Thanks Ed. Your point of view and explanations are welcome. I must admit that Karl raised important concerns about the right to inspection under the California code / law and its application to our model ( costs of inspection, 3rd parties , electronic analysis etc). I have read the law and considered the many limitations that members and directors have under the Code. Having studied company law and being a former corporate secretary I believe that they are legitimate concerns which many members/directors to face in companies. However I'm glad that you have clarified the issues. That being, under the new model we would enjoy far greater rights of inspection than anticipated . I must admit that I am not familiar with the work of the CCWG accountability team but I will certainly read the recommendations as you suggested. Even though I am not on the team I will pay close attention to its progress and implementation. regards Karel Douglas On Mon, Feb 15, 2016 at 2:05 PM, Robin Gross <[log in to unmask]> wrote: > Thanks, Carlos! > > If anyone is interested in joining the CCWG-Accountability as an > individual participant or mailing list observer, please contact > [log in to unmask] Use that email address for official list issues > also - it is ICANN staff member(s) for the CCWG-ACCT. > > Best, > Robin > > > On Feb 15, 2016, at 9:40 AM, Carlos Raúl Gutiérrez G. <[log in to unmask]> > wrote: > > > > Thank you Robin! > > > > I have been waiting for WS2 all along. But at some point Becky Burr > changed into WS1 and the very preliminary efforts on WS2 disappeared. > Question: Who takes care of the official list of issues and interested > members of WS2? I would like to speed up my participation on a few issues > there. > > > > Best regards > > > > Carlos Raúl Gutiérrez > > +506 8837 7176 > > Skype: carlos.raulg > > On 15 Feb 2016, at 11:31, Robin Gross wrote: > > > >> Thanks, team! I’d like to add that we’ve got the issues of > transparency over board deliberations in Work Stream 2 (coming up!) as well > as transparency over ICANN’s lobbying of governments, and review of the > DIDP and whistle-blower policies. So quite a few key additional > transparency issues are yet to be done, but are in our work plan for the > next year. Anyone wanting to work on these transparency issues in Work > Stream 2 (or any of the issues in WS2) are welcome to join the CCWG > discussions and contribute to the formulation of these key reforms in the > coming months. > >> > >> Thanks! > >> Robin > >> > >>> On Feb 15, 2016, at 6:38 AM, Schaefer, Brett < > [log in to unmask]> wrote: > >>> > >>> > >>> There is also the right of investigation (which I have to confess > escaped me until I read through the latest drafts) to consider in this as a > compliment to the right of inspection. > >>> > >>> > >>> > >>> Brett Schaefer > >>> Jay Kingham Senior Research Fellow in International Regulatory Affairs > >>> Margaret Thatcher Center for Freedom Davis Institute for National > Security and Foreign Policy > >>> The Heritage Foundation > >>> 214 Massachusetts Avenue, NE > >>> Washington, DC 20002 > >>> 202-608-6097 > >>> heritage.org <http://heritage.org/> > >>> > >>> > >>> From: NCSG-Discuss [mailto:[log in to unmask] <mailto: > [log in to unmask]>] On Behalf Of Edward Morris > >>> Sent: Sunday, February 14, 2016 10:26 PM > >>> To: [log in to unmask] <mailto: > [log in to unmask]> > >>> Subject: Re: What Karl Auerbach says about inspection rights at ICANN > IS COMPLETELY WRONG > >>> > >>> Thanks Kathy. > >>> > >>> I also want to thank Farzi for her great work on Inspection and > transparency. It's been sensational! > >>> > >>> We've had an absolutely fantastic team on the CCWG, led by our member > Robin Gross. Brett, Paul, Matt, Milton, James, Avri, Farzi...all have made > enormous contributions to the effort. It's pretty safe to say the NCSG has > certainly punched above our weight on this important project. We didn't get > everything we wanted but, in the words of the famous philosopher Mick > Jagger, just maybe we got what we needed. > >>> > >>> On Inspection, though, we actually got everything we could have asked > for and more and , yes, I think it is something the NCSG and the entire > community will greatly benefit from in the years to come. > >>> > >>> Best, > >>> > >>> Ed > >>> > >>> > >>> > >>> > >>> > >>> Sent from my iPhone > >>> > >>> On 15 Feb 2016, at 03:13, Kathy Kleiman <[log in to unmask] > <mailto:[log in to unmask]>> wrote: > >>> > >>> I would like to thank Ed and Farzi (and all in NCSG who worked for it) > for the tremendous amount of work they have done on research, drafting, > explaining, convincing and achieving an inspection right. Their work was > done with the support of independent attorneys hired by ICANN, and > reporting to CCWG. It was a huge effort, and I am tremendously appreciative > and supportive of what they have achieved. It will make a big difference in > the future... > >>> > >>> Best, > >>> Kathy > >>> > >>> On 2/14/2016 8:14 PM, Edward Morris wrote: > >>> Thanks Farzi. > >>> > >>> Actually, no. This