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Ombudsman asks DCA to simmer down after .africa conflict of interest complaint

Kevin Murphy, December 10, 2012, Domain Policy

ICANN’s Ombudsman dismissed a complaint from DotConnectAfrica about alleged conflicts of interest on ICANN’s board of directors, but scolded DCA for its “intemperate” blog posts.

DCA complained in October that two members of the board — Mike Silber and Chris Disspain — have conflicts of interest in relation to the contested .africa gTLD.

DCA has applied for .africa without notable government support, whereas South African registry Uniforum has applied with formal backing from most African governments.

According to DCA’s complaint, as described by Ombudsman Chris LaHatte in a new blog post, Disspain and Silber somehow have conflicts of interest related to this contention set.

Silber is treasurer of ZADNA, the South African domain name authority, which oversees .za policy and ergo Uniforum’s ccTLD business, which is arguably a close connection to the .africa applicant.

Disspain is CEO of auDA, which oversees policy for Australia’s .au ccTLD and therefore has a relationship with AusRegistry, a major back-end provider for new gTLD applicants.

It’s not at all obvious what the alleged conflict of interest related to .africa is in Disspain’s case.

When LaHatte asked DCA executive director Sophia Bekele to explain the precise nature of the conflicts, he did not receive any information beyond identification of these two employment connections, both of which are already fully disclosed by ICANN.

Both men are members of the board’s New gTLD Program Committee, which wields the board’s power over the new gTLD program and is designed to comprise only non-conflicted directors.

LaHatte blogged that he was unable to find any discussion of .africa in any board or committee meeting minutes — because ICANN has not discussed any individual gTLD applications yet — and was therefore unable to find any unfair treatment of DCA.

Dealing with unfair treatment is of course the Ombudsman’s job. LaHatte concluded:

I consider that no disqualifying conflict of interest, or indeed any conflict of interest at all, is present in the actions of both Chris Disspain and Mike Silber. It is likely this complaint has led to increased awareness of the possibilities of conflict of interest, which the Board will carefully consider in terms of the existing policy about conflict, when the issue arises. I consider this should continue to be a matter for consideration in gTLD decision making by the Board.

But the Ombudsman also, it seems, had some concerns about the nature of DCA’s lobbying campaign over the last several months, which has been as vitriolic has it has been scattershot.

As previously noted, some of its allegations against its .africa rival have been baffling.

LaHatte clearly picked up on the tone of the debate also, blogging:

There has been considerable amount of discussion on blogs, Twitter and other sites and in comments on the ICANN website in relation to the new .africa gTLDs applications. Regrettably much of the discussion has been intemperate.

An aspect of this application has been the unfortunate tone of much of the debate on various websites blogs and other places. During the course of this investigation I discussed this with Sophia Bekele (at the Toronto meeting) and suggested that perhaps a less aggressive approach would be appropriate. She readily agreed to this.

The discussion and debate continues to be fairly vigorous, but I would suggest to the competing parties for .africa that they should pay attention to the ICANN rules about respectful communication.

As Uniforum has said little, and DCA a lot, I can also assume that the blog posts being referred to are DCA’s.

The company has for several months regularly posted often incomprehensible allegations on its blog, usually in multicolored text with liberal use of italics and bold.

Bekele was also last week rumbled using a fake identity on a mailing list to support DCA’s position.

ICANN to hire conflict of interest experts

Kevin Murphy, October 6, 2011, Domain Policy

ICANN is to bring in ethics experts to advise it on its conflicts of interest policy, addressing the ongoing controversy over its former chairman’s move to the domain industry.

The organization plans to “engage an external firm with expertise in advising on ethical issues”, according to the minutes of a September 15 meeting of its Board Governance Committee.

The consultants will be tasked with helping to “develop an ICANN Ethics Regime or set of Guidelines for the Board, the staff and the community.”

ICANN has been faced recently with calls to impose post-employment restrictions on board members and staff, in order to prevent a “revolving door” between it and the industry it essentially regulates.

This follows former chairman Peter Dengate Thrush’s move to new gTLD applicant Minds + Machines just a few weeks after voting to approve the new gTLD program.

Senator Ron Wyden and the Association of National Advertisers are among those making the call, and the US Department of Commerce, which oversees ICANN, appears to have heard it.

But as I reported earlier in the week, it may actually be illegal for ICANN, as a California corporation, to contractually ban employees from joining domain name companies after they quit.

