purposes of grant-making pursuant to Mechanism C? (I am also wondering if outside legal resources were used to set up PTI or if this was done in-house.) In other words, could another CA non-profit formed pursuant to Mechanism C be exempted from RFR and IRP, but NOT be exempted from other EC accountability mechanisms, in the same manner as the PTI formation was handled? Many thanks for your patience with respect to questions which may already have been addressed in prior deliberations of the CCWG. Anne . . From: Samantha Eisner <Samantha.Eisner@icann.org<mailto:Samantha.Eisner@icann.org>> Sent: Monday, November 18, 2019 1:13 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ One other note - to your final question of "Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?" From the legal perspective, we considered the interplay of the Bylaws/accountability processes with the different mechanisms and our conclusion is that, absent a Bylaws change to exclude individual grant actions from the IRP/Reconsideration processes, there still remains a risk of the use of ICANN accountability processes whether the grant disbursements are completed through Mechanisms A, B or C. With that, the need to address the scope of the accountability mechanisms through Bylaws changes exists across all three mechanisms. ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Samantha Eisner Sent: Monday, November 18, 2019 11:07 AM To: Aikman-Scalese, Anne; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted? ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> Sent: Friday, November 15, 2019 4:41 PM To: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN <image001.gif> On the topics of “Accountability” and “Best Practices”, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A – Management and support of ICANN’s accountability mechanisms triggered by the grant distribution activity (if any.)” In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG – doing my best to catch up. If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report. Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions? Thank you, Anne <image002.png> Anne E. 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The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. _______________________________________________ Ccwg-auctionproceeds mailing list Ccwg-auctionproceeds@icann.org<mailto:Ccwg-auctionproceeds@icann.org> https://mm.icann.org/mailman/listinfo/ccwg-auctionproceeds _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy) and the website Terms of Service (https://www.icann.org/privacy/tos). 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Anne - I will not be able to review your points before tomorrow evening, Wednesday, November 20. Thank you! Erika Sent from my iPhone
On Nov 19, 2019, at 7:31 PM, Aikman-Scalese, Anne <AAikman@lrrc.com> wrote:
Erika, Becky, et al,
Proposed Final Report and Consensus
I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à-vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persons other than applicants could file an RFR or an IRP in relation to ICANN’s handling of the grant-making process.) The Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this.
In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discussions in relation to a ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.)
To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability to Sunset” is important in relation to the principle of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds.
Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “directly proposed” by the CCWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4.
Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments.
Choice of Mechanism and Survey
Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows:
(1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranches”.
(2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches” for grant-making purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’s accountability than do RFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think anyone would want the EC powers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budget” aspect of an overall line item for grants within the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t think the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.)
(3) To preserve the EC powers as to Budget, it would seem “cleaner” to place the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s oversight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities.
I appreciate any observations other CCWG members may have that will help bring me up to speed.
Thank you, Anne
Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com _____________________________ <image001.png> Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com <image002.jpg> Because what matters to you, matters to us.™
From: Erika Mann <erika@erikamann.com> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr <becky.burr@board.icann.org> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com>; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
[EXTERNAL] Becky - That’s what we agreed upon but in the light of Anne’s points raised, we should evaluate whether our judgement will not be contestable. Erika
Sent from my iPhone
On Nov 19, 2019, at 3:33 PM, Becky Burr <becky.burr@board.icann.org> wrote:
Anne,
I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes.
Please correct me if I am wrong, Sam.
Becky
On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylaws”. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding?
It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC.
Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25).
Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “tranche”.)
Mechanism C Re Mechanism C, when PTI was formed, the structure chosen was ICANN as sole member of a California non-profit public benefit corporation (Article 16.2). I believe actions by the PTI Board of Directors remain subject to Empowered Community accountability processes, but not to RFR and IRP, but am not sure. Can you confirm? If this is the case, could another California non-profit public benefit corporation be set up in the same manner for purposes of grant-making pursuant to Mechanism C? (I am also wondering if outside legal resources were used to set up PTI or if this was done in-house.) In other words, could another CA non-profit formed pursuant to Mechanism C be exempted from RFR and IRP, but NOT be exempted from other EC accountability mechanisms, in the same manner as the PTI formation was handled?
Many thanks for your patience with respect to questions which may already have been addressed in prior deliberations of the CCWG.
Anne
. .
From: Samantha Eisner <Samantha.Eisner@icann.org> Sent: Monday, November 18, 2019 1:13 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com>; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
[EXTERNAL] One other note - to your final question of "Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?"
From the legal perspective, we considered the interplay of the Bylaws/accountability processes with the different mechanisms and our conclusion is that, absent a Bylaws change to exclude individual grant actions from the IRP/Reconsideration processes, there still remains a risk of the use of ICANN accountability processes whether the grant disbursements are completed through Mechanisms A, B or C. With that, the need to address the scope of the accountability mechanisms through Bylaws changes exists across all three mechanisms.
____
Samantha Eisner
Deputy General Counsel, ICANN
12025 Waterfront Drive, Suite 300
Los Angeles, California 90094
USA
Direct Dial: +1 310 578 8631
From: Samantha Eisner Sent: Monday, November 18, 2019 11:07 AM To: Aikman-Scalese, Anne; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted?
____
Samantha Eisner
Deputy General Counsel, ICANN
12025 Waterfront Drive, Suite 300
Los Angeles, California 90094
USA
Direct Dial: +1 310 578 8631
From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com> Sent: Friday, November 15, 2019 4:41 PM To: ccwg-auctionproceeds@icann.org Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
<image001.gif> On the topics of “Accountability” and “Best Practices”, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A – Management and support of ICANN’s accountability mechanisms triggered by the grant distribution activity (if any.)”
In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG – doing my best to catch up.
If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report.
Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?
Thank you, Anne
<image002.png> Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com _____________________________ <image003.png> Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com] <image004.jpg> Because what matters to you, matters to us.™
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I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself. I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable). If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine. Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration). Alan At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote: Erika, Becky, et al, Proposed Final Report and Consensus I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-� -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persons other than applicants could file an RFR or an IRP in relation to ICANN’s handling of the grant-making process.) The Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this. In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discussions in relation to a ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.) To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability to Sunset” is important in relation to the principle of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds. Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “directly proposed” by the CCWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4. Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments. Choice of Mechanism and Survey Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows: (1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranches”. (2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches” for grant-making purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’s accountability than do RFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think anyone would want the EC powers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budget” aspect of an overall line item for grants within the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t think the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.) (3) To preserve the EC powers as to Budget, it would seem “cleaner” to place the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s oversight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities. I appreciate any observations other CCWG members may have that will help bring me up to speed. Thank you, Anne Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [[]] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com<http://lrrc.com/> [[]] Because what matters to you, matters to us.� From: Erika Mann <erika@erikamann.com> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr <becky.burr@board.icann.org> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com>; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Becky - That’s what we agreed upon but in the light of Anne’s points raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone On Nov 19, 2019, at 3:33 PM, Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> wrote: Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylaws”. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “tranche”.) Mechanism C Re Mechanism C, when PTI was formed, the structure chosen was ICANN as sole member of a California non-profit public benefit corporation (Article 16.2). I believe actions by the PTI Board of Directors remain subject to Empowered Community accountability processes, but not to RFR and IRP, but am not sure. Can you confirm? If this is the case, could another California non-profit public benefit corporation be set up in the same manner for purposes of grant-making pursuant to Mechanism C? (I am also wondering if outside legal resources were used to set up PTI or if this was done in-house.) In other words, could another CA non-profit formed pursuant to Mechanism C be exempted from RFR and IRP, but NOT be exempted from other EC accountability mechanisms, in the same manner as the PTI formation was handled? Many thanks for your patience with respect to questions which may already have been addressed in prior deliberations of the CCWG. Anne . . From: Samantha Eisner < Samantha.Eisner@icann.org<mailto:Samantha.Eisner@icann.org>> Sent: Monday, November 18, 2019 1:13 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ One other note - to your final question of "Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?"
From the legal perspective, we considered the interplay of the Bylaws/accountability processes with the different mechanisms and our conclusion is that, absent a Bylaws change to exclude individual grant actions from the IRP/Reconsideration processes, there still remains a risk of the use of ICANN accountability processes whether the grant disbursements are completed through Mechanisms A, B or C. With that, the need to address the scope of the accountability mechanisms through Bylaws changes exists across all three mechanisms.
____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Samantha Eisner Sent: Monday, November 18, 2019 11:07 AM To: Aikman-Scalese, Anne; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted? ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Ccwg-auctionproceeds < ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> Sent: Friday, November 15, 2019 4:41 PM To: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN <image001.gif> On the topics of “Accountability” and “Best Practices”, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A � Management and support of ICANN’s accountabiliity mechanisms triggered by the grant distribution activity (if any.)” In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG � doing my best to catch up. < If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report. Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions? Thank you, Anne <image002.png> Anne E. 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Thanks Alan. It’s the desire to set up a situation which readily achieves the necessary 3/4 EC approval of the ByLaws amendments that causes me to ask these clarifying questions re the exact nature of CCWG Consensus and making that clear in the Proposed Final Report. Regarding the mechanism to be chosen, there is something about the way PTI was set up (as further described by Samantha and as further set out in the ByLaws in Section 16) that looks very “clean” to me in terms of clearly identifying recommended ByLaws changes as to the permitted Accountability challenges and those which will become inapplicable. In addition, I note that Accountability Work stream 2 implementation is not complete. So, for example, having worked actively on one of the Subgroups in Accountability Workstream 2, I have to ask how the Chartering Organizations may consider the CCWG recommendations in relation to the risk of challenges once the Work stream 2 Recommendations are finalized and implemented. Would there be, for example, an available challenge re violation of the ByLaws (as amended to implement Workstream 2) based on an alleged Human Rights violation by ICANN in the administration of the Auction Funds? It seems to me that if ICANN employs 20 additional staff as contemplated in Mechanism A, that risk is increased. (20 staff is assumed across all Mechanisms.) I would be inclined to assess the risk as being lower where administration and grants are concentrated in an entity other than ICANN. In the case of Mechanism B, risk reduction would be due to the expert independent contractor relationship, though admittedly ICANN controls the RFP process and would be supplying some of the staff as well as adding the function to its budgeting and audit processes. In the case of Mechanism C, risk reduction would be due to the independent Board of Directors and independent staffing, as it is with PTI. If valid, these observations may bear on the draft Proposed Final Report at page 19, including Marika’s request for further clarification [MK6] about what is meant by “a healthy degree of independence” and what the CCWG hopes to achieve with that goal generally (and not just in relation to the possible establishment of a foundation.) I would say the goal of a “healthy degree of independence” is controlling risk of expensive challenges to ICANN and its Board and to the Auction Proceeds per se. In other words, the greater distance ICANN maintains from the grant-making process, while still exercising its fiduciary oversight duties, the lower the risk to ICANN, its Board, and the funds. Of course risk reduction has to be balanced against costs. In this regard, it would be helpful to have some additional information. For example, how does headcount cost for 20 people to be hired in ICANN compare to the fees for hiring an expert pre-existing non-profit? Can a foundation be set up using ICANN in-house legal staff or must we go to outside counsel? (Here I am thinking about questions that will be asked by members of the CSG constituencies.) Anne From: Alan Greenberg <alan.greenberg@mcgill.ca> Sent: Tuesday, November 19, 2019 12:51 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com>; Erika Mann <erika@erikamann.com>; Becky Burr <becky.burr@board.icann.org> Cc: ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself. I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable). If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine. Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration). Alan At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote: Erika, Becky, et al, Proposed Final Report and Consensus I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persons other than applicants could file an RFR or an IRP in relation to ICANN’s handling of the grant-making process.) The Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this. In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discussions in relation to a ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.) To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability to Sunset†is important in relation to the principle of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds. Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “directly proposed†by the CCWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4. Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments. Choice of Mechanism and Survey Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows: (1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranchesâ€. (2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches†for grant-making purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’s accountability than do RFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think anyone would want the EC powers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budget†aspect of an overall line item for grants within the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t think the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.) (3) To preserve the EC powers as to Budget, it would seem “cleaner†to place the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s oversight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities. I appreciate any observations other CCWG members may have that will help bring me up to speed. Thank you, Anne Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [[]] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com<http://lrrc.com/> [[]] Because what matters to you, matters to us.™ From: Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr <becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Becky - That’s what we agreed upon but in the light of Anne’s points raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone On Nov 19, 2019, at 3:33 PM, Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> wrote: Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylawsâ€. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “trancheâ€.) Mechanism C Re Mechanism C, when PTI was formed, the structure chosen was ICANN as sole member of a California non-profit public benefit corporation (Article 16.2). I believe actions by the PTI Board of Directors remain subject to Empowered Community accountability processes, but not to RFR and IRP, but am not sure. Can you confirm? If this is the case, could another California non-profit public benefit corporation be set up in the same manner for purposes of grant-making pursuant to Mechanism C? (I am also wondering if outside legal resources were used to set up PTI or if this was done in-house.) In other words, could another CA non-profit formed pursuant to Mechanism C be exempted from RFR and IRP, but NOT be exempted from other EC accountability mechanisms, in the same manner as the PTI formation was handled? Many thanks for your patience with respect to questions which may already have been addressed in prior deliberations of the CCWG. Anne . . From: Samantha Eisner < Samantha.Eisner@icann.org<mailto:Samantha.Eisner@icann.org>> Sent: Monday, November 18, 2019 1:13 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ One other note - to your final question of "Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?​" From the legal perspective, we considered the interplay of the Bylaws/accountability processes with the different mechanisms and our conclusion is that, absent a Bylaws change to exclude individual grant actions from the IRP/Reconsideration processes, there still remains a risk of the use of ICANN accountability processes whether the grant disbursements are completed through Mechanisms A, B or C. With that, the need to address the scope of the accountability mechanisms through Bylaws changes exists across all three mechanisms. ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Samantha Eisner Sent: Monday, November 18, 2019 11:07 AM To: Aikman-Scalese, Anne; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making​", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted? ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Ccwg-auctionproceeds < ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> Sent: Friday, November 15, 2019 4:41 PM To: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN <image001.gif> On the topics of “Accountability†and “Best Practicesâ€, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A – Management and support of ICANN’s accountabiliity mechanisms triggered by the grant distribution activity (if any.)†In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG – doing my best to catch up. < If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report. Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions? Thank you, Anne <image002.png> Anne E. 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See embedded replies. At 19/11/2019 04:35 PM, Aikman-Scalese, Anne wrote: Thanks Alan. It’s the desire to set up a situation which readily achieves the necessary 3/4 EC approval of the ByLaws amendments that causes me to ask these clarifying questions re the exact nature of CCWG Consensus and making that clear in the Proposed Final Report. I'm not sure what you mean by "3/4". If memory serves me, the approval of a Fundamental Bylaw requires the active support of at least 3 of the 5 EC members and rejection by no more than 1 of the 5. In this case, I do not see an obstacle to approval, probably unanimous. Before we can get to that stage, this CCWG will go to the chartering organizations. That is the five EC Members plus the SSAC and RSSAC. I see real problems going forward to the Board if most of the chartering orgs do not approve it, so once it goes to the board for action, most or all of the EC members will have already given their support. If they do not do that, then I see the report coming back to us first, before it even gets to the Board. Regarding the mechanism to be chosen, there is something about the way PTI was set up (as further described by Samantha and as further set out in the ByLaws in Section 16) that looks very “clean” to me in terms of clearly identifying recommended ByLaws changes as to the permitted Accountability challenges and those which will become inapplicable. As far as I can see, the only relation between PTI and the accountability measures is that the EC can object to the PTI budget, can object to ICANN trying to divest itself of PTI (in a variety of ways) and how ICANN handles recommendation to PTI reviews. The other EC actions all relate to things in ICANN proper. None of what we are talking about is an attempt to stop the EC from challenging how auction funds are handles on a global basis. The Bylaw change we are discussing is for how applicants can (or rather cannot) challenge. The EC will always have control over the auction process on a global scale because they always have the authority to remove the entire ICANN Board. We cannot (or rather will not) change that. In addition, I note that Accountability Work stream 2 implementation is not complete. So, for example, having worked actively on one of the Subgroups in Accountability Workstream 2, I have to ask how the Chartering Organizations may consider the CCWG recommendations in relation to the risk of challenges once the Work stream 2 Recommendations are finalized and implemented. Would there be, for example, an available challenge re violation of the ByLaws (as amended to implement Workstream 2) based on an alleged Human Rights violation by ICANN in the administration of the Auction Funds? It seems to me that if ICANN employs 20 additional staff as contemplated in Mechanism A, that risk is increased. (20 staff is assumed across all Mechanisms.) I see no impact regardless of mechanism. ICANN will be responsible to ensuring it meets its Bylaws whether the auction work is done by staff, or partially or entirely subcontracted. We cannot avoid obligations just by sub-contracting (otherwise everyone would subcontract everything and avoid all liabilities. I would be inclined to assess the risk as being lower where administration and grants are concentrated in an entity other than ICANN. In the case of Mechanism B, risk reduction would be due to the expert independent contractor relationship, though admittedly ICANN controls the RFP process and would be supplying some of the staff as well as adding the function to its budgeting and audit processes. In the case of Mechanism C, risk reduction would be due to the independent Board of Directors and independent staffing, as it is with PTI. I ALL mechanisms we will use an indep expert group to do the application assessment and decide on awards. PTI may have a Board, and that may alter legal liabilities, but ICANN has control over that Board and its budget and I do not believe the it can be isolated from PTI actions if it allows them to happen. If valid, these observations may bear on the draft Proposed Final Report at page 19, including Marika’s request for further clarification [MK6] about what is meant by “a healthy degree of independence” and what the CCWG hopes to achieve with that goal generally (and not just in relation to the possible establishment of a foundation.) I would say the goal of a “healthy degree of independence” is controlling risk of expensive challenges to ICANN and its Board and to the Auction Proceeds per se. In other words, the greater distance ICANN maintains from the grant-making process, while still exercising its fiduciary oversight duties, the lower the risk to ICANN, its Board, and the funds. As I understand it ALL mechanisms will have independence of the grant making process. Period. Challenges will always be possible for potentially all sorts of reasons. The only challenges we can control are those from applicants. Of course risk reduction has to be balanced against costs. In this regard, it would be helpful to have some additional information. For example, how does headcount cost for 20 people to be hired in ICANN compare to the fees for hiring an expert pre-existing non-profit? Can a foundation be set up using ICANN in-house legal staff or must we go to outside counsel? (Here I am thinking about questions that will be asked by members of the CSG constituencies.) I will leave these to Sam and Xavier. Alan Anne From: Alan Greenberg <alan.greenberg@mcgill.ca> Sent: Tuesday, November 19, 2019 12:51 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com>; Erika Mann <erika@erikamann.com>; Becky Burr <becky.burr@board.icann.org> Cc: ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself. I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable). If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine. Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration). Alan At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote: Erika, Becky, et al, Proposed Final Report and Consensus I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (Itâ��s possible persons other than appliplicants could file an RFR or an IRP in relation to ICANNâ€�s handling of the grant-making process.) Thee Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this. In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I donâ��t recall any specific discuscussions in relation to a ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.) To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that â��ability toto Sunsetâ�� is important in relation to the prinnciple of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds. Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be â��directly proposedâ�� by the CCWG iWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4. Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments. Choice of Mechanism and Survey Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows: (1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in â��tranchesâ��. &> (2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of â��tranchesâ�� for grant-makimaking purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANNâ��™s accountability than do RFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I donâ��t think anyone would want the EC powpowers to apply to any individual grant. So it seems we need to choose a structure that keeps the â��Budgdgetâ�� aspect of an overall line item for grants wwithin the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just donâ��t��t think the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.) (3) To preserve the EC powers as to Budget, it would seem â��cleanerâ�� to bsp; place the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Boardâ��s overversight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities. I appreciate any observations other CCWG members may have that will help bring me up to speed. Thank you, Anne Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [[]] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com<http://lrrc.com/> [[]] Because what matters to you, matters to us.� From: Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Becky - Thatâ�℄�s what we agreed upon but in the light of Anneâ��s �s points raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone On Nov 19, 2019, at 3:33 PM, Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> wrote: Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. â��Neither the EC, the Decisional Participants, , the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylawsâ��. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any â��trancheâ��.)
Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.” Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one” as you say. And that makes the survey very important. To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently. You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset” Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions. The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey. Anne From: Alan Greenberg <alan.greenberg@mcgill.ca> Sent: Tuesday, November 19, 2019 4:34 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com>; Erika Mann <erika@erikamann.com>; Becky Burr <becky.burr@board.icann.org> Cc: ccwg-auctionproceeds@icann.org Subject: RE: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ See embedded replies. At 19/11/2019 04:35 PM, Aikman-Scalese, Anne wrote: Thanks Alan. It’s the desire to set up a situation which readily achieves the necessary 3/4 EC approval of the ByLaws amendments that causes me to ask these clarifying questions re the exact nature of CCWG Consensus and making that clear in the Proposed Final Report. I'm not sure what you mean by "3/4". If memory serves me, the approval of a Fundamental Bylaw requires the active support of at least 3 of the 5 EC members and rejection by no more than 1 of the 5. In this case, I do not see an obstacle to approval, probably unanimous. Before we can get to that stage, this CCWG will go to the chartering organizations. That is the five EC Members plus the SSAC and RSSAC. I see real problems going forward to the Board if most of the chartering orgs do not approve it, so once it goes to the board for action, most or all of the EC members will have already given their support. If they do not do that, then I see the report coming back to us first, before it even gets to the Board. Regarding the mechanism to be chosen, there is something about the way PTI was set up (as further described by Samantha and as further set out in the ByLaws in Section 16) that looks very “clean†to me in terms of clearly identifying recommended ByLaws changes as to the permitted Accountability challenges and those which will become inapplicable. As far as I can see, the only relation between PTI and the accountability measures is that the EC can object to the PTI budget, can object to ICANN trying to divest itself of PTI (in a variety of ways) and how ICANN handles recommendation to PTI reviews. The other EC actions all relate to things in ICANN proper. None of what we are talking about is an attempt to stop the EC from challenging how auction funds are handles on a global basis. The Bylaw change we are discussing is for how applicants can (or rather cannot) challenge. The EC will always have control over the auction process on a global scale because they always have the authority to remove the entire ICANN Board. We cannot (or rather will not) change that. In addition, I note that Accountability Work stream 2 implementation is not complete. So, for example, having worked actively on one of the Subgroups in Accountability Workstream 2, I have to ask how the Chartering Organizations may consider the CCWG recommendations in relation to the risk of challenges once the Work stream 2 Recommendations are finalized and implemented. Would there be, for example, an available challenge re violation of the ByLaws (as amended to implement Workstream 2) based on an alleged Human Rights violation by ICANN in the administration of the Auction Funds? It seems to me that if ICANN employs 20 additional staff as contemplated in Mechanism A, that risk is increased. (20 staff is assumed across all Mechanisms.) I see no impact regardless of mechanism. ICANN will be responsible to ensuring it meets its Bylaws whether the auction work is done by staff, or partially or entirely subcontracted. We cannot avoid obligations just by sub-contracting (otherwise everyone would subcontract everything and avoid all liabilities. I would be inclined to assess the risk as being lower where administration and grants are concentrated in an entity other than ICANN. In the case of Mechanism B, risk reduction would be due to the expert independent contractor relationship, though admittedly ICANN controls the RFP process and would be supplying some of the staff as well as adding the function to its budgeting and audit processes. In the case of Mechanism C, risk reduction would be due to the independent Board of Directors and independent staffing, as it is with PTI. I ALL mechanisms we will use an indep expert group to do the application assessment and decide on awards. PTI may have a Board, and that may alter legal liabilities, but ICANN has control over that Board and its budget and I do not believe the it can be isolated from PTI actions if it allows them to happen. If valid, these observations may bear on the draft Proposed Final Report at page 19, including Marika’s request for further clarification [MK6] about what is meant by “a healthy degree of independence†and what the CCWG hopes to achieve with that goal generally (and not just in relation to the possible establishment of a foundation.) I would say the goal of a “healthy degree of independence†is controlling risk of expensive challenges to ICANN and its Board and to the Auction Proceeds per se. In other words, the greater distance ICANN maintains from the grant-making process, while still exercising its fiduciary oversight duties, the lower the risk to ICANN, its Board, and the funds. As I understand it ALL mechanisms will have independence of the grant making process. Period. Challenges will always be possible for potentially all sorts of reasons. The only challenges we can control are those from applicants. Of course risk reduction has to be balanced against costs. In this regard, it would be helpful to have some additional information. For example, how does headcount cost for 20 people to be hired in ICANN compare to the fees for hiring an expert pre-existing non-profit? Can a foundation be set up using ICANN in-house legal staff or must we go to outside counsel? (Here I am thinking about questions that will be asked by members of the CSG constituencies.) I will leave these to Sam and Xavier. Alan Anne From: Alan Greenberg <alan.greenberg@mcgill.ca<mailto:alan.greenberg@mcgill.ca>> Sent: Tuesday, November 19, 2019 12:51 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>>; Becky Burr <becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself. I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable). If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine. Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration). Alan At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote: Erika, Becky, et al, Proposed Final Report and Consensus I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persons other than appliplicants could file an RFR or an IRP in relation to ICANN’s handling of the grant-making process.) Thee Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this. In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discuscussions in relation to a ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.) To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability toto Sunset†is important in relation to the prinnciple of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds. Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “directly proposed†by the CCWG iWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4. Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments. Choice of Mechanism and Survey Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows: (1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranchesâ€. &> (2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches†for grant-makimaking purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’™s accountability than do RFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think anyone would want the EC powpowers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budgdget†aspect of an overall line item for grants wwithin the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t„¢t think the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.) (3) To preserve the EC powers as to Budget, it would seem “cleaner†to bsp; place the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s overversight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities. I appreciate any observations other CCWG members may have that will help bring me up to speed. Thank you, Anne Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [[]] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com<http://lrrc.com/> [[]] Because what matters to you, matters to us.™ From: Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Becky - Thatâ€â„„¢s what we agreed upon but in the light of Anne’s ¢s points raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone On Nov 19, 2019, at 3:33 PM, Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> wrote: Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, , the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylawsâ€. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “trancheâ€.) ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. 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All, I would like to highlight several things that Anne has mentioned. We are of course all in support of accountability, minimizing the risk of disputes in the management of the auction proceeds, and support that costs should be managed prudently. Those apply to whatever Mechanism is finally selected. As for the “many trade-offs” as between Mechanisms A, B, and C, those that raise or lower the desirability of individual Mechanisms are pretty much independent of how we sort out the accountability and risk management issues. The Mechanism properties and the associated “trade-offs” are likely to be thoroughly aired in the public comment period for the Final Report. Bits and pieces of those trade-offs have been raised in the work of the group, but now, in the comment period, is the time to get more specific and explicit about the strengths and weaknesses of the three options. Sam Lanfranco On 11/19/2019 7:24 PM, Aikman-Scalese, Anne wrote:
Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.” Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one” as you say. And that makes the survey very important.
To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently.
You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset” Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions.
The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey.
