RE: [council] Regarding Conflicts of Interest for ICANN Board members

["Michael D. Palage" <michael@xxxxxxxxxx>]

Bruce:

Attached below is a summary of my current conflict of interest statement as
a well as my candidate statement which I had previously circulated to the
various constituencies. I have submitted to the ICANN Board Conflicts
Committee a much more detailed statement with confidential information. This
detailed conflict statement was reviewed by the full ICANN Board Conflicts
Committee during the annual meeting in Cape Town and found to be in
compliance. In fact, a presentation by Hagen Hultzsch, the Chair of the
Conflicts Committee, was given during the annual meeting in Cape Town.

Conflict of Interest Statement - Summary

I am intellectual property attorney licensed in the states of Pennsylvania
and Florida, and I currently work as an information technology consultant. I
provide consulting/legal support services to various registration
authorities (registrars/registries). I also provide expert testimony in
connection with Internet and domain name related matters. I currently sit on
the Policy Advisory Board of .US, and I previously served as a WIPO
panelist.

Because of an ongoing consulting arrangement with Afilias, I have recused
myself in connection with the current .NET re-bid process and in connection
with certain discussions regarding certain sTLD applications in which
Afilias is providing backend registry services. In such situations, I work
closely with the Chair of the Conflicts Committee and ICANN's general
counsel to ensure that adequate safeguards are in place to ensure the
integrity of the Board's decisions. This process is not unique to myself, as
the ICANN Board by the nature of its composition has potential conflicts
that arise time to time.

Also listed below is a Candidate Statement which I prepared and circulated
to various constituencies outlining my qualifications and objectives for a
second term if re-elected.

I look forward to answering any questions that the Council members may have
on the call later today.

Best regards,

Michael D. Palage


*** BEGIN CANDIDATE STATEMENT ***


Hello All:

I have prepared this candidate statement for dissemination to the council
and their respective constituencies. Under the terms set forth by the GNSO
Council in connection with the election process for ICANN Board seat #14,
any potential candidate must seek the nomination of two GNSO Council
members. Although I have been approached by  several Council representatives
inquiring about my intentions/desires to seek re-election, I have requested
that these individuals withhold any nominations of my candidacy until I had
circulated this statement.

Let me begin by stating that it is my intention to seek a second term on the
ICANN Board. This is a decision that did not come lightly, but one which
involved a lot of consultation with friends and colleagues, but most
importantly my family. I hope that I will be afforded the privilege to serve
a second term on the ICANN Board as a duly elected representative of the
GNSO. What I would like to do in this statement is (I) describe my
qualifications as required by ICANN's bylaws; (II) explain how I have
represented the interests of all Internet stakeholders during my initial
two-year term; and (III) set forth a list of priorities which I would like
to achieve during a potential second term.

If there are any constituencies that would like to set up a conference call
to discuss this statement, I would be willing to do so either individually
or in connection with any other candidates which may be nominated. As always
should anyone have any questions or comments please do not hesitate to
contact me.

Best regards,

Michael D. Palage


I. QUALIFICATIONS

Directors shall be:

A. Accomplished persons of integrity, objectivity, and intelligence, with
reputations for sound judgment and open minds, and a demonstrated capacity
for thoughtful group decision-making;

I have a very diverse educational and professional background which is
founded upon the principles of integrity, objectivity and intelligence. I
hold a Bachelors of Science in Electrical Engineering from Drexel
University, and a Juris Doctorate from the Temple University School of Law.
I am currently admitted to practice law in the states of Florida and
Pennsylvania. Prior to serving on the ICANN Board I Co-Chaired ICANN's
Working Group B and served as the Chair of the ICANN Registrar Constituency.
Both of
these positions required me to balance diverse business and philosophical
interests in decision-making processes.

