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
> >
>