Anne
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Thank you Sam. I agree with your observations, but my understanding is that the survey of Chartering Organizations comes before the public comment is received. So I am asking these questions in relation to analysis I need to provide to the CSG. Does the survey precede the receipt and analysis of public comment and is that the right way to go? Thank you, Anne From: Sam Lanfranco <sam@lanfranco.net> Sent: Tuesday, November 19, 2019 5:56 PM To: ccwg-auctionproceeds@icann.org Cc: Aikman-Scalese, Anne <AAikman@lrrc.com>; Alan Greenberg <alan.greenberg@mcgill.ca>; Erika Mann <erika@erikamann.com>; Becky Burr <becky.burr@board.icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ All, I would like to highlight several things that Anne has mentioned. We are of course all in support of accountability, minimizing the risk of disputes in the management of the auction proceeds, and support that costs should be managed prudently. Those apply to whatever Mechanism is finally selected. As for the “many trade-offs” as between Mechanisms A, B, and C, those that raise or lower the desirability of individual Mechanisms are pretty much independent of how we sort out the accountability and risk management issues. The Mechanism properties and the associated “trade-offs” are likely to be thoroughly aired in the public comment period for the Final Report. Bits and pieces of those trade-offs have been raised in the work of the group, but now, in the comment period, is the time to get more specific and explicit about the strengths and weaknesses of the three options. Sam Lanfranco On 11/19/2019 7:24 PM, Aikman-Scalese, Anne wrote: Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.” Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one” as you say. And that makes the survey very important. To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently. You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset” Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions. The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey. Anne <rest deleted> ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
Hi Anne, Thanks for your question. Correct, during discussions in the face-to-face meeting, the CCWG agreed to hold the poll prior to the public comment period, so that it has the opportunity to refine recommendations about the preferred mechanism(s) before seeking public comment. We expect to be able to share the updated report tomorrow based on the most recent comments received and also open the poll tomorrow. The poll will close on Tuesday 3 December. The report will then be updated based on poll results and put out for public comment. The CCWG will have an opportunity to finalize the contents of the report (including recommendations) after it considers input received through public comment. Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of "Aikman-Scalese, Anne" <AAikman@lrrc.com> Date: Thursday, 21 November 2019 at 19:17 To: Sam Lanfranco <sam@lanfranco.net>, "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Thank you Sam. I agree with your observations, but my understanding is that the survey of Chartering Organizations comes before the public comment is received. So I am asking these questions in relation to analysis I need to provide to the CSG. Does the survey precede the receipt and analysis of public comment and is that the right way to go? Thank you, Anne From: Sam Lanfranco <sam@lanfranco.net> Sent: Tuesday, November 19, 2019 5:56 PM To: ccwg-auctionproceeds@icann.org Cc: Aikman-Scalese, Anne <AAikman@lrrc.com>; Alan Greenberg <alan.greenberg@mcgill.ca>; Erika Mann <erika@erikamann.com>; Becky Burr <becky.burr@board.icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ All, I would like to highlight several things that Anne has mentioned. We are of course all in support of accountability, minimizing the risk of disputes in the management of the auction proceeds, and support that costs should be managed prudently. Those apply to whatever Mechanism is finally selected. As for the “many trade-offs” as between Mechanisms A, B, and C, those that raise or lower the desirability of individual Mechanisms are pretty much independent of how we sort out the accountability and risk management issues. The Mechanism properties and the associated “trade-offs” are likely to be thoroughly aired in the public comment period for the Final Report. Bits and pieces of those trade-offs have been raised in the work of the group, but now, in the comment period, is the time to get more specific and explicit about the strengths and weaknesses of the three options. Sam Lanfranco On 11/19/2019 7:24 PM, Aikman-Scalese, Anne wrote: Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.” Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one” as you say. And that makes the survey very important. To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently. You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset” Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions. The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey. Anne <rest deleted> ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
For reference, the timeline discussed at ICANN66 is attached. Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Emily Barabas <emily.barabas@icann.org> Date: Thursday, 21 November 2019 at 19:25 To: "Aikman-Scalese, Anne" <AAikman@lrrc.com>, Sam Lanfranco <sam@lanfranco.net>, "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Hi Anne, Thanks for your question. Correct, during discussions in the face-to-face meeting, the CCWG agreed to hold the poll prior to the public comment period, so that it has the opportunity to refine recommendations about the preferred mechanism(s) before seeking public comment. We expect to be able to share the updated report tomorrow based on the most recent comments received and also open the poll tomorrow. The poll will close on Tuesday 3 December. The report will then be updated based on poll results and put out for public comment. The CCWG will have an opportunity to finalize the contents of the report (including recommendations) after it considers input received through public comment. Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of "Aikman-Scalese, Anne" <AAikman@lrrc.com> Date: Thursday, 21 November 2019 at 19:17 To: Sam Lanfranco <sam@lanfranco.net>, "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Thank you Sam. I agree with your observations, but my understanding is that the survey of Chartering Organizations comes before the public comment is received. So I am asking these questions in relation to analysis I need to provide to the CSG. Does the survey precede the receipt and analysis of public comment and is that the right way to go? Thank you, Anne From: Sam Lanfranco <sam@lanfranco.net> Sent: Tuesday, November 19, 2019 5:56 PM To: ccwg-auctionproceeds@icann.org Cc: Aikman-Scalese, Anne <AAikman@lrrc.com>; Alan Greenberg <alan.greenberg@mcgill.ca>; Erika Mann <erika@erikamann.com>; Becky Burr <becky.burr@board.icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ All, I would like to highlight several things that Anne has mentioned. We are of course all in support of accountability, minimizing the risk of disputes in the management of the auction proceeds, and support that costs should be managed prudently. Those apply to whatever Mechanism is finally selected. As for the “many trade-offs” as between Mechanisms A, B, and C, those that raise or lower the desirability of individual Mechanisms are pretty much independent of how we sort out the accountability and risk management issues. The Mechanism properties and the associated “trade-offs” are likely to be thoroughly aired in the public comment period for the Final Report. Bits and pieces of those trade-offs have been raised in the work of the group, but now, in the comment period, is the time to get more specific and explicit about the strengths and weaknesses of the three options. Sam Lanfranco On 11/19/2019 7:24 PM, Aikman-Scalese, Anne wrote: Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.” Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one” as you say. And that makes the survey very important. To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently. You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset” Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions. The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey. Anne <rest deleted> ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
Hi Anne, Apologies for the multiple messages, but I wanted to share one additional point of clarification. The upcoming poll is what we are calling an “indicative” poll. It is not necessary to consult with your groups to respond to this poll. You can respond from your own perspective based on the discussions to date and your own analysis. The results of the indicative poll will be tested during the public comment period where SO/ACs and SG/Cs will have an opportunity to respond to the recommendations in the report and members can ensure at that point with their groups that they are aligned. I hope this clarification is helpful. Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Emily Barabas <emily.barabas@icann.org> Date: Thursday, 21 November 2019 at 19:28 To: "Aikman-Scalese, Anne" <AAikman@lrrc.com>, Sam Lanfranco <sam@lanfranco.net>, "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN For reference, the timeline discussed at ICANN66 is attached. Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Emily Barabas <emily.barabas@icann.org> Date: Thursday, 21 November 2019 at 19:25 To: "Aikman-Scalese, Anne" <AAikman@lrrc.com>, Sam Lanfranco <sam@lanfranco.net>, "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Hi Anne, Thanks for your question. Correct, during discussions in the face-to-face meeting, the CCWG agreed to hold the poll prior to the public comment period, so that it has the opportunity to refine recommendations about the preferred mechanism(s) before seeking public comment. We expect to be able to share the updated report tomorrow based on the most recent comments received and also open the poll tomorrow. The poll will close on Tuesday 3 December. The report will then be updated based on poll results and put out for public comment. The CCWG will have an opportunity to finalize the contents of the report (including recommendations) after it considers input received through public comment. Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of "Aikman-Scalese, Anne" <AAikman@lrrc.com> Date: Thursday, 21 November 2019 at 19:17 To: Sam Lanfranco <sam@lanfranco.net>, "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Thank you Sam. I agree with your observations, but my understanding is that the survey of Chartering Organizations comes before the public comment is received. So I am asking these questions in relation to analysis I need to provide to the CSG. Does the survey precede the receipt and analysis of public comment and is that the right way to go? Thank you, Anne From: Sam Lanfranco <sam@lanfranco.net> Sent: Tuesday, November 19, 2019 5:56 PM To: ccwg-auctionproceeds@icann.org Cc: Aikman-Scalese, Anne <AAikman@lrrc.com>; Alan Greenberg <alan.greenberg@mcgill.ca>; Erika Mann <erika@erikamann.com>; Becky Burr <becky.burr@board.icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ All, I would like to highlight several things that Anne has mentioned. We are of course all in support of accountability, minimizing the risk of disputes in the management of the auction proceeds, and support that costs should be managed prudently. Those apply to whatever Mechanism is finally selected. As for the “many trade-offs” as between Mechanisms A, B, and C, those that raise or lower the desirability of individual Mechanisms are pretty much independent of how we sort out the accountability and risk management issues. The Mechanism properties and the associated “trade-offs” are likely to be thoroughly aired in the public comment period for the Final Report. Bits and pieces of those trade-offs have been raised in the work of the group, but now, in the comment period, is the time to get more specific and explicit about the strengths and weaknesses of the three options. Sam Lanfranco On 11/19/2019 7:24 PM, Aikman-Scalese, Anne wrote: Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.” Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one” as you say. And that makes the survey very important. To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently. You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset” Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions. The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey. Anne <rest deleted> ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
Thanks Emily. If this is merely an “indicative poll” and does not constitute the view of the Chartering Organization (but rather our views as individual participants), I am struggling to understand how the CCWG will properly consider public comment. Public comment on the models will apparently be analyzed but I do not see in the timeline a point where the Chartering Organizations (apparently acting as the EC as Becky stated?) will be asked to express a vote as to what each one’s position is on the preferred Mechanism and how that view will be reflected in the Final Report. Naturally representatives of Chartering Organizations will need time to analyze public comment, submit the considerations to their CO membership and have it discussed. Presumably the Report should not be finalized until after the Chartering Organizations have weighed in, so that the Final Report may include the preferred Mechanism choice of each of the Chartering Organizations. Otherwise, it’s unclear how Chartering Organizations could vote to approve the Final Report if each Chartering Organization’s preferred mechanism is not contained in the Final Report. Can you please clarify? Thank you, Anne From: Emily Barabas <emily.barabas@icann.org> Sent: Thursday, November 21, 2019 11:36 AM To: Aikman-Scalese, Anne <AAikman@lrrc.com>; Sam Lanfranco <sam@lanfranco.net>; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Hi Anne, Apologies for the multiple messages, but I wanted to share one additional point of clarification. The upcoming poll is what we are calling an “indicative” poll. It is not necessary to consult with your groups to respond to this poll. You can respond from your own perspective based on the discussions to date and your own analysis. The results of the indicative poll will be tested during the public comment period where SO/ACs and SG/Cs will have an opportunity to respond to the recommendations in the report and members can ensure at that point with their groups that they are aligned. I hope this clarification is helpful. Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Emily Barabas <emily.barabas@icann.org<mailto:emily.barabas@icann.org>> Date: Thursday, 21 November 2019 at 19:28 To: "Aikman-Scalese, Anne" <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>, Sam Lanfranco <sam@lanfranco.net<mailto:sam@lanfranco.net>>, "ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>" <ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN For reference, the timeline discussed at ICANN66 is attached. Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Emily Barabas <emily.barabas@icann.org<mailto:emily.barabas@icann.org>> Date: Thursday, 21 November 2019 at 19:25 To: "Aikman-Scalese, Anne" <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>, Sam Lanfranco <sam@lanfranco.net<mailto:sam@lanfranco.net>>, "ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>" <ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Hi Anne, Thanks for your question. Correct, during discussions in the face-to-face meeting, the CCWG agreed to hold the poll prior to the public comment period, so that it has the opportunity to refine recommendations about the preferred mechanism(s) before seeking public comment. We expect to be able to share the updated report tomorrow based on the most recent comments received and also open the poll tomorrow. The poll will close on Tuesday 3 December. The report will then be updated based on poll results and put out for public comment. The CCWG will have an opportunity to finalize the contents of the report (including recommendations) after it considers input received through public comment. Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of "Aikman-Scalese, Anne" <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> Date: Thursday, 21 November 2019 at 19:17 To: Sam Lanfranco <sam@lanfranco.net<mailto:sam@lanfranco.net>>, "ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>" <ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Thank you Sam. I agree with your observations, but my understanding is that the survey of Chartering Organizations comes before the public comment is received. So I am asking these questions in relation to analysis I need to provide to the CSG. Does the survey precede the receipt and analysis of public comment and is that the right way to go? Thank you, Anne From: Sam Lanfranco <sam@lanfranco.net<mailto:sam@lanfranco.net>> Sent: Tuesday, November 19, 2019 5:56 PM To: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; Alan Greenberg <alan.greenberg@mcgill.ca<mailto:alan.greenberg@mcgill.ca>>; Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>>; Becky Burr <becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ All, I would like to highlight several things that Anne has mentioned. We are of course all in support of accountability, minimizing the risk of disputes in the management of the auction proceeds, and support that costs should be managed prudently. Those apply to whatever Mechanism is finally selected. As for the “many trade-offs” as between Mechanisms A, B, and C, those that raise or lower the desirability of individual Mechanisms are pretty much independent of how we sort out the accountability and risk management issues. The Mechanism properties and the associated “trade-offs” are likely to be thoroughly aired in the public comment period for the Final Report. Bits and pieces of those trade-offs have been raised in the work of the group, but now, in the comment period, is the time to get more specific and explicit about the strengths and weaknesses of the three options. Sam Lanfranco On 11/19/2019 7:24 PM, Aikman-Scalese, Anne wrote: Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.” Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one” as you say. And that makes the survey very important. To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently. You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset” Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions. The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey. Anne <rest deleted> ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
Anne - the first poll is insofar indicative as not everyone has found the time to finalize the internal consultation process with their Chartering Organization - and some may want to wait until all comments are reviewed from the second Public Comment period. Insofar there will be sufficient time before we will initiate a Consensus Call (after the second Public Comment period.). I noted that we will have to talk about these processes again in our next call. We will put this item on our agenda. I hope this clarifies your questions. Kind regards, Erika On Thu, Nov 21, 2019 at 8:47 PM Aikman-Scalese, Anne <AAikman@lrrc.com> wrote:
Thanks Emily. If this is merely an “indicative poll” and does not constitute the view of the Chartering Organization (but rather our views as individual participants), I am struggling to understand how the CCWG will properly consider public comment.
Public comment on the models will apparently be analyzed but I do not see in the timeline a point where the Chartering Organizations (apparently acting as the EC as Becky stated?) will be asked to express a vote as to what each one’s position is on the preferred Mechanism and how that view will be reflected in the Final Report.
Naturally representatives of Chartering Organizations will need time to analyze public comment, submit the considerations to their CO membership and have it discussed. Presumably the Report should not be finalized until after the Chartering Organizations have weighed in, so that the Final Report may include the preferred Mechanism choice of each of the Chartering Organizations. Otherwise, it’s unclear how Chartering Organizations could vote to approve the Final Report if each Chartering Organization’s preferred mechanism is not contained in the Final Report.
Can you please clarify?
Thank you,
Anne
*From:* Emily Barabas <emily.barabas@icann.org> *Sent:* Thursday, November 21, 2019 11:36 AM *To:* Aikman-Scalese, Anne <AAikman@lrrc.com>; Sam Lanfranco < sam@lanfranco.net>; ccwg-auctionproceeds@icann.org *Subject:* Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
*[EXTERNAL]* ------------------------------
Hi Anne,
Apologies for the multiple messages, but I wanted to share one additional point of clarification. The upcoming poll is what we are calling an “indicative” poll. It is not necessary to consult with your groups to respond to this poll. You can respond from your own perspective based on the discussions to date and your own analysis. The results of the indicative poll will be tested during the public comment period where SO/ACs and SG/Cs will have an opportunity to respond to the recommendations in the report and members can ensure at that point with their groups that they are aligned.
I hope this clarification is helpful.
Kind regards,
Emily
*From: *Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Emily Barabas <emily.barabas@icann.org> *Date: *Thursday, 21 November 2019 at 19:28 *To: *"Aikman-Scalese, Anne" <AAikman@lrrc.com>, Sam Lanfranco < sam@lanfranco.net>, "ccwg-auctionproceeds@icann.org" < ccwg-auctionproceeds@icann.org> *Subject: *Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
For reference, the timeline discussed at ICANN66 is attached.
Kind regards,
Emily
*From: *Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Emily Barabas <emily.barabas@icann.org> *Date: *Thursday, 21 November 2019 at 19:25 *To: *"Aikman-Scalese, Anne" <AAikman@lrrc.com>, Sam Lanfranco < sam@lanfranco.net>, "ccwg-auctionproceeds@icann.org" < ccwg-auctionproceeds@icann.org> *Subject: *Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
Hi Anne,
Thanks for your question. Correct, during discussions in the face-to-face meeting, the CCWG agreed to hold the poll prior to the public comment period, so that it has the opportunity to refine recommendations about the preferred mechanism(s) before seeking public comment.
We expect to be able to share the updated report tomorrow based on the most recent comments received and also open the poll tomorrow. The poll will close on Tuesday 3 December. The report will then be updated based on poll results and put out for public comment. The CCWG will have an opportunity to finalize the contents of the report (including recommendations) after it considers input received through public comment.
Kind regards,
Emily
*From: *Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of "Aikman-Scalese, Anne" <AAikman@lrrc.com> *Date: *Thursday, 21 November 2019 at 19:17 *To: *Sam Lanfranco <sam@lanfranco.net>, "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> *Subject: *Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
Thank you Sam. I agree with your observations, but my understanding is that the survey of Chartering Organizations comes before the public comment is received. So I am asking these questions in relation to analysis I need to provide to the CSG.
Does the survey precede the receipt and analysis of public comment and is that the right way to go?
Thank you,
Anne
*From:* Sam Lanfranco <sam@lanfranco.net> *Sent:* Tuesday, November 19, 2019 5:56 PM *To:* ccwg-auctionproceeds@icann.org *Cc:* Aikman-Scalese, Anne <AAikman@lrrc.com>; Alan Greenberg < alan.greenberg@mcgill.ca>; Erika Mann <erika@erikamann.com>; Becky Burr < becky.burr@board.icann.org> *Subject:* Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
*[EXTERNAL]* ------------------------------
All,
I would like to highlight several things that Anne has mentioned. We are of course all in support of accountability, minimizing the risk of disputes in the management of the auction proceeds, and support that costs should be managed prudently. Those apply to whatever Mechanism is finally selected.
As for the “many trade-offs” as between Mechanisms A, B, and C, those that raise or lower the desirability of individual Mechanisms are pretty much independent of how we sort out the accountability and risk management issues. The Mechanism properties and the associated “trade-offs” are likely to be thoroughly aired in the public comment period for the Final Report. Bits and pieces of those trade-offs have been raised in the work of the group, but now, in the comment period, is the time to get more specific and explicit about the strengths and weaknesses of the three options.
Sam Lanfranco
On 11/19/2019 7:24 PM, Aikman-Scalese, Anne wrote:
Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.” Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one” as you say. And that makes the survey very important.
To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently.
You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset” Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions.
The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey.
Anne
<rest deleted>
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This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. _______________________________________________ Ccwg-auctionproceeds mailing list Ccwg-auctionproceeds@icann.org https://mm.icann.org/mailman/listinfo/ccwg-auctionproceeds _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy) and the website Terms of Service (https://www.icann.org/privacy/tos). You can visit the Mailman link above to change your membership status or configuration, including unsubscribing, setting digest-style delivery or disabling delivery altogether (e.g., for a vacation), and so on.
Thank you Erika. From: Erika Mann <erika@erikamann.com> Sent: Thursday, November 21, 2019 1:00 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com> Cc: Emily Barabas <emily.barabas@icann.org>; Sam Lanfranco <sam@lanfranco.net>; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Anne - the first poll is insofar indicative as not everyone has found the time to finalize the internal consultation process with their Chartering Organization - and some may want to wait until all comments are reviewed from the second Public Comment period. Insofar there will be sufficient time before we will initiate a Consensus Call (after the second Public Comment period.). I noted that we will have to talk about these processes again in our next call. We will put this item on our agenda. I hope this clarifies your questions. Kind regards, Erika On Thu, Nov 21, 2019 at 8:47 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thanks Emily. If this is merely an “indicative poll” and does not constitute the view of the Chartering Organization (but rather our views as individual participants), I am struggling to understand how the CCWG will properly consider public comment. Public comment on the models will apparently be analyzed but I do not see in the timeline a point where the Chartering Organizations (apparently acting as the EC as Becky stated?) will be asked to express a vote as to what each one’s position is on the preferred Mechanism and how that view will be reflected in the Final Report. Naturally representatives of Chartering Organizations will need time to analyze public comment, submit the considerations to their CO membership and have it discussed. Presumably the Report should not be finalized until after the Chartering Organizations have weighed in, so that the Final Report may include the preferred Mechanism choice of each of the Chartering Organizations. Otherwise, it’s unclear how Chartering Organizations could vote to approve the Final Report if each Chartering Organization’s preferred mechanism is not contained in the Final Report. Can you please clarify? Thank you, Anne From: Emily Barabas <emily.barabas@icann.org<mailto:emily.barabas@icann.org>> Sent: Thursday, November 21, 2019 11:36 AM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; Sam Lanfranco <sam@lanfranco.net<mailto:sam@lanfranco.net>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Hi Anne, Apologies for the multiple messages, but I wanted to share one additional point of clarification. The upcoming poll is what we are calling an “indicative” poll. It is not necessary to consult with your groups to respond to this poll. You can respond from your own perspective based on the discussions to date and your own analysis. The results of the indicative poll will be tested during the public comment period where SO/ACs and SG/Cs will have an opportunity to respond to the recommendations in the report and members can ensure at that point with their groups that they are aligned. I hope this clarification is helpful. Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Emily Barabas <emily.barabas@icann.org<mailto:emily.barabas@icann.org>> Date: Thursday, 21 November 2019 at 19:28 To: "Aikman-Scalese, Anne" <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>, Sam Lanfranco <sam@lanfranco.net<mailto:sam@lanfranco.net>>, "ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>" <ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN For reference, the timeline discussed at ICANN66 is attached. Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Emily Barabas <emily.barabas@icann.org<mailto:emily.barabas@icann.org>> Date: Thursday, 21 November 2019 at 19:25 To: "Aikman-Scalese, Anne" <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>, Sam Lanfranco <sam@lanfranco.net<mailto:sam@lanfranco.net>>, "ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>" <ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Hi Anne, Thanks for your question. Correct, during discussions in the face-to-face meeting, the CCWG agreed to hold the poll prior to the public comment period, so that it has the opportunity to refine recommendations about the preferred mechanism(s) before seeking public comment. We expect to be able to share the updated report tomorrow based on the most recent comments received and also open the poll tomorrow. The poll will close on Tuesday 3 December. The report will then be updated based on poll results and put out for public comment. The CCWG will have an opportunity to finalize the contents of the report (including recommendations) after it considers input received through public comment. Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of "Aikman-Scalese, Anne" <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> Date: Thursday, 21 November 2019 at 19:17 To: Sam Lanfranco <sam@lanfranco.net<mailto:sam@lanfranco.net>>, "ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>" <ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Thank you Sam. I agree with your observations, but my understanding is that the survey of Chartering Organizations comes before the public comment is received. So I am asking these questions in relation to analysis I need to provide to the CSG. Does the survey precede the receipt and analysis of public comment and is that the right way to go? Thank you, Anne From: Sam Lanfranco <sam@lanfranco.net<mailto:sam@lanfranco.net>> Sent: Tuesday, November 19, 2019 5:56 PM To: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; Alan Greenberg <alan.greenberg@mcgill.ca<mailto:alan.greenberg@mcgill.ca>>; Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>>; Becky Burr <becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ All, I would like to highlight several things that Anne has mentioned. We are of course all in support of accountability, minimizing the risk of disputes in the management of the auction proceeds, and support that costs should be managed prudently. Those apply to whatever Mechanism is finally selected. As for the “many trade-offs” as between Mechanisms A, B, and C, those that raise or lower the desirability of individual Mechanisms are pretty much independent of how we sort out the accountability and risk management issues. The Mechanism properties and the associated “trade-offs” are likely to be thoroughly aired in the public comment period for the Final Report. Bits and pieces of those trade-offs have been raised in the work of the group, but now, in the comment period, is the time to get more specific and explicit about the strengths and weaknesses of the three options. Sam Lanfranco On 11/19/2019 7:24 PM, Aikman-Scalese, Anne wrote: Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.” Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one” as you say. And that makes the survey very important. To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently. You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset” Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions. The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey. Anne <rest deleted> ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. 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The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. _______________________________________________ Ccwg-auctionproceeds mailing list Ccwg-auctionproceeds@icann.org<mailto:Ccwg-auctionproceeds@icann.org> https://mm.icann.org/mailman/listinfo/ccwg-auctionproceeds _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy) and the website Terms of Service (https://www.icann.org/privacy/tos). 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Thank you. Speaking for myself, it will be extremely difficult to answer the poll without additional information regarding staffing costs in Mechanism A and C (which don’t appear to me to differ a great deal at all) in comparison to the estimated costs of working with an expert organization pursuant to Mechanism B. I have no idea what the market rates (fees) are that are charged by organizations performing the functions described in Mechanism B. Knowing that information would potentially have a great impact on the analysis. Is that information available somewhere in the history of the deliberations? (Just trying to catch up and ICANN org has placed great emphasis on costs.) Thank you, Anne From: Emily Barabas <emily.barabas@icann.org> Sent: Thursday, November 21, 2019 11:36 AM To: Aikman-Scalese, Anne <AAikman@lrrc.com>; Sam Lanfranco <sam@lanfranco.net>; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Hi Anne, Apologies for the multiple messages, but I wanted to share one additional point of clarification. The upcoming poll is what we are calling an “indicative” poll. It is not necessary to consult with your groups to respond to this poll. You can respond from your own perspective based on the discussions to date and your own analysis. The results of the indicative poll will be tested during the public comment period where SO/ACs and SG/Cs will have an opportunity to respond to the recommendations in the report and members can ensure at that point with their groups that they are aligned. I hope this clarification is helpful. Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Emily Barabas <emily.barabas@icann.org<mailto:emily.barabas@icann.org>> Date: Thursday, 21 November 2019 at 19:28 To: "Aikman-Scalese, Anne" <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>, Sam Lanfranco <sam@lanfranco.net<mailto:sam@lanfranco.net>>, "ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>" <ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN For reference, the timeline discussed at ICANN66 is attached. Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Emily Barabas <emily.barabas@icann.org<mailto:emily.barabas@icann.org>> Date: Thursday, 21 November 2019 at 19:25 To: "Aikman-Scalese, Anne" <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>, Sam Lanfranco <sam@lanfranco.net<mailto:sam@lanfranco.net>>, "ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>" <ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Hi Anne, Thanks for your question. Correct, during discussions in the face-to-face meeting, the CCWG agreed to hold the poll prior to the public comment period, so that it has the opportunity to refine recommendations about the preferred mechanism(s) before seeking public comment. We expect to be able to share the updated report tomorrow based on the most recent comments received and also open the poll tomorrow. The poll will close on Tuesday 3 December. The report will then be updated based on poll results and put out for public comment. The CCWG will have an opportunity to finalize the contents of the report (including recommendations) after it considers input received through public comment. Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of "Aikman-Scalese, Anne" <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> Date: Thursday, 21 November 2019 at 19:17 To: Sam Lanfranco <sam@lanfranco.net<mailto:sam@lanfranco.net>>, "ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>" <ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Thank you Sam. I agree with your observations, but my understanding is that the survey of Chartering Organizations comes before the public comment is received. So I am asking these questions in relation to analysis I need to provide to the CSG. Does the survey precede the receipt and analysis of public comment and is that the right way to go? Thank you, Anne From: Sam Lanfranco <sam@lanfranco.net<mailto:sam@lanfranco.net>> Sent: Tuesday, November 19, 2019 5:56 PM To: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; Alan Greenberg <alan.greenberg@mcgill.ca<mailto:alan.greenberg@mcgill.ca>>; Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>>; Becky Burr <becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ All, I would like to highlight several things that Anne has mentioned. We are of course all in support of accountability, minimizing the risk of disputes in the management of the auction proceeds, and support that costs should be managed prudently. Those apply to whatever Mechanism is finally selected. As for the “many trade-offs” as between Mechanisms A, B, and C, those that raise or lower the desirability of individual Mechanisms are pretty much independent of how we sort out the accountability and risk management issues. The Mechanism properties and the associated “trade-offs” are likely to be thoroughly aired in the public comment period for the Final Report. Bits and pieces of those trade-offs have been raised in the work of the group, but now, in the comment period, is the time to get more specific and explicit about the strengths and weaknesses of the three options. Sam Lanfranco On 11/19/2019 7:24 PM, Aikman-Scalese, Anne wrote: Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.” Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one” as you say. And that makes the survey very important. To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently. You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset” Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions. The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey. Anne <rest deleted> ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
Anne - we will have a so called Implementation Phase that will follow our work phase. We have developed guidance for this particular phase to look into some of the issues that we can't answer fully at this time. Concerning the costs involved in the various mechanism. We're recommending a best practice approach with a prudent and modest administrative cost allocation. We looked into this and we had many discussions about it - it's a bit like the chicken-egg example - but we may not get exact figures ahead of time. The leadership had mentioned the topic to ICANN ORG but it's not easy to come up with concrete numbers. Keep in mind, mechanism C would be an ICANN Foundation and work and staff allocation may even allow some flexibilities between these two entities ... in case this would be the wish of the CCWG. We're not going to be able to re-discuss all items but you certainly will have the time to raise these items during our upcoming call(s) and during the second Public Comment period, though we're limiting replies to new topics. Kind regards, Erika On Thu, Nov 21, 2019 at 9:04 PM Aikman-Scalese, Anne <AAikman@lrrc.com> wrote:
Thank you. Speaking for myself, it will be extremely difficult to answer the poll without additional information regarding staffing costs in Mechanism A and C (which don’t appear to me to differ a great deal at all) in comparison to the estimated costs of working with an expert organization pursuant to Mechanism B.
I have no idea what the market rates (fees) are that are charged by organizations performing the functions described in Mechanism B. Knowing that information would potentially have a great impact on the analysis. Is that information available somewhere in the history of the deliberations? (Just trying to catch up and ICANN org has placed great emphasis on costs.)
Thank you,
Anne
*From:* Emily Barabas <emily.barabas@icann.org> *Sent:* Thursday, November 21, 2019 11:36 AM *To:* Aikman-Scalese, Anne <AAikman@lrrc.com>; Sam Lanfranco < sam@lanfranco.net>; ccwg-auctionproceeds@icann.org *Subject:* Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
*[EXTERNAL]* ------------------------------
Hi Anne,
Apologies for the multiple messages, but I wanted to share one additional point of clarification. The upcoming poll is what we are calling an “indicative” poll. It is not necessary to consult with your groups to respond to this poll. You can respond from your own perspective based on the discussions to date and your own analysis. The results of the indicative poll will be tested during the public comment period where SO/ACs and SG/Cs will have an opportunity to respond to the recommendations in the report and members can ensure at that point with their groups that they are aligned.
I hope this clarification is helpful.
Kind regards,
Emily
*From: *Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Emily Barabas <emily.barabas@icann.org> *Date: *Thursday, 21 November 2019 at 19:28 *To: *"Aikman-Scalese, Anne" <AAikman@lrrc.com>, Sam Lanfranco < sam@lanfranco.net>, "ccwg-auctionproceeds@icann.org" < ccwg-auctionproceeds@icann.org> *Subject: *Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
For reference, the timeline discussed at ICANN66 is attached.
