Re: [ga] ICANN loses $4.6 mil

[George Kirikos <gkirikos@xxxxxxxxx>]

Hi again,


Just in case folks haven't noticed, there's been an active discussion on this 
topic on CircleID

http://www.circleid.com/posts/20090203_icann_blows_46_million_stock_market/

(see the comments), including one from the CFO of ICANN, Kevin Wilson. (here's 
a copy of my most recent comment there)

I did a search with Google, and could not find any public comment period or 
public consultation associated with the Investment Policy. Thus, it would 
appear the blame falls squarely upon the folks who crafted it and approved it.

Going back to the actual Board resolution

http://www.icann.org/en/minutes/resolutions-02nov07.htm#_Toc55609372

I also do not see any reference to the public having participated in the 
decision.

Reading the actual text of the Investment Policy,

http://www.icann.org/en/financials/icann-investment-policy-nov2007.htm

it even states plainly that "The Reserve Fund is only used for **emergencies**" 
and "The Reserve Fund is the pool of investments held by ICANN that is 
restricted for use for “rainy day” **emergencies** only." (emphasis added) 
There are **13** references to "emergency" or "emergencies" in the document. 
This confirms the inappropriateness of a 5-year time horizon, which should have 
been obvious to anyone without advanced financial training.

The document also directly mentions the "Areas of Responsibility" naming the 
parties responsible for this faulty policy. ICANN needs to make people 
accountable for this loss, including firings, resignations or reprimands as 
needed. They can either do this now, or wait until the NTIA next seeks public 
comments on ICANN, where this incident will be one of the highlights. The 
choice is clear, say you dealt with it when it came up, or have a lot of 
explaining to do later. Since the Board approved this, some of the Board 
members might find it appropriate to tender their resignations, if they were 
there in November 2007. Or, they can find more directly responsible individuals 
to reprimand.

Our funds are now still at risk. It's time to cut the losses, and pick choices 
A or B above (i.e. return the funds through lower fees, or place them in 
appropriate safe securities like government guaranteed bank deposits, referring 
to a prior comment at CircleID). Even if the funds were to go up in value, 
investing them in the first place in risky assets was entirely inappropriate.

If ICANN has the free time to spend making spin-doctor videos about new gTLDs 
(had the appearance of a deer in the headlights, to me),

http://blog.icann.org/2009/02/video-update-to-the-applicant-guidebook-process/

they certainly have the time to make an official statement on the ICANN 
website, after calling an emergency Board meeting. In their next video, they 
might want to use the words "we're sorry" in the first sentence.

Sincerely,

George Kirikos
http://www.leap.com/