[Ccwg-auctionproceeds] Judith Hellerstein's comments on the Auction Proceeds Draft

Alan Greenberg alan.greenberg at mcgill.ca
Fri Jul 26 16:55:58 UTC 2019


Vanda, if i correctly understood you, some of your projects were sent out to existing organizations for management but that is not what we are discussing here (that is closer to Mech D which we have discarded). We are talking about first having to build then run the external organization (foundation).

Alan
--
Sent from my mobile. Please excuse brevity and typos.

On July 26, 2019 12:13:15 PM EDT, Vanda Scartezini <vanda at scartezini.org> wrote:
Dear friends

As Marilyn would like to hear some fact base, below just to share my own experience :
I was responsible (besides other things) during my time in the government,  for some grants  ( the amount was not small, around 500 millions USD a year) to select relevant projects under the Information Technology Law under the Federal Secretariat as was the head of.
We were public, could not contract anyone, and should be accountable to the federal Government, Treasure and IR ( since the money was from fiscal incentives from companies) the Public Ministry ( from Judiciary) and the Account Tribunal which controls the righteous expenditure of public organs.
To deal with this challenge we form a Committee  of volunteers , without paying any member.
 Processes to receive, analyze, select and specially control the disbursement of grants demands a lot of work , people without conflict  and with a clear knowledge of the theme associated to the grant to allow a fair and constructive selection of the projects.  The committee had a maximum of 5% of the total $$ to do this job.
The money were for staff support, legal support, travels to visit the proposed groups for any project, general costs as meals etc.  registered and published detailed to be accountable to all.
 How we have worked:
We announced the openness of the slot of time to receive proposals – 3 months –  and publish the requisites and documentation demanded as historical, previous grants etc as well general criteria we will use for selection under the Law.  Took us  2 previous months to prepare the public call then we start our job while receiving all projects -  we made a pre selection into 3 categories- excellent / good / poor  and then analyze overall cost of excellent and good, call the excellent to f2 f  interviews/  visited their facilities,  if not known  etc. and start to refine the selection, calling the good ones etc till the amount available.
If there were not enough good projects to reach the overall amount for the year , the difference  will be transferred to  FINEP ( www.finep.gov.br<http://www.finep.gov.br>) a public Foundation,  kind of Bank,  to support R&D development and financing companies to improve their own R&D, as well as give grants to research centers or universities for smaller projects, still under the Law of Information Technology. Finep took about 30% of the amount to his own task.
 The most difficult part was to control the development of the project – committee  members were assigned to follow up some projects  with staff/legal support, a quarter report is demanded from the grantee, till the deliverables were done.
Both alternatives were used at the time:

  1.  send money to third part  and just got the reports analyzed by the Committee,  and
  2.  an “inside” management with the committee and third part staff/ legal contracted personnel.
 My evaluation:
Even less work sending money to the Foundation, the best results from projects  ( hence better $$ expended) we got from the work of the committee.


Vanda Scartezini
Polo Consultores Associados
Av. Paulista 1159, cj 1004
01311-200- Sao Paulo, SP, Brazil
Land Line: +55 11 3266.6253
Mobile: + 55 11 98181.1464
Sorry for any typos.





From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces at icann.org> on behalf of Alan Greenberg <alan.greenberg at mcgill.ca>
Date: Friday, July 26, 2019 at 12:07
To: Marilyn Cade <marilynscade at hotmail.com>, "ccwg-auctionproceeds at icann.org" <ccwg-auctionproceeds at icann.org>
Cc: "Aikman-Scalese, Anne" <AAikman at lrrc.com>
Subject: Re: [Ccwg-auctionproceeds] Judith Hellerstein's comments on the Auction Proceeds Draft

Marilyn, although I have preferences, I will not here debate the options or even how we are to decide, but I would like more clarity on how you see the Mechanism C foundation operating.

The only example we have for a corporation being set up in addition to ICANN is PTI. In that case, the majority of the PTI Board is appointed by ICANN (the rest being appointed by the ICANN NomCom), so it is had to claim that there is any independence. I presume that your intent would be to have, at the least, a majority of Foundation Board members being appointed NOT by ICANN. What level of majority for non-ICANN Board members do you consider reasonable and how would you see them being selected?

