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

Becky Burr becky.burr at board.icann.org
Tue Nov 19 14:33:44 UTC 2019


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 at 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 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
> *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> on
> behalf of Aikman-Scalese, Anne <AAikman at lrrc.com>
> *Sent:* Friday, November 15, 2019 4:41 PM
> *To:* ccwg-auctionproceeds at 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 at lrrc.com
>
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> ------------------------------
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