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

From: Declan McCullagh (declanat_private)
Date: Tue Mar 19 2002 - 21:40:42 PST

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    Karl Auerbach's previous messages that have appeared on Politech:
    Of particular relevance is this one, where I invited ICANN to publicize 
    what it requires that its directors sign (ICANN never replied):
    From: "Karl Auerbach" <karlat_private>
    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
    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:
    The EFF press release is at:
    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
    "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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