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Leaked memo alleges lavish travel spending at auDA

Kevin Murphy, April 16, 2018, Domain Registries

A report into .au registry auDA’s historical travel expenses has leaked to the Australian media, the latest apparent salvo in the organization’s increasingly personal civil war.

The Sydney Morning Herald this evening reports on “allegations of lavish spending and misuse of expense accounts by some former directors and employees”.

The primary individual targeted (for want of a better word) by the story is Paul Szyndler, former head of public affairs at auDA and one of the three people behind the Grumpier.com.au campaign to ouster auDA’s current CEO and chair.

It seems the Herald has managed to scoop a leaked copy of an audit compiled by PPB Advisory, which has been looking into spending practices at auDA under its previous management.

The existence of this report has been known for some time, but little about its contents had made it into the public domain beyond a slide deck (pdf) alluding to slack controls on travel expenditure.

The newspaper reports that PPB claims Szyndler racked up several thousand dollars of expenses on a family trip to Disneyland to coincide with ICANN 51 in Los Angeles in 2014.

Shortly before the Herald published (overnight in Australia), Szyndler took to an Aussie domainer forum to admit the truth of the allegation, but explain that it was fully compliant with auDA’s expenses policy at the time.

“auDA had a very clear and well understood policy at the time, whereby staff — after receiving best-available business class airfare and accommodation quotes, could spend up to, but NOT MORE THAN that figure on personal arrangements,” Szyndler wrote.

“My family joined me on a number of international trips. None cost any more than it would have cost to send me alone,” he said.

In other words, if he’d left his family at home and skipped Disneyland, he would have spent the exact same amount on a business-class flight for himself.

The Herald also says that PPB identified thousands of dollars being spent on family member travel to exotic locations, credit card cash withdrawals, expensive restaurants and even a “butler service”.

It does not say which specific staffers or directors are alleged to have spent auDA money on those things.

Indeed, Szyndler is the only person connected to specific spending in the Herald’s report.

There’s no mention of any allegations against former CEO and current ICANN vice-chair Chris Disspain — under whose watch these expenses will have been incurred — though the piece does include his blanket denial of wrongdoing.

auDA’s new chair Chris Leptos — who also sits on the PPB board — revealed last week that “several” former directors have been referred to state police over “a number of practices” upon which he did not elaborate.

Szyndler and his other Grumpier auDA members have managed to rack up enough signatures on their petition to force auDA into a special members meeting, date to be determined, that will vote on whether to get rid of Leptos, CEO Cameron Boardman and two other independent directors.

The Australian government has also been probing the organization’s antics since October, and the Herald reports that its findings could be published as soon as tomorrow (today in Australia).

Could auDA be about to get Nominetted?

auDA refers former directors to police

Kevin Murphy, April 14, 2018, Domain Registries

Imploding Australian ccTLD registry auDA has ratted out “several” of its former directors to the local cops, it was revealed this week.

In a message to its community to mark Chris Leptos’ 150th day as chair of the organization, he wrote:

I am disappointed to advise you that in my first week as Independent Chair I was briefed on a number of practices of several former auDA directors. Your Board concluded that those practices warranted referral to the Victoria Police. As you would appreciate, it is not appropriate at this stage to provide further details regarding this matter.

I’m told there are 48 former auDA directors, and auDA has not said which of them have been referred to the police.

Josh Rowe, a former director who’s orchestrating a campaign to oust Leptos, auDA CEO Cameron Boardman, and two other directors, called the move a “heinous act of bullying against all 48 ex auDA directors”.

Another former director, the Aussie domain industry blogger David Goldstein, has suggested that the timing of the revelation was designed to “silence” critics including Rowe.

The Grumpier.com.au petition organized by Rowe and others has forced auDA to hold a members meeting at which the four directors’ future employment will be voted on.

auDA lawyers contacted Grumpier earlier this week to warn that any defamatory or confidential information posted on the site could lead to litigation.

But Leptos has now seemingly confirmed that the special members meeting will in fact go ahead.

