> 24. If ICANN approved the removal of the price cap for registration fees for .org domains, provide a detailed explanation how this occurred, including when and who initiated the process to remove the price caps and how it was ultimately approved;
...
> 35. Your conflict of interest policy.
I think it's a good sign they're asking for specific individuals. Really looks like they're not fooling around.
> 16. Did ICANN ever conduct or review any analysis of the monetary value of the .org Registry Agreement? If yes, provide all documents regarding such analysis
I'd love it if they required the de-redaction of some of the individuals involved. I think that could prove entirely enlightening to some of the _real_ motivations at play.
> The current deadline for ICANN to approve or deny the sale is February 20. It is asking Public Interest Registry to extend this to April 20 as a result of the attorney general office’s request.
> This is perhaps the biggest wrinkle so far in Internet Society’s plans to sell the registry for $1.135 billion to a private equity company.
Are the details outside the amount public and is there any clawback amount if the deal does not go through?
Looks like the AG is considering that case seriously, they're asking a very extensive list of information, including information on how the decision to remove price caps was made, the names if individuals involved, and confidential details of the deal with Ethos Capital. They definitely already studied the case to ask the pertinent questions. Hopefully this is treated as seriously as it is for the Internet and any decision where corruption was involved, or that is detrimental to the interests of non-profits, is not allowed to go through.
> *The Office of the Attorney General has the duty to supervise charitable organizations under [law#]. The [ICANN], as a registered nonprofit in California, is subject to regulation by the California Attorney General.
Sort, IANAL answer: They are incorporated in California, making their corporate conduct subject to California's laws.
Mike Godwin make several claims that the only way for the .org tld to survive is that it requires capital to improve. Another point that is repeated is that PIR (current owner of .org) is constantly making a surplus of money. The reasoning for this disparity is that a non-profit cannot use money it generates to improve itself. Is this a valid point, and if so why?
Nonprofits in California are allowed to take out loans to acquire capital. They are also allowed to spend money to improve the service they offer in the furtherance of their tax-exempt purpose, so long as the capital expenses don't count as self-dealing (like the .org sale, allegedly). There's no legal basis for either of those claims. The thing they can't do is go out and sell equity for VC money on their core purpose, or exceed the legal threshold for unrelated business income. But neither should be necessary to improve the nonprofit, especially given that it already has a surplus of money.
> Nonprofits in California are allowed to take out loans to acquire capital.
Just as point of clarification, California non-profit corporation law wouldn't apply to Public Interest Registry. It is formed and domiciled in Pennsylvania. That said, Pennsylvania law appears to permit non-profit corporations to take on debt in the same way that any other corporation formed under PA law can do (subject to rules found in the organization's bylaws or formation documents, which I've not read for PIR). Title 15 of Pennsylvania's consolidated statutes, section 5502(6) reads that a non-profit corporation has the authority "[t]o borrow money, issue or incur its obligations and secure any of its obligations by mortgage on or pledge of or security interest in all or any part of its property and assets, wherever situated, franchises or income, or any interest therein."
I can't think of a reason why PIR, with a surplus of annual income, would have any trouble receiving a loan from any number of financial institutions. In fact, the vast majority of credit unions would be tripping over themselves to make such a loan, based on what I've seen of PIR's financials. Taking out a loan against surplus income to make cash-intensive improvements to the non-profit in furtherance of its mission is basically the whole point of running a surplus that isn't distributed back to members.
I don't know how you can conclude that. To stop it they would need to challenge it in court and they're up against a potential profit here that can afford any number of big-gun law firms. I don't know the law here, but that's what will determine if this scheme succeeds, and hard proof that this sale violates such applicable laws.
I mean, you're in the territory of a non-profit entity being used to generate profit for a few individuals through corruption. The AG has a lot of pull here.
After the long list of extensively specific requests for details regarding the sale and the price cap removal and communications between each of these organizations, point 35 felt like a punchline to read.
It makes it clear they know exactly what issue they're sussing out with these requests.
Does a conflict of interest actually make something illegal? I was under the impression that while best practice to declare and avoid conflicts of interest, it was not actually illegal as long as the motives for each decision were defensible.
35 isn't a request, but a message from a powerful politician to the people behind the sale. It's hard to guess the exact meaning without full context, but I think it's "I know enough. If you want to proceed with the sale, you have to give me the names and I'll send some of them to prison." They may try to call his bluff, but they'll be sorry if he indeed knows something.
I believe a 501c3 is bound by their charter which would presumably include this conflict of interest policy. Not doing so could cause loss of non-profit status and probably other fines and penalties.
Conflict of interest may not generally be illegal, but it can be illegal under specific circumstances, especially if undisclosed. Especially things that get filed with the SEC. I would assume a lot of decisions made at the board and C-suite level have stricter requirements for this.
The question is what the private equity firm will do with .org that it thinks will earn a good profit on the 1.145 billion it is investing. And would that leave the internet better or worse off. Did ICANN even ask that question?
> If it gets the answers it demands, it will get much more information than ICANN has previously disclosed about the process and thinking behind removing price caps on .org domain names last year.
Can someone help me understand why a domain name still costs $10-$13 a year to own? Even with so many tlds (presumably competition) it’s still expensive. Why?
> 24. If ICANN approved the removal of the price cap for registration fees for .org domains, provide a detailed explanation how this occurred, including when and who initiated the process to remove the price caps and how it was ultimately approved;
...
> 35. Your conflict of interest policy.
I think it's a good sign they're asking for specific individuals. Really looks like they're not fooling around.