Bruce: Attached below is a summary of my current conflict of interest statement as a well as my candidate statement which I had previously circulated to the various constituencies. I have submitted to the ICANN Board Conflicts Committee a much more detailed statement with confidential information. This detailed conflict statement was reviewed by the full ICANN Board Conflicts Committee during the annual meeting in Cape Town and found to be in compliance. In fact, a presentation by Hagen Hultzsch, the Chair of the Conflicts Committee, was given during the annual meeting in Cape Town. Conflict of Interest Statement - Summary I am intellectual property attorney licensed in the states of Pennsylvania and Florida, and I currently work as an information technology consultant. I provide consulting/legal support services to various registration authorities (registrars/registries). I also provide expert testimony in connection with Internet and domain name related matters. I currently sit on the Policy Advisory Board of .US, and I previously served as a WIPO panelist. Because of an ongoing consulting arrangement with Afilias, I have recused myself in connection with the current .NET re-bid process and in connection with certain discussions regarding certain sTLD applications in which Afilias is providing backend registry services. In such situations, I work closely with the Chair of the Conflicts Committee and ICANN's general counsel to ensure that adequate safeguards are in place to ensure the integrity of the Board's decisions. This process is not unique to myself, as the ICANN Board by the nature of its composition has potential conflicts that arise time to time. Also listed below is a Candidate Statement which I prepared and circulated to various constituencies outlining my qualifications and objectives for a second term if re-elected. I look forward to answering any questions that the Council members may have on the call later today. Best regards, Michael D. Palage *** BEGIN CANDIDATE STATEMENT *** Hello All: I have prepared this candidate statement for dissemination to the council and their respective constituencies. Under the terms set forth by the GNSO Council in connection with the election process for ICANN Board seat #14, any potential candidate must seek the nomination of two GNSO Council members. Although I have been approached by several Council representatives inquiring about my intentions/desires to seek re-election, I have requested that these individuals withhold any nominations of my candidacy until I had circulated this statement. Let me begin by stating that it is my intention to seek a second term on the ICANN Board. This is a decision that did not come lightly, but one which involved a lot of consultation with friends and colleagues, but most importantly my family. I hope that I will be afforded the privilege to serve a second term on the ICANN Board as a duly elected representative of the GNSO. What I would like to do in this statement is (I) describe my qualifications as required by ICANN's bylaws; (II) explain how I have represented the interests of all Internet stakeholders during my initial two-year term; and (III) set forth a list of priorities which I would like to achieve during a potential second term. If there are any constituencies that would like to set up a conference call to discuss this statement, I would be willing to do so either individually or in connection with any other candidates which may be nominated. As always should anyone have any questions or comments please do not hesitate to contact me. Best regards, Michael D. Palage I. QUALIFICATIONS Directors shall be: A. Accomplished persons of integrity, objectivity, and intelligence, with reputations for sound judgment and open minds, and a demonstrated capacity for thoughtful group decision-making; I have a very diverse educational and professional background which is founded upon the principles of integrity, objectivity and intelligence. I hold a Bachelors of Science in Electrical Engineering from Drexel University, and a Juris Doctorate from the Temple University School of Law. I am currently admitted to practice law in the states of Florida and Pennsylvania. Prior to serving on the ICANN Board I Co-Chaired ICANN's Working Group B and served as the Chair of the ICANN Registrar Constituency. Both of these positions required me to balance diverse business and philosophical interests in decision-making processes. B. Persons with an understanding of ICANN's mission and the potential impact of ICANN decisions on the global Internet community, and committed to the success of ICANN; I have been involved in ICANN since nearly its inception. I attended my first ICANN event in January of 1999 in Washington while the various stakeholders debated the structure of the then Domain Name Supporting Organization (DNSO). Later that Spring my company InfoNetworks was selected as one of the first 32 ICANN accredited registrars. In March of that year in Berlin, Germany, I was elected as the secretariat/chair of the newly formed Registrar Constituency. In this capacity I was intimately involved in the drafting and implementation of the UDRP. Over the years I have also been involved in various policy development efforts as well as Evolution and Reform Process. In 2003, I was elected to serve a 2 year term on the ICANN Board of Directors. Through these many years I have remained committed to the principles of openness and transparency upon which ICANN was founded. C. Persons who will produce the broadest cultural and geographic diversity on the Board consistent with meeting the other criteria set forth in this Section; One of the criticisms of ICANN at the time of its formation was its domination by North American