Kind regards,
Emily
*From: *Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Emily Barabas <emily.barabas@icann.org> *Date: *Thursday, 21 November 2019 at 19:25 *To: *"Aikman-Scalese, Anne" <AAikman@lrrc.com>, Sam Lanfranco < sam@lanfranco.net>, "ccwg-auctionproceeds@icann.org" < ccwg-auctionproceeds@icann.org> *Subject: *Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
Hi Anne,
Thanks for your question. Correct, during discussions in the face-to-face meeting, the CCWG agreed to hold the poll prior to the public comment period, so that it has the opportunity to refine recommendations about the preferred mechanism(s) before seeking public comment.
We expect to be able to share the updated report tomorrow based on the most recent comments received and also open the poll tomorrow. The poll will close on Tuesday 3 December. The report will then be updated based on poll results and put out for public comment. The CCWG will have an opportunity to finalize the contents of the report (including recommendations) after it considers input received through public comment.
Kind regards,
Emily
*From: *Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of "Aikman-Scalese, Anne" <AAikman@lrrc.com> *Date: *Thursday, 21 November 2019 at 19:17 *To: *Sam Lanfranco <sam@lanfranco.net>, "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> *Subject: *Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
Thank you Sam. I agree with your observations, but my understanding is that the survey of Chartering Organizations comes before the public comment is received. So I am asking these questions in relation to analysis I need to provide to the CSG.
Does the survey precede the receipt and analysis of public comment and is that the right way to go?
Thank you,
Anne
*From:* Sam Lanfranco <sam@lanfranco.net> *Sent:* Tuesday, November 19, 2019 5:56 PM *To:* ccwg-auctionproceeds@icann.org *Cc:* Aikman-Scalese, Anne <AAikman@lrrc.com>; Alan Greenberg < alan.greenberg@mcgill.ca>; Erika Mann <erika@erikamann.com>; Becky Burr < becky.burr@board.icann.org> *Subject:* Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
*[EXTERNAL]* ------------------------------
All,
I would like to highlight several things that Anne has mentioned. We are of course all in support of accountability, minimizing the risk of disputes in the management of the auction proceeds, and support that costs should be managed prudently. Those apply to whatever Mechanism is finally selected.
As for the “many trade-offs” as between Mechanisms A, B, and C, those that raise or lower the desirability of individual Mechanisms are pretty much independent of how we sort out the accountability and risk management issues. The Mechanism properties and the associated “trade-offs” are likely to be thoroughly aired in the public comment period for the Final Report. Bits and pieces of those trade-offs have been raised in the work of the group, but now, in the comment period, is the time to get more specific and explicit about the strengths and weaknesses of the three options.
Sam Lanfranco
On 11/19/2019 7:24 PM, Aikman-Scalese, Anne wrote:
Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.” Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one” as you say. And that makes the survey very important.
To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently.
You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset” Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions.
The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey.
Anne
<rest deleted>
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This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. _______________________________________________ Ccwg-auctionproceeds mailing list Ccwg-auctionproceeds@icann.org https://mm.icann.org/mailman/listinfo/ccwg-auctionproceeds _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy) and the website Terms of Service (https://www.icann.org/privacy/tos). You can visit the Mailman link above to change your membership status or configuration, including unsubscribing, setting digest-style delivery or disabling delivery altogether (e.g., for a vacation), and so on.
/First a little humor. /As U.S. actor-turned-President Ronald Reagan liked to say: “/There you [I] go again/”. I would like to approach the issue of Mechanisms and Costs in a reverse order. If we start from the deliverables, they are the same for each Mechanism, and baring different Mechanisms facing different prices for similar skills, the overall dollar costs should be about the same. Thus, costs probably should not be a deciding factor in ranking preferences for Mechanisms A, B, and C. All three options will be approached of course with “…a best practice approach with a prudent and modest administrative cost allocation.” There may be some cost savings from Mechanism B depending on how partner expertise is costed out, and there may be some one-time additional cost to set up a Foundation for Mechanism C. ICANN services and staff provided for Mechanism A (and B) would probably be costed competitively to those provided by others within Mechanisms B and C. In my view a best practice approach to making the Mechanism choice is to complete this Work Phase focused on the complicated issues we have explored, what we want the Mechanism to do, and how we want it to work. This is then handed off to the Implementation Phase, along with comments (and questions) about the issues relevant for ranking A, B and C. These might include elapsed time to implementation (i.e., how long to the first round of grant applications), prospects for receiving additional funds from other sources, (to do more things or do things longer) and the like. In this scenario the Implementation Phase would be where the Mechanism choice was identified, and then subject to whatever ICANN stakeholder approval process is appropriate. If we are to make that choice at this Work Phase, we need to make a list of the factors, other than costs, about what evidence we need to assess, and what decisions (e.g. open to supplemental funding) need to be made before ranking the Mechanisms. Sam L.
That makes sense, Sam. At the moment I think we are coming unstuck because we are trying to think out the implementation phase as well as the ones we were tasked with which I thought were mainly to identify some mechanism options to manage and distribute the funds and some criteria by which projects could be selected. Maureen On Thu, 21 Nov 2019, 11:16 AM Sam Lanfranco, <sam@lanfranco.net> wrote:
*First a little humor. *As U.S. actor-turned-President Ronald Reagan liked to say: “*There you [I] go again*”.
I would like to approach the issue of Mechanisms and Costs in a reverse order. If we start from the deliverables, they are the same for each Mechanism, and baring different Mechanisms facing different prices for similar skills, the overall dollar costs should be about the same. Thus, costs probably should not be a deciding factor in ranking preferences for Mechanisms A, B, and C. All three options will be approached of course with “…a best practice approach with a prudent and modest administrative cost allocation.”
There may be some cost savings from Mechanism B depending on how partner expertise is costed out, and there may be some one-time additional cost to set up a Foundation for Mechanism C. ICANN services and staff provided for Mechanism A (and B) would probably be costed competitively to those provided by others within Mechanisms B and C.
In my view a best practice approach to making the Mechanism choice is to complete this Work Phase focused on the complicated issues we have explored, what we want the Mechanism to do, and how we want it to work. This is then handed off to the Implementation Phase, along with comments (and questions) about the issues relevant for ranking A, B and C. These might include elapsed time to implementation (i.e., how long to the first round of grant applications), prospects for receiving additional funds from other sources, (to do more things or do things longer) and the like.
In this scenario the Implementation Phase would be where the Mechanism choice was identified, and then subject to whatever ICANN stakeholder approval process is appropriate. If we are to make that choice at this Work Phase, we need to make a list of the factors, other than costs, about what evidence we need to assess, and what decisions (e.g. open to supplemental funding) need to be made before ranking the Mechanisms. Sam L.
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All, You are having a great productive brainstorming about costs. To feed into this brainstorming exercise, please consider the following few comments which have been made at some point, usually verbally, by the Board liaisons, Sam and I over the past 2.5 years: 1. Any estimate of costs can only be done once we know what we do. The mechanisms will need to be transformed into implementation plan with detailed design in order to be able to evaluate the costs. An illustration of such questions (please don’t comment on this example, it just an example), is the size of the grants: 1 grant of $200m is very differently managed than 200,000 grants of $1,000, with many differences in costs. 2. However, some differences and logical principles can be formulated: - mechanisms B and C would have higher overheads costs than A, because there would be some duplication of costs between ICANN and the partner organization (mechanism B) and ICANN and the foundation (mechanism C). There is also a cost of coordinating 2 entities which exists with B and C and does not with A. - I would expect C to have, for the same reason, higher overhead costs than B, because some of the costs in B would be shared resources since the partner organization would leverage its existing structure. - resources directly and fully allocated to the program would probably cost the same in the 3 mechanisms: there is a requirement in not-for-profit oversight that salaries must be reasonable for the job purpose, so we would expect that across each of these mechanisms, the salaries paid to support the program itself would be somewhat similar. - If the focus is on selecting the lowest cost mechanism, the focus would be on areas of duplication of roles and cost drivers. I hope this helps. Thank you. Best, Xavier Xavier Calvez SVP & Chief Financial Officer ICANN P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052 E: xavier.calvez@icann.org<mailto:xavier.calvez@icann.org> | www.icann.org<http://www.icann.org/> 12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094 From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Sam Lanfranco <sam@lanfranco.net> Date: Thursday, November 21, 2019 at 1:16 PM To: "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanisms First a little humor. As U.S. actor-turned-President Ronald Reagan liked to say: “There you [I] go again”. I would like to approach the issue of Mechanisms and Costs in a reverse order. If we start from the deliverables, they are the same for each Mechanism, and baring different Mechanisms facing different prices for similar skills, the overall dollar costs should be about the same. Thus, costs probably should not be a deciding factor in ranking preferences for Mechanisms A, B, and C. All three options will be approached of course with “…a best practice approach with a prudent and modest administrative cost allocation.” There may be some cost savings from Mechanism B depending on how partner expertise is costed out, and there may be some one-time additional cost to set up a Foundation for Mechanism C. ICANN services and staff provided for Mechanism A (and B) would probably be costed competitively to those provided by others within Mechanisms B and C. In my view a best practice approach to making the Mechanism choice is to complete this Work Phase focused on the complicated issues we have explored, what we want the Mechanism to do, and how we want it to work. This is then handed off to the Implementation Phase, along with comments (and questions) about the issues relevant for ranking A, B and C. These might include elapsed time to implementation (i.e., how long to the first round of grant applications), prospects for receiving additional funds from other sources, (to do more things or do things longer) and the like. In this scenario the Implementation Phase would be where the Mechanism choice was identified, and then subject to whatever ICANN stakeholder approval process is appropriate. If we are to make that choice at this Work Phase, we need to make a list of the factors, other than costs, about what evidence we need to assess, and what decisions (e.g. open to supplemental funding) need to be made before ranking the Mechanisms. Sam L.
Thanks Xavier, Your point 1, linking costs to the "products" being delivered, is well taken. However an estimate of total costs is not the central issue here. It is, as you explore in your point 2, the relative costs of of the respective Mechanisms for supplying the same "products mix", those "products" being funded projects, evaluations, etc.. Let me take your arguments one at a time: * /RE: suggestion/ that A (in-house) would have lower overheads. That is not a forgone result. While ICANN might cover administrative costs at a competitive rate, it has little expertise in managing competitive grant funding, and the ongoing administration of funded projects. (/how the funds are administered can be a nightmare/). It also does not have the expertise for ongoing and final project evaluation, and for presenting those results in ways that ICANN org, its Board and the stakeholder communities can understand. All of that expertise will have to be bought, retained, and added to the ICANN payroll. * /RE: suggestion/ that B will result in some duplication of costs between ICANN and partner organization. That need not be the case. A partner organization would be selected based on its competencies, and Mechanism B would benefit from having that expertise "in-house", within Mechanism B. Each of the Mechanisms has similar internal work: funds distribution and evaluation, and an Accountability component. There is little reason to believe that costs, all assigned to the Mechanism, would be higher for B than for A. If such costs stood out as exceptional, that would be a red flag that something is being done wrong. * /RE: suggestion/ that C would have higher overhead costs than B. I believe it is a mistake to compare operating costs for C to B, and not count partner costs in B. While it is true that a partner organization would leverage its existing structure in B, the costs of those resources would be levied against the Mechanism's operating costs. The partner selection for B would be based on its capacity to do the work (/not because it is a charity providing free services/). Lastly, one distinguishing feature as between A and B&C, especially C, is that B and C carry the potential to be ongoing activities with funding from other sources (grants, whatever). That may or may not be a significant factor. Sam Lanfranco, NPOC On 11/21/2019 5:23 PM, Xavier J. Calvez wrote:
All,
You are having a great productive brainstorming about costs. To feed into this brainstorming exercise, please consider the following few comments which have been made at some point, usually verbally, by the Board liaisons, Sam and I over the past 2.5 years:
1. Any estimate of costs can only be done once we know what we do. The mechanisms will need to be transformed into implementation plan with detailed design in order to be able to evaluate the costs. An illustration of such questions (please don’t comment on this example, it just an example), is the size of the grants: 1 grant of $200m is very differently managed than 200,000 grants of $1,000, with many differences in costs.
2. However, some differences and logical principles can be formulated:
- mechanisms B and C would have higher overheads costs than A, because there would be some duplication of costs between ICANN and the partner organization (mechanism B) and ICANN and the foundation (mechanism C). There is also a cost of coordinating 2 entities which exists with B and C and does not with A.
- I would expect C to have, for the same reason, higher overhead costs than B, because some of the costs in B would be shared resources since the partner organization would leverage its existing structure.
- resources directly and fully allocated to the program would probably cost the same in the 3 mechanisms: there is a requirement in not-for-profit oversight that salaries must be reasonable for the job purpose, so we would expect that across each of these mechanisms, the salaries paid to support the program itself would be somewhat similar.
- If the focus is on selecting the lowest cost mechanism, the focus would be on areas of duplication of roles and cost drivers.
I hope this helps.
Thank you.
Best,
Xavier
*Xavier Calvez*
SVP & Chief Financial Officer
ICANN
P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052
E: _xavier.calvez@icann.org <mailto:xavier.calvez@icann.org>_ | www.icann.org <http://www.icann.org/>
12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094
< rest deleted>
Hi Sam, Xavier and all As a person that in a government position supervised grant for projects selected throughout public open process I do believe Sam reasons are quite good ones- expertise on establish process, selected appropriate projects that has more change to bring good results , following on how the money are being spent , formulate framework reports that can clear and not too bureaucratic way demonstrate how the money is spending and how the progress is pursuing is not as simple as it may appear and for not experienced people may cost nit only more money as much more time and may get not as good results as should . Alternative to have an external expert group to do so may solve majority of the problems - ICANN has enough expertise to separate activities and supervise with good results - travel for instance can be one exemple - it is not easy ( I had chance to check it in the past as chair of the audit committee)- the question here will be select a good group with expertise and capacity to distribute and control money around the world ! Being from a developing country I know quite well such difficulties - To solve these problems we may encourage consortium projects among developed and developing countries since in research & development world the barriers to transfer money is less complex - this is just an idea I have used in the past .. if my experience can help I can share more detailed info in specific calls Just my 2cents Vanda Scartezini Sent from my iPhone Sorry for typos On 21 Nov 2019, at 19:02, Sam Lanfranco <sam@lanfranco.net> wrote: Thanks Xavier, Your point 1, linking costs to the "products" being delivered, is well taken. However an estimate of total costs is not the central issue here. It is, as you explore in your point 2, the relative costs of of the respective Mechanisms for supplying the same "products mix", those "products" being funded projects, evaluations, etc.. Let me take your arguments one at a time: * RE: suggestion that A (in-house) would have lower overheads. That is not a forgone result. While ICANN might cover administrative costs at a competitive rate, it has little expertise in managing competitive grant funding, and the ongoing administration of funded projects. (how the funds are administered can be a nightmare). It also does not have the expertise for ongoing and final project evaluation, and for presenting those results in ways that ICANN org, its Board and the stakeholder communities can understand. All of that expertise will have to be bought, retained, and added to the ICANN payroll. * RE: suggestion that B will result in some duplication of costs between ICANN and partner organization. That need not be the case. A partner organization would be selected based on its competencies, and Mechanism B would benefit from having that expertise "in-house", within Mechanism B. Each of the Mechanisms has similar internal work: funds distribution and evaluation, and an Accountability component. There is little reason to believe that costs, all assigned to the Mechanism, would be higher for B than for A. If such costs stood out as exceptional, that would be a red flag that something is being done wrong. * RE: suggestion that C would have higher overhead costs than B. I believe it is a mistake to compare operating costs for C to B, and not count partner costs in B. While it is true that a partner organization would leverage its existing structure in B, the costs of those resources would be levied against the Mechanism's operating costs. The partner selection for B would be based on its capacity to do the work (not because it is a charity providing free services). Lastly, one distinguishing feature as between A and B&C, especially C, is that B and C carry the potential to be ongoing activities with funding from other sources (grants, whatever). That may or may not be a significant factor. Sam Lanfranco, NPOC On 11/21/2019 5:23 PM, Xavier J. Calvez wrote: All, You are having a great productive brainstorming about costs. To feed into this brainstorming exercise, please consider the following few comments which have been made at some point, usually verbally, by the Board liaisons, Sam and I over the past 2.5 years: 1. Any estimate of costs can only be done once we know what we do. The mechanisms will need to be transformed into implementation plan with detailed design in order to be able to evaluate the costs. An illustration of such questions (please don’t comment on this example, it just an example), is the size of the grants: 1 grant of $200m is very differently managed than 200,000 grants of $1,000, with many differences in costs. 2. However, some differences and logical principles can be formulated: - mechanisms B and C would have higher overheads costs than A, because there would be some duplication of costs between ICANN and the partner organization (mechanism B) and ICANN and the foundation (mechanism C). There is also a cost of coordinating 2 entities which exists with B and C and does not with A. - I would expect C to have, for the same reason, higher overhead costs than B, because some of the costs in B would be shared resources since the partner organization would leverage its existing structure. - resources directly and fully allocated to the program would probably cost the same in the 3 mechanisms: there is a requirement in not-for-profit oversight that salaries must be reasonable for the job purpose, so we would expect that across each of these mechanisms, the salaries paid to support the program itself would be somewhat similar. - If the focus is on selecting the lowest cost mechanism, the focus would be on areas of duplication of roles and cost drivers. I hope this helps. Thank you. Best, Xavier Xavier Calvez SVP & Chief Financial Officer ICANN P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052 E: xavier.calvez@icann.org<mailto:xavier.calvez@icann.org> | www.icann.org<http://www.icann.org/> 12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094 < rest deleted> _______________________________________________ Ccwg-auctionproceeds mailing list Ccwg-auctionproceeds@icann.org https://mm.icann.org/mailman/listinfo/ccwg-auctionproceeds _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy) and the website Terms of Service (https://www.icann.org/privacy/tos). You can visit the Mailman link above to change your membership status or configuration, including unsubscribing, setting digest-style delivery or disabling delivery altogether (e.g., for a vacation), and so on.
Sam, I fully agree with the analysis that you provided below, but I believe your analysis is valid for what I am calling costs pertaining to the specific activities of the program. My point on costs duplication between ICANN and other parties (for mechanism B and C) was specifically on overheads as I specified in my email, which I define as the non-direct costs to the program. ICANN, the third party, and the foundation, would all have their own overheads which, to some extent would burden the program and be duplicative as a result. A limited number of program specific activities would also be duplicative: part of the communication and reporting of grants, part of the due diligence on the verification of grants made,… See also additional comments inserted below. If further discussion would be useful, I would suggest that you and I discuss for a more productive and efficient exchange, and then bring back to the group the conclusions of our conversation. Thank you. Best, Xavier Xavier Calvez SVP & Chief Financial Officer ICANN P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052 E: xavier.calvez@icann.org<mailto:xavier.calvez@icann.org> | www.icann.org<http://www.icann.org/> 12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094 From: Sam Lanfranco <sam@lanfranco.net> Date: Thursday, November 21, 2019 at 4:01 PM To: Xavier Calvez <xavier.calvez@icann.org>, "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> Subject: [Ext] Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanisms Thanks Xavier, Your point 1, linking costs to the "products" being delivered, is well taken. However an estimate of total costs is not the central issue here. It is, as you explore in your point 2, the relative costs of of the respective Mechanisms for supplying the same "products mix", those "products" being funded projects, evaluations, etc.. Let me take your arguments one at a time: * RE: suggestion that A (in-house) would have lower overheads. That is not a forgone result. While ICANN might cover administrative costs at a competitive rate, it has little expertise in managing competitive grant funding [XC: this is not overheads as per my definition], and the ongoing administration of funded projects [XC: excluded from scope. ICANN org would not administrate funded projects on an on-going basis]. (how the funds are administered can be a nightmare). It also does not have the expertise for ongoing and final project evaluation, and for presenting those results in ways that ICANN org, its Board and the stakeholder communities can understand. [XC: while ICANN org does not have specific experience in presenting grants as you indicate, NO ONE ELSE has more expertise and experience than ICANN org to present info internally, to its Board and to the ICANN stakeholders]. All of that expertise will have to be bought, retained, and added to the ICANN payroll. * RE: suggestion that B will result in some duplication of costs between ICANN and partner organization. That need not be the case. A partner organization would be selected based on its competencies, and Mechanism B would benefit from having that expertise "in-house", within Mechanism B. Each of the Mechanisms has similar internal work: funds distribution and evaluation, and an Accountability component. There is little reason to believe that costs, all assigned to the Mechanism, would be higher for B than for A. If such costs stood out as exceptional, that would be a red flag that something is being done wrong. [XC: except for overheads as explained above]. * RE: suggestion that C would have higher overhead costs than B. I believe it is a mistake to compare operating costs for C to B, and not count partner costs in B. While it is true that a partner organization would leverage its existing structure in B, the costs of those resources would be levied against the Mechanism's operating costs. The partner selection for B would be based on its capacity to do the work (not because it is a charity providing free services). [XC: I don’t understand the point you are making here]. Lastly, one distinguishing feature as between A and B&C, especially C, is that B and C carry the potential to be ongoing activities with funding from other sources (grants, whatever). That may or may not be a significant factor.[XC: I believe that possibility has already been excluded by the CCWG in past discussions on the basis that ICANN’s role in the coordination of the unique identifiers does not require it to continuously manage a grant giving activity. Anyone who remembers better should correct me]. Sam Lanfranco, NPOC On 11/21/2019 5:23 PM, Xavier J. Calvez wrote: All, You are having a great productive brainstorming about costs. To feed into this brainstorming exercise, please consider the following few comments which have been made at some point, usually verbally, by the Board liaisons, Sam and I over the past 2.5 years: 1. Any estimate of costs can only be done once we know what we do. The mechanisms will need to be transformed into implementation plan with detailed design in order to be able to evaluate the costs. An illustration of such questions (please don’t comment on this example, it just an example), is the size of the grants: 1 grant of $200m is very differently managed than 200,000 grants of $1,000, with many differences in costs. 2. However, some differences and logical principles can be formulated: - mechanisms B and C would have higher overheads costs than A, because there would be some duplication of costs between ICANN and the partner organization (mechanism B) and ICANN and the foundation (mechanism C). There is also a cost of coordinating 2 entities which exists with B and C and does not with A. - I would expect C to have, for the same reason, higher overhead costs than B, because some of the costs in B would be shared resources since the partner organization would leverage its existing structure. - resources directly and fully allocated to the program would probably cost the same in the 3 mechanisms: there is a requirement in not-for-profit oversight that salaries must be reasonable for the job purpose, so we would expect that across each of these mechanisms, the salaries paid to support the program itself would be somewhat similar. - If the focus is on selecting the lowest cost mechanism, the focus would be on areas of duplication of roles and cost drivers. I hope this helps. Thank you. Best, Xavier Xavier Calvez SVP & Chief Financial Officer ICANN P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052 E: xavier.calvez@icann.org<mailto:xavier.calvez@icann.org> | www.icann.org [icann.org]<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.icann.org_&d=DwMDaQ&...> 12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094 < rest deleted>
Regarding costs, I agree with Sam’s analysis. I also think that communications with ICANN’s Board and the community remains the same whether ICANN org has an internal department, works with a pre-existing expert grant-making organization, or forms an ICANN Foundation. (There is nothing about the way ICANN currently works with contractors that makes everyone want to bring all RFP work in-house, though I realize that some outside functions are being reconsidered at this time.) ICANN traditionally goes to independent contractors when it lacks in-house expertise. Separately, one certainly cannot say that costs cannot be projected or estimated until we know whether the Independent Evaluation Panel will be making a few big grants or many little ones. A mechanism must be chosen before an Independent Evaluation Panel is constituted. I cannot conclude that costs associated with Mechanism A and C are the same as Mechanism B since I don’t have the data. It is counterintuitive to conclude that existing expert organizations would incur the same costs as start-ups, especially as to onboarding and training. These people have regular training programs already established and are receiving resumes from qualified individuals on a regular basis. (Just ask any foundation you see on the screen when you watch Public Television in the US.) The notion that it would somehow be outside ICANN’s mission to accept donations from third parties that are directed to uses that are squarely within ICANN’s mission does not make sense. If a third party Foundation is willing to work with ICANN to make such donations for the purpose of fulfilling ICANN’s mission, why on earth would ICANN refuse that money? Best hypothetical example Bill and Melinda Gates Foundation wants to make grants to ICANN for purposes of Applicant Support program to encourage applications from the Global South. ICANN has an Applicant Support program and this is clearly within its mission so why would it not be in its missions to accept donations to a 501(c) (3) that are dedicated to that purpose as long as the Independent Evaluation Panel makes a decision for such Support to be extended to an applicant? (It seems to me ICANN will look downright silly and out of touch if none of the Auction Proceeds go to Applicant Support, but that is another topic.) Further re the possibility of donations from third party foundations, if grant-making is supposedly on the edge of ICANN’s remit as to Mission scope, then the last thing we want to do is place the function in an internal department of ICANN. Much cleaner to transfer the “tranche” to a pre-existing expert organization or to an independent, but affiliated foundation. Once the tranche funds (assuming the amount in the Proposed Budget is not challenged by the EC based on its powers) are placed with a different entity, the funds become irrevocable. Another aspect of costing is risk. An internal department making grants is a very unusual structure for grant-making. It follows that Mechanism A creates the greatest risk of both (a) challenges to grants made and (b) reputational risk that ICANN sees Auction Proceeds as a source of operational funding. This is the same category of risk identified by the Board when it stated that no grants should be made for projects akin to current budget items. Here is it noteworthy that the Applicant Guidebook section on Auction Proceeds makes specific reference to a foundation. Lastly, regarding any future feasibility study, based on all the comments on the list about implementation, such a study (and its parameters) should be a matter to be handled by an Auction Proceeds IRT. Anne From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> On Behalf Of Xavier J. Calvez Sent: Thursday, November 21, 2019 5:48 PM To: Sam Lanfranco <sam@lanfranco.net>; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] [Ext] Re: Auction Proceeds Mechanisms [EXTERNAL] ________________________________ Sam, I fully agree with the analysis that you provided below, but I believe your analysis is valid for what I am calling costs pertaining to the specific activities of the program. My point on costs duplication between ICANN and other parties (for mechanism B and C) was specifically on overheads as I specified in my email, which I define as the non-direct costs to the program. ICANN, the third party, and the foundation, would all have their own overheads which, to some extent would burden the program and be duplicative as a result. A limited number of program specific activities would also be duplicative: part of the communication and reporting of grants, part of the due diligence on the verification of grants made,… See also additional comments inserted below. If further discussion would be useful, I would suggest that you and I discuss for a more productive and efficient exchange, and then bring back to the group the conclusions of our conversation. Thank you. Best, Xavier Xavier Calvez SVP & Chief Financial Officer ICANN P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052 E: xavier.calvez@icann.org<mailto:xavier.calvez@icann.org> | www.icann.org<http://www.icann.org/> 12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094 From: Sam Lanfranco <sam@lanfranco.net<mailto:sam@lanfranco.net>> Date: Thursday, November 21, 2019 at 4:01 PM To: Xavier Calvez <xavier.calvez@icann.org<mailto:xavier.calvez@icann.org>>, "ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>" <ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>> Subject: [Ext] Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanisms Thanks Xavier, Your point 1, linking costs to the "products" being delivered, is well taken. However an estimate of total costs is not the central issue here. It is, as you explore in your point 2, the relative costs of of the respective Mechanisms for supplying the same "products mix", those "products" being funded projects, evaluations, etc.. Let me take your arguments one at a time: * RE: suggestion that A (in-house) would have lower overheads. That is not a forgone result. While ICANN might cover administrative costs at a competitive rate, it has little expertise in managing competitive grant funding [XC: this is not overheads as per my definition], and the ongoing administration of funded projects [XC: excluded from scope. ICANN org would not administrate funded projects on an on-going basis]. (how the funds are administered can be a nightmare). It also does not have the expertise for ongoing and final project evaluation, and for presenting those results in ways that ICANN org, its Board and the stakeholder communities can understand. [XC: while ICANN org does not have specific experience in presenting grants as you indicate, NO ONE ELSE has more expertise and experience than ICANN org to present info internally, to its Board and to the ICANN stakeholders]. All of that expertise will have to be bought, retained, and added to the ICANN payroll. * RE: suggestion that B will result in some duplication of costs between ICANN and partner organization. That need not be the case. A partner organization would be selected based on its competencies, and Mechanism B would benefit from having that expertise "in-house", within Mechanism B. Each of the Mechanisms has similar internal work: funds distribution and evaluation, and an Accountability component. There is little reason to believe that costs, all assigned to the Mechanism, would be higher for B than for A. If such costs stood out as exceptional, that would be a red flag that something is being done wrong. [XC: except for overheads as explained above]. * RE: suggestion that C would have higher overhead costs than B. I believe it is a mistake to compare operating costs for C to B, and not count partner costs in B. While it is true that a partner organization would leverage its existing structure in B, the costs of those resources would be levied against the Mechanism's operating costs. The partner selection for B would be based on its capacity to do the work (not because it is a charity providing free services). [XC: I don’t understand the point you are making here]. Lastly, one distinguishing feature as between A and B&C, especially C, is that B and C carry the potential to be ongoing activities with funding from other sources (grants, whatever). That may or may not be a significant factor.[XC: I believe that possibility has already been excluded by the CCWG in past discussions on the basis that ICANN’s role in the coordination of the unique identifiers does not require it to continuously manage a grant giving activity. Anyone who remembers better should correct me]. Sam Lanfranco, NPOC On 11/21/2019 5:23 PM, Xavier J. Calvez wrote: All, You are having a great productive brainstorming about costs. To feed into this brainstorming exercise, please consider the following few comments which have been made at some point, usually verbally, by the Board liaisons, Sam and I over the past 2.5 years: 1. Any estimate of costs can only be done once we know what we do. The mechanisms will need to be transformed into implementation plan with detailed design in order to be able to evaluate the costs. An illustration of such questions (please don’t comment on this example, it just an example), is the size of the grants: 1 grant of $200m is very differently managed than 200,000 grants of $1,000, with many differences in costs. 2. However, some differences and logical principles can be formulated: - mechanisms B and C would have higher overheads costs than A, because there would be some duplication of costs between ICANN and the partner organization (mechanism B) and ICANN and the foundation (mechanism C). There is also a cost of coordinating 2 entities which exists with B and C and does not with A. - I would expect C to have, for the same reason, higher overhead costs than B, because some of the costs in B would be shared resources since the partner organization would leverage its existing structure. - resources directly and fully allocated to the program would probably cost the same in the 3 mechanisms: there is a requirement in not-for-profit oversight that salaries must be reasonable for the job purpose, so we would expect that across each of these mechanisms, the salaries paid to support the program itself would be somewhat similar. - If the focus is on selecting the lowest cost mechanism, the focus would be on areas of duplication of roles and cost drivers. I hope this helps. Thank you. Best, Xavier Xavier Calvez SVP & Chief Financial Officer ICANN P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052 E: xavier.calvez@icann.org<mailto:xavier.calvez@icann.org> | www.icann.org [icann.org]<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.icann.org_&d=DwMDaQ&...> 12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094 < rest deleted> ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. 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Colleagues I would like to put an idea on the back burner, i.e., not to be discussed or dealt with here. It is getting increasingly difficult not to know that there is considerable discussion around the planned ISOC sale of PIR, the registry for .org, to a private entity. This is not the place for any of that discussion. However, the potential outcomes raise some possibilities that could impact on the Mechanism that gets selected for the new gTLD auction proceeds. It has long been felt that the gTLD universe needs one or more registry homes that reflect the public interest. The last gTLD round made some accommodations for proposals in that area but none survived the process. Until now the ISOC ownership of PIR, the .org registry, more or less satisfied that interest. Whatever the outcome of the current .org saga, there is likely to be pressure for a non-profit registry handling .org, or an appropriately named new gTLD with a public interest mission. Within this working group’s dialogue, we have taken the position that any of the three Mechanisms under consideration would have a finite life, terminating once the auction proceeds are exhausted. I have supported that position, in part because the economist in me says that new gTLDs have reached seriously diminishing marginal returns, and because newer social media platforms allow search and discovery without requiring domain names. However, whatever new gTLD auction proceeds Mechanism materializes, it involves building capacity to administer a grant making process. It is worth noting that if the .org registry needed a new home or especially if a new public interest gTLD were to be created, an option would be to create the registry out of the selected Mechanism, an entity that would have considerable expertise and hit the ground running. Just food for future thought. Sam Lanfranco
