Re: [wg-review] Clarifications requested from BoD, Staff, NC, TC,Chair prior to co-Chair elections

[Kent Crispin <kent@songbird.com>]

On Tue, Jan 09, 2001 at 07:56:23AM -0800, Karl Auerbach wrote:
> On Tue, 9 Jan 2001, Kent Crispin wrote:
> 
> > ... of course we can modify the bylaws to our hearts
> > content; we could dissolve the corp if we got bored with it, etc.  It's
> > OUR corporation.
> 
> > But *exactly* the same legal structure applies to ICANN.
> 
> It is amazing how many utterly incorrect and naive legal notions float out
> of some keyboards.

No question about that.  Especially amazing when it comes from those who
should know better. 

> A corporation is not fully empowered to change itself.

Of course -- a 501(c)(3) can't just decide to become a for-profit
enterprise.  But it's power to do change itself is *far* greater than
you admit. 

> An extreme example
> will demonstrate:  The board may not simply terminate the corporation and
> distribute the residual assets into their own pockets.

Nonsense.  In some cases they certainly can, in other cases they can't. 
There are many different kinds of corporations... 

> And non-profits are even less able to change both under law and under
> restrictions that are built into the corporation's organic documents and
> placed out of reach of the board's ability to change.  (ICANN is under
> both types of limitations.)
> 
> A non-profit is strongly restricted in what it can do and how it can do
> it.

In certain well-defined areas, of course.  In other areas it has 
great freedom.

> And ICANN is more than merely a "corporation", it is a
> "non-profit/public-benefit" corporation under California law and it is a
> 501(c)(3)  corporation (charitable/scientific/educational) under the US
> tax laws.  ICANN must thread its way through these limitations - and these
> are not trivial limitations, they are very intricate

Why then do you complain about ICANN hiring one of the most highly
respected legal firms in the country? In any case, I'm quite sure that
the limitations really aren't that intricate to a competent lawyer. 

> - ICANN not free to
> simply change its spots at its will.

Sure -- for example, it can't start turning a profit, because the gov
would be very disturbed at the loss of tax revenue.  But in fact, most
of its spots it *can* change at will. 

> The fact that it has done so, that it has ignorred its obligations to its
> "members" does not make those obligations any less.

Fact:  It explicitly has no members.

> Board members who simply "amend the bylaws" because they feel like it are
> violating their legal obligations and are potential subject to personal
> liability for violating those obligations.

No, that is simply not correct.  Amending bylaws just because you feel
like it in no way violates any legal obligations.  A directors 
emotional attachment to a particular set of words isn't really an 
issue. 

> Of course, the writer to whom I am responding didn't even respond to the
> main point that ICANN is failing to abide by the bylaws as written.
> 
> As for interpreting the bylaws - that's one of my jobs as a Director.

Yes indeed -- which quite neatly makes my point.

-- 
Kent Crispin                               "Be good, and you will be
kent@songbird.com                           lonesome." -- Mark Twain
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