However, the BGC has other ideas about how to strengthen ethics without imposing these potentially problematic employment restrictions.

It’s now talking about a ethics policy with “disclosure and abstention requirements” for directors “surrounding future interests or potential future interests”.

While the policy has yet to be written, one can imagine a scenario in which an ICANN director would be prevented from voting on a policy that would be likely to enrich them in a future job.

Cherine Chalaby, Bill Graham and Ray Plzak are the BGC members who will be leading the board discussions, which are expected to continue in Dakar later this month.

The ethics issue was first raised publicly by ICANN president Rod Beckstrom during his opening address at the Singapore meeting in June — before the new gTLD vote and before Dengate Thrush’s departure.

Would an ICANN ethics policy break the law?

Kevin Murphy, October 3, 2011, Domain Policy

Calls for a new ethics policy to prevent a “revolving door” between ICANN and the domain name industry stepped up today, with the Association of National Advertisers entering the debate.

But would such a policy be illegal in ICANN’s home state of California?

The ANA and others wrote to ICANN today, in response to a public comment period on the question of whether ICANN should revise its conflicts of interest policy.

ICANN had asked whether the policy should be changed in order to let its board of directors vote to give themselves a salary. They’re currently all unpaid except the chair.

But the responses so far have instead largely focused on the perceived need to stop directors (and to a lesser extent staff) from taking lucrative industry jobs after they quit.

That was perhaps inevitable given the recent mainstream media coverage of former ICANN chair Peter Dengate Thrush, who took a high-paying job with new gTLD applicant Minds + Machines just a few weeks after helping to push through approval of the gTLD program.

The ANA’s president, Bob Liodice, wrote:

There is, at a minimum, legitimate reason for concern that the lack of adequate conflict of interest policies have led to the development of a growing perception that Mr. Thrush (and perhaps other senior staff who recently have left ICANN) may have let future career prospects influence their official duties.

(The other senior staffer he refers to could only be Craig Schwartz, the former chief gTLD registry liaison, who quit ICANN to join a likely .bank applicant in June.

While there are good reasons that Dengate Thrush’s move looks extremely fishy to outsiders, I’ve yet to hear any compelling arguments that Schwartz, who I don’t think had any high-level policy-making power anyway, did anything wrong.)

The ANA is of course the ring-leader of the ongoing campaign to get ICANN to rethink the new gTLD program in its entirety.

Liodice’s letter goes on to outline a number of suggestions, posed as questions, as to how ICANN could improve its conflict of interest policy, such as:

should ICANN consider reasonable restrictions or a moratorium on post‐service employment of ICANN staff by, or the contracting of such staff members with, parties under contract to ICANN, or whose businesses are materially affected by any decision made by the Board during the staff member’s tenure?

In other words: should ICANN staff be banned from joining registrars and registries after they leave?

In two other letters to ICANN today, Coalition for Online Accountability, International Trademark Association and American IP Law Association (collectively) and the French government make similar calls for future employment restrictions, albeit only for ICANN directors rather than staff.

But here’s another question: if the community asked ICANN to institute a revolving-door prevention policy, could it legally do so? A bit of digging suggests it might be tough.

According to the minutes of an August 15 meeting of ICANN’s Board Governance Committee:

The BGC discussed that as a private sector organization, ICANN is limited in its ability to place restrictions on future employment, though there are many things that ICANN can do to address these concerns, such as continued strict adherence and enforcement of confidentiality provisions.

The matter was also discussed by the full board at its retreat last month, and is on the agenda for the public meeting in Dakar, Senegal, at the end of October.

While ICANN does have pseudo-regulatory power (all enforced through contract) it is at the end of the day a California corporation, which is bound by California law.

And in California, it may not be legal to unreasonably restrict employees’ future job opportunities.

I’m not a lawyer, and this may not be applicable to ICANN for any number of reasons, but consider how California law deals with so-called “non-compete clauses” in employment contracts.

The text “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void” is on the California statute books.

And in 2008, the California Supreme Court interpreted this rather strictly, ruling that “non-competition agreements are invalid under section 16600 in California even if narrowly drawn”.

So could ICANN legally prevent staff or directors from jumping into the for-profit sector when they please? Is there any point in the community even debating the subject?

At this point, any members of the California Bar reading this are welcome to throw their $0.02 into the comments section below.