At 19/11/2019 07:24 PM, Aikman-Scalese, Anne wrote: Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.” Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one” as you say. And that makes the survey very important. If these same decisional participants approve the entire report allowing it to go to the Board, it would be an interesting situation if they then refuse to support or even object to the Bylaw. To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently. You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. To be clear, I am not speaking on behalf of ALAC. In fact, the ALAC appointed members to this CCWG have tended to have differing opinions. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset” Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions. I am not sure we ever were aiming at lowest cost. There has always been strong preferences that in some cases were despite the costs. Alan The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey. Anne From: Alan Greenberg <alan.greenberg@mcgill.ca> Sent: Tuesday, November 19, 2019 4:34 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com>; Erika Mann <erika@erikamann.com>; Becky Burr <becky.burr@board.icann.org> Cc: ccwg-auctionproceeds@icann.org Subject: RE: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ See embedded replies. At 19/11/2019 04:35 PM, Aikman-Scalese, Anne wrote: Thanks Alan. Itâ��s thethe desire to set up a situation which readily achieves the necessary 3/4 EC approval of the ByLaws amendments that causes me to ask these clarifying questions re the exact nature of CCWG Consensus and making that clear in the Proposed Final Report. I'm not sure what you mean by "3/4". If memory serves me, the approval of a Fundamental Bylaw requires the active support of at least 3 of the 5 EC members and rejection by no more than 1 of the 5. In this case, I do not see an obstacle to approval, probably unanimous. Before we can get to that stage, this CCWG will go to the chartering organizations. That is the five EC Members plus the SSAC and RSSAC. I see real problems going forward to the Board if most of the chartering orgs do not approve it, so once it goes to the board for action, most or all of the EC members will have already given their support. If they do not do that, then I see the report coming back to us first, before it even gets to the Board. Regarding the mechanism to be chosen, there is something about the way PTI was set up (as further described by Samantha and as further set out in the ByLaws in Section 16) that looks very â��cleanâ�� to me in terms of clearlearly identifying recommended ByLaws changes as to the permitted Accountability challenges and those which will become inapplicable. As far as I can see, the only relation between PTI and the accountability measures is that the EC can object to the PTI budget, can object to ICANN trying to divest itself of PTI (in a variety of ways) and how ICANN handles recommendation to PTI reviews. The other EC actions all relate to things in ICANN proper. None of what we are talking about is an attempt to stop the EC from challenging how auction funds are handles on a global basis. The Bylaw change we are discussing is for how applicants can (or rather cannot) challenge. The EC will always have control over the auction process on a global scale because they always have the authority to remove the entire ICANN Board. We cannot (or rather will not) change that. In addition, I note that Accountability Work stream 2 implementation is not complete. So, for example, having worked actively on one of the Subgroups in Accountability Workstream 2, I have to ask how the Chartering Organizations may consider the CCWG recommendations in relation to the risk of challenges once the Work stream 2 Recommendations are finalized and implemented. Would there be, for example, an available challenge re violation of the ByLaws (as amended to implement Workstream 2) based on an alleged Human Rights violation by ICANN in the administration of the Auction Funds? It seems to me that if ICANN employs 20 additional staff as contemplated in Mechanism A, that risk is increased. (20 staff is assumed across all Mechanisms.) I see no impact regardless of mechanism. ICANN will be responsible to ensuring it meets its Bylaws whether the auction work is done by staff, or partially or entirely subcontracted. We cannot avoid obligations just by sub-contracting (otherwise everyone would subcontract everything and avoid all liabilities. I would be inclined to assess the risk as being lower where administration and grants are concentrated in an entity other than ICANN. In the case of Mechanism B, risk reduction would be due to the expert independent contractor relationship, though admittedly ICANN controls the RFP process and would be supplying some of the staff as well as adding the function to its budgeting and audit processes. In the case of Mechanism C, risk reduction would be due to the independent Board of Directors and independent staffing, as it is with PTI. I ALL mechanisms we will use an indep expert group to do the application assessment and decide on awards. PTI may have a Board, and that may alter legal liabilities, but ICANN has control over that Board and its budget and I do not believe the it can be isolated from PTI actions if it allows them to happen. If valid, these observations may bear on the draft Proposed Final Report at page 19, including Marikaâ��™s request for further clarification [MK6] about what is meant by â��a healthy degree of independenceâ�� and what the CCWG hopes to achieve with that goal generally (and not just in relation to the possible establishment of a foundation.) I would say the goal of a â��healthy degree of independenceâ�� is is controlling risk of expensive challenges to ICANN and its Board and to the Auction Proceeds per se. In other words, the greater distance ICANN maintains from the grant-making process, while still exercising its fiduciary oversight duties, the lower the risk to ICANN, its Board, and the funds. As I understand it ALL mechanisms will have independence of the grant making process. Period. Challenges will always be possible for potentially all sorts of reasons. The only challenges we can control are those from applicants. Of course risk reduction has to be balanced against costs. In this regard, it would be helpful to have some additional information. For example, how does headcount cost for 20 people to be hired in ICANN compare to the fees for hiring an expert pre-existing non-profit? Can a foundation be set up using ICANN in-house legal staff or must we go to outside counsel? (Here I am thinking about questions that will be asked by members of the CSG constituencies.) I will leave these to Sam and Xavier. Alan Anne From: Alan Greenberg <alan.greenberg@mcgill.ca<mailto:alan.greenberg@mcgill.ca> > Sent: Tuesday, November 19, 2019 12:51 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>>; Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself. I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable). If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine. Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration). Alan At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote: Erika, Becky, et al, Proposed Final Report and Consensus I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (Itâ��s possible persersons other than appliplicants could file an RFR or an IRP in relation to ICANNââ�¬�s handling of the grantant-making process.) Thee Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this. In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I donâ€�t recall any specific discuscussions in relation to aa ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.) To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that â��ability toto Sunsetâ� is important in relation to the prinnciple of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds. Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be â��dirirectly proposedâ�� by the CCWG iWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4. Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments. Choice of Mechanism and Survey Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows: (1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in â��tranchesâ��. &> (2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of â��tranchesâ�� f7; for grant-makimaking purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANNâ��â�¢s accountability than do RFR anFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I donâ��t think nk anyone would want the EC powpowers to apply to any individual grant. So it seems we need to choose a structure that keeps the â��Budgdgetâ�� aspectpect of an overall line item for grants wwithin the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just donâ��t�¢t think the the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.) (3) To preserve the EC powers as to Budget, it would seem â��cleanerâ�� to bsp; placelace the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Boardâ��s overversersight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities. I appreciate any observations other CCWG members may have that will help bring me up to speed. Thank you, Anne Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [[]] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com<http://lrrc.com/> [[]] Because what matters to you, matters to us.�< From: Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Becky - Thatâ�â��¢s what we agre agreed upon but in the light of Anneâ��s ¢s points ra raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone On Nov 19, 2019, at 3:33 PM, Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> wrote: Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. â��Neither the EC, the Decisional Participants, , the S Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylawsâ��. IIn this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any â��trancheâ��.) ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
All, There are references in this email thread about ICANN org hiring and firing 20 people under mechanism A. I am not sure where the idea of ICANN org hiring 20 people come from nor how it was determined. ICANN org has not produced any evaluation of incremental resource requirements driven by any mechanism at this stage. While ICANN org may require to add skillset (insistance on “may”) and is likely to need more resources to address the auction proceeds distribution process, under any mechanism, we have not produced any analysis about it at this stage. Such analysis is dependent on many factors, including the general level of workload of the organization during the expected period of disbursement. Generally, ICANN org, like most organizations, would address temporary work and activities with temporary resources, whichever form such temporary resources would take. In addition, under mechanism C, there is more likelihood that the resources in the foundation be made redundant as the distribution process winds down than in mechanism A. In mechanism A, the level of incremental resources would be less, and the likelihood of redundancy would be less as result, and also because resources not needed anymore could be reallocated within the organization as and if needed. Separately, regarding the point of risks and control: * Under Mechanism B and C, there are risk and costs associated with the complexity of operating a mechanism that involves one or several parties in addition to ICANN. Sam and I made these points several times over the past CCWG AP meetings. I am happy to elaborate further but the illustration used of the discussion of PTI is very helpful as the actual IANA functions are exactly the same before than after the creation of PTI, but the subcontracting of most of the IANA functions to PTI has created complexities that create risks that require more resources, associated with the governance around the IANA functions. * As a reminder to inform your discussions on mechanisms A,B and C, I am attaching a presentation provided to this group in June 2017, notably the slide #7, which describes that ICANN’s obligations to ensure the funds are adequately used are the same, irrespective of the number intermediate parties inserted between ICANN and the end user in the process. There is not less obligations for ICANN to ensure funds are adequately used in mechanism C but there is more risks and costs to ensure such funds are adequately used. Thank you. Best, Xavier Xavier Calvez SVP & Chief Financial Officer ICANN P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052 E: xavier.calvez@icann.org<mailto:xavier.calvez@icann.org> | www.icann.org<http://www.icann.org/> 12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094 From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Alan Greenberg <alan.greenberg@mcgill.ca> Date: Tuesday, November 19, 2019 at 8:37 PM To: "Aikman-Scalese, Anne" <AAikman@lrrc.com>, "erika@erikamann.com" <erika@erikamann.com>, Becky Burr <becky.burr@board.icann.org> Cc: "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN At 19/11/2019 07:24 PM, Aikman-Scalese, Anne wrote: Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.†Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one†as you say. And that makes the survey very important. If these same decisional participants approve the entire report allowing it to go to the Board, it would be an interesting situation if they then refuse to support or even object to the Bylaw. To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently. You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. To be clear, I am not speaking on behalf of ALAC. In fact, the ALAC appointed members to this CCWG have tended to have differing opinions. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset†Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions. I am not sure we ever were aiming at lowest cost. There has always been strong preferences that in some cases were despite the costs. Alan The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey. Anne From: Alan Greenberg <alan.greenberg@mcgill.ca> Sent: Tuesday, November 19, 2019 4:34 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com>; Erika Mann <erika@erikamann.com>; Becky Burr <becky.burr@board.icann.org> Cc: ccwg-auctionproceeds@icann.org Subject: RE: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ See embedded replies. At 19/11/2019 04:35 PM, Aikman-Scalese, Anne wrote: Thanks Alan. It’s thethe desire to set up a situation which readily achieves the necessary 3/4 EC approval of the ByLaws amendments that causes me to ask these clarifying questions re the exact nature of CCWG Consensus and making that clear in the Proposed Final Report. I'm not sure what you mean by "3/4". If memory serves me, the approval of a Fundamental Bylaw requires the active support of at least 3 of the 5 EC members and rejection by no more than 1 of the 5. In this case, I do not see an obstacle to approval, probably unanimous. Before we can get to that stage, this CCWG will go to the chartering organizations. That is the five EC Members plus the SSAC and RSSAC. I see real problems going forward to the Board if most of the chartering orgs do not approve it, so once it goes to the board for action, most or all of the EC members will have already given their support. If they do not do that, then I see the report coming back to us first, before it even gets to the Board. Regarding the mechanism to be chosen, there is something about the way PTI was set up (as further described by Samantha and as further set out in the ByLaws in Section 16) that looks very “clean†to me in terms of clearlearly identifying recommended ByLaws changes as to the permitted Accountability challenges and those which will become inapplicable. As far as I can see, the only relation between PTI and the accountability measures is that the EC can object to the PTI budget, can object to ICANN trying to divest itself of PTI (in a variety of ways) and how ICANN handles recommendation to PTI reviews. The other EC actions all relate to things in ICANN proper. None of what we are talking about is an attempt to stop the EC from challenging how auction funds are handles on a global basis. The Bylaw change we are discussing is for how applicants can (or rather cannot) challenge. The EC will always have control over the auction process on a global scale because they always have the authority to remove the entire ICANN Board. We cannot (or rather will not) change that. In addition, I note that Accountability Work stream 2 implementation is not complete. So, for example, having worked actively on one of the Subgroups in Accountability Workstream 2, I have to ask how the Chartering Organizations may consider the CCWG recommendations in relation to the risk of challenges once the Work stream 2 Recommendations are finalized and implemented. Would there be, for example, an available challenge re violation of the ByLaws (as amended to implement Workstream 2) based on an alleged Human Rights violation by ICANN in the administration of the Auction Funds? It seems to me that if ICANN employs 20 additional staff as contemplated in Mechanism A, that risk is increased. (20 staff is assumed across all Mechanisms.) I see no impact regardless of mechanism. ICANN will be responsible to ensuring it meets its Bylaws whether the auction work is done by staff, or partially or entirely subcontracted. We cannot avoid obligations just by sub-contracting (otherwise everyone would subcontract everything and avoid all liabilities. I would be inclined to assess the risk as being lower where administration and grants are concentrated in an entity other than ICANN. In the case of Mechanism B, risk reduction would be due to the expert independent contractor relationship, though admittedly ICANN controls the RFP process and would be supplying some of the staff as well as adding the function to its budgeting and audit processes. In the case of Mechanism C, risk reduction would be due to the independent Board of Directors and independent staffing, as it is with PTI. I ALL mechanisms we will use an indep expert group to do the application assessment and decide on awards. PTI may have a Board, and that may alter legal liabilities, but ICANN has control over that Board and its budget and I do not believe the it can be isolated from PTI actions if it allows them to happen. If valid, these observations may bear on the draft Proposed Final Report at page 19, including Marika’™s request for further clarification [MK6] about what is meant by “a healthy degree of independence†and what the CCWG hopes to achieve with that goal generally (and not just in relation to the possible establishment of a foundation.) I would say the goal of a “healthy degree of independence†is is controlling risk of expensive challenges to ICANN and its Board and to the Auction Proceeds per se. In other words, the greater distance ICANN maintains from the grant-making process, while still exercising its fiduciary oversight duties, the lower the risk to ICANN, its Board, and the funds. As I understand it ALL mechanisms will have independence of the grant making process. Period. Challenges will always be possible for potentially all sorts of reasons. The only challenges we can control are those from applicants. Of course risk reduction has to be balanced against costs. In this regard, it would be helpful to have some additional information. For example, how does headcount cost for 20 people to be hired in ICANN compare to the fees for hiring an expert pre-existing non-profit? Can a foundation be set up using ICANN in-house legal staff or must we go to outside counsel? (Here I am thinking about questions that will be asked by members of the CSG constituencies.) I will leave these to Sam and Xavier. Alan Anne From: Alan Greenberg <alan.greenberg@mcgill.ca<mailto:alan.greenberg@mcgill.ca> > Sent: Tuesday, November 19, 2019 12:51 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>>; Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself. I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable). If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine. Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration). Alan At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote: Erika, Becky, et al, Proposed Final Report and Consensus I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persersons other than appliplicants could file an RFR or an IRP in relation to ICANN’s handling of the grantant-making process.) Thee Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this. In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discuscussions in relation to aa ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.) To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability toto Sunset†is important in relation to the prinnciple of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds. Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “dirirectly proposed†by the CCWG iWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4. Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments. Choice of Mechanism and Survey Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows: (1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranchesâ€. &> (2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches†f7; for grant-makimaking purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’â„¢s accountability than do RFR anFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think nk anyone would want the EC powpowers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budgdget†aspectpect of an overall line item for grants wwithin the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t„¢t think the the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.) (3) To preserve the EC powers as to Budget, it would seem “cleaner†to bsp; placelace the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s overversersight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities. I appreciate any observations other CCWG members may have that will help bring me up to speed. Thank you, Anne Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [[]] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com]<https://urldefense.proofpoint.com/v2/url?u=http-3A__lrrc.com_&d=DwMF-g&c=FmY...> [[]] Because what matters to you, matters to us.™< From: Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Becky - Thatâ€Ã¢„„¢s what we agre agreed upon but in the light of Anne’s ¢s points ra raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone On Nov 19, 2019, at 3:33 PM, Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> wrote: Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, , the S Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylawsâ€. IIn this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “trancheâ€.) ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
Xavier, Re: "While ICANN org may require to add skillset (insistance on “may”)..." With my albeit limited experience around grant giving, working at both ends of the process, I would stress that it is an absolute certainty that all three Mechanisms will require an appropriate skillset that currently is not resident for Mechanism A, might exist in Mechanism B, and would have to be build in Mechanism C. The proper management of a competitive grants process is complicated and demands particular skills that could not be supplied through secondment or redeployment from ICANN staff. Sam Lanfranco On 11/20/2019 2:49 PM, Xavier J. Calvez wrote:
All,
There are references in this email thread about ICANN org hiring and firing 20 people under mechanism A.
I am not sure where the idea of ICANN org hiring 20 people come from nor how it was determined. ICANN org has not produced any evaluation of incremental resource requirements driven by any mechanism at this stage.
While ICANN org may require to add skillset (insistance on “may”) and is likely to need more resources to address the auction proceeds distribution process, under any mechanism, we have not produced any analysis about it at this stage. Such analysis is dependent on many factors, including the general level of workload of the organization during the expected period of disbursement.
Generally, ICANN org, like most organizations, would address temporary work and activities with temporary resources, whichever form such temporary resources would take. In addition, under mechanism C, there is more likelihood that the resources in the foundation be made redundant as the distribution process winds down than in mechanism A. In mechanism A, the level of incremental resources would be less, and the likelihood of redundancy would be less as result, and also because resources not needed anymore could be reallocated within the organization as and if needed.
Separately, regarding the point of risks and control:
* Under Mechanism B and C, there are risk and costs associated with the complexity of operating a mechanism that involves one or several parties in addition to ICANN. Sam and I made these points several times over the past CCWG AP meetings. I am happy to elaborate further but the illustration used of the discussion of PTI is very helpful as the actual IANA functions are exactly the same before than after the creation of PTI, but the subcontracting of most of the IANA functions to PTI has created complexities that create risks that require more resources, associated with the governance around the IANA functions. * As a reminder to inform your discussions on mechanisms A,B and C, I am attaching a presentation provided to this group in June 2017, notably the slide #7, which describes that ICANN’s obligations to ensure the funds are adequately used are the same, irrespective of the number intermediate parties inserted between ICANN and the end user in the process. There is not less obligations for ICANN to ensure funds are adequately used in mechanism C but there is more risks and costs to ensure such funds are adequately used.
Thank you.
Best,
Xavier
*Xavier Calvez*
SVP & Chief Financial Officer
ICANN
P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052
E: _xavier.calvez@icann.org <mailto:xavier.calvez@icann.org>_ | www.icann.org <http://www.icann.org/>
12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094
*From: *Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Alan Greenberg <alan.greenberg@mcgill.ca> *Date: *Tuesday, November 19, 2019 at 8:37 PM *To: *"Aikman-Scalese, Anne" <AAikman@lrrc.com>, "erika@erikamann.com" <erika@erikamann.com>, Becky Burr <becky.burr@board.icann.org> *Cc: *"ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> *Subject: *Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
At 19/11/2019 07:24 PM, Aikman-Scalese, Anne wrote:
Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.†Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one†as you say. And that makes the survey very important.
If these same decisional participants approve the entire report allowing it to go to the Board, it would be an interesting situation if they then refuse to support or even object to the Bylaw.
To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently.
You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone.
To be clear, I am not speaking on behalf of ALAC. In fact, the ALAC appointed members to this CCWG have tended to have differing opinions.
However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset†Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions.
I am not sure we ever were aiming at lowest cost. There has always been strong preferences that in some cases were despite the costs.
Alan
The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey.
Anne
*From:* Alan Greenberg <alan.greenberg@mcgill.ca> *Sent:* Tuesday, November 19, 2019 4:34 PM *To:* Aikman-Scalese, Anne <AAikman@lrrc.com>; Erika Mann <erika@erikamann.com>; Becky Burr <becky.burr@board.icann.org> *Cc:* ccwg-auctionproceeds@icann.org *Subject:* RE: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
*[EXTERNAL]*
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See embedded replies.
At 19/11/2019 04:35 PM, Aikman-Scalese, Anne wrote:
Thanks Alan. It̢۪s thethe desire to set up a situation which readily achieves the necessary 3/4 EC approval of the ByLaws amendments that causes me to ask these clarifying questions re the exact nature of CCWG Consensus and making that clear in the Proposed Final Report.
I'm not sure what you mean by "3/4". If memory serves me, the approval of a Fundamental Bylaw requires the active support of at least 3 of the 5 EC members and rejection by no more than 1 of the 5.
In this case, I do not see an obstacle to approval, probably unanimous. Before we can get to that stage, this CCWG will go to the chartering organizations. That is the five EC Members plus the SSAC and RSSAC. I see real problems going forward to the Board if most of the chartering orgs do not approve it, so once it goes to the board for action, most or all of the EC members will have already given their support. If they do not do that, then I see the report coming back to us first, before it even gets to the Board.
Regarding the mechanism to be chosen, there is something about the way PTI was set up (as further described by Samantha and as further set out in the ByLaws in Section 16) that looks very “clean†to me in terms of clearlearly identifying recommended ByLaws changes as to the permitted Accountability challenges and those which will become inapplicable.
As far as I can see, the only relation between PTI and the accountability measures is that the EC can object to the PTI budget, can object to ICANN trying to divest itself of PTI (in a variety of ways) and how ICANN handles recommendation to PTI reviews. The other EC actions all relate to things in ICANN proper. None of what we are talking about is an attempt to stop the EC from challenging how auction funds are handles on a global basis. The Bylaw change we are discussing is for how applicants can (or rather cannot) challenge.
The EC will always have control over the auction process on a global scale because they always have the authority to remove the entire ICANN Board. We cannot (or rather will not) change that.
In addition, I note that Accountability Work stream 2 implementation is not complete. So, for example, having worked actively on one of the Subgroups in Accountability Workstream 2, I have to ask how the Chartering Organizations may consider the CCWG recommendations in relation to the risk of challenges once the Work stream 2 Recommendations are finalized and implemented. Would there be, for example, an available challenge re violation of the ByLaws (as amended to implement Workstream 2) based on an alleged Human Rights violation by ICANN in the administration of the Auction Funds? It seems to me that if ICANN employs 20 additional staff as contemplated in Mechanism A, that risk is increased. (20 staff is assumed across all Mechanisms.)
I see no impact regardless of mechanism. ICANN will be responsible to ensuring it meets its Bylaws whether the auction work is done by staff, or partially or entirely subcontracted. We cannot avoid obligations just by sub-contracting (otherwise everyone would subcontract everything and avoid all liabilities.
I would be inclined to assess the risk as being lower where administration and grants are concentrated in an entity other than ICANN. In the case of Mechanism B, risk reduction would be due to the expert independent contractor relationship, though admittedly ICANN controls the RFP process and would be supplying some of the staff as well as adding the function to its budgeting and audit processes. In the case of Mechanism C, risk reduction would be due to the independent Board of Directors and independent staffing, as it is with PTI.
I ALL mechanisms we will use an indep expert group to do the application assessment and decide on awards.
PTI may have a Board, and that may alter legal liabilities, but ICANN has control over that Board and its budget and I do not believe the it can be isolated from PTI actions if it allows them to happen.
If valid, these observations may bear on the draft Proposed Final Report at page 19, including Marika’™s request for further clarification [MK6] about what is meant by “a healthy degree of independence†and what the CCWG hopes to achieve with that goal generally (and not just in relation to the possible establishment of a foundation.) I would say the goal of a “healthy degree of independence†is is controlling risk of expensive challenges to ICANN and its Board and to the Auction Proceeds per se. In other words, the greater distance ICANN maintains from the grant-making process, while still exercising its fiduciary oversight duties, the lower the risk to ICANN, its Board, and the funds.
As I understand it ALL mechanisms will have independence of the grant making process. Period.
Challenges will always be possible for potentially all sorts of reasons. The only challenges we can control are those from applicants.
Of course risk reduction has to be balanced against costs. In this regard, it would be helpful to have some additional information. For example, how does headcount cost for 20 people to be hired in ICANN compare to the fees for hiring an expert pre-existing non-profit? Can a foundation be set up using ICANN in-house legal staff or must we go to outside counsel? (Here I am thinking about questions that will be asked by members of the CSG constituencies.)
I will leave these to Sam and Xavier.
Alan
Anne
From: Alan Greenberg <alan.greenberg@mcgill.ca <mailto:alan.greenberg@mcgill.ca> >
Sent: Tuesday, November 19, 2019 12:51 PM
To: Aikman-Scalese, Anne <AAikman@lrrc.com <mailto:AAikman@lrrc.com>>; Erika Mann <erika@erikamann.com <mailto:erika@erikamann.com>>; Becky Burr <becky.burr@board.icann.org <mailto:becky.burr@board.icann.org>>
Cc: ccwg-auctionproceeds@icann.org <mailto:ccwg-auctionproceeds@icann.org>
Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
[EXTERNAL]
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I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself.
I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable).
If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine.
Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration).
Alan
At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote:
Erika, Becky, et al,
Proposed Final Report and Consensus
I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persersons other than appliplicants could file an RFR or an IRP in relation to ICANN’s handling of the grantant-making process.) Thee Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this.
In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discuscussions in relation to aa ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.)
To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds.
I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability toto Sunset†is important in relation to the prinnciple of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds.
Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “dirirectly proposed†by the CCWG iWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4.
Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments.
Choice of Mechanism and Survey
Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows:
(1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranchesâ€.
&>
(2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches†f7; for grant-makimaking purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’â„¢s accountability than do RFR anFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think nk anyone would want the EC powpowers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budgdget†aspectpect of an overall line item for grants wwithin the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t„¢t think the the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.)
(3) To preserve the EC powers as to Budget, it would seem “cleaner†to bsp; placelace the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if
(a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s overversersight responsibilities and fiduciary duties. (Mechanism B)
(b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities.
I appreciate any observations other CCWG members may have that will help bring me up to speed.
Thank you,
Anne
Anne E. Aikman-Scalese
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From: Erika Mann <erika@erikamann.com <mailto:erika@erikamann.com>>
Sent: Tuesday, November 19, 2019 7:52 AM
To: Becky Burr <becky.burr@board.icann.org <mailto:becky.burr@board.icann.org>>
Cc: Aikman-Scalese, Anne <AAikman@lrrc.com <mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org <mailto:ccwg-auctionproceeds@icann.org>
Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
[EXTERNAL]
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Becky - Thatâ€Ã¢„„¢s what we agre agreed upon but in the light of Anne’s ¢s points ra raised, we should evaluate whether our judgement will not be contestable.