post is so inaccurate it should never have > disgraced the bandwidth of our members. After all, this is a members list > and Karl Auerbach is not a member of the NCSG. > >>> > >>> That said, it's always nice to hear from Karl. Of course it would have > been nice to hear from him in the fourteen months we've been hard at work > obtaining Inspection rights for our members which are, as a package > combined with other rights, in fact, far more extensive than that which > ICANN gave Mr. Auerbach years ago. In the CCWG proposal we not only have > managed to get Inspection rights for the GNSO and the other SOACs, rights > mirrored on California Corporations Code §6333, but we have created a new > and novel Investigation right which far surpasses anything Karl Auerbach > ever obtained from ICANN through his inconclusive and confrontational > legal action. > >>> > >>> I'm happy to discuss any aspect of the CCWG proposal with our members. > I'll briefly respond to Mr. Auerbach's incorrect and factually wrong > assertions briefly, asking folks to understand that this is Valentine's > Day. I've (as have others) already donated Easter, Thanksgiving and my > birthday to the CCWG, and I am doing my best to actually celebrate > Valentines Day this evening. It's my favourite holiday! I will be happy > to respond more in depth to any questions our members may have on this > matter, or anything else related to the CCWG, going forward. Feel free to > ask. > >>> > >>> > >>> Having had a rather intense experience exercising this right when I > was on ICANN's board of directors I am surprised at the absence of some > quite important matters. > >>> > >>> Mr. Auerbach presumes that the information contained in the public > proposal is detailed and comprehensive. It is not, nor is it intended to > be. The Supplemental Proposal which, in fact, has yet to be released to the > public are mere guidelines our independent counsel will use to construct > detailed Bylaws and implementation provisions.. > >>> > >>> > >>> First there is the question of what the person/body making the > inspection can do with the information viewed. Board members have powers > regarding the inspected materials that are limited primarily by their > fiduciary duties. This is an important matter. > >>> > >>> As Mr. Auerbach may or may not be aware there are two types of > Inspection rights under California law: that which is granted to members of > the corporation, when said corporation is based upon a PBC membership > model, and that which is granted to members of the Board of Directors. The > rights obtained by the community in the CCWG are those Inspections rights > granted to members under the PBC membership corporation model. There are no > fiduciary issues involved with this type of Inspection right which, of > course, is why in the interest of transparency we were able to give the > right to all SOACs in true bottom up fashion. The NCSG traditionally > supports the bottom up multistakeholder model. > >>> > >>> > >>> Second, there is much about corporate behaviour that is not > documentary - for example, it is important that whether and how an > organization actually practices what it has written. > >>> > >>> Kark is correct - that is why our CCWG Accountability work stream one > proposal, the final version of which will be released Tuesday, contains in > excess of two hundred pages of mission statements, accountability > procedures and an entirely new bottom up governance model for ICANN which > rests ultimate authority in the community. Karl may want to read the > amazing work we have done over the past fourteen months, study the new and > innovative governance regime (imperfect as it is) we have created before > implying we haven't dealt with accountability issues. We have. In fact, we > have a model that is unparalleled in American corporate history in the > extent we empower community members. Perfect: no. Do we deal with Karl's > expressed concerns: absolutely. It's a shame Karl does not appear to have > read our proposal before he commented on it. > >>> > >>> > >>> Third, there is much that requires considerable analysis. For > financial data this tends to mean that data be available in electronic form > so that it maybe examined and analysed with electronic tools. Simple > eyeball access is inadequate. > >>> > >>> That's not exactly a revelation, Karl. It is after all the year 2016. > Our new and innovative Investigation Right allows the community to obtain, > at ICANN's expense, an independent auditing firm to audit ICANN when there > is a suspicion of malfeasance. The Investigation rights itself will give > SOACs access to information in whatever form it exists. The right is based > upon California Corporations Code §6333 which, itself, has been applied in > corporate California in a way that recognises technological advances in > bookkeeping and record keeping. Mr. Auerbach's concerns are unfounded. > >>> > >>> > >>> Fourth is the ability to bring in third party experts (such as > forensic accountants, economists, and lawyers) to