B. Persons with an understanding of ICANN's mission and the potential impact
of ICANN decisions on the global Internet community, and committed to the
success of ICANN;

I have been involved in ICANN since nearly its inception. I attended my
first ICANN event in January of 1999 in Washington while the various
stakeholders debated the structure of the then Domain Name Supporting
Organization (DNSO). Later that Spring my company InfoNetworks was selected
as one of the first 32 ICANN accredited registrars. In March of that year in
Berlin, Germany, I was elected as the secretariat/chair of the newly formed
Registrar Constituency. In this capacity I was intimately involved in the
drafting and implementation of the UDRP. Over the years I have also been
involved
in various policy development efforts as well as Evolution and Reform
Process. In 2003, I was elected to serve a 2 year term on the ICANN Board of
Directors.  Through these many years I have remained committed to the
principles of openness and transparency upon which ICANN was founded.

C. Persons who will produce the broadest cultural and geographic diversity
on the Board consistent with meeting the other criteria set forth in this
Section;

One of the criticisms of ICANN at the time of its formation was its
domination by North American directors. However, currently I am one of only
three (3) North American directors out of the fifteen (15) ICANN directors.
In fact the Latin Americas and Asia / Pacific  regions each have more
directors than North America. Therefore, my potential election to the ICANN
Board would be consistent with the cultural and geographic diversity that
the by-laws require.


D. Persons who, in the aggregate, have personal familiarity with the
operation of gTLD registries and registrars; with ccTLD registries; with IP
address registries; with Internet technical standards and protocols; with
policy-development procedures, legal traditions, and the public interest;
and with the broad range of business, individual, academic, and
non-commercial users of the Internet;

I am one of the only ICANN Board Members that has an  intimate knowledge of
policy and technical gTLD registry and registrar issues in connection with
my consultation with these entities over the years. I have spent these past
couple of years on the ICANN Board educating the Board Directors  and the
ICANN staff on the technical and operational issues associated with
operating registries and registrars.  In addition, I am also, by training,
an intellectual property attorney that has experience in running my own
consulting business.  I have represented both commercial and noncommercial
entities in my practice.  Each of these experiences gives me the requisite
experience to balance the interests of many of the ICANN stakeholders.  I
also have an understanding of ccTLD operations in connection with my service
as a policy advisory member of the .US Policy Council.

E. Persons who are willing to serve as volunteers, without compensation
other than the reimbursement of certain expenses; and

As my record indicates, since ICANN's inception, I have committed a large
amount of time to domain name policy issues without compensation, including
these past two years on the ICANN Board.  I have no issue with spending the
next several years serving on the ICANN Board without compensation other
than the reimbursement of certain
expenses.


F. Persons who are able to work and communicate in written and spoken
English.

English is my primary written and spoken language



II Accomplishment During My First Term

Although Article VI, Section 7 of the ICANN by-laws prohibit any director
from putting the individual best interests of any supporting organization or
constituency above the best interest of ICANN, I believe that I have been in
the unique position of ensuring that the diverse viewpoints of the various
GNSO constituencies have been heard at the Board level. Among the
accomplishments  during my first term are:

A. Education/Awareness. I believe that I have an in-depth understanding of
the domain name marketplace, as well as the legal nuances of ICANN's by-laws
and various contractual agreements, and have shared such perspectives with
the Board.. Although the ICANN Board is composed of some of the Internet's
greatest pioneers/leaders in the protocol, standards and IP addressing
community, my experience has enabled me to educate the Board on the dynamics
of the domain name marketplace, particularly with regard to the gTLD segment
which accounts for over 80% of ICANN's base revenue.

B. Monitoring of GNSO Council Teleconferences. I regularly attend monthly
GNSO Council teleconferences as an observer so that I can be apprised first
hand of the issues emerging from the GNSO. When I am unable to attend the
calls in real-time, I promptly listen to the real-audio archives when they
are made available.