directors. However, currently I am one of only three (3) North American directors out of the fifteen (15) ICANN directors. In fact the Latin Americas and Asia / Pacific regions each have more directors than North America. Therefore, my potential election to the ICANN Board would be consistent with the cultural and geographic diversity that the by-laws require. D. Persons who, in the aggregate, have personal familiarity with the operation of gTLD registries and registrars; with ccTLD registries; with IP address registries; with Internet technical standards and protocols; with policy-development procedures, legal traditions, and the public interest; and with the broad range of business, individual, academic, and non-commercial users of the Internet; I am one of the only ICANN Board Members that has an intimate knowledge of policy and technical gTLD registry and registrar issues in connection with my consultation with these entities over the years. I have spent these past couple of years on the ICANN Board educating the Board Directors and the ICANN staff on the technical and operational issues associated with operating registries and registrars. In addition, I am also, by training, an intellectual property attorney that has experience in running my own consulting business. I have represented both commercial and noncommercial entities in my practice. Each of these experiences gives me the requisite experience to balance the interests of many of the ICANN stakeholders. I also have an understanding of ccTLD operations in connection with my service as a policy advisory member of the .US Policy Council. E. Persons who are willing to serve as volunteers, without compensation other than the reimbursement of certain expenses; and As my record indicates, since ICANN's inception, I have committed a large amount of time to domain name policy issues without compensation, including these past two years on the ICANN Board. I have no issue with spending the next several years serving on the ICANN Board without compensation other than the reimbursement of certain expenses. F. Persons who are able to work and communicate in written and spoken English. English is my primary written and spoken language II Accomplishment During My First Term Although Article VI, Section 7 of the ICANN by-laws prohibit any director from putting the individual best interests of any supporting organization or constituency above the best interest of ICANN, I believe that I have been in the unique position of ensuring that the diverse viewpoints of the various GNSO constituencies have been heard at the Board level. Among the accomplishments during my first term are: A. Education/Awareness. I believe that I have an in-depth understanding of the domain name marketplace, as well as the legal nuances of ICANN's by-laws and various contractual agreements, and have shared such perspectives with the Board.. Although the ICANN Board is composed of some of the Internet's greatest pioneers/leaders in the protocol, standards and IP addressing community, my experience has enabled me to educate the Board on the dynamics of the domain name marketplace, particularly with regard to the gTLD segment which accounts for over 80% of ICANN's base revenue. B. Monitoring of GNSO Council Teleconferences. I regularly attend monthly GNSO Council teleconferences as an observer so that I can be apprised first hand of the issues emerging from the GNSO. When I am unable to attend the calls in real-time, I promptly listen to the real-audio archives when they are made available. C. Accessibility. I am in regular contact (physical, telephone, and/or email) with various GNSO Council representatives, as well as the various constituents for most all of the GNSO constituencies. During the regional face-to-face ICANN meetings I strive to attend all constituency and cross constituency-meetings, even if only briefly because of scheduling conflicts. I believe that it is my obligation as a Board Director to ensure that these lines of communication always remain open. One of the worst things that could happen without these mechanisms is having a Board that is out of touch with its stakeholders. My participation and accessibility to the stakeholders greatly bridges the often perceived gap between the GNSO and the ICANN Board. D. Attendance. I have not missed one scheduled ICANN Board or Committee Meeting during my two-year term. III Priorities For My Second Term One of the issues that I have been an advocate of is metrics by which ICANN, staff, and the participants within the ICANN process can be held accountable to the ICANN and Internet communities. A Board Director should be no different, and that is why I have provided the list of priorities that I would like to achieve during a potential second term on the ICANN Board. Although the challenges facing ICANN over the next couple of years may necessitate some changes, I believe it is important to enumerate these priorities so that in three years there may be some metrics by which to measure my performance should I be afforded the opportunity to serve a second term. A. Strategic Plan. Prior to the beginning of my first term in 2003, ICANN had just completed a comprehensive Evolution and Reform Process. Much attention was paid to ICANN's limited mission and core values, and the resulting budgetary requirements needed to accomplish these tasks. During my first budgetary cycle process, ICANN's budget essentially doubled from 8 million to 16 million. In the current second budgetary cycle, ICANN is looking at a budget clearly in excess of 20 million dollars annually when you consider the potential revenues from the 75 cent fee incorporated into the .NET RFP, new TLDs, as well as the continued growth of the domain name space. At first