Erika
Sent from my iPhone
On Nov 19, 2019, at 3:33 PM, Becky Burr <becky.burr@board.icann.org <mailto:becky.burr@board.icann.org>> wrote:
Anne,
I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes.
Please correct me if I am wrong, Sam.
Becky
On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com <mailto:AAikman@lrrc.com>> wrote:
Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, , the S Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylawsâ€. IIn this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding?
It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC.
Fundamental ByLaws Changes
It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25).
Mechanism B
In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “trancheâ€.)
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-- ------------------------------------------------ "It is a disgrace to be rich and honored in an unjust state" -Confucius 邦有道，贫且贱焉，耻也。邦无道，富且贵焉，耻也 ------------------------------------------------ Dr Sam Lanfranco (Prof Emeritus), Econ, York U., CANADA email: sam@lanfranco.net Skype: slanfranco blog: https://samlanfranco.blogspot.com Phone: +1 613-476-0429 cell: +1 416-816-2852
Sam, Fully agree. The ICANN community has expertise in grant giving activities, acquired outside of ICANN’s activities. So is the case for ICANN staff. We know there is grant giving expertise in the existing ICANN staff, though we have not yet done a thorough and deep inventory of it, nor do we know if this expertise lies with people who could be reallocated to the Auction Proceeds distribution activities once it will be launched. Also to keep in mind, ICANN org personnel will not require the expertise to evaluate projects to which grants are allocated since this will be done by a separate panel. Separately, not all tasks involved in this activity will require grant-giving type of expertise (Finance, project management,…). Lastly, as with everything that we do for the first time, we will learn…, in addition to bringing required skillset. Thank you. Best, Xavier Xavier Calvez SVP & Chief Financial Officer ICANN P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052 E: xavier.calvez@icann.org<mailto:xavier.calvez@icann.org> | www.icann.org<http://www.icann.org/> 12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094 From: Sam Lanfranco <sam@lanfranco.net> Date: Wednesday, November 20, 2019 at 12:15 PM To: Xavier Calvez <xavier.calvez@icann.org>, "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> Cc: Alan Greenberg <alan.greenberg@mcgill.ca>, "Aikman-Scalese, Anne" <AAikman@lrrc.com>, "erika@erikamann.com" <erika@erikamann.com>, Becky Burr <becky.burr@board.icann.org> Subject: [Ext] Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Xavier, Re: "While ICANN org may require to add skillset (insistance on “may”)..." With my albeit limited experience around grant giving, working at both ends of the process, I would stress that it is an absolute certainty that all three Mechanisms will require an appropriate skillset that currently is not resident for Mechanism A, might exist in Mechanism B, and would have to be build in Mechanism C. The proper management of a competitive grants process is complicated and demands particular skills that could not be supplied through secondment or redeployment from ICANN staff. Sam Lanfranco On 11/20/2019 2:49 PM, Xavier J. Calvez wrote: All, There are references in this email thread about ICANN org hiring and firing 20 people under mechanism A. I am not sure where the idea of ICANN org hiring 20 people come from nor how it was determined. ICANN org has not produced any evaluation of incremental resource requirements driven by any mechanism at this stage. While ICANN org may require to add skillset (insistance on “may”) and is likely to need more resources to address the auction proceeds distribution process, under any mechanism, we have not produced any analysis about it at this stage. Such analysis is dependent on many factors, including the general level of workload of the organization during the expected period of disbursement. Generally, ICANN org, like most organizations, would address temporary work and activities with temporary resources, whichever form such temporary resources would take. In addition, under mechanism C, there is more likelihood that the resources in the foundation be made redundant as the distribution process winds down than in mechanism A. In mechanism A, the level of incremental resources would be less, and the likelihood of redundancy would be less as result, and also because resources not needed anymore could be reallocated within the organization as and if needed. Separately, regarding the point of risks and control: * Under Mechanism B and C, there are risk and costs associated with the complexity of operating a mechanism that involves one or several parties in addition to ICANN. Sam and I made these points several times over the past CCWG AP meetings. I am happy to elaborate further but the illustration used of the discussion of PTI is very helpful as the actual IANA functions are exactly the same before than after the creation of PTI, but the subcontracting of most of the IANA functions to PTI has created complexities that create risks that require more resources, associated with the governance around the IANA functions. * As a reminder to inform your discussions on mechanisms A,B and C, I am attaching a presentation provided to this group in June 2017, notably the slide #7, which describes that ICANN’s obligations to ensure the funds are adequately used are the same, irrespective of the number intermediate parties inserted between ICANN and the end user in the process. There is not less obligations for ICANN to ensure funds are adequately used in mechanism C but there is more risks and costs to ensure such funds are adequately used. Thank you. Best, Xavier Xavier Calvez SVP & Chief Financial Officer ICANN P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052 E: xavier.calvez@icann.org<mailto:xavier.calvez@icann.org> | www.icann.org [icann.org]<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.icann.org_&d=DwMDaQ&...> 12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094 From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org><mailto:ccwg-auctionproceeds-bounces@icann.org> on behalf of Alan Greenberg <alan.greenberg@mcgill.ca><mailto:alan.greenberg@mcgill.ca> Date: Tuesday, November 19, 2019 at 8:37 PM To: "Aikman-Scalese, Anne" <AAikman@lrrc.com><mailto:AAikman@lrrc.com>, "erika@erikamann.com"<mailto:erika@erikamann.com> <erika@erikamann.com><mailto:erika@erikamann.com>, Becky Burr <becky.burr@board.icann.org><mailto:becky.burr@board.icann.org> Cc: "ccwg-auctionproceeds@icann.org"<mailto:ccwg-auctionproceeds@icann.org> <ccwg-auctionproceeds@icann.org><mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN At 19/11/2019 07:24 PM, Aikman-Scalese, Anne wrote: Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.†Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one†as you say. And that makes the survey very important. If these same decisional participants approve the entire report allowing it to go to the Board, it would be an interesting situation if they then refuse to support or even object to the Bylaw. To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently. You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. To be clear, I am not speaking on behalf of ALAC. In fact, the ALAC appointed members to this CCWG have tended to have differing opinions. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset†Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions. I am not sure we ever were aiming at lowest cost. There has always been strong preferences that in some cases were despite the costs. Alan The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey. Anne From: Alan Greenberg <alan.greenberg@mcgill.ca><mailto:alan.greenberg@mcgill.ca> Sent: Tuesday, November 19, 2019 4:34 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com><mailto:AAikman@lrrc.com>; Erika Mann <erika@erikamann.com><mailto:erika@erikamann.com>; Becky Burr <becky.burr@board.icann.org><mailto:becky.burr@board.icann.org> Cc: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: RE: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ See embedded replies. At 19/11/2019 04:35 PM, Aikman-Scalese, Anne wrote: Thanks Alan. It’s thethe desire to set up a situation which readily achieves the necessary 3/4 EC approval of the ByLaws amendments that causes me to ask these clarifying questions re the exact nature of CCWG Consensus and making that clear in the Proposed Final Report. I'm not sure what you mean by "3/4". If memory serves me, the approval of a Fundamental Bylaw requires the active support of at least 3 of the 5 EC members and rejection by no more than 1 of the 5. In this case, I do not see an obstacle to approval, probably unanimous. Before we can get to that stage, this CCWG will go to the chartering organizations. That is the five EC Members plus the SSAC and RSSAC. I see real problems going forward to the Board if most of the chartering orgs do not approve it, so once it goes to the board for action, most or all of the EC members will have already given their support. If they do not do that, then I see the report coming back to us first, before it even gets to the Board. Regarding the mechanism to be chosen, there is something about the way PTI was set up (as further described by Samantha and as further set out in the ByLaws in Section 16) that looks very “clean†to me in terms of clearlearly identifying recommended ByLaws changes as to the permitted Accountability challenges and those which will become inapplicable. As far as I can see, the only relation between PTI and the accountability measures is that the EC can object to the PTI budget, can object to ICANN trying to divest itself of PTI (in a variety of ways) and how ICANN handles recommendation to PTI reviews. The other EC actions all relate to things in ICANN proper. None of what we are talking about is an attempt to stop the EC from challenging how auction funds are handles on a global basis. The Bylaw change we are discussing is for how applicants can (or rather cannot) challenge. The EC will always have control over the auction process on a global scale because they always have the authority to remove the entire ICANN Board. We cannot (or rather will not) change that. In addition, I note that Accountability Work stream 2 implementation is not complete. So, for example, having worked actively on one of the Subgroups in Accountability Workstream 2, I have to ask how the Chartering Organizations may consider the CCWG recommendations in relation to the risk of challenges once the Work stream 2 Recommendations are finalized and implemented. Would there be, for example, an available challenge re violation of the ByLaws (as amended to implement Workstream 2) based on an alleged Human Rights violation by ICANN in the administration of the Auction Funds? It seems to me that if ICANN employs 20 additional staff as contemplated in Mechanism A, that risk is increased. (20 staff is assumed across all Mechanisms.) I see no impact regardless of mechanism. ICANN will be responsible to ensuring it meets its Bylaws whether the auction work is done by staff, or partially or entirely subcontracted. We cannot avoid obligations just by sub-contracting (otherwise everyone would subcontract everything and avoid all liabilities. I would be inclined to assess the risk as being lower where administration and grants are concentrated in an entity other than ICANN. In the case of Mechanism B, risk reduction would be due to the expert independent contractor relationship, though admittedly ICANN controls the RFP process and would be supplying some of the staff as well as adding the function to its budgeting and audit processes. In the case of Mechanism C, risk reduction would be due to the independent Board of Directors and independent staffing, as it is with PTI. I ALL mechanisms we will use an indep expert group to do the application assessment and decide on awards. PTI may have a Board, and that may alter legal liabilities, but ICANN has control over that Board and its budget and I do not believe the it can be isolated from PTI actions if it allows them to happen. If valid, these observations may bear on the draft Proposed Final Report at page 19, including Marika’™s request for further clarification [MK6] about what is meant by “a healthy degree of independence†and what the CCWG hopes to achieve with that goal generally (and not just in relation to the possible establishment of a foundation.) I would say the goal of a “healthy degree of independence†is is controlling risk of expensive challenges to ICANN and its Board and to the Auction Proceeds per se. In other words, the greater distance ICANN maintains from the grant-making process, while still exercising its fiduciary oversight duties, the lower the risk to ICANN, its Board, and the funds. As I understand it ALL mechanisms will have independence of the grant making process. Period. Challenges will always be possible for potentially all sorts of reasons. The only challenges we can control are those from applicants. Of course risk reduction has to be balanced against costs. In this regard, it would be helpful to have some additional information. For example, how does headcount cost for 20 people to be hired in ICANN compare to the fees for hiring an expert pre-existing non-profit? Can a foundation be set up using ICANN in-house legal staff or must we go to outside counsel? (Here I am thinking about questions that will be asked by members of the CSG constituencies.) I will leave these to Sam and Xavier. Alan Anne From: Alan Greenberg <alan.greenberg@mcgill.ca<mailto:alan.greenberg@mcgill.ca> > Sent: Tuesday, November 19, 2019 12:51 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>>; Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself. I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable). If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine. Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration). Alan At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote: Erika, Becky, et al, Proposed Final Report and Consensus I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persersons other than appliplicants could file an RFR or an IRP in relation to ICANN’s handling of the grantant-making process.) Thee Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this. In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discuscussions in relation to aa ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.) To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability toto Sunset†is important in relation to the prinnciple of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds. Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “dirirectly proposed†by the CCWG iWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4. Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments. Choice of Mechanism and Survey Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows: (1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranchesâ€. &> (2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches†f7; for grant-makimaking purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’â„¢s accountability than do RFR anFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think nk anyone would want the EC powpowers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budgdget†aspectpect of an overall line item for grants wwithin the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t„¢t think the the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.) (3) To preserve the EC powers as to Budget, it would seem “cleaner†to bsp; placelace the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s overversersight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities. I appreciate any observations other CCWG members may have that will help bring me up to speed. Thank you, Anne Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [[]] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com]<https://urldefense.proofpoint.com/v2/url?u=http-3A__lrrc.com_&d=DwMF-g&c=FmY...> [[]] Because what matters to you, matters to us.™< From: Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Becky - Thatâ€Ã¢„„¢s what we agre agreed upon but in the light of Anne’s ¢s points ra raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone On Nov 19, 2019, at 3:33 PM, Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> wrote: Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, , the S Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylawsâ€. IIn this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “trancheâ€.) ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. 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The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. _______________________________________________ Ccwg-auctionproceeds mailing list Ccwg-auctionproceeds@icann.org<mailto:Ccwg-auctionproceeds@icann.org> https://mm.icann.org/mailman/listinfo/ccwg-auctionproceeds _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy [icann.org]<https://urldefense.proofpoint.com/v2/url?u=https-3A__www.icann.org_privacy_p...>) and the website Terms of Service (https://www.icann.org/privacy/tos [icann.org]<https://urldefense.proofpoint.com/v2/url?u=https-3A__www.icann.org_privacy_t...>). You can visit the Mailman link above to change your membership status or configuration, including unsubscribing, setting digest-style delivery or disabling delivery altogether (e.g., for a vacation), and so on. -- ------------------------------------------------ "It is a disgrace to be rich and honored in an unjust state" -Confucius 邦有道，贫且贱焉，耻也。邦无道，富且贵焉，耻也 ------------------------------------------------ Dr Sam Lanfranco (Prof Emeritus), Econ, York U., CANADA email: sam@lanfranco.net<mailto:sam@lanfranco.net> Skype: slanfranco blog: https://samlanfranco.blogspot.com [samlanfranco.blogspot.com]<https://urldefense.proofpoint.com/v2/url?u=https-3A__samlanfranco.blogspot.c...> Phone: +1 613-476-0429 cell: +1 416-816-2852
Xavier, This follow up comment is not simply because I agree with you, but because I would like to stress your two points (1)"/...//ICANN org personnel will not require the expertise to evaluate projects to which grants are allocated since this will be done by a separate panel./" and (2)"... /not all tasks involved in this activity will require grant-giving type of expertise (Finance, project management,…). /In the discussions of the working group there was on occasion some confusion about which expertise was needed where. A nice and simple infographic from the World Bank can help here: see: https://projects.worldbank.org/en/projects-operations/products-and-services/... <https://projects.worldbank.org/en/projects-operations/products-and-services/...> // While the infographic is about negotiated country projects, the process helps identify what expertise is needed and where. Here, in the case of auction proceeds, that includes the funding applicants as they identify and prepare a funding submission. Sam L. On 11/20/2019 7:51 PM, Xavier J. Calvez wrote:
Sam,
Fully agree.
The ICANN community has expertise in grant giving activities, acquired outside of ICANN’s activities. So is the case for ICANN staff. We know there is grant giving expertise in the existing ICANN staff, though we have not yet done a thorough and deep inventory of it, nor do we know if this expertise lies with people who could be reallocated to the Auction Proceeds distribution activities once it will be launched.
Also to keep in mind, ICANN org personnel will not require the expertise to evaluate projects to which grants are allocated since this will be done by a separate panel. Separately, not all tasks involved in this activity will require grant-giving type of expertise (Finance, project management,…). Lastly, as with everything that we do for the first time, we will learn…, in addition to bringing required skillset.
Thank you.
Best,
Xavier
*Xavier Calvez*
SVP & Chief Financial Officer
ICANN
P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052
E: _xavier.calvez@icann.org <mailto:xavier.calvez@icann.org>_ | www.icann.org <http://www.icann.org/>
12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094
*From: *Sam Lanfranco <sam@lanfranco.net> *Date: *Wednesday, November 20, 2019 at 12:15 PM *To: *Xavier Calvez <xavier.calvez@icann.org>, "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> *Cc: *Alan Greenberg <alan.greenberg@mcgill.ca>, "Aikman-Scalese, Anne" <AAikman@lrrc.com>, "erika@erikamann.com" <erika@erikamann.com>, Becky Burr <becky.burr@board.icann.org> *Subject: *[Ext] Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
Xavier,
Re: "While ICANN org may require to add skillset (insistance on “may”)..."
With my albeit limited experience around grant giving, working at both ends of the process, I would stress that it is an absolute certainty that all three Mechanisms will require an appropriate skillset that currently is not resident for Mechanism A, might exist in Mechanism B, and would have to be build in Mechanism C. The proper management of a competitive grants process is complicated and demands particular skills that could not be supplied through secondment or redeployment from ICANN staff.
Sam Lanfranco
On 11/20/2019 2:49 PM, Xavier J. Calvez wrote:
All,
There are references in this email thread about ICANN org hiring and firing 20 people under mechanism A.
I am not sure where the idea of ICANN org hiring 20 people come from nor how it was determined. ICANN org has not produced any evaluation of incremental resource requirements driven by any mechanism at this stage.
While ICANN org may require to add skillset (insistance on “may”) and is likely to need more resources to address the auction proceeds distribution process, under any mechanism, we have not produced any analysis about it at this stage. Such analysis is dependent on many factors, including the general level of workload of the organization during the expected period of disbursement.
Generally, ICANN org, like most organizations, would address temporary work and activities with temporary resources, whichever form such temporary resources would take. In addition, under mechanism C, there is more likelihood that the resources in the foundation be made redundant as the distribution process winds down than in mechanism A. In mechanism A, the level of incremental resources would be less, and the likelihood of redundancy would be less as result, and also because resources not needed anymore could be reallocated within the organization as and if needed.
Separately, regarding the point of risks and control:
* Under Mechanism B and C, there are risk and costs associated with the complexity of operating a mechanism that involves one or several parties in addition to ICANN. Sam and I made these points several times over the past CCWG AP meetings. I am happy to elaborate further but the illustration used of the discussion of PTI is very helpful as the actual IANA functions are exactly the same before than after the creation of PTI, but the subcontracting of most of the IANA functions to PTI has created complexities that create risks that require more resources, associated with the governance around the IANA functions. * As a reminder to inform your discussions on mechanisms A,B and C, I am attaching a presentation provided to this group in June 2017, notably the slide #7, which describes that ICANN’s obligations to ensure the funds are adequately used are the same, irrespective of the number intermediate parties inserted between ICANN and the end user in the process. There is not less obligations for ICANN to ensure funds are adequately used in mechanism C but there is more risks and costs to ensure such funds are adequately used.
Thank you.
Best,
Xavier
*Xavier Calvez*
SVP & Chief Financial Officer
ICANN
P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052
E: _xavier.calvez@icann.org <mailto:xavier.calvez@icann.org>_ | www.icann.org [icann.org] <https://urldefense.proofpoint.com/v2/url?u=http-3A__www.icann.org_&d=DwMDaQ&...>
12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094
*From: *Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> <mailto:ccwg-auctionproceeds-bounces@icann.org> on behalf of Alan Greenberg <alan.greenberg@mcgill.ca> <mailto:alan.greenberg@mcgill.ca> *Date: *Tuesday, November 19, 2019 at 8:37 PM *To: *"Aikman-Scalese, Anne" <AAikman@lrrc.com> <mailto:AAikman@lrrc.com>, "erika@erikamann.com" <mailto:erika@erikamann.com> <erika@erikamann.com> <mailto:erika@erikamann.com>, Becky Burr <becky.burr@board.icann.org> <mailto:becky.burr@board.icann.org> *Cc: *"ccwg-auctionproceeds@icann.org" <mailto:ccwg-auctionproceeds@icann.org> <ccwg-auctionproceeds@icann.org> <mailto:ccwg-auctionproceeds@icann.org> *Subject: *Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
At 19/11/2019 07:24 PM, Aikman-Scalese, Anne wrote:
Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.†Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one†as you say. And that makes the survey very important.
If these same decisional participants approve the entire report allowing it to go to the Board, it would be an interesting situation if they then refuse to support or even object to the Bylaw.
To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently.
You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone.
To be clear, I am not speaking on behalf of ALAC. In fact, the ALAC appointed members to this CCWG have tended to have differing opinions.
However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset†Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions.
I am not sure we ever were aiming at lowest cost. There has always been strong preferences that in some cases were despite the costs.
Alan
The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey.
Anne
*From:* Alan Greenberg <alan.greenberg@mcgill.ca> <mailto:alan.greenberg@mcgill.ca> *Sent:* Tuesday, November 19, 2019 4:34 PM *To:* Aikman-Scalese, Anne <AAikman@lrrc.com> <mailto:AAikman@lrrc.com>; Erika Mann <erika@erikamann.com> <mailto:erika@erikamann.com>; Becky Burr <becky.burr@board.icann.org> <mailto:becky.burr@board.icann.org> *Cc:* ccwg-auctionproceeds@icann.org <mailto:ccwg-auctionproceeds@icann.org> *Subject:* RE: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
*[EXTERNAL]*
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See embedded replies.
At 19/11/2019 04:35 PM, Aikman-Scalese, Anne wrote:
Thanks Alan. It̢۪s thethe desire to set up a situation which readily achieves the necessary 3/4 EC approval of the ByLaws amendments that causes me to ask these clarifying questions re the exact nature of CCWG Consensus and making that clear in the Proposed Final Report.
I'm not sure what you mean by "3/4". If memory serves me, the approval of a Fundamental Bylaw requires the active support of at least 3 of the 5 EC members and rejection by no more than 1 of the 5.
In this case, I do not see an obstacle to approval, probably unanimous. Before we can get to that stage, this CCWG will go to the chartering organizations. That is the five EC Members plus the SSAC and RSSAC. I see real problems going forward to the Board if most of the chartering orgs do not approve it, so once it goes to the board for action, most or all of the EC members will have already given their support. If they do not do that, then I see the report coming back to us first, before it even gets to the Board.
Regarding the mechanism to be chosen, there is something about the way PTI was set up (as further described by Samantha and as further set out in the ByLaws in Section 16) that looks very “clean†to me in terms of clearlearly identifying recommended ByLaws changes as to the permitted Accountability challenges and those which will become inapplicable.
As far as I can see, the only relation between PTI and the accountability measures is that the EC can object to the PTI budget, can object to ICANN trying to divest itself of PTI (in a variety of ways) and how ICANN handles recommendation to PTI reviews. The other EC actions all relate to things in ICANN proper. None of what we are talking about is an attempt to stop the EC from challenging how auction funds are handles on a global basis. The Bylaw change we are discussing is for how applicants can (or rather cannot) challenge.
The EC will always have control over the auction process on a global scale because they always have the authority to remove the entire ICANN Board. We cannot (or rather will not) change that.
In addition, I note that Accountability Work stream 2 implementation is not complete. So, for example, having worked actively on one of the Subgroups in Accountability Workstream 2, I have to ask how the Chartering Organizations may consider the CCWG recommendations in relation to the risk of challenges once the Work stream 2 Recommendations are finalized and implemented. Would there be, for example, an available challenge re violation of the ByLaws (as amended to implement Workstream 2) based on an alleged Human Rights violation by ICANN in the administration of the Auction Funds? It seems to me that if ICANN employs 20 additional staff as contemplated in Mechanism A, that risk is increased. (20 staff is assumed across all Mechanisms.)
I see no impact regardless of mechanism. ICANN will be responsible to ensuring it meets its Bylaws whether the auction work is done by staff, or partially or entirely subcontracted. We cannot avoid obligations just by sub-contracting (otherwise everyone would subcontract everything and avoid all liabilities.
I would be inclined to assess the risk as being lower where administration and grants are concentrated in an entity other than ICANN. In the case of Mechanism B, risk reduction would be due to the expert independent contractor relationship, though admittedly ICANN controls the RFP process and would be supplying some of the staff as well as adding the function to its budgeting and audit processes. In the case of Mechanism C, risk reduction would be due to the independent Board of Directors and independent staffing, as it is with PTI.
I ALL mechanisms we will use an indep expert group to do the application assessment and decide on awards.
PTI may have a Board, and that may alter legal liabilities, but ICANN has control over that Board and its budget and I do not believe the it can be isolated from PTI actions if it allows them to happen.
If valid, these observations may bear on the draft Proposed Final Report at page 19, including Marika’™s request for further clarification [MK6] about what is meant by “a healthy degree of independence†and what the CCWG hopes to achieve with that goal generally (and not just in relation to the possible establishment of a foundation.) I would say the goal of a “healthy degree of independence†is is controlling risk of expensive challenges to ICANN and its Board and to the Auction Proceeds per se. In other words, the greater distance ICANN maintains from the grant-making process, while still exercising its fiduciary oversight duties, the lower the risk to ICANN, its Board, and the funds.
As I understand it ALL mechanisms will have independence of the grant making process. Period.
Challenges will always be possible for potentially all sorts of reasons. The only challenges we can control are those from applicants.
Of course risk reduction has to be balanced against costs. In this regard, it would be helpful to have some additional information. For example, how does headcount cost for 20 people to be hired in ICANN compare to the fees for hiring an expert pre-existing non-profit? Can a foundation be set up using ICANN in-house legal staff or must we go to outside counsel? (Here I am thinking about questions that will be asked by members of the CSG constituencies.)
I will leave these to Sam and Xavier.
Alan
Anne
From: Alan Greenberg <alan.greenberg@mcgill.ca <mailto:alan.greenberg@mcgill.ca> >
Sent: Tuesday, November 19, 2019 12:51 PM
To: Aikman-Scalese, Anne <AAikman@lrrc.com <mailto:AAikman@lrrc.com>>; Erika Mann <erika@erikamann.com <mailto:erika@erikamann.com>>; Becky Burr <becky.burr@board.icann.org <mailto:becky.burr@board.icann.org>>
Cc: ccwg-auctionproceeds@icann.org <mailto:ccwg-auctionproceeds@icann.org>
Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
[EXTERNAL]
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I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself.
I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable).
If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine.
Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration).
Alan
At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote:
Erika, Becky, et al,
Proposed Final Report and Consensus
I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persersons other than appliplicants could file an RFR or an IRP in relation to ICANN’s handling of the grantant-making process.) Thee Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this.
In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discuscussions in relation to aa ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.)
To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds.
I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability toto Sunset†is important in relation to the prinnciple of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds.
Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “dirirectly proposed†by the CCWG iWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4.
Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments.
Choice of Mechanism and Survey
Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows:
(1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranchesâ€.
&>
(2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches†f7; for grant-makimaking purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’â„¢s accountability than do RFR anFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think nk anyone would want the EC powpowers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budgdget†aspectpect of an overall line item for grants wwithin the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t„¢t think the the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.)
(3) To preserve the EC powers as to Budget, it would seem “cleaner†to bsp; placelace the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if
(a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s overversersight responsibilities and fiduciary duties. (Mechanism B)
(b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities.
I appreciate any observations other CCWG members may have that will help bring me up to speed.
Thank you,
Anne
Anne E. Aikman-Scalese
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From: Erika Mann <erika@erikamann.com <mailto:erika@erikamann.com>>
Sent: Tuesday, November 19, 2019 7:52 AM
To: Becky Burr <becky.burr@board.icann.org <mailto:becky.burr@board.icann.org>>
Cc: Aikman-Scalese, Anne <AAikman@lrrc.com <mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org <mailto:ccwg-auctionproceeds@icann.org>
Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
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Becky - Thatâ€Ã¢„„¢s what we agre agreed upon but in the light of Anne’s ¢s points ra raised, we should evaluate whether our judgement will not be contestable.
Erika
Sent from my iPhone
On Nov 19, 2019, at 3:33 PM, Becky Burr <becky.burr@board.icann.org <mailto:becky.burr@board.icann.org>> wrote:
Anne,
I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes.
Please correct me if I am wrong, Sam.
Becky
On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com <mailto:AAikman@lrrc.com>> wrote:
Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, , the S Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylawsâ€. IIn this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding?
It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC.
Fundamental ByLaws Changes
It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25).
Mechanism B
In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “trancheâ€.)