C. Accessibility. I am in regular contact (physical, telephone, and/or
email) with various GNSO Council representatives, as well as the various
constituents for most all of the GNSO constituencies. During the regional
face-to-face ICANN meetings I strive to attend all constituency and cross
constituency-meetings, even if only briefly because of scheduling conflicts.
I believe that it is my obligation as a Board Director to ensure that these
lines of communication always remain open.  One of the worst things that
could happen without these mechanisms is having a Board that is out of touch
with its stakeholders.  My participation and accessibility to the
stakeholders greatly bridges the often perceived gap between the GNSO and
the ICANN Board.

D. Attendance. I have not missed one scheduled ICANN Board or Committee
Meeting during my two-year term.


III Priorities For My Second Term

One of the issues that I have been an advocate of is metrics by which ICANN,
staff, and the participants within the ICANN process can be held accountable
to the ICANN and Internet communities. A Board Director should be no
different, and that is why I have
provided the list of priorities that I would like to achieve during a
potential second term on the ICANN Board. Although the challenges facing
ICANN over the next couple of years may necessitate some changes, I believe
it is important to enumerate these priorities so that in three years there
may be some metrics by which to measure my performance should I be afforded
the opportunity to serve a second term.

A. Strategic Plan. Prior to the beginning of my first term in 2003, ICANN
had just completed a comprehensive Evolution and Reform Process. Much
attention was paid to ICANN's limited mission and core values, and the
resulting budgetary requirements needed to accomplish these tasks. During my
first budgetary cycle process, ICANN's budget essentially doubled from 8
million to 16 million. In the current second budgetary cycle, ICANN is
looking at a budget clearly in excess of 20 million dollars annually when
you consider the potential revenues from the 75 cent fee incorporated into
the
.NET RFP, new TLDs, as well as the continued growth of the domain name
space.

At first blush, it is hard to argue that ICANN's mission and core values
have not changed. However, over the past several years there has been
several factors that have directly attributed to these budgetary increases,
most notably litigation expenses and the WSIS process. What I have learned
during my first term on the Board, which has included service on the Finance
Committee, is that no single director alone has the ability alter the ICANN
budget. Instead, any fundamental change to the ICANN budget can only be
achieved by stakeholders input through the bottoms-up consensus process upon
which ICANN is founded. That is why I believe the center-piece of any second
term must be mechanisms that allow for meaningful stakeholder participation
in the Strategic Plan Process, including developing mechanisms for
accountability.

By allowing for direct stakeholder participation in connection with the
ICANN Strategic Plan, stakeholders will be able to have a voice in ICANN's
mission and core values and the resulting budgetary resources to accomplish
these goals. The design and  implementation of these safeguards are a
priority as ICANN is currently undergoing stakeholder consultation in
connection with its first Strategic Plan. I believe that the framework for
these mechanisms can be found in the resulting documentation produced from
the recent Amsterdam consultation process. I look forward to continuing the
work that these individuals during the remainder of my current term, and
hopefully in my second term.

B. Increased resources to enable meaningful stakeholder participation and
policy development. Under Article X, Section 2 of the ICANN by-laws the GNSO
Council is "responsible for managing the policy development process of the
GNSO." However, to date I do not believe that ICANN has dedicated the
necessary resources for the GNSO Council or the GNSO constituencies.  This
has resulted in a
disproportionate burden on the council members and their individual
constituency participants. Additional resources include not only staff, but
tools that will facilitate consensus building initiatives including for
example teleconference capabilities and online voting.

C. Whois. Whois has been a priority policy issue dating back to the
formation of ICANN itself. By most accounts the current system is not
working, and may more importantly be placing some registration authorities
(registrars & registries) in violation of their national/local laws. A
solution must be sought that is consistent with the ICANN mission of
security and stability, and balances the respective rights of individuals,
registration authorities, business/IP interests, as well as law enforcement.

D. WIPO II. ICANN must ensure than ICANN's bottoms-up consensus principles
are adhered to with regard to any proposed changes in gTLD policy.