blush, it is hard to argue that ICANN's mission and core values have not changed. However, over the past several years there has been several factors that have directly attributed to these budgetary increases, most notably litigation expenses and the WSIS process. What I have learned during my first term on the Board, which has included service on the Finance Committee, is that no single director alone has the ability alter the ICANN budget. Instead, any fundamental change to the ICANN budget can only be achieved by stakeholders input through the bottoms-up consensus process upon which ICANN is founded. That is why I believe the center-piece of any second term must be mechanisms that allow for meaningful stakeholder participation in the Strategic Plan Process, including developing mechanisms for accountability. By allowing for direct stakeholder participation in connection with the ICANN Strategic Plan, stakeholders will be able to have a voice in ICANN's mission and core values and the resulting budgetary resources to accomplish these goals. The design and implementation of these safeguards are a priority as ICANN is currently undergoing stakeholder consultation in connection with its first Strategic Plan. I believe that the framework for these mechanisms can be found in the resulting documentation produced from the recent Amsterdam consultation process. I look forward to continuing the work that these individuals during the remainder of my current term, and hopefully in my second term. B. Increased resources to enable meaningful stakeholder participation and policy development. Under Article X, Section 2 of the ICANN by-laws the GNSO Council is "responsible for managing the policy development process of the GNSO." However, to date I do not believe that ICANN has dedicated the necessary resources for the GNSO Council or the GNSO constituencies. This has resulted in a disproportionate burden on the council members and their individual constituency participants. Additional resources include not only staff, but tools that will facilitate consensus building initiatives including for example teleconference capabilities and online voting. C. Whois. Whois has been a priority policy issue dating back to the formation of ICANN itself. By most accounts the current system is not working, and may more importantly be placing some registration authorities (registrars & registries) in violation of their national/local laws. A solution must be sought that is consistent with the ICANN mission of security and stability, and balances the respective rights of individuals, registration authorities, business/IP interests, as well as law enforcement. D. WIPO II. ICANN must ensure than ICANN's bottoms-up consensus principles are adhered to with regard to any proposed changes in gTLD policy. E. ICANN Registrar Accreditation Agreement. ICANN is currently in the process of reviewing the ICANN Registrar Accreditation Agreement. Close attention must be paid to this important process that was one of the first initiatives that ICANN undertook back in the spring of 1999. In considering any proposed changes, ICANN should carefully consider changes in the marketplace and consider changes in the context of ICANN's core values, which include: - Where feasible and appropriate, depending on market mechanisms to promote and sustain a competitive environment. - Introducing and promoting competition in the registration of domain names where practicable and beneficial in the public interest. F. Internationalization of ICANN. ICANN needs to be more inclusive by ensuring that more people are able to participate in the ICANN process. Therefore, ICANN should endeavor to translate key documents such as the Strategic Plan into other languages. Consistent with this internationalization outreach, ICANN needs to play closer attention to how its policies interact with national laws. G. Partnership. ICANN must promote relationships with the public and private sectors as well as civil society to help in promoting and preserving the principles upon which Internet has flourished. *** END CANDIDATE STATEMENT *** -----Original Message----- From: owner-council@gnso.icann.org [mailto:owner-council@gnso.icann.org]On Behalf Of Bruce Tonkin Sent: Wednesday, March 16, 2005 10:02 PM To: council@gnso.icann.org Subject: [council] Regarding Conflicts of Interest for ICANN Board members Hello All, I have asked Michael Palage to provide a current conflict of interest statement to provide information to assist GNSO Council members in making their voting decision. This request would apply to any candidates in the current election, and also to candidates in future elections.
From the ICANN Bylaws, with respect to Conflict of Interest:
"The Board, through a committee designated for that purpose, shall require a statement from each Director not less frequently than once a year setting forth all business and other affiliations which relate in any way to the business and other affiliations of ICANN. Each Director shall be responsible for disclosing to ICANN any matter that could reasonably be considered to make such Director an "interested director" within the meaning of Section 5233 of the California Nonprofit Public Benefit Corporation Law ("CNPBCL"). In addition, each Director shall disclose to ICANN any relationship or other factor that could reasonably be considered to cause the Director to be considered to be an "interested person" within the meaning of Section 5227 of the CNPBCL. The Board shall adopt policies specifically addressing Director, Officer, and Supporting Organization conflicts of interest. No Director shall vote on any matter in which he or she has a material and direct financial interest that would be affected by the outcome of the