ICANN loses $4.6 million of your money in the stock market

[katherine]

ICANN suddenly announces a bunch of new gTLDs:

• .herbalv1agra
• .milf
• .419
• .makemoneyfast

Why not, release them and some domainers will buy them :lol:

 

[dodo1]

Did ICANN sell the stocks at a loss or does it still own them?

 

[vip]

My money is on .xxx

 

[Theo]

Did ICANN sell the stocks at a loss or does it still own them?

Apparently that's the loss their portfolio sustained after it was sold.

 

[GeorgeK]

Their portfolio is managed by an outside investment manager. They invested $25 million, and that represents the "mark to market" loss of their portfolio as of December 31st. It might have gone up or down in value since, but that's not the point, as it shouldn't have been invested in those assets to begin with if it was an emergency reserve fund. Whether the losses are "realized" or "unrealized" also is immaterial, as the market is the market.

If you bought a house for $750,000 and it's now worth $400,000, you have suffered a $350,000 loss. Whether or not you sold the property is immaterial, you are definitely $350,000 poorer. If you think there is a difference, then you're simply fooling yourself (and not anyone else!).

 

[Theo]

Oh ok. So they portfolio hasn't been sold then?
In today's market conditions, it should have been in an all-cash account.

 

[Namebrander]

Totally believable given Icann's glorious past.

Yet another reason to completely mistrust and detest this completely mismanaged (dis)organisation

Class action lawsuit anyone?

 

[GeorgeK]

Oh ok. So they portfolio hasn't been sold then?

It appears not.

In today's market conditions, it should have been in an all-cash account.

If it was an emergency reserve fund, irregardless of booming market conditions or falling markets, it should have been in liquid government guaranteed short-term deposits (i.e. cash, insured CDs, T-bills, etc.). That's why it's an emergency reserve fund, as you need all the money to be there when an emergency happens.

If it's an endowment (which it wasn't advertised to be, note the 13 references to "emergency" or "emergencies" in:

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

then one could/should take a longer-term investment horizon, just like Harvard or Yale manage their endowments. But, ICANN shouldn't be building up any endowment --- fees should be lowered to put back any truly excess funds back into the pockets of domain registrants.

 

[Gerry]

http://www.icann.org/en/general/articles.htm

ARTICLES OF INCORPORATION
OF INTERNET CORPORATION FOR ASSIGNED NAMES AND NUMBERS

3. This Corporation is a nonprofit public benefit corporation and is not organized for the private gain of any person. It is organized under the California Nonprofit Public Benefit Corporation Law for charitable and public purposes. The Corporation is organized, and will be operated, exclusively for charitable, educational, and scientific purposes within the meaning of § 501 (c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), or the corresponding provision of any future United States tax code. Any reference in these Articles to the Code shall include the corresponding provisions of any further United States tax code. In furtherance of the foregoing purposes, and in recognition of the fact that the Internet is an international network of networks, owned by no single nation, individual or organization, the Corporation shall, except as limited by Article 5 hereof, pursue the charitable and public purposes of lessening the burdens of government and promoting the global public interest in the operational stability of the Internet by (i) coordinating the assignment of Internet technical parameters as needed to maintain universal connectivity on the Internet; (ii) performing and overseeing functions related to the coordination of the Internet Protocol ("IP") address space; (iii) performing and overseeing functions related to the coordination of the Internet domain name system ("DNS"), including the development of policies for determining the circumstances under which new top-level domains are added to the DNS root system; (iv) overseeing operation of the authoritative Internet DNS root server system; and (v) engaging in any other related lawful activity in furtherance of items (i) through (iv).


d. No part of the net earnings of the Corporation shall inure to the benefit of or be distributable to its members, directors, trustees, officers, or other private persons, except that the Corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth in Article 3 hereof.

If they are found to be in violation of the US tax code, their non-profit status may be revoked.

 

[GeorgeK]

One can file for an Informant Award with the IRS, challenging ICANN's non-profit status (and thus getting some of their backtaxes), if you think they might not be in full compliance:

http://www.irs.gov/compliance/article/0,,id=180171,00.html
http://www.irs.gov/pub/irs-pdf/f211.pdf

One can get up to 30% of the amounts collected, (although it appears
to be only 10% for stuff based on public info)

http://www.irs.gov/compliance/article/0,,id=181289,00.html

"A reduced award amount of up to 10% in cases based principally on disclosure of specific allegations resulting from: Judicial or administrative hearings, From a governmental report, hearing, audit or investigation,
Or from the news media."