E. ICANN Registrar Accreditation Agreement. ICANN is currently in the
process of reviewing the ICANN Registrar Accreditation Agreement. Close
attention must be paid to this important process that was one of the first
initiatives that ICANN undertook back in the spring of 1999. In considering
any proposed changes, ICANN should carefully consider changes in the
marketplace and consider changes in the context of ICANN's core values,
which include:

- Where feasible and appropriate, depending on market mechanisms to promote
and sustain a competitive environment.

- Introducing and promoting competition in the registration of domain names
where practicable and beneficial in the public interest.

F. Internationalization of ICANN. ICANN needs to be more inclusive by
ensuring that more people are able to participate in the ICANN process.
Therefore, ICANN should endeavor to translate key documents such as the
Strategic Plan into other languages.  Consistent with this
internationalization outreach, ICANN needs to play closer attention to how
its policies interact with national laws.

G. Partnership. ICANN must promote relationships with the public and private
sectors as well as civil society to help in promoting and preserving the
principles upon which Internet has flourished.


*** END CANDIDATE STATEMENT ***





-----Original Message-----
From: owner-council@xxxxxxxxxxxxxx
[mailto:owner-council@xxxxxxxxxxxxxx]On Behalf Of Bruce Tonkin
Sent: Wednesday, March 16, 2005 10:02 PM
To: council@xxxxxxxxxxxxxx
Subject: [council] Regarding Conflicts of Interest for ICANN Board
members


Hello All,

I have asked Michael Palage to provide a current conflict of interest
statement to provide information to assist GNSO Council members in
making their voting decision.

This request would apply to any candidates in the current election, and
also to candidates in future elections.

>From the ICANN Bylaws, with respect to Conflict of Interest:

"The Board, through a committee designated for that purpose, shall
require a statement from each Director not less frequently than once a
year setting forth all business and other affiliations which relate in
any way to the business and other affiliations of ICANN. Each Director
shall be responsible for disclosing to ICANN any matter that could
reasonably be considered to make such Director an "interested director"
within the meaning of Section 5233 of the California Nonprofit Public
Benefit Corporation Law ("CNPBCL"). In addition, each Director shall
disclose to ICANN any relationship or other factor that could reasonably
be considered to cause the Director to be considered to be an
"interested person" within the meaning of Section 5227 of the CNPBCL.
The Board shall adopt policies specifically addressing Director,
Officer, and Supporting Organization conflicts of interest. No Director
shall vote on any matter in which he or she has a material and direct
financial interest that would be affected by the outcome of the vote."

ICANN's conflict of interest policy (approved by the Board in March,
1999) is:
http://www.icann.org/committees/coi/coi-policy-04mar99.htm

Conflicts of Interest Policy
[Adopted March 4, 1999, pursuant to ICANN Bylaws,
Article V, Section 7, and Article VI, Section 3(b)]

1. Purpose

The purpose of the Conflicts of Interest policy is to ensure that the
deliberations and decisions of the Corporation are made in the interests
of the global Internet community as a whole, and to protect the
interests of the Corporation when it is contemplating entering into a
transaction, contract, or arrangement that might benefit the private
interest of an Interested Director, Officer or Person (as defined
below). An Interested Director, Officer or Person may not use his or her
position with respect to the Corporation, or confidential corporate
information obtained by him or her relating to the Corporation, in order
to achieve a financial benefit for himself or herself or for a third
person, including another nonprofit or charitable organization. This
policy is intended to supplement but not replace any applicable laws
governing conflicts of interest in nonprofit and charitable
corporations.

2. Definitions

2.1 Compensation. "Compensation" includes direct and indirect
remuneration as well as gifts or favors that are substantial in nature.

2.2 Family. The "family" of any individual shall include only his or her
spouse; his or her siblings and their spouses; his or her ancestors; and
his or her descendants and their spouses.