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-- ------------------------------------------------ "It is a disgrace to be rich and honored in an unjust state" -Confucius 邦有道，贫且贱焉，耻也。邦无道，富且贵焉，耻也 ------------------------------------------------ Dr Sam Lanfranco (Prof Emeritus), Econ, York U., CANADA email:sam@lanfranco.net <mailto:sam@lanfranco.net> Skype: slanfranco blog:https://samlanfranco.blogspot.com [samlanfranco.blogspot.com] <https://urldefense.proofpoint.com/v2/url?u=https-3A__samlanfranco.blogspot.c...> Phone: +1 613-476-0429 cell: +1 416-816-2852
-- ------------------------------------------------ "It is a disgrace to be rich and honored in an unjust state" -Confucius 邦有道，贫且贱焉，耻也。邦无道，富且贵焉，耻也 ------------------------------------------------ Dr Sam Lanfranco (Prof Emeritus), Econ, York U., CANADA email: sam@lanfranco.net Skype: slanfranco blog: https://samlanfranco.blogspot.com Phone: +1 613-476-0429 cell: +1 416-816-2852
Thank you Sam. The infographic you shared a link of below is very interesting and useful. Thank you. Best, Xavier Xavier Calvez SVP & Chief Financial Officer ICANN P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052 E: xavier.calvez@icann.org<mailto:xavier.calvez@icann.org> | www.icann.org<http://www.icann.org/> 12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094 From: Sam Lanfranco <sam@lanfranco.net> Date: Wednesday, November 20, 2019 at 6:14 PM To: Xavier Calvez <xavier.calvez@icann.org>, "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> Cc: Alan Greenberg <alan.greenberg@mcgill.ca>, "Aikman-Scalese, Anne" <AAikman@lrrc.com>, "erika@erikamann.com" <erika@erikamann.com>, Becky Burr <becky.burr@board.icann.org> Subject: Re: [Ext] Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Xavier, This follow up comment is not simply because I agree with you, but because I would like to stress your two points (1)"...ICANN org personnel will not require the expertise to evaluate projects to which grants are allocated since this will be done by a separate panel." and (2)"... not all tasks involved in this activity will require grant-giving type of expertise (Finance, project management,…). In the discussions of the working group there was on occasion some confusion about which expertise was needed where. A nice and simple infographic from the World Bank can help here: see: https://projects.worldbank.org/en/projects-operations/products-and-services/... [projects.worldbank.org]<https://urldefense.proofpoint.com/v2/url?u=https-3A__projects.worldbank.org_...> While the infographic is about negotiated country projects, the process helps identify what expertise is needed and where. Here, in the case of auction proceeds, that includes the funding applicants as they identify and prepare a funding submission. Sam L. On 11/20/2019 7:51 PM, Xavier J. Calvez wrote: Sam, Fully agree. The ICANN community has expertise in grant giving activities, acquired outside of ICANN’s activities. So is the case for ICANN staff. We know there is grant giving expertise in the existing ICANN staff, though we have not yet done a thorough and deep inventory of it, nor do we know if this expertise lies with people who could be reallocated to the Auction Proceeds distribution activities once it will be launched. Also to keep in mind, ICANN org personnel will not require the expertise to evaluate projects to which grants are allocated since this will be done by a separate panel. Separately, not all tasks involved in this activity will require grant-giving type of expertise (Finance, project management,…). Lastly, as with everything that we do for the first time, we will learn…, in addition to bringing required skillset. Thank you. Best, Xavier Xavier Calvez SVP & Chief Financial Officer ICANN P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052 E: xavier.calvez@icann.org<mailto:xavier.calvez@icann.org> | www.icann.org [icann.org]<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.icann.org_&d=DwMGaQ&...> 12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094 From: Sam Lanfranco <sam@lanfranco.net><mailto:sam@lanfranco.net> Date: Wednesday, November 20, 2019 at 12:15 PM To: Xavier Calvez <xavier.calvez@icann.org><mailto:xavier.calvez@icann.org>, "ccwg-auctionproceeds@icann.org"<mailto:ccwg-auctionproceeds@icann.org> <ccwg-auctionproceeds@icann.org><mailto:ccwg-auctionproceeds@icann.org> Cc: Alan Greenberg <alan.greenberg@mcgill.ca><mailto:alan.greenberg@mcgill.ca>, "Aikman-Scalese, Anne" <AAikman@lrrc.com><mailto:AAikman@lrrc.com>, "erika@erikamann.com"<mailto:erika@erikamann.com> <erika@erikamann.com><mailto:erika@erikamann.com>, Becky Burr <becky.burr@board.icann.org><mailto:becky.burr@board.icann.org> Subject: [Ext] Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Xavier, Re: "While ICANN org may require to add skillset (insistance on “may”)..." With my albeit limited experience around grant giving, working at both ends of the process, I would stress that it is an absolute certainty that all three Mechanisms will require an appropriate skillset that currently is not resident for Mechanism A, might exist in Mechanism B, and would have to be build in Mechanism C. The proper management of a competitive grants process is complicated and demands particular skills that could not be supplied through secondment or redeployment from ICANN staff. Sam Lanfranco On 11/20/2019 2:49 PM, Xavier J. Calvez wrote: All, There are references in this email thread about ICANN org hiring and firing 20 people under mechanism A. I am not sure where the idea of ICANN org hiring 20 people come from nor how it was determined. ICANN org has not produced any evaluation of incremental resource requirements driven by any mechanism at this stage. While ICANN org may require to add skillset (insistance on “may”) and is likely to need more resources to address the auction proceeds distribution process, under any mechanism, we have not produced any analysis about it at this stage. Such analysis is dependent on many factors, including the general level of workload of the organization during the expected period of disbursement. Generally, ICANN org, like most organizations, would address temporary work and activities with temporary resources, whichever form such temporary resources would take. In addition, under mechanism C, there is more likelihood that the resources in the foundation be made redundant as the distribution process winds down than in mechanism A. In mechanism A, the level of incremental resources would be less, and the likelihood of redundancy would be less as result, and also because resources not needed anymore could be reallocated within the organization as and if needed. Separately, regarding the point of risks and control: * Under Mechanism B and C, there are risk and costs associated with the complexity of operating a mechanism that involves one or several parties in addition to ICANN. Sam and I made these points several times over the past CCWG AP meetings. I am happy to elaborate further but the illustration used of the discussion of PTI is very helpful as the actual IANA functions are exactly the same before than after the creation of PTI, but the subcontracting of most of the IANA functions to PTI has created complexities that create risks that require more resources, associated with the governance around the IANA functions. * As a reminder to inform your discussions on mechanisms A,B and C, I am attaching a presentation provided to this group in June 2017, notably the slide #7, which describes that ICANN’s obligations to ensure the funds are adequately used are the same, irrespective of the number intermediate parties inserted between ICANN and the end user in the process. There is not less obligations for ICANN to ensure funds are adequately used in mechanism C but there is more risks and costs to ensure such funds are adequately used. Thank you. Best, Xavier Xavier Calvez SVP & Chief Financial Officer ICANN P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052 E: xavier.calvez@icann.org<mailto:xavier.calvez@icann.org> | www.icann.org [icann.org]<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.icann.org_&d=DwMDaQ&...> 12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094 From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org><mailto:ccwg-auctionproceeds-bounces@icann.org> on behalf of Alan Greenberg <alan.greenberg@mcgill.ca><mailto:alan.greenberg@mcgill.ca> Date: Tuesday, November 19, 2019 at 8:37 PM To: "Aikman-Scalese, Anne" <AAikman@lrrc.com><mailto:AAikman@lrrc.com>, "erika@erikamann.com"<mailto:erika@erikamann.com> <erika@erikamann.com><mailto:erika@erikamann.com>, Becky Burr <becky.burr@board.icann.org><mailto:becky.burr@board.icann.org> Cc: "ccwg-auctionproceeds@icann.org"<mailto:ccwg-auctionproceeds@icann.org> <ccwg-auctionproceeds@icann.org><mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN At 19/11/2019 07:24 PM, Aikman-Scalese, Anne wrote: Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.†Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one†as you say. And that makes the survey very important. If these same decisional participants approve the entire report allowing it to go to the Board, it would be an interesting situation if they then refuse to support or even object to the Bylaw. To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently. You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. To be clear, I am not speaking on behalf of ALAC. In fact, the ALAC appointed members to this CCWG have tended to have differing opinions. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset†Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions. I am not sure we ever were aiming at lowest cost. There has always been strong preferences that in some cases were despite the costs. Alan The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey. Anne From: Alan Greenberg <alan.greenberg@mcgill.ca><mailto:alan.greenberg@mcgill.ca> Sent: Tuesday, November 19, 2019 4:34 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com><mailto:AAikman@lrrc.com>; Erika Mann <erika@erikamann.com><mailto:erika@erikamann.com>; Becky Burr <becky.burr@board.icann.org><mailto:becky.burr@board.icann.org> Cc: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: RE: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ See embedded replies. At 19/11/2019 04:35 PM, Aikman-Scalese, Anne wrote: Thanks Alan. It’s thethe desire to set up a situation which readily achieves the necessary 3/4 EC approval of the ByLaws amendments that causes me to ask these clarifying questions re the exact nature of CCWG Consensus and making that clear in the Proposed Final Report. I'm not sure what you mean by "3/4". If memory serves me, the approval of a Fundamental Bylaw requires the active support of at least 3 of the 5 EC members and rejection by no more than 1 of the 5. In this case, I do not see an obstacle to approval, probably unanimous. Before we can get to that stage, this CCWG will go to the chartering organizations. That is the five EC Members plus the SSAC and RSSAC. I see real problems going forward to the Board if most of the chartering orgs do not approve it, so once it goes to the board for action, most or all of the EC members will have already given their support. If they do not do that, then I see the report coming back to us first, before it even gets to the Board. Regarding the mechanism to be chosen, there is something about the way PTI was set up (as further described by Samantha and as further set out in the ByLaws in Section 16) that looks very “clean†to me in terms of clearlearly identifying recommended ByLaws changes as to the permitted Accountability challenges and those which will become inapplicable. As far as I can see, the only relation between PTI and the accountability measures is that the EC can object to the PTI budget, can object to ICANN trying to divest itself of PTI (in a variety of ways) and how ICANN handles recommendation to PTI reviews. The other EC actions all relate to things in ICANN proper. None of what we are talking about is an attempt to stop the EC from challenging how auction funds are handles on a global basis. The Bylaw change we are discussing is for how applicants can (or rather cannot) challenge. The EC will always have control over the auction process on a global scale because they always have the authority to remove the entire ICANN Board. We cannot (or rather will not) change that. In addition, I note that Accountability Work stream 2 implementation is not complete. So, for example, having worked actively on one of the Subgroups in Accountability Workstream 2, I have to ask how the Chartering Organizations may consider the CCWG recommendations in relation to the risk of challenges once the Work stream 2 Recommendations are finalized and implemented. Would there be, for example, an available challenge re violation of the ByLaws (as amended to implement Workstream 2) based on an alleged Human Rights violation by ICANN in the administration of the Auction Funds? It seems to me that if ICANN employs 20 additional staff as contemplated in Mechanism A, that risk is increased. (20 staff is assumed across all Mechanisms.) I see no impact regardless of mechanism. ICANN will be responsible to ensuring it meets its Bylaws whether the auction work is done by staff, or partially or entirely subcontracted. We cannot avoid obligations just by sub-contracting (otherwise everyone would subcontract everything and avoid all liabilities. I would be inclined to assess the risk as being lower where administration and grants are concentrated in an entity other than ICANN. In the case of Mechanism B, risk reduction would be due to the expert independent contractor relationship, though admittedly ICANN controls the RFP process and would be supplying some of the staff as well as adding the function to its budgeting and audit processes. In the case of Mechanism C, risk reduction would be due to the independent Board of Directors and independent staffing, as it is with PTI. I ALL mechanisms we will use an indep expert group to do the application assessment and decide on awards. PTI may have a Board, and that may alter legal liabilities, but ICANN has control over that Board and its budget and I do not believe the it can be isolated from PTI actions if it allows them to happen. If valid, these observations may bear on the draft Proposed Final Report at page 19, including Marika’™s request for further clarification [MK6] about what is meant by “a healthy degree of independence†and what the CCWG hopes to achieve with that goal generally (and not just in relation to the possible establishment of a foundation.) I would say the goal of a “healthy degree of independence†is is controlling risk of expensive challenges to ICANN and its Board and to the Auction Proceeds per se. In other words, the greater distance ICANN maintains from the grant-making process, while still exercising its fiduciary oversight duties, the lower the risk to ICANN, its Board, and the funds. As I understand it ALL mechanisms will have independence of the grant making process. Period. Challenges will always be possible for potentially all sorts of reasons. The only challenges we can control are those from applicants. Of course risk reduction has to be balanced against costs. In this regard, it would be helpful to have some additional information. For example, how does headcount cost for 20 people to be hired in ICANN compare to the fees for hiring an expert pre-existing non-profit? Can a foundation be set up using ICANN in-house legal staff or must we go to outside counsel? (Here I am thinking about questions that will be asked by members of the CSG constituencies.) I will leave these to Sam and Xavier. Alan Anne From: Alan Greenberg <alan.greenberg@mcgill.ca<mailto:alan.greenberg@mcgill.ca> > Sent: Tuesday, November 19, 2019 12:51 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>>; Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself. I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable). If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine. Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration). Alan At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote: Erika, Becky, et al, Proposed Final Report and Consensus I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persersons other than appliplicants could file an RFR or an IRP in relation to ICANN’s handling of the grantant-making process.) Thee Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this. In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discuscussions in relation to aa ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.) To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability toto Sunset†is important in relation to the prinnciple of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds. Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “dirirectly proposed†by the CCWG iWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4. Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments. Choice of Mechanism and Survey Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows: (1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranchesâ€. &> (2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches†f7; for grant-makimaking purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’â„¢s accountability than do RFR anFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think nk anyone would want the EC powpowers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budgdget†aspectpect of an overall line item for grants wwithin the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t„¢t think the the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.) (3) To preserve the EC powers as to Budget, it would seem “cleaner†to bsp; placelace the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s overversersight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities. I appreciate any observations other CCWG members may have that will help bring me up to speed. Thank you, Anne Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [[]] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com]<https://urldefense.proofpoint.com/v2/url?u=http-3A__lrrc.com_&d=DwMF-g&c=FmY...> [[]] Because what matters to you, matters to us.™< From: Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Becky - Thatâ€Ã¢„„¢s what we agre agreed upon but in the light of Anne’s ¢s points ra raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone On Nov 19, 2019, at 3:33 PM, Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> wrote: Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, , the S Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylawsâ€. IIn this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “trancheâ€.) ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. 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Thank you Sam. This is an extremely important aspect of the analysis. Anne From: Sam Lanfranco <sam@lanfranco.net> Sent: Wednesday, November 20, 2019 1:15 PM To: Xavier J. Calvez <xavier.calvez@icann.org>; ccwg-auctionproceeds@icann.org Cc: Alan Greenberg <alan.greenberg@mcgill.ca>; Aikman-Scalese, Anne <AAikman@lrrc.com>; erika@erikamann.com; Becky Burr <becky.burr@board.icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Xavier, Re: "While ICANN org may require to add skillset (insistance on “may”)..." With my albeit limited experience around grant giving, working at both ends of the process, I would stress that it is an absolute certainty that all three Mechanisms will require an appropriate skillset that currently is not resident for Mechanism A, might exist in Mechanism B, and would have to be build in Mechanism C. The proper management of a competitive grants process is complicated and demands particular skills that could not be supplied through secondment or redeployment from ICANN staff. Sam Lanfranco On 11/20/2019 2:49 PM, Xavier J. Calvez wrote: All, There are references in this email thread about ICANN org hiring and firing 20 people under mechanism A. I am not sure where the idea of ICANN org hiring 20 people come from nor how it was determined. ICANN org has not produced any evaluation of incremental resource requirements driven by any mechanism at this stage. While ICANN org may require to add skillset (insistance on “may”) and is likely to need more resources to address the auction proceeds distribution process, under any mechanism, we have not produced any analysis about it at this stage. Such analysis is dependent on many factors, including the general level of workload of the organization during the expected period of disbursement. Generally, ICANN org, like most organizations, would address temporary work and activities with temporary resources, whichever form such temporary resources would take. In addition, under mechanism C, there is more likelihood that the resources in the foundation be made redundant as the distribution process winds down than in mechanism A. In mechanism A, the level of incremental resources would be less, and the likelihood of redundancy would be less as result, and also because resources not needed anymore could be reallocated within the organization as and if needed. Separately, regarding the point of risks and control: - Under Mechanism B and C, there are risk and costs associated with the complexity of operating a mechanism that involves one or several parties in addition to ICANN. Sam and I made these points several times over the past CCWG AP meetings. I am happy to elaborate further but the illustration used of the discussion of PTI is very helpful as the actual IANA functions are exactly the same before than after the creation of PTI, but the subcontracting of most of the IANA functions to PTI has created complexities that create risks that require more resources, associated with the governance around the IANA functions. - As a reminder to inform your discussions on mechanisms A,B and C, I am attaching a presentation provided to this group in June 2017, notably the slide #7, which describes that ICANN’s obligations to ensure the funds are adequately used are the same, irrespective of the number intermediate parties inserted between ICANN and the end user in the process. There is not less obligations for ICANN to ensure funds are adequately used in mechanism C but there is more risks and costs to ensure such funds are adequately used. Thank you. Best, Xavier Xavier Calvez SVP & Chief Financial Officer ICANN P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052 E: xavier.calvez@icann.org<mailto:xavier.calvez@icann.org> | www.icann.org<http://www.icann.org/> 12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094 From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org><mailto:ccwg-auctionproceeds-bounces@icann.org> on behalf of Alan Greenberg <alan.greenberg@mcgill.ca><mailto:alan.greenberg@mcgill.ca> Date: Tuesday, November 19, 2019 at 8:37 PM To: "Aikman-Scalese, Anne" <AAikman@lrrc.com><mailto:AAikman@lrrc.com>, "erika@erikamann.com"<mailto:erika@erikamann.com> <erika@erikamann.com><mailto:erika@erikamann.com>, Becky Burr <becky.burr@board.icann.org><mailto:becky.burr@board.icann.org> Cc: "ccwg-auctionproceeds@icann.org"<mailto:ccwg-auctionproceeds@icann.org> <ccwg-auctionproceeds@icann.org><mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN At 19/11/2019 07:24 PM, Aikman-Scalese, Anne wrote: Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.†Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one†as you say. And that makes the survey very important. If these same decisional participants approve the entire report allowing it to go to the Board, it would be an interesting situation if they then refuse to support or even object to the Bylaw. To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently. You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. To be clear, I am not speaking on behalf of ALAC. In fact, the ALAC appointed members to this CCWG have tended to have differing opinions. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset†Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions. I am not sure we ever were aiming at lowest cost. There has always been strong preferences that in some cases were despite the costs. Alan The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey. Anne From: Alan Greenberg <alan.greenberg@mcgill.ca><mailto:alan.greenberg@mcgill.ca> Sent: Tuesday, November 19, 2019 4:34 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com><mailto:AAikman@lrrc.com>; Erika Mann <erika@erikamann.com><mailto:erika@erikamann.com>; Becky Burr <becky.burr@board.icann.org><mailto:becky.burr@board.icann.org> Cc: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: RE: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ See embedded replies. At 19/11/2019 04:35 PM, Aikman-Scalese, Anne wrote: Thanks Alan. It’s thethe desire to set up a situation which readily achieves the necessary 3/4 EC approval of the ByLaws amendments that causes me to ask these clarifying questions re the exact nature of CCWG Consensus and making that clear in the Proposed Final Report. I'm not sure what you mean by "3/4". If memory serves me, the approval of a Fundamental Bylaw requires the active support of at least 3 of the 5 EC members and rejection by no more than 1 of the 5. In this case, I do not see an obstacle to approval, probably unanimous. Before we can get to that stage, this CCWG will go to the chartering organizations. That is the five EC Members plus the SSAC and RSSAC. I see real problems going forward to the Board if most of the chartering orgs do not approve it, so once it goes to the board for action, most or all of the EC members will have already given their support. If they do not do that, then I see the report coming back to us first, before it even gets to the Board. Regarding the mechanism to be chosen, there is something about the way PTI was set up (as further described by Samantha and as further set out in the ByLaws in Section 16) that looks very “clean†to me in terms of clearlearly identifying recommended ByLaws changes as to the permitted Accountability challenges and those which will become inapplicable. As far as I can see, the only relation between PTI and the accountability measures is that the EC can object to the PTI budget, can object to ICANN trying to divest itself of PTI (in a variety of ways) and how ICANN handles recommendation to PTI reviews. The other EC actions all relate to things in ICANN proper. None of what we are talking about is an attempt to stop the EC from challenging how auction funds are handles on a global basis. The Bylaw change we are discussing is for how applicants can (or rather cannot) challenge. The EC will always have control over the auction process on a global scale because they always have the authority to remove the entire ICANN Board. We cannot (or rather will not) change that. In addition, I note that Accountability Work stream 2 implementation is not complete. So, for example, having worked actively on one of the Subgroups in Accountability Workstream 2, I have to ask how the Chartering Organizations may consider the CCWG recommendations in relation to the risk of challenges once the Work stream 2 Recommendations are finalized and implemented. Would there be, for example, an available challenge re violation of the ByLaws (as amended to implement Workstream 2) based on an alleged Human Rights violation by ICANN in the administration of the Auction Funds? It seems to me that if ICANN employs 20 additional staff as contemplated in Mechanism A, that risk is increased. (20 staff is assumed across all Mechanisms.) I see no impact regardless of mechanism. ICANN will be responsible to ensuring it meets its Bylaws whether the auction work is done by staff, or partially or entirely subcontracted. We cannot avoid obligations just by sub-contracting (otherwise everyone would subcontract everything and avoid all liabilities. I would be inclined to assess the risk as being lower where administration and grants are concentrated in an entity other than ICANN. In the case of Mechanism B, risk reduction would be due to the expert independent contractor relationship, though admittedly ICANN controls the RFP process and would be supplying some of the staff as well as adding the function to its budgeting and audit processes. In the case of Mechanism C, risk reduction would be due to the independent Board of Directors and independent staffing, as it is with PTI. I ALL mechanisms we will use an indep expert group to do the application assessment and decide on awards. PTI may have a Board, and that may alter legal liabilities, but ICANN has control over that Board and its budget and I do not believe the it can be isolated from PTI actions if it allows them to happen. If valid, these observations may bear on the draft Proposed Final Report at page 19, including Marika’™s request for further clarification [MK6] about what is meant by “a healthy degree of independence†and what the CCWG hopes to achieve with that goal generally (and not just in relation to the possible establishment of a foundation.) I would say the goal of a “healthy degree of independence†is is controlling risk of expensive challenges to ICANN and its Board and to the Auction Proceeds per se. In other words, the greater distance ICANN maintains from the grant-making process, while still exercising its fiduciary oversight duties, the lower the risk to ICANN, its Board, and the funds. As I understand it ALL mechanisms will have independence of the grant making process. Period. Challenges will always be possible for potentially all sorts of reasons. The only challenges we can control are those from applicants. Of course risk reduction has to be balanced against costs. In this regard, it would be helpful to have some additional information. For example, how does headcount cost for 20 people to be hired in ICANN compare to the fees for hiring an expert pre-existing non-profit? Can a foundation be set up using ICANN in-house legal staff or must we go to outside counsel? (Here I am thinking about questions that will be asked by members of the CSG constituencies.) I will leave these to Sam and Xavier. Alan Anne From: Alan Greenberg <alan.greenberg@mcgill.ca<mailto:alan.greenberg@mcgill.ca> > Sent: Tuesday, November 19, 2019 12:51 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>>; Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself. I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable). If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine. Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration). Alan At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote: Erika, Becky, et al, Proposed Final Report and Consensus I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persersons other than appliplicants could file an RFR or an IRP in relation to ICANN’s handling of the grantant-making process.) Thee Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this. In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discuscussions in relation to aa ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.) To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability toto Sunset†is important in relation to the prinnciple of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds. Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “dirirectly proposed†by the CCWG iWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4. Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments. Choice of Mechanism and Survey Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows: (1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranchesâ€. &> (2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches†f7; for grant-makimaking purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’â„¢s accountability than do RFR anFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think nk anyone would want the EC powpowers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budgdget†aspectpect of an overall line item for grants wwithin the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t„¢t think the the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.) (3) To preserve the EC powers as to Budget, it would seem “cleaner†to bsp; placelace the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s overversersight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities. I appreciate any observations other CCWG members may have that will help bring me up to speed. Thank you, Anne Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [[]] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com]<https://urldefense.proofpoint.com/v2/url?u=http-3A__lrrc.com_&d=DwMF-g&c=FmY...> [[]] Because what matters to you, matters to us.™< From: Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Becky - Thatâ€Ã¢„„¢s what we agre agreed upon but in the light of Anne’s ¢s points ra raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone On Nov 19, 2019, at 3:33 PM, Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> wrote: Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, , the S Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylawsâ€. IIn this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “trancheâ€.) ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. 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Xavier - these were hypothetical questions put forward to you to get a very rogue idea about potential costs related to the various mechanism. A complete cost-benefit analysis is typically part of a process in determining the most appropriate funding environment. We had discussed this aspect many times and, I believe the leadership team had forwarded a question even to you but it's hard to follow all the various strings. We still have time during the second public comment to sort this all out. Thanks, Erika On Wed, Nov 20, 2019 at 8:51 PM Xavier J. Calvez <xavier.calvez@icann.org> wrote:
All,
There are references in this email thread about ICANN org hiring and firing 20 people under mechanism A.
I am not sure where the idea of ICANN org hiring 20 people come from nor how it was determined. ICANN org has not produced any evaluation of incremental resource requirements driven by any mechanism at this stage.
While ICANN org may require to add skillset (insistance on “may”) and is likely to need more resources to address the auction proceeds distribution process, under any mechanism, we have not produced any analysis about it at this stage. Such analysis is dependent on many factors, including the general level of workload of the organization during the expected period of disbursement.
Generally, ICANN org, like most organizations, would address temporary work and activities with temporary resources, whichever form such temporary resources would take. In addition, under mechanism C, there is more likelihood that the resources in the foundation be made redundant as the distribution process winds down than in mechanism A. In mechanism A, the level of incremental resources would be less, and the likelihood of redundancy would be less as result, and also because resources not needed anymore could be reallocated within the organization as and if needed.
Separately, regarding the point of risks and control:
- Under Mechanism B and C, there are risk and costs associated with the complexity of operating a mechanism that involves one or several parties in addition to ICANN. Sam and I made these points several times over the past CCWG AP meetings. I am happy to elaborate further but the illustration used of the discussion of PTI is very helpful as the actual IANA functions are exactly the same before than after the creation of PTI, but the subcontracting of most of the IANA functions to PTI has created complexities that create risks that require more resources, associated with the governance around the IANA functions. - As a reminder to inform your discussions on mechanisms A,B and C, I am attaching a presentation provided to this group in June 2017, notably the slide #7, which describes that ICANN’s obligations to ensure the funds are adequately used are the same, irrespective of the number intermediate parties inserted between ICANN and the end user in the process. There is not less obligations for ICANN to ensure funds are adequately used in mechanism C but there is more risks and costs to ensure such funds are adequately used.
Thank you.
Best,
Xavier
*Xavier Calvez*
SVP & Chief Financial Officer
ICANN
P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052
E: *xavier.calvez@icann.org <xavier.calvez@icann.org>* | www.icann.org
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*From: *Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Alan Greenberg <alan.greenberg@mcgill.ca> *Date: *Tuesday, November 19, 2019 at 8:37 PM *To: *"Aikman-Scalese, Anne" <AAikman@lrrc.com>, "erika@erikamann.com" < erika@erikamann.com>, Becky Burr <becky.burr@board.icann.org> *Cc: *"ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> *Subject: *Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
At 19/11/2019 07:24 PM, Aikman-Scalese, Anne wrote:
Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.†Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one†as you say. And that makes the survey very important.
If these same decisional participants approve the entire report allowing it to go to the Board, it would be an interesting situation if they then refuse to support or even object to the Bylaw.
To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently.
You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone.
To be clear, I am not speaking on behalf of ALAC. In fact, the ALAC appointed members to this CCWG have tended to have differing opinions.
However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset†Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions.
I am not sure we ever were aiming at lowest cost. There has always been strong preferences that in some cases were despite the costs.
Alan
The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey.
Anne
*From:* Alan Greenberg <alan.greenberg@mcgill.ca> *Sent:* Tuesday, November 19, 2019 4:34 PM *To:* Aikman-Scalese, Anne <AAikman@lrrc.com>; Erika Mann < erika@erikamann.com>; Becky Burr <becky.burr@board.icann.org> *Cc:* ccwg-auctionproceeds@icann.org *Subject:* RE: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
*[EXTERNAL]* * ------------------------------ *
See embedded replies.
At 19/11/2019 04:35 PM, Aikman-Scalese, Anne wrote:
Thanks Alan. It̢۪s thethe desire to set up a situation which readily achieves the necessary 3/4 EC approval of the ByLaws amendments that causes me to ask these clarifying questions re the exact nature of CCWG Consensus and making that clear in the Proposed Final Report.
I'm not sure what you mean by "3/4". If memory serves me, the approval of a Fundamental Bylaw requires the active support of at least 3 of the 5 EC members and rejection by no more than 1 of the 5.
In this case, I do not see an obstacle to approval, probably unanimous. Before we can get to that stage, this CCWG will go to the chartering organizations. That is the five EC Members plus the SSAC and RSSAC. I see real problems going forward to the Board if most of the chartering orgs do not approve it, so once it goes to the board for action, most or all of the EC members will have already given their support. If they do not do that, then I see the report coming back to us first, before it even gets to the Board.
Regarding the mechanism to be chosen, there is something about the way PTI was set up (as further described by Samantha and as further set out in the ByLaws in Section 16) that looks very “clean†to me in terms of clearlearly identifying recommended ByLaws changes as to the permitted Accountability challenges and those which will become inapplicable.
As far as I can see, the only relation between PTI and the accountability measures is that the EC can object to the PTI budget, can object to ICANN trying to divest itself of PTI (in a variety of ways) and how ICANN handles recommendation to PTI reviews. The other EC actions all relate to things in ICANN proper. None of what we are talking about is an attempt to stop the EC from challenging how auction funds are handles on a global basis. The Bylaw change we are discussing is for how applicants can (or rather cannot) challenge.
The EC will always have control over the auction process on a global scale because they always have the authority to remove the entire ICANN Board. We cannot (or rather will not) change that.
In addition, I note that Accountability Work stream 2 implementation is not complete. So, for example, having worked actively on one of the Subgroups in Accountability Workstream 2, I have to ask how the Chartering Organizations may consider the CCWG recommendations in relation to the risk of challenges once the Work stream 2 Recommendations are finalized and implemented. Would there be, for example, an available challenge re violation of the ByLaws (as amended to implement Workstream 2) based on an alleged Human Rights violation by ICANN in the administration of the Auction Funds? It seems to me that if ICANN employs 20 additional staff as contemplated in Mechanism A, that risk is increased. (20 staff is assumed across all Mechanisms.)