analyze the data. And > with regard to third parties is the question of who controls maters of > confidentiality and who has the authority over that third party. > >>> > >>> > >>> As noted, the new and innovative Investigation right allows us to > bring in, at ICANN's expense, third parties to audit ICANN's books and > records. The other issues identified by Mr. Auerbach have been identified > and will be dealt with in an appropriate way in implantation documents and > Bylaws provisions all based upon the normal practice of PBCs per CCC §6333. > >>> > >>> > >>> Fifth is the question of retention of the materials that have been > inspected. > >>> > >>> Again, we are not reinventing the wheel here (although our > Investigation Right is, in fact, a breakthrough). Procedures concerning > retention will be developed by our independent counsel based upon best > practices of California PBC's whose Inspection procedures are governed by > CCC §6333. > >>> > >>> > >>> Sixth is the question of costs. None of this stuff is without cost. > Who pays? > >>> > >>> Asked and answered (above). Costs of audits under the Investigation > Right, audits which are triggered by the community, are paid by ICANN. > >>> > >>> > >>> > >>> As a an attorney in California, particularly one who has been on > ICANN's board and one who has exercised these powers of inspection I am not > at all confident that these measures are consistent with the California law > that governs public-benefit/non-profit corporations. > >>> > >>> 1. Mr. Auerbach has never exercised the Inspection rights in question. > His claim to have done so is false. He may have exercised Inspection rights > granted to Board members, such as they existed a decade and a half ago. He > has never exercised Inspection rights granted to corporate members, circa > 2016, because ICANN has not been nor will be a membership corporation under > the California Corporations Code and the Inspection rights we are creating > based upon CCC §6333, to the best of our knowledge, have never before been > ported in their entirety to a private corporate entity. > >>> > >>> 2. Mr. Auerbach is absolutely wrong in his assertion regarding the > consistency of our Inspection provisions with California law. Our > Inspection Rights are specifically ported from California Corporations Code > §6333. The Investigation Right is completely consistent with applicable > California law. > >>> > >>> 3. California has many attorneys. Rosemary Fei of the San Francisco > based law firm Adler & Colvin, has been the principle architect of our > Inspection and Investigation Rights. You can read about Rosemary here: > http://www.adlercolvin.com/attorneys/rosemary-fei.php < > http://www.adlercolvin.com/attorneys/rosemary-fei.php> . I was on the > sub-team that retained Adler & Colvin. Adler is the premiere law firm > dealing with nonprofits in the State of California and has done a great job > for us. Mr. Auerbach's biography does not indicate any substantive > knowledge of or experience in California nonprofit law. What little legal > experience he has appears to be in the field of intellectual property law. > His bio may be found here: > http://cavebear.com/index.php?option=com_content&view=article&id=16&Itemid=52 > < > http://cavebear.com/index.php?option=com_content&view=article&id=16&Itemid=52 > >. > >>> > >>> > >>> And he added > >>> > >>> BTW, the inspection rights being proposed are at best a thin shadow of > the inspection rights that the law of California (and also of most other > places) grants to each member of a board of corporate directors or to > members of a public-benefit/non-profit (as is ICANN) that has "members". > >>> > >>> Mr. Auerbach's assertion heretofore is completely and absolutely > untrue. Karl has no idea what he is writing about. > >>> > >>> Our Inspection Rights are directly ported from the California > Corporations Code. Our Investigation Right takes the California statutory > Inspection Right and extends it in ways heretofore unprecedented in > corporate California. A thin shadow?: Quite the opposite.. > >>> > >>> The CCWG Inspection rights exceed California law in ways that, > frankly, are revolutionary. We achieved transparency rights in the CCWG > that are far more extensive than Mr. Auerbach ever attempted in his > conflict with ICANN over a decade ago and have achieved far more thnt are > possessed by the standard California Public Benefit Corporation. Opinion? > No. Fact. > >>> > >>> > >>> Corporations have always been cauldrons of competing interests. The > corporations law of California is based on more than two centuries of > practical experience resolving those interests. That law is hardly > irrational. Nor is it unique. Laws like it are found around the world. > It would be far better to use the machinery already in the law regarding > directors and members than to invent something new that would be fought > tooth and nail by ICANN. It took me 18 moths and a fair amount of money to > fight ICANN when it refused to honor an extremely clear inspection > provision of the law. Think how much longer ICANN could drag out this new > thing that is being proposed, especially given the argument, one that will > be made, that it is an attempt to turn a corporation into what is, in > effect, the sole proprietorship or partnership of the designated party or > parties. > >>> <~WRD000.jpg> > >>> > >>> > >>> Folks, I once respected Karl Auerbach. No longer. With regard to the > CCWG proposal Mr. Auerbach is completely ignorant as to it's content, > structure, history and process. I doubt he's read the actual proposal. If > he has he doesn't understand it. I make a habit of reading and > understanding things before I criticise them. Mr. Auerbach apparently does > not. > >>> > >>> I do agree with Mr. Auerbach that we would be better off using the > membership PBC contained in the California Corporations Code than the model > we are proposing. Other community groups disagreed. That said, in terms of > Inspection and Investigation the CCWG proposal is FAR SUPERIOR to that > contained in the California Corporations Code. > >>> > >>> This has been my focus on the CCWG. I've spent in excess of several > hundred hours working with Board members, our attorneys, the CCWG > co-chairs, our NCSG contingent, participants and members from the IPC, BC, > ISPC, RySG, RrSG, CCNSO, ALAC and ASO to get these rights for the > community. There's been a lot of education and surprisingly little > compromise. Frankly, we achieved more in this area than I thought possible. > I not only got what I wanted, I got a lot more than I wanted. It's amazing > what happens when you work with people instead of insulting and suing them. > >>> > >>> It's easy to lob hand grenades. It's a lot harder to build things. If > Mr. Auerbach wishes to criticise our work he should read our report first. > Then I'll be happy to engage. If any of our members have questions, please > ask. I'd appreciate it if you would read our proposal first. It can be > found on pages 6-7 here: > https://community.icann.org/pages/viewpage.action?pageId=58723723&preview=/58723723/58724026/Annex%2001%20-%20Rec%201%20FINAL.pdf > < > https://community.icann.org/pages/viewpage.action?pageId=58723723&preview=/58723723/58724026/Annex%2001%20-%20Rec%201%20FINAL.pdf>. > It will one a pleasure to walk you through what we have achieved. It's a > big achievement for our group and for our community. > >>> > >>> Happy Valentines Day everyone. I hope it's not too late to go back to > mine. I just did not want to let these untruths and inaccuracies by a > non-NCSG member fester any longer than necessary. Any chance next year we > can make Valentines Day a post free holiday? :) > >>> > >>> Best, > >>> > >>> Ed > >>> > >>> --- > >>> > >>> Right to inspect accounting books and records of ICANN > >>> 19 > >>> In addition to the statutory ri > >>> ght that the Empowered Community will have and the new > >>> Community Powers described in Recommendation #4, the CCWG > >>> - > >>> Accountability > >>> recommends including in the ICANN Fundamental Bylaws the right for > Decisional > >>> Participants in the Empowered Community to inspect > >>> as outlined in California Corporations > >>> Code 6333, although this specific article reference would not be > mentioned in the Bylaws. > >>> 20 > >>> This inspection right is distinct from the Document Information > Disclosure Policy (DIDP). > >>> While any eligible party can file a > >>> request according to the DIDP, inspection rights are only > >>> accessible to Decisional Participants in the Empowered Community. The > scopes are also > >>> different as explained below. > >>> This inspection right would include the accounting books and records > of ICANN an > >>> d the > >>> minutes of proceedings of the Board of Directors and committees of the > Board of > >>> Directors, on the conditions discussed below. Since ICANN w > >>> ill not have statutory > >>> “members > >>> ” > >>> , > >>> the right to inspect “member” meeting minutes would not apply. > >>> Although the > >>> Corporations Code does not defin > >>> e “books and records of account > >>> ” > >>> , > >>> the > >>> term is generally understood to refer to the journals and ledgers in > which financial > >>> transactions are originally entered and recorded, and the statements > compiled from > >>> them. The term gen > >>> erally does not extend to source documents on which books and > >>> records of account are based, such as canceled checks and invoices. > Similarly, the > >>> term generally encompasses documents relevant to the operation of the > corporation as > >>> a whole, and not to those > >>> relevant to only a small or isolated aspect of the corporation’s > >>> operations. > >>> Authority under Section 6333 is sparse, but it is nonetheless clear > that a “purpose > >>> reasonably related to [a] person’s interests as a member” does not > include a member’s > >>> commercia > >>> l or political interests, harassment, or massive and repeated > inspection > >>> demands probing the minutiae of financial records and details of > management a > > >