2.3 Financial Interest. A person has a "financial interest" if the
person has, directly or indirectly, through business, investment or
family:

(a) An existing or potential ownership or investment interest in any
entity with which the Corporation has a transaction, contract, or other
arrangement, or

(b) A compensation arrangement with the Corporation or with any entity
or individual with which the Corporation has a transaction, contract, or
other arrangement, or

(c) An existing or potential ownership or investment interest in, or
compensation arrangement with, any entity or individual with which the
Corporation is negotiating a transaction, contract, or other
arrangement, or

(d) An existing or potential ownership or investment interest in, or
compensation arrangement with, any entity whose business or operation
has been or will be directly affected by a decision or action of the
Corporation.

2.4 Interested Director. "Interested Director" shall mean any Director
of the Corporation who has a material financial interest, as defined
above, or who serves as a Director or Officer of any entity with which
the Corporation has a transaction, contract, or other arrangement.

2.5 Interested Officer. "Interested Officer" shall mean any Officer who
has a material financial interest, as defined above, or who serves as a
Director or Officer of any entity with which the Corporation has a
transaction, contract, or other arrangement. For purposes of this
policy, the President of the Corporation shall be treated as an Officer.

2.6 Interested Person. "Interested Person" shall mean either:

(a) Any person currently being compensated by the Corporation for
services rendered to it within the previous 12 months, whether as a
full- or part-time employee, independent contractor, or otherwise, or

(b) Any person whose family member, as defined in Section 2.2, is
currently being compensated by the Corporation for services rendered to
it within the previous 12 months, whether as a full- or part-time
employee, independent contractor, or otherwise.

3. Committee on Conflicts of Interest

3.1 To administer and monitor compliance with this Policy, the Board
shall create a Committee of the Board on Conflicts of Interest
("Conflicts Committee"), to consist of at least two Directors named by
the Board.

3.2 The Conflicts Committee shall require a statement from each Director
and Officer not less frequently than once a year setting forth all
business and other affiliations which relate in any way to the business
and other activities of the Corporation.

4. Duty to Abstain

4.1 No Director shall vote on any matter in which he or she has a
material and direct financial interest that will be affected by the
outcome of the vote.

4.2 In the event of such an abstention, the abstaining Director shall
state the reason for the abstention, which shall be noted in the minutes
of the Board of Directors.

5. Disclosure by Directors and Officers

5.1 When requested by the Conflicts Committee (not less frequently than
once a year), each Director and Officer shall promptly submit a
statement to the Committee setting forth all business and other
affiliations which relate in any way to the business and other
affiliations of the Corporation.

5.2 With respect to any particular matter then pending before the
Corporation, each Director and Officer shall disclose to the Conflicts
Committee any matter that could reasonably be considered to make the
Director or Officer an "Interested Director" or "Interested Officer," as
defined above.

5.3 With respect to any particular matter then pending before the
Corporation, each Director and Officer shall disclose to the Conflicts
Committee any relationship or other factor that could reasonably be
considered to cause the Director or Officer to be considered to be an
"Interested Person," as defined above.

5.4 For purposes of this section, Officers of the Corporation need not
disclose compensation and other benefits paid to the Officer by the
Corporation pursuant to Board resolution.

6. Disclosure by Supporting Organization

Members of or participants in Supporting Organization councils must
disclose conflicts of interest or other financial interests in matters
within the scope of the Supporting Organization in the manner required
by the Bylaws of the Supporting Organization.

7. Procedures in Connection with Proposed Transactions and Arrangements

7.1 Scope. This section applies to any proposed transaction, contract,
or arrangement in which a Director, Officer, or Interested Person has a
material financial interest.

7.2 Duty to Disclose. In connection with any actual or possible
conflicts of interest, an Interested Director or Interested Officer must
disclose the existence and nature of his of her material financial
interest to the Conflicts Committee prior to the consideration of the
proposed transaction, contract, or arrangement by the Board or any
Committee of the Board.

