[Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN

Aikman-Scalese, Anne AAikman at lrrc.com
Mon Nov 18 22:19:41 UTC 2019


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 at icann.org>
Sent: Monday, November 18, 2019 1:13 PM
To: Aikman-Scalese, Anne <AAikman at lrrc.com>; ccwg-auctionproceeds at 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 at icann.org<mailto:ccwg-auctionproceeds at 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 at icann.org<mailto:ccwg-auctionproceeds-bounces at icann.org>> on behalf of Aikman-Scalese, Anne <AAikman at lrrc.com<mailto:AAikman at lrrc.com>>
Sent: Friday, November 15, 2019 4:41 PM
To: ccwg-auctionproceeds at icann.org<mailto:ccwg-auctionproceeds at icann.org>
Subject: [Ccwg-auctionproceeds] Auction Proceeds Mechanism A - Internal Department at ICANN

[cid:image001.gif at 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


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Anne E. Aikman-Scalese

Of Counsel

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520.879.4725 fax

AAikman at lrrc.com<mailto:AAikman at lrrc.com>

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