vote." ICANN's conflict of interest policy (approved by the Board in March, 1999) is: http://www.icann.org/committees/coi/coi-policy-04mar99.htm Conflicts of Interest Policy [Adopted March 4, 1999, pursuant to ICANN Bylaws, Article V, Section 7, and Article VI, Section 3(b)] 1. Purpose The purpose of the Conflicts of Interest policy is to ensure that the deliberations and decisions of the Corporation are made in the interests of the global Internet community as a whole, and to protect the interests of the Corporation when it is contemplating entering into a transaction, contract, or arrangement that might benefit the private interest of an Interested Director, Officer or Person (as defined below). An Interested Director, Officer or Person may not use his or her position with respect to the Corporation, or confidential corporate information obtained by him or her relating to the Corporation, in order to achieve a financial benefit for himself or herself or for a third person, including another nonprofit or charitable organization. This policy is intended to supplement but not replace any applicable laws governing conflicts of interest in nonprofit and charitable corporations. 2. Definitions 2.1 Compensation. "Compensation" includes direct and indirect remuneration as well as gifts or favors that are substantial in nature. 2.2 Family. The "family" of any individual shall include only his or her spouse; his or her siblings and their spouses; his or her ancestors; and his or her descendants and their spouses. 2.3 Financial Interest. A person has a "financial interest" if the person has, directly or indirectly, through business, investment or family: (a) An existing or potential ownership or investment interest in any entity with which the Corporation has a transaction, contract, or other arrangement, or (b) A compensation arrangement with the Corporation or with any entity or individual with which the Corporation has a transaction, contract, or other arrangement, or (c) An existing or potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the Corporation is negotiating a transaction, contract, or other arrangement, or (d) An existing or potential ownership or investment interest in, or compensation arrangement with, any entity whose business or operation has been or will be directly affected by a decision or action of the Corporation. 2.4 Interested Director. "Interested Director" shall mean any Director of the Corporation who has a material financial interest, as defined above, or who serves as a Director or Officer of any entity with which the Corporation has a transaction, contract, or other arrangement. 2.5 Interested Officer. "Interested Officer" shall mean any Officer who has a material financial interest, as defined above, or who serves as a Director or Officer of any entity with which the Corporation has a transaction, contract, or other arrangement. For purposes of this policy, the President of the Corporation shall be treated as an Officer. 2.6 Interested Person. "Interested Person" shall mean either: (a) Any person currently being compensated by the Corporation for services rendered to it within the previous 12 months, whether as a full- or part-time employee, independent contractor, or otherwise, or (b) Any person whose family member, as defined in Section 2.2, is currently being compensated by the Corporation for services rendered to it within the previous 12 months, whether as a full- or part-time employee, independent contractor, or otherwise. 3. Committee on Conflicts of Interest 3.1 To administer and monitor compliance with this Policy, the Board shall create a Committee of the Board on Conflicts of Interest ("Conflicts Committee"), to consist of at least two Directors named by the Board. 3.2 The Conflicts Committee shall require a statement from each Director and Officer not less frequently than once a year setting forth all business and other affiliations which relate in any way to the business and other activities of the Corporation. 4. Duty to Abstain 4.1 No Director shall vote on any matter in which he or she has a material and direct financial interest that will be affected by the outcome of the vote. 4.2 In the event of such an abstention, the abstaining Director shall state the reason for the abstention, which shall be noted in the minutes of the Board of Directors. 5. Disclosure by Directors and Officers 5.1 When requested by the Conflicts Committee (not less frequently than once a year), each Director and Officer shall promptly submit a statement to the Committee setting forth all business and other affiliations which relate in any way to the business and other affiliations of the Corporation. 5.2 With respect to any particular matter then pending before the Corporation, each Director and Officer shall disclose to the Conflicts Committee any matter that could reasonably be considered to make the Director or Officer an "Interested Director" or "Interested Officer," as defined above. 5.3 With respect to any particular matter then pending before the Corporation, each Director and Officer shall disclose to the Conflicts Committee any relationship or other factor that could reasonably be considered to cause the Director or Officer to be considered to be an "Interested Person," as defined above. 5.4 For purposes of this section, Officers of the Corporation need not disclose compensation and other benefits paid to the Officer by the Corporation pursuant to Board resolution. 6. Disclosure by Supporting Organization Members of or participants in Supporting Organization councils must disclose conflicts of interest or other financial interests in matters within the scope of the Supporting Organization in the manner required by the Bylaws of the Supporting Organization. 