[Chapter-delegates] The kinds of objections (was Re: Join our call to stop the sale of .org)

[Dave Burstein]

Andrew

Apologies for this being yet another boring bit about PIR. It would be much
easier if getting the facts were not so difficult.

Your note addresses only a small fraction of the issues, although they are
important.
Several involved have set up straw men arguments that have confused all of
the issues. It will require a lengthy back and forth to clarify things. (I
believe you tried to be objective, but there are several errors.) You
obviously couldn't address most of the issues in 30 minutes. When will the
followup discussion be held?

*The most important thing to discuss Friday is whether it was right for you
and the Board Chairman to claim ISOC is not and should not be a
multistakeholder organization.* I urge you to put that at the top of the
agenda after you provide any additional facts you are releasing. (Even
better, send the new data in an email before to save time.)

The previous CEO told the board ISOC was a bottoms-up multi-stakeholder
organization and if I remember correctly, Gonzalo agreed. We all know that
literally dozens of top ISOC people have said we are multistakeholder,
including a recent official statement. I don't know the legal requirements,
but we all know ISOC has made a moral commitment. I don't see anywhere in
the minutes of the board the change has been discussed, much less approved.

I'm not the only one who thinks reversing ISOC pledge to being
multistakeholder is the most important issue now on the table.

Also important:

Is it a good deal for the Internet Society?
Some smart investors, including Fidelity, are willing to risk a billion
dollars. That tells us to look closely at our valuation.
To evaluate the deal, we need to know things like whether Perot, Romney,
and Johnson can back out of the deal without at least covering our
expenses. We're using lawyers from firms where partners can bill at
$1,000/hour. Those bills will be high.

Will they indemnify ISOC for any taxes?
What are the current financials of PIR and ISOC?
In 2017, PIR provided $74 million to ISOC; in 2018 $48 million. That's a
huge gap we need to evaluate. We need the data for 2019 and the projections
assuming a 10% annual increase to figure the Net Present Value we should
ask for.
PIR and ISOC spend the better part of a million dollars on accounting and
have monthly and quarterly figures. What are they implying?

Will it be approved by the US governments?
On the face of things, the deal has enormous problems and would normally be
blocked by Pennsylvania. IANAL A US not for profit can't be owned; ISOC
does not own PIR. Both boards have a fiduciary duty they seem to be
ignoring.
Our very expensive lawyers obviously have a legal theory and precedents
that will get around the obstacles. Could you please explain them in depth.
If PA proceedings are delayed for a public hearing and comment, can the
money men back out after we've spent what would be millions?

Will the deal be approved by ICANN?
Professor Milton Mueller, an expert on Internet Governance, has written that
ICANN can and should block the deal as proposed.
<https://www.internetgovernance.org/2019/11/25/what-to-do-about-org/>Has
ICANN agreed to approve the deal?
If not, and ICANN delays, can the money men pull out?
(I don't know if Milton is right, but he's credible enough we should have
full details, including how that would affect the deal.)
Will the money men live up to the public service and financial commitments
that ISOC talks about?

Will Romney, Perot, or Johnson be represented?
Brooks has used weasel words and not made any firm commitment I've seen.
"in the spirit of" is legally meaningless. I'm guessing that he hasn't
received authorization from the money. Until we have something firm from
the majority in control, reporters and anyone else evaluating the deal
should assume Brooks' comments are not binding.

How was the deal negotiated? Have independent directors reviewed any
possible conflicts, including the financial details of employees? Will
anyone get a change of control payment?
There are printed rumors of conflict of interest. I see at least one
director who should have been recused. Can we get the details of the ethics
review, including who conducted it?

We seem to be relying on Goldman Sachs for financial advice. What fee will
they expect if the deal goes through? If it doesn't?
It's common for advisors in M & A deals to make much more if the deals go
through.
Goldman Sachs as good as they come at making money for Goldman Sachs. If
they have an incentive to push the deal, I would want independent advice.
Google Goldman Sachs and:
CDO/mortage derivitives
Insider trading Rajat Gupta
Abacus
1MDB
Jack Grubman
You will discover that Goldman has been deeply involved in massive
financial shenanigans and paid over five billions in settlements.
<https://fortune.com/2016/04/11/goldman-sachs-doj-settlement/> I still
would like to have them on my side because they are very good. But I
wouldn't consider their advice independent if they will make more money if
the deal wins.



This list does not include several other issues that have come to the list
and been otherwise reported.

Dave



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