You talk here about the potential for ICANN chargebacks being excessive. PTI purchases (ie outsources) a variety of services from ICANN (accounting, payroll, building space, etc.) Would you foresee the Foundation doing the same or are you suggesting that this not be allowed (ie the Foundation must be truly a stand-alone body providing all of its own services, or outsourcing them to some non-ICANN entity(ies).

You talk about ICANN's salaries being excessive. How would you enforce lower salary levels in the Foundation when it would likely be co-located with ICANN and Foundation employees being able to be hired by ICANN for significant pay increases?

The gist of my questions are that indeed, ICANN may have high operating costs, but I am unsure how the Foundation remedies it.

A foundation *may* allow us to address such issues, but without clear ground rules, an "independent" foundation affiliated with ICANN could well have all of the same issues as those you associate with Mechanism A.

Alan


At 26/07/2019 10:30 AM, Marilyn Cade wrote:


my apologies for being off line for a couple of days as other priorities did take over my life.

As I represent the CSG, which is 3 constituencies, I will restate that we have strong concerns about Mechanism A as we do not understand how to ensure complete independence, which is of critical importance.  I can't say that have been able to fully consult recently with the other participants from the CSG, but the general direction has not changed.

We supported Mechanism C, and our preference has not changed. Accepting that there needs to be two options, Mechanism A and Mechanism C presented to the community -- still we strongly require that there be more fact based, and not just opinions from each of us as participants, presented. Thus, while any of us may have experience or preference, the CSG prefers to see fact based and even external reports. We do not support relying on member or participant, or internal ICANN staff analysis on certain areas, as for Mechanism A, given the landfall of chargeback costs, there could be unrecognized preferences.

Thus we want to see independent analysis of the key questions. and while we welcome ICANN legal and financial analysis, it is not sufficient. Further ICANN staff are not experts in grant making, grant management and while they can "count heads" and analyze certain functions such as completing the tax returns, the 990, etc., maintaining separate bank accounts, as they have done with the Auction Funds proceeds as an interim management function, this does not morph into a sophisticated grant management entity.


Mechanism A: This in not the CSG preferred option.
We have described our concern that there are issues about an in-house entity, with many issues related to how to be independent., lack of skills, hiring and firing of staff, increased liability to ICANN Org, overall, etc. etc

 It is not accurate to state that because ICANN can set up separate bank accounts and maintain independence of such, that they are experienced in operating a truly independent grant making program. AND in operating such.

An internal unit will have higher costs than are being acknowledged. On'e can't work part time on policy development or at GDD or GEE and then, presto, magic, morph over to spend 4 hours per day on a grant making program, at a lower costs, or at the same, higher cost of ICANN but without any clear distinction for tax reporting purposes.

ICANN pays much higher salareies/benefits than is usual in a grant making entity and has also exit costs for staff who are part of ICANN and then are "made surplus", etc. And, not it isn't sufficient to cite California laws as if an employee is based in Europe, they gain additional benefits, like announcing they want to take a sabbatical to attend an educational program, and they simply are then still able to return to ICANN with a guarantee of job, as we have expeienced in the past. ICANN pays at far above usual rates for a not for profit organization, instead benchmarking against high tech companies -- this has been noted and objected to in the Budget Comments from the community, but is relevant here only as any "internal" process brings on exceptionally higher costs than is usual in a grant making/grant oversight/management process established in an external organization.

I heard statements like: these staff can apply for ICANN jobs in the future, rather than being terminated. Let's be clear: grant making is a different skill set and we need to recognize that.

In addition, the internal mechanism assumes that ICANN bills the "fund" at their usual really [well, I hesitate to use the word bloated, but certainly "high cost"] for any services they provide, and any services they provide are on top of what is supposed to be a full time job [according to the ICANN budget], which means retention of contractors, external resources, or additions of staff].  All at ICANN usual "costs".

Again, higher than is usual for grant making organizations.

The independence of any "internal body" is highly questionable.