7. Procedures in Connection with Proposed Transactions and Arrangements 7.1 Scope. This section applies to any proposed transaction, contract, or arrangement in which a Director, Officer, or Interested Person has a material financial interest. 7.2 Duty to Disclose. In connection with any actual or possible conflicts of interest, an Interested Director or Interested Officer must disclose the existence and nature of his of her material financial interest to the Conflicts Committee prior to the consideration of the proposed transaction, contract, or arrangement by the Board or any Committee of the Board. 7.3 Determining Whether a Conflict of Interest Exists. After disclosure of the financial interest, the disinterested members of the Conflicts Committee shall determine whether a conflict of interest exists. Neither the Board nor any Committee of the Board shall vote upon any proposed transaction, contract, or arrangement in connection with which an actual or possible conflict of interest has been disclosed by an Interested Director until such time as the Conflicts Committee has addressed the actual or possible conflict of interest. For matters pending before the full Board of Directors, a referral to the Conflicts Committee will not be required where the Interested Director fully discloses to the Board his or her financial interest and abstains from participation in the Board's consideration of the proposed transaction, contract, or arrangement. 7.4 Procedures for Addressing a Conflict of Interest 7.4.1 Where a matter has been referred to the Conflicts Committee and the Conflicts Committee has concluded that a conflict of interest exists, the chairman of the Board or Committee of the Board shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction, contract, or arrangement. 7.4.2 After exercising due diligence, the Board or Committee shall determine whether the Corporation can obtain a more advantageous transaction, contract, or arrangement with reasonable efforts from a person or entity that would not give rise to a conflict of interest. 7.4.3 If a more advantageous transaction, contract, or other arrangement is not reasonably attainable under circumstances that would not give rise to a conflict of interest, the Board or Committee shall determine by a majority vote of the disinterested Directors whether the transaction, contract, or arrangement is in the Corporation's best interest and for its own benefit and whether it is fair and reasonable to the Corporation, and shall make its decision as to whether to enter into the transaction, contract, or arrangement in conformity with such determination. 8. Violations of the Conflicts of Interest Policy 8.1 If the Conflicts Committee has reasonable cause to believe that a Director or Officer has failed to disclose an actual or possible conflict of interest, it shall inform the Director or Officer of the basis for such belief and afford the Director or Officer an opportunity to explain the alleged failure to disclose. 8.2 If, after hearing the response of the Director or Officer and making such further investigation as may be warranted in the circumstances, the Conflicts Committee determines that the member has in fact failed to disclose an actual or possible conflict of interest, it shall recommend to the Board of Directors appropriate disciplinary and corrective action. 8.3 The violation of this conflicts of interest policy is a serious matter and may constitute "cause" for removal or termination of a Director or Officer, or the termination of any contractual relationship the Corporation may have with an Interested Person or other party. 9. Records of Proceedings 9.1 The minutes of the Conflicts Committee shall contain: (a) The names of Directors and Officers found to have a material financial interest in connection with an actual or possible conflict of interest; the nature of the financial interest; any action taken to determine whether a conflict of interest was present; and the decision of the Conflicts Committee as to whether a conflict of interest in fact existed. (b) The names of the persons who were present for discussions and votes relating to the actual or potential conflict of interest; the content of the discussion; and a record of any votes taken in connection therewith. 9.2 In connection with a conflict of interest, the minutes of the Board or other Committee of the Board shall contain the names of the persons who were present for discussions and votes relating to the transaction or arrangement; the content of the discussion, including any alternatives to the proposed transaction or arrangement; and a record of any votes taken in connection therewith. 10. Compensation Committees A member of any Committee of the Board the jurisdiction of which includes compensation matters and who receives compensation from the Corporation for services is precluded from voting on matters pertaining to that member's compensation. 11. Annual Statements Each Director and Officer shall annually sign a statement which affirms that such person: (a) Has received a copy of the conflicts of interest policy; (b) Has read and understands the policy; (c) Has agreed to comply with the policy; and (d) Understands that the Corporation is a charitable organization and that in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes. 12. Periodic Reviews The Conflicts Committee shall periodically consider whether and how this Conflicts of Interest Policy should be revised or amended to better meet its objectives. In connection with any periodic review conducted by the Corporation to ensure that it operates in a manner consistent with its charitable purposes, the Conflicts Committee shall report on the matters referred to it and their resolution. Regards, Bruce Tonkin