As a non-US person, I'd not be in a position to file.

One can also use that program to go after other Americans who might not be paying their taxes... (possibly a few on this board!) :yes:

 

[mediawizard]

You invest it in safe (government-backed) liquid cash-based instruments.

With the current state of global mega bailout and stimulus packages, one needs to wonder to a certain extent how safe '(government-backed) liquid cash-based instruments' really are.

It's not inconceivable for governments to default. And its not like it hasn't happened in the past.

After all, printing more money is just a short term fix. Not a long term solution to better things for you and me.

 

[Gerry]

One can file for an Informant Award with the IRS, challenging ICANN's non-profit status (and thus getting some of their backtaxes), if you think they might not be in full compliance:

http://www.irs.gov/compliance/article/0,,id=180171,00.html
http://www.irs.gov/pub/irs-pdf/f211.pdf

One can get up to 30% of the amounts collected, (although it appears
to be only 10% for stuff based on public info)

http://www.irs.gov/compliance/article/0,,id=181289,00.html

"A reduced award amount of up to 10% in cases based principally on disclosure of specific allegations resulting from: Judicial or administrative hearings, From a governmental report, hearing, audit or investigation,
Or from the news media."

As a non-US person, I'd not be in a position to file.

One can also use that program to go after other Americans who might not be paying their taxes... (possibly a few on this board!) :yes:

Ahh, yeah?

The biggest issue is credibility. I think ICANN may be losing credibility on many fronts.

And if it loses credibility with the Government and Lawmakers, then ICANN may cease to exist.

I know that is a bold claim, but I just don't know how much scrutiny they can withstand. And for how long.

It's not inconceivable for governments to default. And its not like it hasn't happened in the past.

It is a long shot with many governments.

Government backed securities paying only 3% is what created this global mess to begin with. Although guaranteed, the banks and lending institutions wanted more and saw more in the mortgage markets.

This is what caused many banks and lending institutions and a country or two to collapse - taking money out of secure bonds and playing the crap shoot.

High yield equals high risk.

 

[kamilaseo]

seem it is a great service

seem it is a great service

 

[Deleted member 5660]

These were operating funds for the coming year, not some long term investment. No reasonable organization would put their operating funds into stocks. Does anyone know anything about who actually invested the money and how they claim it was lost? The whole thing sounds fishy to me.

ICANN is not allowed to use funds for anything other than user fees. Otherise, it is considered a tax in the US.

 

[RTM.net]

RTM: There's a big difference in how one invests an endowment, versus how one invests emergency reserve funds. See the comments of the CircleID article for broader discussion of that important point.

If the funds were not for an emergency, then they should have been returned to domain registrants.

Point taken; I admit that I should have read the entire story more carefully. Given the facts, it is unacceptable that these funds were moved into a volatile and speculative investment vehicle. Unfortunately, it is not surprising and... it seems that ICANN is not really subject to being held accountable for this? At least discussions like this help expose the apparent mismanagement of funds... our funds.

Exactly! You never EVER invest emergency funds in a risky investment vehicle like the stock market. You invest it in safe (government-backed) liquid cash-based instruments.

If this loss truly comes from the emergency funds, then it borders on criminal incompetence. Or maybe some sort of corruption and kick backs to directors that have not yet come to light.

+1 ... couldn't have said it better myself.

ICANN suddenly announces a bunch of new gTLDs:

• .herbalv1agra
• .milf
• .419
• .makemoneyfast

LOL...

Rob

 

[Deleted member 5660]

I propose ICANN move its offices to a new California location to save money. If we can the cooperation of Governor Arnold Schwarzenegger maybe we can move them here:

http://en.wikipedia.org/wiki/Pelican_Bay_State_Prison

 

[carlton]

ICANN have a video response (in their official blog) to the many comments and concerns voiced by corporations & domainers in reference to the new gTLD Applicant Guidebook. In the video, Paul Twomey briefly addresses the impetus behind new tld's ... which he presents as a grand design to bring innovation to the internet.