Stating that the ICANN Board has fiduciary responsibility, etc. is factual, but does not mean day to day oversight. And in fact, should be recognized as prohibited by the need for an independent disbursement mechanism.

In fact, in the view of some, including the CSG and others in the public comment process, creating a mechanism with accountability, and independence from influence from Board and staff and even community, with focus on the established criteria led to members of the community to support Mechanism C over the recommendation of Mechanism A and B.

Mechanism C remains our preferred option to present but we understand that it is possibly useful to present Mechanism A and C -- both -- as there is not agreement to a single mechanism at this point, among those who are active representatives and participants in this work effort. And it is important for us all to understand that this has been a prolonged and intensive effort.  And we are close to the end -- presenting, we hope -- two options, with more detailed analysis and remaining questions, and then posting for our final public comment process.

Frankly, as for me, there are continued questions about the influence of the staff and even the Board from time to time on this process  and whether it is appropriate to have "preferences" expressed, which occasionally I have feared that I tetected -- e.g. the Board prefers ... etc. or senior staff think... etc.

I believe strongly, and advocated from when I became the CSG rep that it is essential to have a very stringent approach to fact based decision making, essential for a public service, not for profit corporation, incorporated under California law.  And an independent process that does not bring into ICANN a short term process, that is clearly not part of the core mission of ICXANN -- e.g grants management of a short term/but multi million$ fund, but one that is not part of why we created ICANN. Creating a separate Foundation, with a separate independent Board, with perhaps two ex officio non voting members that are from the ICANN Board, and a community advisory group

I understand that some prefer to have the function inside ICANN. That is not supported by others in the members and participants, so a compromise is submitting Mechanism A and C, but then actually doing more due diligence as needed about each.

Statements that a separate foundation is more expensive or longer than an internal mechanism are speculative right now, but can be addressed by factual analysis. However, I do not agree that ICANN staff have expertise in analyzing the attributes of staff or process to manage grant solutions/review/management. 🙂 Yes, they can set up separate bank accounts, and do other forms of administrative reporting, and of course, would have to be paid for at the usual ICANN [which is quite generous} fee basis. BUT, the background, experience, and skills to do grant solicitation,award/evalation is different.

Recently an experienced colleague in grants management told me he managed a $80M grant which was dispersed in a 9 month announcement, award selection, then performance of 1 year period, with a second year management/evulation process, and described the overhead and reports. Another colleague told me about a $190M grant process -- again, dispursement/oversight/evaluation within a 3 year period.  These are not trivial tasks, and the overhead is what some might think is high, but is based on what kind of evaluation is required, and whether it is a grant to do something, or a grant to effect a major change. One might be light assessment- a) hold a meeting with 50 people/address training in DNSSEC, 40 of those invited attended/ 35 received the credentials, etc. etc. versus: establish a multi year, multi country training program in capacity building in DNS issues and successfully bring in 200 attendees per year, with XX changes in skills at national level. Evaluate changes in expertise.


Mechanism B had some attraction but there was not enough work on the criteria bout how to select the "partner" with experience/expertise in operating a grant making program.

Thus, I hope that the CCWG-AP sending forward  Mechanism A and Mechanism C -- with the clear understanding that the CSG has many concerns with Mechanism A, and prefers Mechanism C.  And we will encourage informed comments during the public comment process.

It is important to be clear about what the public comment process is about.
I spent over an hour clarifying to Fellows and NextGen, who were encouraged by ICANN staff to express their "preference" on how to influence what is funded. This is a misunderstanding and probably on many parts. That is NOT the purpose of the CCWG-AP, and probably a misunderstanding by staff when they encouraged attending the CCWG-AP session but it is important to understand that this public comment includes a clear understandable statement that this is not a slush fund; it is not up to the ICANN Board to direct; it must be independently managed and not put ICANN's integrity, or tax status, or anti trust status at risk by any even suspicion.

Boards change, so do Senior staff/executives. The community needs to have a good understanding of our responsibilities, but also our limitation, given the focused purpose of the Auction Proceeds.

