House of cards: Lawyers at every turn
While ICANN's board is subject to its bylaws of transparency and accountability, ICANN's legal team developed their own opinion that they were not subject to their own organization's rules, and neither were the evaluators that they selected.
This was not the only extraordinary thing to emerge from a day-long hearing [PDF] earlier this year. Under questioning, ICANN's legal representative attempted to argue that even though the EIU's decision was passed through ICANN's legal team, who then recommended to the ICANN board whether to accept it, at no point was there an actual determination over the accuracy or validity of the EIU decision.
If any EIU decision was subsequently challenged, ICANN's legal team informed the board that it was their legal opinion that any challenge could only be heard on the very limited grounds of whether there had been a procedural error, rather than on the merits of the decision.
In addition, the legal team drew up strict confidentiality requirements in the evaluators' contracts that prevent them from providing any information to anyone but the legal team. And any and all information between the BGC and ICANN staff was also made through the general counsel's office in order to claim that it came under legal privilege. ICANN also claimed legal privilege over a wide range of other documents.
In effect, ICANN's general counsel not only wanted to have his cake and eat it, but also oversaw the purchase of the eggs and flour and supervised the baker.
This house of cards fell down, however, when Dot Registry's counsel – Arif Ali – walked the review panel through the process, with the panel concluding that despite all the legal sleight of hand, it did not allow the board "to disregard mandatory obligations under the bylaws."
Despite three different requests from the panel to ICANN to supply relevant materials, it repeatedly failed to provide documentation that Dot Registry and the panel are confident exists. Instead, ICANN supplied only a limited "privilege log" of what emails were sent from whom and the names of any attachments on those emails.
"The privilege log submitted by ICANN in these proceedings does not list any documents either sent from Board members to any ICANN staff or sent from any Board member to any other Board member," the judgment notes with some irritation.
According to Dot Registry's expert testimony – to which ICANN failed to provide a response – the company was treated differently from other companies that had also applied for community status for their names.
Additional requirements that did not exist for other applicants – such as the need for a community to "act as a community" and for there to be "consistent" support for the application from every supporting organization – were applied to Dot Registry. In total, the company identified six ways in which it was treated differently.
Despite ICANN's Board Governance Committee having the explicit authority to dig into the allegations – the panel identifies no less than six different ways that it is empowered in the bylaws to carry out an independent investigation – the judgment notes: "The BGC did none of these."
As CEO of Dot Registry, Shaul Jolles, told us after the judgment was published: "As soon as I saw the original EIU decision, I knew they were trying to fail us. I knew the whole thing was a sham."
As well as finding in favor of the applicant, the panel ordered that ICANN pay all fees, totaling $465,000.
ICANN's chosen panelist, Charles Browser, published a dissenting opinion in which he argued primarily that he doesn't believe the Dot Registry applications would pass the community evaluation.
The majority of the panel stated that this "focus on whether Dot Registry should have succeeded in its application for community priority is entirely misplaced," quoting ICANN's own legal counsel, who said the singular purpose of the IRP was to see if the ICANN board had followed its own bylaws.
Follow the money
As to why ICANN's staff deliberately interfered in the evaluation of .inc, .llp and .llc and then went to such enormous lengths to try to cover it up, Jolles feels it has to do with the fact that there's a significant number of other companies that also applied for the names, and that they have undeniable commercial value.
"Some of my competitors are even on the [ICANN] Board," he noted. "These strings are worth a lot of money. Just look at what happened with .web."
Earlier this month, an action for the internet extension .web went to auction and was sold for $135m. All of that money went into ICANN's coffers. The organization has yet to say what it will do with it, as well as the other $105m it has also raised from a further 15 auctions of top-level domains.
Since 2010, ICANN's top lawyer John Jeffrey has seen his salary rise on average 26 per cent per year to $530,000 in 2015. Also in 2015, the chair of the BGC, Chris Disspain, received [PDF] $145,000 in compensation, payment and reimbursements for the part-time voluntary work he carried out for ICANN, a California-based non-profit.
"We are still studying the declaration, but according to ICANN’s bylaws the next step will be for the Board of Directors to consider the declaration," a spokesman for ICANN told us today. ®