Director Sues ICANN

Working on behalf of one of the Internet Corporation for Assigned Names and
Numbers (ICANN) directors, the Electronic Frontier Foundation (EFF) filed a
lawsuit against the organization Monday for access to corporate records.

According to the lawsuit, ICANN management has allegedly been involved in a series of
delaying tactics to hinder Karl Auerbach — one of 19 ICANN directors —
from reviewing documents, in violation of California non-profit
organization regulations.

The lawsuit comes at a particularly bad time for the beleagured
organization, which has recently drawn
the ire
of Congressional members who question ICANN’s operations,
mainly its secrecy and seeming attempts to do away with public representation.

According to Auerbach, he has been trying to review ICANN’s financial
documents since his election through the At-Large election process in
December 2000. He said management’s position so far, that he must sign a
non-disclosure agreement (NDA) over the contents of the documents, is illegal.

“California nonprofit law requires a corporation to provide its directors
the information required to make informed and intelligent decisions,” he
said. “ICANN management has denied me the tools I need to exercise
independent judgment and fulfill my duties as a director.”

In his Web-published diaries,
Auerbach’s alludes to possible “excessive payments to disqualified
persons,” which would seem to be the reason behind the NDA, though ICANN
officials were not available for comment.

ICANN’s auditor, KPMG, was notified last year about these suspect fund
transfers, so they can’t pull an “Andersen” and plead ignorance, he said,
referring to the current Enron scandal.

Auerbach, who represents North America on the board of directors, said the
organization has done whatever it could to prevent him from seeing corporate
documents, even going so far as secretly instituting the NDA policy without
presenting it to directors for vote.

The approach has shocked many in the legal and Internet community, who
quickly point to ICANN bylaws, which state: “Every Director shall have
the right at any reasonable time to inspect and copy all books, records and
documents of every kind, and to inspect the physical properties of the
Corporation. The Corporation shall establish reasonable procedures to
protect against the inappropriate disclosure of confidential information.”

According to James Tyre, Auerbach’s attorney, his client has an “absolute
right” to inspect and copy any corporate records for his use, not only
under ICANN guidelines, but under California law.

“Directors, not management, have the ultimate responsibility and authority
to oversee the operations of a corporation like ICANN,” he said. “ICANN
staff’s arbitrary and changing policy regarding access to corporate records
is not only disturbing, but unlawful in the state of California.”

ICANN could not be reached for comment.

News Around the Web