Marilyn Cade
CSG member in the CCWG-AP


________________________________
From: Ccwg-auctionproceeds <ccwg-auctionproceeds-bounces at icann.org> on behalf of Judith Hellerstein <judith at jhellerstein.com>
Sent: Thursday, July 25, 2019 11:25 PM
To: Elliot Noss <enoss at tucows.com>
Cc: ccwg-auctionproceeds at icann.org <ccwg-auctionproceeds at icann.org>
Subject: Re: [Ccwg-auctionproceeds] Judith Hellerstein's comments on the Auction Proceeds Draft

Hi Elliot
Mechanism A is an internal icann department hired to do the evaluation and choosing of grants
As such icann staff will be reviewing all grant applications and choosing the winners. This is why I said, to me it is clear, that this mechanism has the least independence and in my mind does not meet the requirements set up by the board.

If icann outsourced the reviewing and selection of the grantees it us not clear to me what the difference of the mechanisms us to me.

With mechanism b, this choice of reviewing and selecting the grant winners will be done by the donor advisory fund. This is and independent group where icann has no ability to influence

Mechanism C is an icann foundation. Again an independent group reviews and select the grantees

Hope this answers your questions

Best
Judith

Sent from my iPhone
Judith at jhellerstein.com<mailto:Judith at jhellerstein.com>
Skype ID:Judithhellerstein

On Jul 25, 2019, at 7:51 AM, Elliot Noss <enoss at tucows.com<mailto:enoss at tucows.com>> wrote:


Hi Judith,

You say " It seems clear to me that Mechanism A would not meet the independent requirements set up by the ICANN Board”. This is not clear to me. Please explain. Thanks.

EN


On Jul 24, 2019, at 11:02 PM, Judith Hellerstein <judith at jhellerstein.com<mailto:judith at jhellerstein.com> > wrote:

As per Emily's request, I am forwarding my comments to the entire list. I had previously sent them just to Staff and the Co-Chairs

Best,

Judith

_________________________________________________________________________

Judith Hellerstein, Founder & CEO

Hellerstein & Associates

3001 Veazey Terrace NW, Washington DC 20008

Phone: (202) 362-5139  Skype ID: judithhellerstein

Mobile/Whats app: +1202-333-6517

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-------- Forwarded Message --------
Subject: Re: [Ext] My comments on the Auction Proceeds Draft
Date: Wed, 24 Jul 2019 18:53:06 +0000
From: Emily Barabas <emily.barabas at icann.org><mailto:emily.barabas at icann.org>
To: judith at jhellerstein.com<mailto:judith at jhellerstein.com> <judith at jhellerstein.com><mailto:judith at jhellerstein.com>, Marika Konings <marika.konings at icann.org><mailto:marika.konings at icann.org>, erika at erikamann.com<mailto:erika at erikamann.com> <erika at erikamann.com><mailto:erika at erikamann.com>, Joke Braeken <joke.braeken at icann.org><mailto:joke.braeken at icann.org> , ching.chiao at gmail.com<mailto:ching.chiao at gmail.com> <ching.chiao at gmail.com><mailto:ching.chiao at gmail.com>


Hi Judith,

Would you mind sending your feedback to the CCWG mailing list, or if you would like staff can do so on your behalf? Just let us know which you prefer.

Kind regards,
Emily


On 24/07/2019, 20:45, "Judith Hellerstein" <judith at jhellerstein.com><mailto:judith at jhellerstein.com> wrote:

HI Marika and Emily,
I am attaching my comments on the auction proceeds draft document. It seems clear to me that Mechanism A would not meet the independent requirements set up by the ICANN Board but do not see this referenced in the report. Perhaps I am misunderstanding some things. I have also added comments about Mechanism B and C as well as other issues

Earlier today, I have also  added comments to the google doc you posted today on the list serv
Thanks for extending the deadline to Friday. Look forward to the call on Wednesday

Best,
Judith
-- _________________________________________________________________________
Judith Hellerstein, Founder & CEO
Hellerstein & Associates
3001 Veazey Terrace NW, Washington DC 20008
Phone: (202) 362-5139 Skype ID: judithhellerstein
Mobile/Whats app: +1202-333-6517
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