I see no impact regardless of mechanism. ICANN will be responsible to ensuring it meets its Bylaws whether the auction work is done by staff, or partially or entirely subcontracted. We cannot avoid obligations just by sub-contracting (otherwise everyone would subcontract everything and avoid all liabilities.
I would be inclined to assess the risk as being lower where administration and grants are concentrated in an entity other than ICANN. In the case of Mechanism B, risk reduction would be due to the expert independent contractor relationship, though admittedly ICANN controls the RFP process and would be supplying some of the staff as well as adding the function to its budgeting and audit processes. In the case of Mechanism C, risk reduction would be due to the independent Board of Directors and independent staffing, as it is with PTI.
I ALL mechanisms we will use an indep expert group to do the application assessment and decide on awards.
PTI may have a Board, and that may alter legal liabilities, but ICANN has control over that Board and its budget and I do not believe the it can be isolated from PTI actions if it allows them to happen.
If valid, these observations may bear on the draft Proposed Final Report at page 19, including Marika’™s request for further clarification [MK6] about what is meant by “a healthy degree of independence†and what the CCWG hopes to achieve with that goal generally (and not just in relation to the possible establishment of a foundation.) I would say the goal of a “healthy degree of independence†is is controlling risk of expensive challenges to ICANN and its Board and to the Auction Proceeds per se. In other words, the greater distance ICANN maintains from the grant-making process, while still exercising its fiduciary oversight duties, the lower the risk to ICANN, its Board, and the funds.
As I understand it ALL mechanisms will have independence of the grant making process. Period.
Challenges will always be possible for potentially all sorts of reasons. The only challenges we can control are those from applicants.
Of course risk reduction has to be balanced against costs. In this regard, it would be helpful to have some additional information. For example, how does headcount cost for 20 people to be hired in ICANN compare to the fees for hiring an expert pre-existing non-profit? Can a foundation be set up using ICANN in-house legal staff or must we go to outside counsel? (Here I am thinking about questions that will be asked by members of the CSG constituencies.)
I will leave these to Sam and Xavier.
Alan
Anne
From: Alan Greenberg <alan.greenberg@mcgill.ca >
Sent: Tuesday, November 19, 2019 12:51 PM
To: Aikman-Scalese, Anne <AAikman@lrrc.com>; Erika Mann < erika@erikamann.com>; Becky Burr < becky.burr@board.icann.org>
Cc: ccwg-auctionproceeds@icann.org
Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
[EXTERNAL] ------------------------------
I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself.
I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable).
If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine.
Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration).
Alan
At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote:
Erika, Becky, et al,
Proposed Final Report and Consensus
I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persersons other than appliplicants could file an RFR or an IRP in relation to ICANN’s handling of the grantant-making process.) Thee Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this.
In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discuscussions in relation to aa ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.)
To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds.
I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability toto Sunset†is important in relation to the prinnciple of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds.
Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “dirirectly proposed†by the CCWG iWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4.
Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments.
Choice of Mechanism and Survey
Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows:
(1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranches†.
&>
(2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches†f7; for grant-makimaking purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’â„¢s accountability than do RFR anFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think nk anyone would want the EC powpowers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budgdget†aspectpect of an overall line item for grants wwithin the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t„¢t think the the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.)
(3) To preserve the EC powers as to Budget, it would seem “cleaner†to bsp; placelace the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if
(a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s overversersight responsibilities and fiduciary duties. (Mechanism B)
(b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities.
I appreciate any observations other CCWG members may have that will help bring me up to speed.
Thank you,
Anne
Anne E. Aikman-Scalese
Of Counsel
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AAikman@lrrc.com
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From: Erika Mann <erika@erikamann.com>
Sent: Tuesday, November 19, 2019 7:52 AM
To: Becky Burr < becky.burr@board.icann.org>
Cc: Aikman-Scalese, Anne <AAikman@lrrc.com>; ccwg-auctionproceeds@icann.org
Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
[EXTERNAL] ------------------------------
Becky - Thatâ€Ã¢„„¢s what we agre agreed upon but in the light of Anne’s ¢s points ra raised, we should evaluate whether our judgement will not be contestable.
Erika
Sent from my iPhone
On Nov 19, 2019, at 3:33 PM, Becky Burr < becky.burr@board.icann.org> wrote:
Anne,
I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes.
Please correct me if I am wrong, Sam.
Becky
On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com> wrote:
Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, , the S Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylaws†. IIn this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding?
It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC.
Fundamental ByLaws Changes
It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25).
Mechanism B
In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “tranche†.) ------------------------------
This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.
Thanks Xavier. Perhaps you can clarify the Proposed Final Report reference in relation to 20 staff members from page 9: “At the request of the CCWG, ICANN org did already provide input on the relative costs of staffing associated with mechanisms A and C noting that:…. “The question suggests to describe differences assuming that 20 people would be needed in both mechanisms.” I think the comments go on to say that ICANN org believes that the number of staff needed among the mechanisms is in fact different. Given that personnel cost is often the largest cost associated with mounting an activity of this type, could you be somewhat more specific regarding the personnel cost analysis previously provided to the CCWG? Does the CCWG in fact already have the comparative estimated cost of personnel (staffing up and benefits) in each of the Mechanisms? To the extent that ICANN org may be proposing assigning additional duties to persons already employed by ICANN, are we saying there are people on ICANN staff who, in addition to having grant administration experience, are currently lacking enough work to fill a full time job? Again, many thanks for helping me get up to speed in relation to the upcoming survey and the need to communicate comparisons to the CSG as a Chartering Organization. Thank you, Anne From: Xavier J. Calvez <xavier.calvez@icann.org> Sent: Wednesday, November 20, 2019 12:50 PM To: Alan Greenberg <alan.greenberg@mcgill.ca>; Aikman-Scalese, Anne <AAikman@lrrc.com>; erika@erikamann.com; Becky Burr <becky.burr@board.icann.org> Cc: ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ All, There are references in this email thread about ICANN org hiring and firing 20 people under mechanism A. I am not sure where the idea of ICANN org hiring 20 people come from nor how it was determined. ICANN org has not produced any evaluation of incremental resource requirements driven by any mechanism at this stage. While ICANN org may require to add skillset (insistance on “may”) and is likely to need more resources to address the auction proceeds distribution process, under any mechanism, we have not produced any analysis about it at this stage. Such analysis is dependent on many factors, including the general level of workload of the organization during the expected period of disbursement. Generally, ICANN org, like most organizations, would address temporary work and activities with temporary resources, whichever form such temporary resources would take. In addition, under mechanism C, there is more likelihood that the resources in the foundation be made redundant as the distribution process winds down than in mechanism A. In mechanism A, the level of incremental resources would be less, and the likelihood of redundancy would be less as result, and also because resources not needed anymore could be reallocated within the organization as and if needed. Separately, regarding the point of risks and control: - Under Mechanism B and C, there are risk and costs associated with the complexity of operating a mechanism that involves one or several parties in addition to ICANN. Sam and I made these points several times over the past CCWG AP meetings. I am happy to elaborate further but the illustration used of the discussion of PTI is very helpful as the actual IANA functions are exactly the same before than after the creation of PTI, but the subcontracting of most of the IANA functions to PTI has created complexities that create risks that require more resources, associated with the governance around the IANA functions. - As a reminder to inform your discussions on mechanisms A,B and C, I am attaching a presentation provided to this group in June 2017, notably the slide #7, which describes that ICANN’s obligations to ensure the funds are adequately used are the same, irrespective of the number intermediate parties inserted between ICANN and the end user in the process. There is not less obligations for ICANN to ensure funds are adequately used in mechanism C but there is more risks and costs to ensure such funds are adequately used. Thank you. Best, Xavier Xavier Calvez SVP & Chief Financial Officer ICANN P: +1 (310) 301-5838 (Direct) | M: +1 (805) 312-0052 E: xavier.calvez@icann.org<mailto:xavier.calvez@icann.org> | www.icann.org<http://www.icann.org/> 12025 Waterfront Drive, Ste 300, Los Angeles, CA 90094 From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Alan Greenberg <alan.greenberg@mcgill.ca<mailto:alan.greenberg@mcgill.ca>> Date: Tuesday, November 19, 2019 at 8:37 PM To: "Aikman-Scalese, Anne" <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>, "erika@erikamann.com<mailto:erika@erikamann.com>" <erika@erikamann.com<mailto:erika@erikamann.com>>, Becky Burr <becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: "ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>" <ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org>> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN At 19/11/2019 07:24 PM, Aikman-Scalese, Anne wrote: Hi Alan. I apologize - the 3/4 vote required to amend Fundamental ByLaws is for 3/4 of the Board of Directors. The approval of the EC is listed in Annex D to the ByLaws and apparently requires approval of three EC Decisional Participants as well as the condition that the ByLaws amendment is “(B) not objected to by more than one Decisional Participant.†Annex D Section 1.4 (b) (i). So if two Decisional Participants object, we are back to “square one†as you say. And that makes the survey very important. If these same decisional participants approve the entire report allowing it to go to the Board, it would be an interesting situation if they then refuse to support or even object to the Bylaw. To clarify, I don’t think anyone is trying to escape Accountability. Everyone agrees that grants shouldn’t be subject to being revoked and that ICANN should minimize the risk of adverse action (disputes) in relation to its management of Auction Proceeds. Everyone also agrees that costs should be managed prudently. You may think that keeping grant-making inside the ICANN organization is equally safe in the above respects for ICANN, its Board of Directors, and all grant recipients. ALAC may want to support Mechanism A if, in fact, it is the lowest initial investment, for that reason alone. To be clear, I am not speaking on behalf of ALAC. In fact, the ALAC appointed members to this CCWG have tended to have differing opinions. However, I don’t think the Proposed Final Report makes it clear which is the lowest cost alternative in the long run. 20 new ICANN employees with benefits would be expensive and I would assume they would have to be compensated from Auction Proceeds monies. It’s likely easier to “Sunset†Mechanism B so you don’t have to fire 20 people. Mechanism C would provide incentives for other organizations and foundations to make additional contributions to an ICANN charitable foundation so there are many trade-offs. I’m sure the CCWG must have discussed these trade-offs over many sessions. I am not sure we ever were aiming at lowest cost. There has always been strong preferences that in some cases were despite the costs. Alan The risk management issue doesn’t seem nearly as obvious to me as it does to you, but many thanks for engaging in the discussion in a way that helps us all clarify the considerations in advance of issuing the Proposed Initial Report and conducting the survey. Anne From: Alan Greenberg <alan.greenberg@mcgill.ca<mailto:alan.greenberg@mcgill.ca>> Sent: Tuesday, November 19, 2019 4:34 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>>; Becky Burr <becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: RE: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ See embedded replies. At 19/11/2019 04:35 PM, Aikman-Scalese, Anne wrote: Thanks Alan. It’s thethe desire to set up a situation which readily achieves the necessary 3/4 EC approval of the ByLaws amendments that causes me to ask these clarifying questions re the exact nature of CCWG Consensus and making that clear in the Proposed Final Report. I'm not sure what you mean by "3/4". If memory serves me, the approval of a Fundamental Bylaw requires the active support of at least 3 of the 5 EC members and rejection by no more than 1 of the 5. In this case, I do not see an obstacle to approval, probably unanimous. Before we can get to that stage, this CCWG will go to the chartering organizations. That is the five EC Members plus the SSAC and RSSAC. I see real problems going forward to the Board if most of the chartering orgs do not approve it, so once it goes to the board for action, most or all of the EC members will have already given their support. If they do not do that, then I see the report coming back to us first, before it even gets to the Board. Regarding the mechanism to be chosen, there is something about the way PTI was set up (as further described by Samantha and as further set out in the ByLaws in Section 16) that looks very “clean†to me in terms of clearlearly identifying recommended ByLaws changes as to the permitted Accountability challenges and those which will become inapplicable. As far as I can see, the only relation between PTI and the accountability measures is that the EC can object to the PTI budget, can object to ICANN trying to divest itself of PTI (in a variety of ways) and how ICANN handles recommendation to PTI reviews. The other EC actions all relate to things in ICANN proper. None of what we are talking about is an attempt to stop the EC from challenging how auction funds are handles on a global basis. The Bylaw change we are discussing is for how applicants can (or rather cannot) challenge. The EC will always have control over the auction process on a global scale because they always have the authority to remove the entire ICANN Board. We cannot (or rather will not) change that. In addition, I note that Accountability Work stream 2 implementation is not complete. So, for example, having worked actively on one of the Subgroups in Accountability Workstream 2, I have to ask how the Chartering Organizations may consider the CCWG recommendations in relation to the risk of challenges once the Work stream 2 Recommendations are finalized and implemented. Would there be, for example, an available challenge re violation of the ByLaws (as amended to implement Workstream 2) based on an alleged Human Rights violation by ICANN in the administration of the Auction Funds? It seems to me that if ICANN employs 20 additional staff as contemplated in Mechanism A, that risk is increased. (20 staff is assumed across all Mechanisms.) I see no impact regardless of mechanism. ICANN will be responsible to ensuring it meets its Bylaws whether the auction work is done by staff, or partially or entirely subcontracted. We cannot avoid obligations just by sub-contracting (otherwise everyone would subcontract everything and avoid all liabilities. I would be inclined to assess the risk as being lower where administration and grants are concentrated in an entity other than ICANN. In the case of Mechanism B, risk reduction would be due to the expert independent contractor relationship, though admittedly ICANN controls the RFP process and would be supplying some of the staff as well as adding the function to its budgeting and audit processes. In the case of Mechanism C, risk reduction would be due to the independent Board of Directors and independent staffing, as it is with PTI. I ALL mechanisms we will use an indep expert group to do the application assessment and decide on awards. PTI may have a Board, and that may alter legal liabilities, but ICANN has control over that Board and its budget and I do not believe the it can be isolated from PTI actions if it allows them to happen. If valid, these observations may bear on the draft Proposed Final Report at page 19, including Marika’™s request for further clarification [MK6] about what is meant by “a healthy degree of independence†and what the CCWG hopes to achieve with that goal generally (and not just in relation to the possible establishment of a foundation.) I would say the goal of a “healthy degree of independence†is is controlling risk of expensive challenges to ICANN and its Board and to the Auction Proceeds per se. In other words, the greater distance ICANN maintains from the grant-making process, while still exercising its fiduciary oversight duties, the lower the risk to ICANN, its Board, and the funds. As I understand it ALL mechanisms will have independence of the grant making process. Period. Challenges will always be possible for potentially all sorts of reasons. The only challenges we can control are those from applicants. Of course risk reduction has to be balanced against costs. In this regard, it would be helpful to have some additional information. For example, how does headcount cost for 20 people to be hired in ICANN compare to the fees for hiring an expert pre-existing non-profit? Can a foundation be set up using ICANN in-house legal staff or must we go to outside counsel? (Here I am thinking about questions that will be asked by members of the CSG constituencies.) I will leave these to Sam and Xavier. Alan Anne From: Alan Greenberg <alan.greenberg@mcgill.ca<mailto:alan.greenberg@mcgill.ca> > Sent: Tuesday, November 19, 2019 12:51 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>>; Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself. I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable). If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine. Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration). Alan At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote: Erika, Becky, et al, Proposed Final Report and Consensus I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persersons other than appliplicants could file an RFR or an IRP in relation to ICANN’s handling of the grantant-making process.) Thee Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this. In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discuscussions in relation to aa ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.) To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability toto Sunset†is important in relation to the prinnciple of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds. Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “dirirectly proposed†by the CCWG iWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4. Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments. Choice of Mechanism and Survey Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows: (1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranchesâ€. &> (2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches†f7; for grant-makimaking purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’â„¢s accountability than do RFR anFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think nk anyone would want the EC powpowers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budgdget†aspectpect of an overall line item for grants wwithin the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t„¢t think the the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.) (3) To preserve the EC powers as to Budget, it would seem “cleaner†to bsp; placelace the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s overversersight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities. I appreciate any observations other CCWG members may have that will help bring me up to speed. Thank you, Anne Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [[]] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com]<https://urldefense.proofpoint.com/v2/url?u=http-3A__lrrc.com_&d=DwMF-g&c=FmY...> [[]] Because what matters to you, matters to us.™< From: Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Becky - Thatâ€Ã¢„„¢s what we agre agreed upon but in the light of Anne’s ¢s points ra raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone On Nov 19, 2019, at 3:33 PM, Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> wrote: Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, , the S Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylawsâ€. IIn this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “trancheâ€.) ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. 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You’re absolutely right. We already said we would do this. Erika Sent from my iPhone
On Nov 19, 2019, at 8:50 PM, Alan Greenberg <alan.greenberg@mcgill.ca> wrote:
I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself.
I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable).
If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine.
Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration).
Alan
At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote:
Erika, Becky, et al,
Proposed Final Report and Consensus
I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persons other than applicants could file an RFR or an IRP in relation to ICANN’s handling of the grant-making process.) The Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this.
In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discussions in relation to a ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.)
To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability to Sunset†is important in relation to the principle of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds.
Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “directly proposed†by the CCWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4.
Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments.
Choice of Mechanism and Survey
Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows:
(1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranchesâ€.
(2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches†for grant-making purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’s accountability than do RFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think anyone would want the EC powers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budget†aspect of an overall line item for grants within the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t think the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.)
(3) To preserve the EC powers as to Budget, it would seem “cleaner†to place the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s oversight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities.
I appreciate any observations other CCWG members may have that will help bring me up to speed.
Thank you, Anne
Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com _____________________________
Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com
Because what matters to you, matters to us.™
From: Erika Mann <erika@erikamann.com> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr <becky.burr@board.icann.org> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com>; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
[EXTERNAL] Becky - That’s what we agreed upon but in the light of Anne’s points raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone
On Nov 19, 2019, at 3:33 PM, Becky Burr < becky.burr@board.icann.org> wrote: Anne,
I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes.
Please correct me if I am wrong, Sam.
Becky
On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylawsâ€. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding?
It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC.
Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25).
Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “trancheâ€.)
Mechanism C Re Mechanism C, when PTI was formed, the structure chosen was ICANN as sole member of a California non-profit public benefit corporation (Article 16.2). I believe actions by the PTI Board of Directors remain subject to Empowered Community accountability processes, but not to RFR and IRP, but am not sure. Can you confirm? If this is the case, could another California non-profit public benefit corporation be set up in the same manner for purposes of grant-making pursuant to Mechanism C? (I am also wondering if outside legal resources were used to set up PTI or if this was done in-house.) In other words, could another CA non-profit formed pursuant to Mechanism C be exempted from RFR and IRP, but NOT be exempted from other EC accountability mechanisms, in the same manner as the PTI formation was handled?
Many thanks for your patience with respect to questions which may already have been addressed in prior deliberations of the CCWG.
Anne
. .
From: Samantha Eisner < Samantha.Eisner@icann.org> Sent: Monday, November 18, 2019 1:13 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com>; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
[EXTERNAL] One other note - to your final question of "Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?​"
From the legal perspective, we considered the interplay of the Bylaws/accountability processes with the different mechanisms and our conclusion is that, absent a Bylaws change to exclude individual grant actions from the IRP/Reconsideration processes, there still remains a risk of the use of ICANN accountability processes whether the grant disbursements are completed through Mechanisms A, B or C. With that, the need to address the scope of the accountability mechanisms through Bylaws changes exists across all three mechanisms.
____
Samantha Eisner
Deputy General Counsel, ICANN
12025 Waterfront Drive, Suite 300
Los Angeles, California 90094
USA
Direct Dial: +1 310 578 8631 From: Samantha Eisner Sent: Monday, November 18, 2019 11:07 AM To: Aikman-Scalese, Anne; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making​", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted?
____
Samantha Eisner
Deputy General Counsel, ICANN
12025 Waterfront Drive, Suite 300
Los Angeles, California 90094
USA
Direct Dial: +1 310 578 8631 From: Ccwg-auctionproceeds < ccwg-auctionproceeds-bounces@icann.org> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com> Sent: Friday, November 15, 2019 4:41 PM To: ccwg-auctionproceeds@icann.org Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
<image001.gif> On the topics of “Accountability†and “Best Practicesâ€, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A – Management and support of ICANN’s accountabiliity mechanisms triggered by the grant distribution activity (if any.)â€
In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG – doing my best to catch up. < If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report.
Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?
Thank you, Anne
<image002.png> Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com _____________________________ <image003.png> Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com] <image004.jpg> Because what matters to you, matters to us.™
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Hi Alan, Erika, and everyone, Would this proposed edit address the concern you are raising? "The CCWG did agree that appropriate measures must be taken that would exclude the use of applicants from using ICANN accountability measures such as IRP in relation to challenges for individual applications. The reason for this recommendation is that the Board decision in any review context would be in relation to the overall program’s disbursement of funds based on the recommendations of the independent evaluation panel and not as a result of the ICANN’s Board assessment of an individual application. (...) CCWG Recommendation #NEW: Applicants and other parties should not have access to ICANN accountability mechanisms such as IRP or other appeal mechanisms to challenge a decision from the independent evaluation panel to not approve their application, but applicants not selected should receive further details about where information can be found about the next round of applications as well as any educational materials that may be available to assist applicants.” Kind regards, Emily From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Erika Mann <erika@erikamann.com> Date: Wednesday, 20 November 2019 at 07:14 To: Alan Greenberg <alan.greenberg@mcgill.ca> Cc: "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN You’re absolutely right. We already said we would do this. Erika Sent from my iPhone On Nov 19, 2019, at 8:50 PM, Alan Greenberg <alan.greenberg@mcgill.ca<mailto:alan.greenberg@mcgill.ca>> wrote: I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself. I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable). If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine. Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration). Alan At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote: Erika, Becky, et al, Proposed Final Report and Consensus I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persons other than applicants could file an RFR or an IRP in relation to ICANN’s handling of the grant-making process.) The Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this. In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discussions in relation to a ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.) To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability to Sunset†is important in relation to the principle of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds. Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “directly proposed†by the CCWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4. Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments. Choice of Mechanism and Survey Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows: (1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranchesâ€. (2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches†for grant-making purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’s accountability than do RFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think anyone would want the EC powers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budget†aspect of an overall line item for grants within the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t think the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.) (3) To preserve the EC powers as to Budget, it would seem “cleaner†to place the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s oversight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities. I appreciate any observations other CCWG members may have that will help bring me up to speed. Thank you, Anne Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [[]] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com]<https://urldefense.proofpoint.com/v2/url?u=http-3A__lrrc.com_&d=DwMFaQ&c=FmY...> [[]] Because what matters to you, matters to us.™ From: Erika Mann <erika@erikamann.com<mailto:erika@erikamann.com>> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr <becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Becky - That’s what we agreed upon but in the light of Anne’s points raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone On Nov 19, 2019, at 3:33 PM, Becky Burr < becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> wrote: Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylawsâ€. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “trancheâ€.) Mechanism C Re Mechanism C, when PTI was formed, the structure chosen was ICANN as sole member of a California non-profit public benefit corporation (Article 16.2). I believe actions by the PTI Board of Directors remain subject to Empowered Community accountability processes, but not to RFR and IRP, but am not sure. Can you confirm? If this is the case, could another California non-profit public benefit corporation be set up in the same manner for purposes of grant-making pursuant to Mechanism C? (I am also wondering if outside legal resources were used to set up PTI or if this was done in-house.) In other words, could another CA non-profit formed pursuant to Mechanism C be exempted from RFR and IRP, but NOT be exempted from other EC accountability mechanisms, in the same manner as the PTI formation was handled? Many thanks for your patience with respect to questions which may already have been addressed in prior deliberations of the CCWG. Anne . . From: Samantha Eisner < Samantha.Eisner@icann.org<mailto:Samantha.Eisner@icann.org>> Sent: Monday, November 18, 2019 1:13 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ One other note - to your final question of "Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?​" From the legal perspective, we considered the interplay of the Bylaws/accountability processes with the different mechanisms and our conclusion is that, absent a Bylaws change to exclude individual grant actions from the IRP/Reconsideration processes, there still remains a risk of the use of ICANN accountability processes whether the grant disbursements are completed through Mechanisms A, B or C. With that, the need to address the scope of the accountability mechanisms through Bylaws changes exists across all three mechanisms. ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Samantha Eisner Sent: Monday, November 18, 2019 11:07 AM To: Aikman-Scalese, Anne; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making​", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted? ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Ccwg-auctionproceeds < ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> Sent: Friday, November 15, 2019 4:41 PM To: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN <image001.gif> On the topics of “Accountability†and “Best Practicesâ€, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A – Management and support of ICANN’s accountabiliity mechanisms triggered by the grant distribution activity (if any.)†In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG – doing my best to catch up. < If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report. Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions? Thank you, Anne <image002.png> Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ <image003.png> Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com]<https://urldefense.proofpoint.com/v2/url?u=http-3A__lrrc.com_&d=DwMF-g&c=FmY...> <image004.jpg> Because what matters to you, matters to us.™ ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. 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Dear Emily - I prefer a positive formulation instead a negative one. Let me come back to you all with a positive formulation in the afternoon or in the evening. I’m in meetings today until 9PM CET. We should check as well that we’ve replaced the term ‘review’ with ‘evaluation’ (pane(s)) to avoid any potential misunderstandings. Kind regards, Erika Sent from my iPhone
On Nov 20, 2019, at 9:22 AM, Emily Barabas <emily.barabas@icann.org> wrote:
Hi Alan, Erika, and everyone,
Would this proposed edit address the concern you are raising?
"The CCWG did agree that appropriate measures must be taken that would exclude the use of applicants from using ICANN accountability measures such as IRP in relation to challenges for individual applications. The reason for this recommendation is that the Board decision in any review context would be in relation to the overall program’s disbursement of funds based on the recommendations of the independent evaluation panel and not as a result of the ICANN’s Board assessment of an individual application. (...)
CCWG Recommendation #NEW: Applicants and other parties should not have access to ICANN accountability mechanisms such as IRP or other appeal mechanisms to challenge a decision from the independent evaluation panel to not approve their application, but applicants not selected should receive further details about where information can be found about the next round of applications as well as any educational materials that may be available to assist applicants.”
Kind regards, Emily
From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Erika Mann <erika@erikamann.com> Date: Wednesday, 20 November 2019 at 07:14 To: Alan Greenberg <alan.greenberg@mcgill.ca> Cc: "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
You’re absolutely right. We already said we would do this.
Erika
Sent from my iPhone
On Nov 19, 2019, at 8:50 PM, Alan Greenberg <alan.greenberg@mcgill.ca> wrote:
I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself.
I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable).
If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine.
Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration).
Alan
At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote:
Erika, Becky, et al,
Proposed Final Report and Consensus
I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persons other than applicants could file an RFR or an IRP in relation to ICANN’s handling of the grant-making process.) The Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this.
In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discussions in relation to a ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.)
To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability to Sunset†is important in relation to the principle of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds.
Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “directly proposed†by the CCWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4.
Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments.
Choice of Mechanism and Survey
Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows:
(1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranchesâ€.
(2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches†for grant-making purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’s accountability than do RFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think anyone would want the EC powers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budget†aspect of an overall line item for grants within the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t think the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.)
(3) To preserve the EC powers as to Budget, it would seem “cleaner†to place the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s oversight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities.
I appreciate any observations other CCWG members may have that will help bring me up to speed.
Thank you, Anne
Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com _____________________________
Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com]
Because what matters to you, matters to us.™
From: Erika Mann <erika@erikamann.com> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr <becky.burr@board.icann.org> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com>; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
[EXTERNAL] Becky - That’s what we agreed upon but in the light of Anne’s points raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone
On Nov 19, 2019, at 3:33 PM, Becky Burr < becky.burr@board.icann.org> wrote: Anne,
I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes.
Please correct me if I am wrong, Sam.
Becky
On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylawsâ€. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding?
It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC.
Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25).
Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “trancheâ€.)
Mechanism C Re Mechanism C, when PTI was formed, the structure chosen was ICANN as sole member of a California non-profit public benefit corporation (Article 16.2). I believe actions by the PTI Board of Directors remain subject to Empowered Community accountability processes, but not to RFR and IRP, but am not sure. Can you confirm? If this is the case, could another California non-profit public benefit corporation be set up in the same manner for purposes of grant-making pursuant to Mechanism C? (I am also wondering if outside legal resources were used to set up PTI or if this was done in-house.) In other words, could another CA non-profit formed pursuant to Mechanism C be exempted from RFR and IRP, but NOT be exempted from other EC accountability mechanisms, in the same manner as the PTI formation was handled?
Many thanks for your patience with respect to questions which may already have been addressed in prior deliberations of the CCWG.
Anne
. .
From: Samantha Eisner < Samantha.Eisner@icann.org> Sent: Monday, November 18, 2019 1:13 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com>; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
[EXTERNAL] One other note - to your final question of "Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?​"
From the legal perspective, we considered the interplay of the Bylaws/accountability processes with the different mechanisms and our conclusion is that, absent a Bylaws change to exclude individual grant actions from the IRP/Reconsideration processes, there still remains a risk of the use of ICANN accountability processes whether the grant disbursements are completed through Mechanisms A, B or C. With that, the need to address the scope of the accountability mechanisms through Bylaws changes exists across all three mechanisms.