Goldstein also suggested that the police referrals are related to insinuations contained within a pair of Freedom of Information Act requests filed late last year by domain consultant Ron Andruff.

In one of Andruff’s FOIA requests, he suggests that auDA may have paid legal fees of up to AUD 120,000 incurred by Rowe when he was sued almost a decade ago by a alleged domain slammer he had regularly criticized.

Rowe has called these inferences “grossly inaccurate” and “defamatory”.

In the other, which we have reported on previously, Andruff has asked for records of expenses incurred by former auDA CEO Chris Disspain, current vice-chair of ICANN.

Both FOIA requests have been denied by the Aussie government and subsequently appealed by Andruff.

Andruff is known to have beef with Disspain after he was passed over for a prominent ICANN volunteer role.

I should note for the record that, for all of the allegations swirling around, I have not seen any evidence directly connecting any individual to any wrongdoing.

Grumpier Aussies call for more blood on the auDA boardroom floor

A group of pissed-off members of the Australian domain name industry are calling for the heads of auDA’s CEO, its new chair, and two other members of its board.

A triumvirate of long-time participants in the auDA community say they have secured enough signatures on a petition to force the organization to call the meeting under Aussie law.

They want a vote of no confidence in the CEO, Cameron Boardman, and the firing of all three “independent” directors: Chris Leptos (also chair), Sandra Hook and Suzanne Ewart.

Their list of beefs is long, but high on it is auDA’s plan to open up .au to direct, second-level registrations for the first time, enabling folk to register example.au instead of example.com.au.

If this all sounds worryingly familiar, it’s because it’s the second year in a row members have called a special meeting in order to oust its top brass.

A campaign orchestrated at Grumpy.com.au last year resulted in chair Stuart Benjamin quitting ahead of a member vote to fire him.

This year’s campaign is being coordinated, with a nod and a wink but none of Grumpy’s original leaders, at Grumpier.com.au.

Entrepreneur Josh Rowe appears to have held the pen on the petition, backed up by former head of auDA public affairs Paul Szyndler and businessman Jim Stewart.

As well as the direct registration issue, which the three men think is merely a cash-grab with no benefits for registrants, the petitioners have some harsh things to say about auDA’s governance and transparency.

The organization has promised to be more open in the wake of last year’s carnage, but Grumpier thinks “things have only got worse”.

The petition also alludes to rumors of “whispering campaigns” against former staff and “possible financial irregularities”.

Rowe recently complained on his blog about a freedom of information request related to his own conduct, filed by the same person pursing form auDA CEO (and current ICANN vice chair) Chris Disspain with FOIA requests.

They also unhappy that auDA is switching .au’s registry service provider from Neustar to Afilias, gaining a rumored 60% discount of which only 10% will be passed on to registrars.

It’s all getting rather nasty, and I’ve not even mentioned some of the rumors of shenanigans that I seem to find in my inbox on an almost daily basis.

To force a special member meeting under Australian law, Grumpier says it had to secure signatures of 5% of the members, which it says it has done.

That’s not much of a threshold, given that auDA only has about 320 members at the moment.

Assuming auDA agrees that it has to hold a meeting, it has a couple of months to do so.

auDA role “could have killed me” says resigning domainer

Domainer and activist blogger Ned O’Meara has resigned from the auDA board of directors, about four months after being elected.

He said in an apologetic blog post that the “negative stress” caused by being on the .au registry’s board had sent his blood pressure up, making him worry about having a third heart attack.

“[I]f I continued slugging it out at auDA, I believe it could have killed me,” he wrote.

He went on to say that he expected to be sidelined on key votes such as auDA’s decision to sell domains directly at the second level, due to perceived “conflicts of interest”, which he disputed.

O’Meara was elected in November as a “demand-class” member of the board, after using his blog to spearhead a campaign for greater transparency at the organization.