He compares the new tld proposal to Facebook and Google and the innovation they introduced. Below is a copy of my comments to the ICANN blog. I'm posting this to stimulate thought, discussion, and to help keep domainer concerns and vigilance alive. I give George Kirikos much credit for shining a light on ICANN and their process. I have learned a good deal about ICANN from George's insights over the past 2 years.

Here's the ICANN video

My response:

The video is helpful to put a face, and sentiment, behind the comments of ICANN. The transcript is appreciated too.

The new gTLD's are presented by Twomey as a push for innovation not unlike Facebook, Google, etc. The difference is that those privately held companies were able to launch with no potential repercussions to the larger internet community due to the singular and confined nature of their business. They would succeed, or fade by the wayside, with little damaging ripple effect.

The new gTLD proposal risks multiple negative consequences to several large & influential groups (as eloquently described in the ICANN discussion forum). Personally, it seems more pie-in-the-sky to envision a wave of new tld's as bringing any real innovation to the market. New tld's have been done, and we have clear historical precedent that new tld's are only marginally embraced ... if at all. This practical reality suggests, strongly, that there is no substantial need for new tld's.

Major corporations wrote ICANN. And the overwhelming consensus was against the proposal. A handful of registrars and registries, who stand to gain, were the primary bases of support. Who are these companies wanting a wave of new tld's? Where is this large list of stakeholder constituents who are ready to fund their own vanity tld and bring "innovation" to the market? In lieu of the profuse letters of concern submitted to ICANN, the $185,000 tld application fee seems a more real & tangible incentive at work than does a desire to innovate.

Perhaps ICANN genuinely want to bring innovation to the domain & internet community. But the proposal must be brought forth, crafted, and implemented with great care, and a defensive mindset, due to the widespread and immediate impact it will have on corporations and website owners. Can ICANN guarantee only positive effects, and the absence of litigation and other harmful ripple effects? Once the genie is out of the bottle, it will be too late to reverse direction.

What about existing registries, already on record now, who are poised to demand that ICANN rewrite their agreements to allow for unregulated pricing. This cannot happen ... ever! It cannot be allowed ... and the inevitable decision falls squarely on ICANN. There will be years of lawsuits and an aggressive firestorm of criticism, and legal opposition, toward ICANN and its officers, if ICANN were to give in to existing registries who will claim "unfair competition" (pending the allowance of such unregulated pricing for any newly introduced tld).

In closing, savvy internetters and entrepreneurs can appreciate the "innovation" rationale. But that argument must be tempered, and weighed against ALL of the legitimate concerns voiced by an ocean of opposition. An ocean of support is a vote of confidence. But an ocean of opposition is a signal than ICANN's proposal isn't close to acceptable. To ignore the voice of the internet community would point clearly to corruption and greedy financial incentives tied to a small handful of gTLD supporters. I think better of ICANN ... so I'm cautiously optimistic.

ICANN, please continue to listen and adapt. Please present your most compelling arguments, and then step back to take in the feedback, and incorporate the feedback, of many interested parties. We look forward to your intelligent, carefully crafted policies that protect the hard-earned status quo as much as they push to innovate.

Internet commerce funds you. Domain investors fund you, and will demand a voice, and ICANN accountability. In this climate of arrogant egos gone wild, and financial malfeasance, the people will not stand by idle while policymakers make bad decisions that affect their futures.

Thank you for considering these comments.

 

[Theo]

Nice. But you can't make ICANN feel guilty; their job is to appear self-governed and evolutionary. It will take more force to take down their ill-studied proposal for opening up the TLD gates than for any other project in the past.

 

[ilovedomains]

Internet commerce funds you. Domain investors fund you, and will demand a voice, and ICANN accountability. In this climate of arrogant egos gone wild, and financial malfeasance, the people will not stand by idle while policymakers make bad decisions that affect their futures.

Thank you for considering these comments.

Dream on. ICANN is like the SEC "regulating" Wall Street. Thanks to bribery and lobbying, they will wind up being the friends, flunkies, and bum boys to the wealthy corporations their supposed to regulate.

 

[Meridian66]

Dream on. ICANN is like the SEC "regulating" Wall Street. Thanks to bribery and lobbying, they will wind up being the friends, flunkies, and bum boys to the wealthy corporations their supposed to regulate.

But who are ICANN sucking up too? They seem to be universally disliked and untrusted.