____
Samantha Eisner
Deputy General Counsel, ICANN
12025 Waterfront Drive, Suite 300
Los Angeles, California 90094
USA
Direct Dial: +1 310 578 8631 From: Samantha Eisner Sent: Monday, November 18, 2019 11:07 AM To: Aikman-Scalese, Anne; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making​", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted?
____
Samantha Eisner
Deputy General Counsel, ICANN
12025 Waterfront Drive, Suite 300
Los Angeles, California 90094
USA
Direct Dial: +1 310 578 8631 From: Ccwg-auctionproceeds < ccwg-auctionproceeds-bounces@icann.org> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com> Sent: Friday, November 15, 2019 4:41 PM To: ccwg-auctionproceeds@icann.org Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
<image001.gif> On the topics of “Accountability†and “Best Practicesâ€, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A – Management and support of ICANN’s accountabiliity mechanisms triggered by the grant distribution activity (if any.)â€
In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG – doing my best to catch up. < If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report.
Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?
Thank you, Anne
<image002.png> Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com _____________________________ <image003.png> Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com] <image004.jpg> Because what matters to you, matters to us.™
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This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. _______________________________________________ Ccwg-auctionproceeds mailing list Ccwg-auctionproceeds@icann.org https://mm.icann.org/mailman/listinfo/ccwg-auctionproceeds _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy ( https://www.icann.org/privacy/policy [icann.org]) and the website Terms of Service ( https://www.icann.org/privacy/tos [icann.org]). You can visit the Mailman link above to change your membership status or configuration, including unsubscribing, setting digest-style delivery or disabling delivery altogether (e.g., for a vacation), and so on.
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This addresses the concern. But I have a secondary question. Is it necessary to say "The reason for this..."? Maybe start the next sentence with "The Board decision in any review...". Sam Lanfranco On 11/20/2019 3:22 AM, Emily Barabas wrote:
Hi Alan, Erika, and everyone,
Would this proposed edit address the concern you are raising?
"The CCWG did agree that appropriate measures must be taken that would exclude *the use of* applicants from using ICANN accountability measures such as IRP in relation to challenges for individual applications. The reason for this recommendation is that the Board decision in any review context would be in relation to the overall program’s disbursement of funds based on the recommendations of the independent evaluation panel and not as a result of the ICANN’s Board assessment of an individual application.
(...)
CCWG Recommendation #NEW: Applicants *and other parties* should not have access to ICANN accountability mechanisms such as IRP *or other appeal mechanisms* to challenge a decision from the independent evaluation panel to not approve their application, but applicants not selected should receive further details about where information can be found about the next round of applications as well as any educational materials that may be available to assist applicants.”
Kind regards,
Emily
*From: *Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Erika Mann <erika@erikamann.com> *Date: *Wednesday, 20 November 2019 at 07:14 *To: *Alan Greenberg <alan.greenberg@mcgill.ca> *Cc: *"ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> *Subject: *Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
You’re absolutely right. We already said we would do this.
Erika
Sent from my iPhone
On Nov 19, 2019, at 8:50 PM, Alan Greenberg <alan.greenberg@mcgill.ca <mailto:alan.greenberg@mcgill.ca>> wrote:
I agree that we should make a simple statement that ICANN's accountability measures cannot be used in relation to Auction Proceeds grant requests (regardless of who might file them). This has nothing to do with the approval of annual budgets. If the EC decides that the tranch allocated in the budget is not appropriate, it can still take action under its powers. We are proposing nothing related to the powers of the EC itself.
I presume the Board will ultimately approve whatever it approves contingent on the Fundamental Bylaw change being approved by the EC. If the EC does not approve it, we are back to square one (or somewhere, but do not have an Auction Proceeds plan that is workable).
If there are auction proceeds from further rounds, AND the ICANN Board decides they go into te same post as we have now, fine. If there are no auction proceeds or if they are designated for something else. fine.
Regarding Bylaws 25.4, note that the lead-in words are "for avoidance of doubt". The earlier section of 25 explicitly call out the process which is led by the Board. We have already approved a fundamental Bylaw change and the process is understood (I speak as a former member of the EC Administration).
Alan
At 19/11/2019 01:31 PM, Aikman-Scalese, Anne wrote:
Erika, Becky, et al,
*Proposed Final Report and Consensus * I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to _applicants_ vis-à -vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persons other than applicants could file an RFR or an IRP in relation to ICANN’s handling of the grant-making process.) The Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this.
In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discussions in relation to a ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.)
To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability to Sunset†is important in relation to the principle of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds.
Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “directly proposed†by the CCWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4.
Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments. * Choice of Mechanism and Survey * Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows:
(1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranchesâ€.
(2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches†for grant-making purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’s accountability than do RFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think anyone would want the EC powers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budget†aspect of an overall line item for grants within the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t think the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.)
(3) To preserve the EC powers as to Budget, it would seem “cleaner†to place the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s oversight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities.
I appreciate any observations other CCWG members may have that will help bring me up to speed.
Thank you, Anne
*Anne E. Aikman-Scalese** *Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com <mailto:AAikman@lrrc.com> _____________________________ [] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com] <https://urldefense.proofpoint.com/v2/url?u=http-3A__lrrc.com_&d=DwMFaQ&c=FmY...> [] Because what matters to you, matters to us.™
*From:* Erika Mann <erika@erikamann.com <mailto:erika@erikamann.com>> *Sent:* Tuesday, November 19, 2019 7:52 AM *To:* Becky Burr <becky.burr@board.icann.org <mailto:becky.burr@board.icann.org>> *Cc:* Aikman-Scalese, Anne <AAikman@lrrc.com <mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org <mailto:ccwg-auctionproceeds@icann.org> *Subject:* Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
*[EXTERNAL]*
* ------------------------------------------------------------------------ *
Becky - That’s what we agreed upon but in the light of Anne’s points raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone
On Nov 19, 2019, at 3:33 PM, Becky Burr <becky.burr@board.icann.org <mailto:becky.burr@board.icann.org>> wrote:
Anne,
I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes.
Please correct me if I am wrong, Sam.
Becky
On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com <mailto:AAikman@lrrc.com>> wrote:
Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylawsâ€. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding?
It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC.
Fundamental ByLaws Changes
It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25).
Mechanism B
In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “trancheâ€.)
Mechanism C
Re Mechanism C, when PTI was formed, the structure chosen was ICANN as sole member of a California non-profit public benefit corporation (Article 16.2). I believe actions by the PTI Board of Directors remain subject to Empowered Community accountability processes, but not to RFR and IRP, but am not sure. Can you confirm? If this is the case, could another California non-profit public benefit corporation be set up in the same manner for purposes of grant-making pursuant to Mechanism C? (I am also wondering if outside legal resources were used to set up PTI or if this was done in-house.) In other words, could another CA non-profit formed pursuant to Mechanism C be exempted from RFR and IRP, but NOT be exempted from other EC accountability mechanisms, in the same manner as the PTI formation was handled?
Many thanks for your patience with respect to questions which may already have been addressed in prior deliberations of the CCWG.
Anne
.
.
From: Samantha Eisner <Samantha.Eisner@icann.org <mailto:Samantha.Eisner@icann.org>>
Sent: Monday, November 18, 2019 1:13 PM
To: Aikman-Scalese, Anne <AAikman@lrrc.com <mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org <mailto:ccwg-auctionproceeds@icann.org>
Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
[EXTERNAL]
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One other note - to your final question of "Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?​"
From the legal perspective, we considered the interplay of the Bylaws/accountability processes with the different mechanisms and our conclusion is that, absent a Bylaws change to exclude individual grant actions from the IRP/Reconsideration processes, there still remains a risk of the use of ICANN accountability processes whether the grant disbursements are completed through Mechanisms A, B or C. With that, the need to address the scope of the accountability mechanisms through Bylaws changes exists across all three mechanisms.
____
Samantha Eisner
Deputy General Counsel, ICANN
12025 Waterfront Drive, Suite 300
Los Angeles, California 90094
USA
Direct Dial: +1 310 578 8631
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From: Samantha Eisner
Sent: Monday, November 18, 2019 11:07 AM
To: Aikman-Scalese, Anne; ccwg-auctionproceeds@icann.org <mailto:ccwg-auctionproceeds@icann.org>
Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making​", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted?
____
Samantha Eisner
Deputy General Counsel, ICANN
12025 Waterfront Drive, Suite 300
Los Angeles, California 90094
USA
Direct Dial: +1 310 578 8631
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From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org <mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com <mailto:AAikman@lrrc.com>>
Sent: Friday, November 15, 2019 4:41 PM
To: ccwg-auctionproceeds@icann.org <mailto:ccwg-auctionproceeds@icann.org>
Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN
<image001.gif>
On the topics of “Accountability†and “Best Practicesâ€, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A – Management and support of ICANN’s accountabiliitymechanisms triggered by the grant distribution activity (if any.)â€
In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG – doing my best to catch up.
<
If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report.
Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?
Thank you,
Anne
<image002.png>
Anne E. Aikman-Scalese
Of Counsel
520.629.4428 office
520.879.4725 fax
AAikman@lrrc.com <mailto:AAikman@lrrc.com>
_____________________________
<image003.png>
Lewis Roca Rothgerber Christie LLP
One South Church Avenue, Suite 2000
Tucson, Arizona 85701-1611
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-- ------------------------------------------------ "It is a disgrace to be rich and honored in an unjust state" -Confucius 邦有道，贫且贱焉，耻也。邦无道，富且贵焉，耻也 ------------------------------------------------ Dr Sam Lanfranco (Prof Emeritus), Econ, York U., CANADA email: sam@lanfranco.net Skype: slanfranco blog: https://samlanfranco.blogspot.com Phone: +1 613-476-0429 cell: +1 416-816-2852
To Anne's Question: Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “directly proposed” by the CCWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4. If the CCWG recommends that an exception be made in the Bylaws, the Board will initiate the Fundamental Bylaws process through authorizing the posting of proposed language for public comment. If there's an IRT established to assist in implementation, org would expect to share the draft of any proposed language with that IRT prior to public posting. On the EC budgetary powers, org is not making any recommendation as to a carve out or not. That is a community decision. But if a carve out is a path that the CCWG wishes to take, we do not think that any mechanism will lead to individual grant applications being listed within a future-year's budget or planning document. Because of that, we do not see much difference in how a budget rejection would be activated for any of the mechanisms. ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com> Sent: Tuesday, November 19, 2019 10:31 AM To: erika@erikamann.com; Becky Burr Cc: ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Erika, Becky, et al, Proposed Final Report and Consensus I believe there was CCWG consensus regarding the need for a Fundamental ByLaws change as to the unavailability of Request for Reconsideration (RFR) and Independent Review Panel (IRP) in relation to applicants vis-à-vis the grant-making process. Here, the CCWG makes a NEW recommendation on page 23 of the Proposed Final report in relation to remedies available to applicants for grants. This recommendation does not cover the possibility of RFR and IRP that might be filed by someone other than an applicant and I believe that risk must be controlled as well. (It’s possible persons other than applicants could file an RFR or an IRP in relation to ICANN’s handling of the grant-making process.) The Proposed Final Report should likely also reflect that this requires a Fundamental ByLaws change requiring approval by 3/4 of the EC because public commenters need to know this. In the limited tracking I have done prior to becoming the voting rep for the CSG Chartering organization, I don’t recall any specific discussions in relation to a ByLaws amendment relative to the powers of the Empowered Community established in the revisions to the ByLaws made in 2016 as a result of the Accountability Workstream 1 work. Did the CCWG discuss these specific Empowered Community powers in relation to the Budget relative to use of Auction Proceeds? Should the CCWG clarify that we are not recommending ByLaws changes in relation to EC powers? And if we do, does that make individual grants subject to EC powers (a result the CCWG does not want.) To be specific, it does not appear to me from the Proposed Final Report that there has ever been a CCWG Consensus Recommendation in relation to (a) availability of RFR and IRP to persons other than applicants for grants or (b) any effect on the EC powers memorialized in 2016 in relation to the use of Auction Proceeds funds. I sincerely hope we can clarify that the CCWG is not recommending that the Empowered Community give up the Accountability processes contained in the ByLaws in relation to Budgeting of funds obtained via Auction Proceeds. In my view as an active member of Subsequent Procedures, this is a long term concern since the Sub Pro WG is quite likely to confirm that auctions will remain the mechanism of last resort in string contention far into the future. While I understand that “ability to Sunset” is important in relation to the principle of not trying to establish a long term principal endowment, it does seem appropriate to consider that future new gTLD rounds were always intended and are likely to proceed at some point. Thus, future auctions are likely to result in additional auction proceeds. Again, in order to be crystal clear on page 23 of the Proposed Final Report, it would also be helpful if Samantha could clarify how specific ByLaws amendments can be proposed based on the CCWG recommendations. The ByLaws seem to provide in Article 25 that this cannot be “directly proposed” by the CCWG itself so I assume that what the CCWG recommends would need to then lead to a formulation by the Board of a specific ByLaws amendment. See attached section 25.4. Accordingly, in relation to the Proposed Final Report, I believe that the Recommendation (NEW) on page 23 should be reworked to clarify the CCWG Recommendations in relation to the needed ByLaws amendments. Choice of Mechanism and Survey Separately, in regard to the description of risk management I will need to provide to the CSG, I am trying to clarify whether it would be advisable (for the Board, ICANN org, the Community, and the grant recipients themselves) to structure as follows: (1) Fundamental ByLaws change to remove RFR and IRP from (a) remedies for applicants for the funds (b) remedies for anyone else who may have standing to file against ICANN decisions about Budgeting re use of funds inside the org and (b) ICANN decisions about how much to allot to grant-making in “tranches”. (2) Preserve EC Powers as they stand in the ByLaws in relation to general Budgeting for both (a) the ICANN org use of the Auction Proceeds funds and (b) ICANN org budgeting of “tranches” for grant-making purposes. EC powers as to the Budget process have a much higher threshold for challenging ICANN’s accountability than do RFR and IRP. A challenge is not easily mounted and a forum must be convened, etc, etc. But I don’t think anyone would want the EC powers to apply to any individual grant. So it seems we need to choose a structure that keeps the “Budget” aspect of an overall line item for grants within the EC Accountablity provisions but puts the individual grant-making outside the EC Accountablity powers. (Perhaps I am wrong that individual grant-making could be subject to EC general powers if Mechanism A is utilized and if so, please advise. I just don’t think the CCWG actually has a Consensus on recommending a ByLaws change in relation to the EC accountability powers.) (3) To preserve the EC powers as to Budget, it would seem “cleaner” to place the actual individual grant-making processes outside ICANN org and have the CCWG recommend and the EC acknowledge that specific individual grants are not subject to the EC Budgeting powers if (a) they are made by a pre-existing non-profit with expertise in grant-making working under the guidelines provided by the work of the CCWG and in accordance with the Board’s oversight responsibilities and fiduciary duties. (Mechanism B) (b) or they are made by an ICANN Foundation formed with an independent Board of Directors similar to the manner in which PTI was formed with ICANN as the sole member of the corporation and thus well able to conduct oversight and fiduciary responsibilities. I appreciate any observations other CCWG members may have that will help bring me up to speed. Thank you, Anne Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [cid:image001.png@01D59ECC.D58DE1A0] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com]<https://urldefense.proofpoint.com/v2/url?u=http-3A__lrrc.com_&d=DwMGaQ&c=FmY...> [cid:image002.jpg@01D59ECC.D58DE1A0] Because what matters to you, matters to us.™ From: Erika Mann <erika@erikamann.com> Sent: Tuesday, November 19, 2019 7:52 AM To: Becky Burr <becky.burr@board.icann.org> Cc: Aikman-Scalese, Anne <AAikman@lrrc.com>; ccwg-auctionproceeds@icann.org Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ Becky - That’s what we agreed upon but in the light of Anne’s points raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone On Nov 19, 2019, at 3:33 PM, Becky Burr <becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> wrote: Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylaws”. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “tranche”.) Mechanism C Re Mechanism C, when PTI was formed, the structure chosen was ICANN as sole member of a California non-profit public benefit corporation (Article 16.2). I believe actions by the PTI Board of Directors remain subject to Empowered Community accountability processes, but not to RFR and IRP, but am not sure. Can you confirm? If this is the case, could another California non-profit public benefit corporation be set up in the same manner for purposes of grant-making pursuant to Mechanism C? (I am also wondering if outside legal resources were used to set up PTI or if this was done in-house.) In other words, could another CA non-profit formed pursuant to Mechanism C be exempted from RFR and IRP, but NOT be exempted from other EC accountability mechanisms, in the same manner as the PTI formation was handled? Many thanks for your patience with respect to questions which may already have been addressed in prior deliberations of the CCWG. Anne . . From: Samantha Eisner <Samantha.Eisner@icann.org<mailto:Samantha.Eisner@icann.org>> Sent: Monday, November 18, 2019 1:13 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ One other note - to your final question of "Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?" From the legal perspective, we considered the interplay of the Bylaws/accountability processes with the different mechanisms and our conclusion is that, absent a Bylaws change to exclude individual grant actions from the IRP/Reconsideration processes, there still remains a risk of the use of ICANN accountability processes whether the grant disbursements are completed through Mechanisms A, B or C. With that, the need to address the scope of the accountability mechanisms through Bylaws changes exists across all three mechanisms. ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Samantha Eisner Sent: Monday, November 18, 2019 11:07 AM To: Aikman-Scalese, Anne; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted? ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> Sent: Friday, November 15, 2019 4:41 PM To: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN <image001.gif> On the topics of “Accountability” and “Best Practices”, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A – Management and support of ICANN’s accountability mechanisms triggered by the grant distribution activity (if any.)” In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG – doing my best to catch up. If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report. Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions? Thank you, Anne <image002.png> Anne E. 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Ok, I understand the EC issue J. Beckwith Burr HARRIS, WILTSHIRE & GRANNIS LLP 1919 M Street NW, The Eighth Floor Washington, DC 20036 +1.202.730.1316 (o) +1.202.352.6367 (m) From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org> on behalf of Erika Mann <erika@erikamann.com> Date: Tuesday, November 19, 2019 at 9:52 AM To: Becky Burr <becky.burr@board.icann.org> Cc: "ccwg-auctionproceeds@icann.org" <ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Becky - That’s what we agreed upon but in the light of Anne’s points raised, we should evaluate whether our judgement will not be contestable. Erika Sent from my iPhone On Nov 19, 2019, at 3:33 PM, Becky Burr <becky.burr@board.icann.org<mailto:becky.burr@board.icann.org>> wrote: Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylaws”. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “tranche”.) Mechanism C Re Mechanism C, when PTI was formed, the structure chosen was ICANN as sole member of a California non-profit public benefit corporation (Article 16.2). I believe actions by the PTI Board of Directors remain subject to Empowered Community accountability processes, but not to RFR and IRP, but am not sure. Can you confirm? If this is the case, could another California non-profit public benefit corporation be set up in the same manner for purposes of grant-making pursuant to Mechanism C? (I am also wondering if outside legal resources were used to set up PTI or if this was done in-house.) In other words, could another CA non-profit formed pursuant to Mechanism C be exempted from RFR and IRP, but NOT be exempted from other EC accountability mechanisms, in the same manner as the PTI formation was handled? Many thanks for your patience with respect to questions which may already have been addressed in prior deliberations of the CCWG. Anne . . From: Samantha Eisner <Samantha.Eisner@icann.org<mailto:Samantha.Eisner@icann.org>> Sent: Monday, November 18, 2019 1:13 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ One other note - to your final question of "Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?" From the legal perspective, we considered the interplay of the Bylaws/accountability processes with the different mechanisms and our conclusion is that, absent a Bylaws change to exclude individual grant actions from the IRP/Reconsideration processes, there still remains a risk of the use of ICANN accountability processes whether the grant disbursements are completed through Mechanisms A, B or C. With that, the need to address the scope of the accountability mechanisms through Bylaws changes exists across all three mechanisms. ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Samantha Eisner Sent: Monday, November 18, 2019 11:07 AM To: Aikman-Scalese, Anne; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted? ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> Sent: Friday, November 15, 2019 4:41 PM To: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN <image001.gif> On the topics of “Accountability” and “Best Practices”, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A – Management and support of ICANN’s accountability mechanisms triggered by the grant distribution activity (if any.)” In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG – doing my best to catch up. If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report. Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions? Thank you, Anne <image002.png> Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman@lrrc.com<mailto:AAikman@lrrc.com> _____________________________ <image003.png> Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 2000 Tucson, Arizona 85701-1611 lrrc.com [lrrc.com]<https://urldefense.proofpoint.com/v2/url?u=http-3A__lrrc.com_&d=DwMF-g&c=FmY...> <image004.jpg> Because what matters to you, matters to us.™ ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. _______________________________________________ Ccwg-auctionproceeds mailing list Ccwg-auctionproceeds@icann.org<mailto:Ccwg-auctionproceeds@icann.org> https://mm.icann.org/mailman/listinfo/ccwg-auctionproceeds _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy) and the website Terms of Service (https://www.icann.org/privacy/tos). 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Thanks Becky. I agree with your summation and concur that the decisional participants each have sufficient processes (though some are still being refined) to address fundamental Bylaws amendment processes. Anne, to your other questions: 1. PTI is not subject to EC power by virtue of being an affiliate of ICANN. The EC's power is within ICANN. Of course, the ICANN Bylaws allow the EC to address issues that relate to PTI, but that is because the powers are granted through the ICANN Bylaws and not solely by virtue of PTI's relationship with ICANN. For example, the EC has the ability to reject the IANA Budget, which is an ICANN-developed budget. PTI separately has the PTI budget (that is subsumed in the IANA Budget) but the EC does not have specific rejection rights over the PTI budget/the PTI Bylaws-specified process for approval of that budget. The EC also has specific powers regarding how the ICANN Board considers recommendations from the IANA Naming Function Review, but those powers are applicable against ICANN as the IANA Functions Operator and the holder of the contract with PTI, and not against PTI. If there was a separate foundation created, the EC would similarly only have powers as it relates to ICANN, and not over the separate foundation. As this is likely to be implemented, across all potential mechanisms (A, B, C), what would appear in ICANN's budget and planning documents would be a more high-level annual amount attributed to the program. Under each of these mechanisms, there would be an amount allocated for the annual tranche, as well as an amount for ICANN's administration of the mechanism. This administration amount will vary based on the level of involvement ICANN has in the mechanism. It is this annual amount that could be placed at issue in the EC's budget/plan rejection power. I do not anticipate that under any mechanism the ICANN Budget would contain detail on a grant-by-grant basis sufficient to allow the EC to challenge individual grants through the budget rejection process. To date, we have not had conversations amongst the CCWG as to how the CCWG recommends the EC powers to be exercised. If ICANN implements the AP program as recommended, does the CCWG have any recommendations as to the EC's ability to challenge the funding of the AP distribution on an annual basis? ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Becky Burr <becky.burr@board.icann.org> Sent: Tuesday, November 19, 2019 6:33 AM To: Aikman-Scalese, Anne Cc: Samantha Eisner; ccwg-auctionproceeds@icann.org Subject: [Ext] Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Anne, I think Sam is saying that Mechanisms A, B, and C would ALL require a fundamental bylaws change to eliminate the availability of IRP and Reconsideration with respect to individual grant awards. I think we had strong consensus that decisions on individual grants should not be appealable using Reconsideration and IRP, and that a bylaws change should be pursued. Inasmuch as the EC agreed to a fundamental bylaws change in Montreal, it seems all members have established the necessary processes. Please correct me if I am wrong, Sam. Becky On Mon, Nov 18, 2019 at 5:20 PM Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> wrote: Thank you Samantha. I want to make sure I understand the implications for Accountability mechanisms and ByLaws amendments when presenting the options to the CSG. As an initial matter, could you please clarify one question as to Article 25.4 OTHER AMENDMENTS. “Neither the EC, the Decisional Participants, the Supporting Organizations, the Advisory Committees nor any other entity or person shall have the power to directly propose amendments to these Bylaws”. In this regard, I gather that the CCWG recommends and then the Board itself will specifically propose a Fundamental ByLaws amendment in relation to Auction Proceeds. Is that your understanding? It seems a bit unlikely that the EC will want to give up its powers in relation to the Budgeting process as regards the use of Auction Proceeds for (a) use for grant-making purposes (regardless of the mechanism chosen) OR (b) internal use by ICANN Org in its own budget. (Perhaps that is why there is a bullet point in Board comment relative to the cost of complying with Accountability mechanisms. However, this cost is identified in that Board comment that now appears on page 10 of the Proposed Final Draft as a cost associated ONLY with Mechanism A. The other mechanisms are listed in the Board input as requiring the further development of independent Accountability mechanisms so that is a bit confusing.) However, overall Budgeting is of course different from the making of individual grants per se. I think we definitely need to protect individual grants from being revoked by the EC. Fundamental ByLaws Changes It appears that eliminating Request for Reconsideration (RFR) and Independent Review Panel (IRP) Accountability mechanisms would be a Fundamental ByLaws change requiring 3/4 approval from the Empowered Community members (some of whom may not have implemented EC processes yet?) Can you confirm this? (Article 25). Mechanism B In Mechanism B, ICANN works with an outside contractor already set up for non-profit grant-making. In that case, it would seem that although overall Budget allocation and tranches may still be subject to Empowered Community processes, individual grants made by the pre-existing expert non-profit would not necessarily be subject to being revoked through an EC process. In other words, working with a qualified expert grant-making organization could reduce risk, including the risk to recipients of grants. (EC processes could theoretically be used to affect or influence the choice of the independent expert non-profit organization and the amount being allocated in any “tranche”.) Mechanism C Re Mechanism C, when PTI was formed, the structure chosen was ICANN as sole member of a California non-profit public benefit corporation (Article 16.2). I believe actions by the PTI Board of Directors remain subject to Empowered Community accountability processes, but not to RFR and IRP, but am not sure. Can you confirm? If this is the case, could another California non-profit public benefit corporation be set up in the same manner for purposes of grant-making pursuant to Mechanism C? (I am also wondering if outside legal resources were used to set up PTI or if this was done in-house.) In other words, could another CA non-profit formed pursuant to Mechanism C be exempted from RFR and IRP, but NOT be exempted from other EC accountability mechanisms, in the same manner as the PTI formation was handled? Many thanks for your patience with respect to questions which may already have been addressed in prior deliberations of the CCWG. Anne . . From: Samantha Eisner <Samantha.Eisner@icann.org<mailto:Samantha.Eisner@icann.org>> Sent: Monday, November 18, 2019 1:13 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [EXTERNAL] ________________________________ One other note - to your final question of "Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions?" From the legal perspective, we considered the interplay of the Bylaws/accountability processes with the different mechanisms and our conclusion is that, absent a Bylaws change to exclude individual grant actions from the IRP/Reconsideration processes, there still remains a risk of the use of ICANN accountability processes whether the grant disbursements are completed through Mechanisms A, B or C. With that, the need to address the scope of the accountability mechanisms through Bylaws changes exists across all three mechanisms. ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Samantha Eisner Sent: Monday, November 18, 2019 11:07 AM To: Aikman-Scalese, Anne; ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: Re: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN Thanks Anne. For clarity as we look internally at the potential Bylaws changes that could be needed, when you are considering the potential for a Bylaws change to confirm that the EC's power "does not apply to such grant-making", are there particular reserved powers that the EC holds to which you are referring? However the mechanism is formed (funding a supporting foundation through tranches or having an internal disbursement mechanism), there might be a need to consider the EC's ability to reject a budget/plan on the basis of ICANN fulfilling the program based on the CCWG's recommendations. Are there other powers that you are also seeing as impacted? ____ Samantha Eisner Deputy General Counsel, ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, California 90094 USA Direct Dial: +1 310 578 8631 ________________________________ From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces@icann.org<mailto:ccwg-auctionproceeds-bounces@icann.org>> on behalf of Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>> Sent: Friday, November 15, 2019 4:41 PM To: ccwg-auctionproceeds@icann.org<mailto:ccwg-auctionproceeds@icann.org> Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN [cid:16e84120ad04cdccc1] On the topics of “Accountability” and “Best Practices”, has anyone looked at whether the grant-making function placed inside an internal department of ICANN would be subject to review under the Empowered Community Accountablity rules? On page 10 of the current draft, there is a bullet point called “On-going costs only in Mechanism A – Management and support of ICANN’s accountability mechanisms triggered by the grant distribution activity (if any.)” In terms of risk assessment, I really can’t see the grant-making process being subject to the Empowered Community accountability procedures. On the other hand, I don’t know that the EC will readily accept amending the ByLaws for purposes of getting the grant-making outside the EC process. This is especially true in that all the Accountability work was done in CCWGs in two lengthy work-streams. I apologize if this was previously discussed by the CCWG – doing my best to catch up. If we think that the ByLaws would need to be amended not only to remove the availability of the Request for Reconsideration (RFR) and the Independent Review Panel (IRP), but also to be amended to state that the power given to the Empowered Community does not apply to such grant-making, then we should say so in the Proposed Final Report. Has legal advice been provided as to whether the formation of an independent foundation might avoid the need to amend the ICANN ByLaws with respect to IRP, RFR, and Empowered Community provisions? Thank you, Anne [cid:16e84120ad05b16b22] Anne E. 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participants (12)
-
Aikman-Scalese, Anne -
Alan Greenberg -
Becky Burr -
Becky Burr -
Emily Barabas -
Erika Mann -
Judith Hellerstein -
Maureen Hilyard -
Sam Lanfranco -
Samantha Eisner -
Vanda Scartezini -
Xavier J. Calvez