It sounds to me like he’s made the correct decision in stepping aside. No matter how important you believe a domain policy to be, it’s not worth your health. I wish him well.

auDA said it is now looking for two demand-class directors, to fill O’Meara’s vacant seat and another seat that is opening up due to the end of another director’s term.

auDA probably won’t pass on full Afilias savings to registrants

Kevin Murphy, February 22, 2018, Domain Registries

Switching .au’s back-end to Afilias will cut auDA’s per-domain costs by more than half, but registrants are not likely to benefit from the full impact of the savings.

auDA’s Bruce Tonkin, who led the committee that selected Afilias to replace incumbent Neustar, told DI this week that the organization is likely to take a bigger cut of .au registration fees in future, in order to invest in marketing.

That would include marketing the ability of Aussies to register .au domains at the second level for the first time — a controversial, yet-to-roll-out proposal.

Tonkin confirmed that the back-end fee auDA will be paying Afilias is less than half of what it is currently paying Neustar — the unconfirmed rumor is that it’s 40% of the current rate — but said that Afilias was not the cheapest of the nine bidders.

While .au names are sold for a minimum of two years, the current wholesale price charged to registrars works out to AUD 8.75 ($6.85) per year, of which Neustar gets AUD 6.33; auDA receives the other AUD 2.42.

A back-end fee of roughly $5 (US) per domain per year is well above market rates, so it’s pretty clear why auDA chose to open the contract to competition.

Tonkin explained the process by which Afilias was selected:

We first considered scoring without price, and Afilias received the highest score for non-financial criteria.

We then considered pricing information to form an assessment of value for money. The average pricing across the 9 [Request For Tender] responses was less than half of the present registry back-end fee ($6.33). Afilias was close to the average pricing, and while it was not the cheapest price — it was considered best value for money when taking into account the highest score in non-financial criteria.

I asked Afilias for comment on rumors that its price was 60% down on the current rate and received this statement:

Afilias believes auDA chose us based on the best overall value for the Australian internet community. The evaluation heavily weighted expertise, quality and breadth of service over price. While we don’t know what others bid, Afilias works to be competitive in today‚Äôs market. Attempts to price significantly higher than market without a value proposition are unrealistic and could even be considered price gouging.

It’s not known what price Neustar bid for the continuation of the contract, but I expect it will have also offered a deep discount to its current rate.

By switching, auDA is basically going to be saving itself over AUD 3 per domain per year, which works out to a total of AUD 9 million ($7 million) per year at least.

But the organization has yet to decide how much of that money, if any, to pass on to its registrars and ultimately registrants.

The auDA board of directors will meet in March to discuss this, Tonkin (who is in charge of the registry transition project but not on the board) said.

“We don’t want to set expectations that the wholesale price is going to change massively,” he said.

“I don’t expect it’s going to be any higher than the current wholesale price,” he said.

But he said he expects auDA to increase its slice of the pie in order to raise more money for marketing. The organization does “basically no marketing” now, he said.

“There’s certainly strong interest in doing more to market and grow the namespace,” he said. “One option is that more money is put into marketing the namespace and growing awareness of .au… That AUD 2.42, I expect that to change.”

This would include marketing direct second-level registrations, an incoming change to how .au names are sold that has domain investors worried about confusion and market dilution.

Outrage over the 2LD proposal — it appears to be a done deal, even if the details and timeline have yet to be finalized — has started attracting the attention of business media in Australia recently.

But auDA’s own research shows that opposition is not that substantial outside of these “special interests”.

A survey last year showed that 40% of .com.au registrants “support” or “strongly support” the direct registration proposal, with 18% “opposed” or “strongly opposed” Another 42% were completely unaware of the changes.

Support among .org.au registrants was lower, and it was higher among .net.au registrants.

But 36% of “special interests” — which appears to mean people who discovered the survey due to their close involvement in the domain industry — were opposed to the plan.

There’s no current timeline for the introduction of direct registrations, but the back-end handover from Neustar to Afilias is set to happen July 1 this year.

Neustar acquired AusRegistry, which has been running .au since 2002, for $87 million a couple of years ago.