7.3 Determining Whether a Conflict of Interest Exists. After disclosure
of the financial interest, the disinterested members of the Conflicts
Committee shall determine whether a conflict of interest exists. Neither
the Board nor any Committee of the Board shall vote upon any proposed
transaction, contract, or arrangement in connection with which an actual
or possible conflict of interest has been disclosed by an Interested
Director until such time as the Conflicts Committee has addressed the
actual or possible conflict of interest. For matters pending before the
full Board of Directors, a referral to the Conflicts Committee will not
be required where the Interested Director fully discloses to the Board
his or her financial interest and abstains from participation in the
Board's consideration of the proposed transaction, contract, or
arrangement.

7.4 Procedures for Addressing a Conflict of Interest

7.4.1 Where a matter has been referred to the Conflicts Committee and
the Conflicts Committee has concluded that a conflict of interest
exists, the chairman of the Board or Committee of the Board shall, if
appropriate, appoint a disinterested person or committee to investigate
alternatives to the proposed transaction, contract, or arrangement.

7.4.2 After exercising due diligence, the Board or Committee shall
determine whether the Corporation can obtain a more advantageous
transaction, contract, or arrangement with reasonable efforts from a
person or entity that would not give rise to a conflict of interest.

7.4.3 If a more advantageous transaction, contract, or other arrangement
is not reasonably attainable under circumstances that would not give
rise to a conflict of interest, the Board or Committee shall determine
by a majority vote of the disinterested Directors whether the
transaction, contract, or arrangement is in the Corporation's best
interest and for its own benefit and whether it is fair and reasonable
to the Corporation, and shall make its decision as to whether to enter
into the transaction, contract, or arrangement in conformity with such
determination.

8. Violations of the Conflicts of Interest Policy

8.1 If the Conflicts Committee has reasonable cause to believe that a
Director or Officer has failed to disclose an actual or possible
conflict of interest, it shall inform the Director or Officer of the
basis for such belief and afford the Director or Officer an opportunity
to explain the alleged failure to disclose.

8.2 If, after hearing the response of the Director or Officer and making
such further investigation as may be warranted in the circumstances, the
Conflicts Committee determines that the member has in fact failed to
disclose an actual or possible conflict of interest, it shall recommend
to the Board of Directors appropriate disciplinary and corrective
action.

8.3 The violation of this conflicts of interest policy is a serious
matter and may constitute "cause" for removal or termination of a
Director or Officer, or the termination of any contractual relationship
the Corporation may have with an Interested Person or other party.

9. Records of Proceedings

9.1 The minutes of the Conflicts Committee shall contain:

(a) The names of Directors and Officers found to have a material
financial interest in connection with an actual or possible conflict of
interest; the nature of the financial interest; any action taken to
determine whether a conflict of interest was present; and the decision
of the Conflicts Committee as to whether a conflict of interest in fact
existed.

(b) The names of the persons who were present for discussions and votes
relating to the actual or potential conflict of interest; the content of
the discussion; and a record of any votes taken in connection therewith.


9.2 In connection with a conflict of interest, the minutes of the Board
or other Committee of the Board shall contain the names of the persons
who were present for discussions and votes relating to the transaction
or arrangement; the content of the discussion, including any
alternatives to the proposed transaction or arrangement; and a record of
any votes taken in connection therewith.

10. Compensation Committees

A member of any Committee of the Board the jurisdiction of which
includes compensation matters and who receives compensation from the
Corporation for services is precluded from voting on matters pertaining
to that member's compensation.

11. Annual Statements

Each Director and Officer shall annually sign a statement which affirms
that such person:

(a) Has received a copy of the conflicts of interest policy;

(b) Has read and understands the policy;

(c) Has agreed to comply with the policy; and

(d) Understands that the Corporation is a charitable organization and
that in order to maintain its federal tax exemption it must engage
primarily in activities which accomplish one or more of its tax-exempt
purposes.

12. Periodic Reviews

The Conflicts Committee shall periodically consider whether and how this
Conflicts of Interest Policy should be revised or amended to better meet
its objectives. In connection with any periodic review conducted by the
Corporation to ensure that it operates in a manner consistent with its
charitable purposes, the Conflicts Committee shall report on the matters
referred to it and their resolution.


Regards,
Bruce Tonkin