ICANN's founding CEO and chair accuse biz of abandoning principles in push for billion-dollar .org sale ICANN has been accused by its founding CEO and original chair of abandoning the organization's core principles and accepting commitments it knows it cannot enforce in order to push through the sale of the .org registry later this week. In a furious letter [PDF] from Mike Roberts and Esther Dyson to the attorney generals of …
"Daming" is not a word. If it was, it would be applied to The Queen dubbing women as 'Dames' of the Empire.
And yes, ICANN is now a victim of Corporatocracy, aka the ruination of any sense of We The People in the world. It's now We The Corporations, IOW Idiocracy. The ICANN leadership system is a blatant failure that must be reinvented into something sane, fair and technologically literate.
IANAL, but IIRC, the "corporations are humans for the purpose of benefits normally reserved for flesh and blood, but cannot be jailed or executed" stance is a pile of interpretations tracing back to a "note" added by a clerk to a 19th-century decision. It survives because it serves its masters well.
But it is the internet community that is damned.. You can dream of somehow reconstituting ICANN but I can't see a way that could ever happen, especially given the political climate in the White House.
The sale is likely to go through with some unenforceable paper promises to make it more palatable in a news release.
The only way out that I can see is a white knight stepping in with a bigger bid. but the only ones I can think of that might be interested are Google or Microsoft which bring their own sets of issues.
I posted this three months ago, and it still applies, so here goes:
according to IRS regulations, you cannot "turn a non-profit organization into a profit making organization" without first giving (not selling) all assets of the non-profit to another non-profit. not for money, they must be given.
otherwise anyone could start a 'non-profit' and not pay tax and then when you're ready, just say 'ok i am a regular corporation now, just forget about all the tax i never paid before'.
if you begin to operate the non-profit profitably using assets acquired or created during the non-profit period, there is a 200% IRS tax penalty.
self-dealing as a non-profit, where a member of that non-profit makes money off of the non-profit, which benefits the individual at the expense of the non-profit, is a federal tax felony.
and of course there is the IRS snitch reward program, where if you inform on a tax cheat, you get a percentage (typically 40%) of the fine they pay.
$1.2 billion x 200% = $2.4 billion
40% reward = $960 million that the EFF or others could claim if they levy charges of tax fraud (which this most definitely is).
otherwise anyone could start a 'non-profit' and not pay tax and then when you're ready, just say 'ok i am a regular corporation now, just forget about all the tax i never paid before'.
I'm guessing this is why there are so many SPVs involved in the deal, and the suspicious way they all emerged on the same day. So the backers/insiders presumably think they have a structure set up that's IRS-friendly. Or compliant. Or opaque enough to fend off less determined investigators & journalists.
Also process wise, curious how any legal fisking can be instigated. So California AG has standing as ICANN's in California, but do can an AG refer to IRS, or does IRS have to instigate it's own investigation? And presumably timing becomes an issue, ie the conversion hasn't happened yet, so can IRS do more that sending a letter stating 'If you try this on, it'll cost you'.
And then there's the financial engineering and legal fictions used to minimise tax. So new .org entity stays a 'non-profit' simply due to the $1.2bn debt it's loaded with, and fees/service charges extracted by the SPVs hovering around this turd.
But as a non-lawyer, I think you're right that investigation into the seemingly obvious self-dealing may be the way to go, and presumably something the AG can handle via the re-incorporation legislation rather than tax code.
Given the secrecy surrounding the ownership there are some interesting possibilities.
The board of ICANN
The board of “.org”
The Chinese government.
The North Korean government.
One of the Silicon Valley millionaires
Ernst Blofeld and his cat.
One thing is for sure nobody ethical with the interests of the internet users or the owners of .org websites at heart would go to so much trouble to hide their identity.
Whilst agreeing with the tenor of the letter and viewing ICANN as a greedy, self-interested body answerable to no-one I do think that the letter was sent to the wrong place.
The salutation of the letters is: "Dear General Becerra and General Shapiro:"
If the two addressees are Generals then surely the Pentagon is where the letter should have been sent.
Alternatively if the salutation had been "Dear Attorney General Becerra and Attorney General Shapiro:" then it might have been aimed at the right target.
All joking aside, is there no way that these corporate scofflaws can be brought to heel?
"In a furious letter...". I think you meant "curious". It's curious in that it doesn't actually bring any facts or legal arguments to bear, or even suggest by what mysterious mechanism a couple of AGs might stop a commercial transaction. It's also curious in that it cites two media stories that happen to have been written by the author (one cannot say "journalist") of this one. We move in small circles, apparently.
I'm a bit disappointed by Mike and Esther, too. (I've met them both.) They know, because they were there at the beginning in 1998-2000, that ICANN was created by the US Government precisely to privatize the Top Level Domain business. Once that was done, it was game over for idealistic ideas about the public interest: Ayn Rand had won. Companies get bought and sold. Don't like it? Try communism to see if you like that better.
Sorry but we have to live in the real world.
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