FC: Karl Auerbach sues ICANN to open books, inspect financial info

[Declan McCullagh <declan () well com>]

Karl Auerbach's previous messages that have appeared on Politech:
http://www.politechbot.com/cgi-bin/politech.cgi?name=auerbach

Of particular relevance is this one, where I invited ICANN to publicize 
what it requires that its directors sign (ICANN never replied):
http://www.politechbot.com/p-02886.html

-Declan

---

From: "Karl Auerbach" <karl () cavebear com>
Date: Mon, 18 Mar 2002 10:41:54
Subject: I brought legal action against ICANN today

As you know, I am a Director of ICANN.  And as you also know, I have been
trying to inspect ICANN's financial records (and other materials) ever
since I got onto the Board of Directors.  But ICANN has created delays and
obstacles - I've been stonewalled for nearly a year and a half despite the
fact that under California law I have the "absolute right" to make such an
inspection.

ICANN wants me to check my independent judgement at their door and submit
to ICANN managment's dictates when I come to inspect the records. But I
say that just as the mice are not in a position to dictate the menu to the
cat, corporate management is not in a position to dictate to a Director
how that Director shall exercise his or her duty of making independent
judgements about the best interests of the corporation.

So today I filed a Petition For Writ of Mandate To Compell Inspection and
Copying of Books, Records and Documents to require ICANN to let me inspect
the corporate records without having to check the independence of my
judgement at the door.

The petition is at:
        http://www.cavebear.com/icann-board/petition-march-18-2002.pdf

The EFF press release is at:
        http://www.cavebear.com/icann-board/eff-release-mar-18-2002.txt

                --karl--

---

http://www.icann.org/announcements/announcement-19mar02.htm

ICANN: Auerbach's Allegations Off Target

Marina del Rey, California, USA (19 March 2002) - ICANN Board Director Karl
Auerbach's allegations "are way off target and grossly distort the facts."
This according to ICANN President M. Stuart Lynn after reviewing the
lawsuit filed yesterday by Auerbach against ICANN in California Superior
Court. The lawsuit claims that Auerbach has been illegally blocked from
inspecting ICANN's corporate records. "ICANN has never prevented Karl from
inspecting the records. In fact, we have offered to make those records
available to him on several occasions," Lynn added.

According to Lynn, Auerbach has only been asked to affirm that he will
abide by reasonable procedures for access endorsed by ICANN's Audit
Committee (composed of three independent Directors) and shared with the
entire Board. "He could have had access months ago but prefers to file
lawsuits instead," noted Lynn.

Among ICANN's 19-member Board of Directors, only Mr. Auerbach has objected
to those procedures, refusing to acknowledge that all ICANN Directors owe a
fiduciary duty to ICANN. He claims that he alone, and not the whole Board,
will determine whether to disclose personnel and other information normally
kept confidential or privileged.

"I cannot understand for the life of me why Karl would object to affirming
his willingness to keep these records confidential," noted Phil Davidson,
Chair of the Audit Committee. "I followed the procedures myself and had
full access to all of the records with no hindrance whatsoever."

"Karl paints this as a dispute between him and ICANN management, but
nothing could be further from the truth," noted Board chairman Vint Cerf.
"ICANN management is merely carrying out its obligation to follow the
wishes of the Board as a whole rather than follow the dictates of any
single Director."

The procedures allow for any Director to appeal to the entire Board if he
or she disagrees with any decision made under those procedures, an option
Auerbach has ignored. By filing the lawsuit he has chosen to bypass the
Board.

"This lawsuit is misplaced and can only result in a total waste of valuable
time and resources," Lynn summarized. "ICANN will defend itself vigorously
to protect the rights of the corporation, and the legitimate best interests
of all of ICANN's directors and of the stakeholder community."

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