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Fadi’s Resignation, Sepp Blatter’s Resignation - Others Should Consider Resigning as Well…

“Only proper regulation by an independent agency with full Congressional mandate will ensure that a ‘FIFA-Mafia type’ organization of systematic corruption does not emerge. ICANN should not be trusted by Congress to regulate itself.” (Excerpted from March 9, 2015, CircleID)

A Review of Fadi Chehade’s Incomplete Legacy at ICANN

Fadi Chehade, the incumbent President and CEO of the Internet Corporation for Assigned Names and Numbers (ICANN), on 21 May 2015 announced his intention to leave ICANN by March 2016. No actual reasons were given for his summary and unexpected decision to stop being the head of an organization that he has led since 2012—against the background that Fadi Chehade had recently received an ICANN Board-approved contract extension up till 30 June 2017; together with a slate that has a long list of things to do with many uncompleted assignments. Apart from mentioning that Fadi Chehade would be moving after March 2016 to a career in the private sector, outside the domain name industry, no other helpful detail was contained in the ICANN announcement.

By the time Fadi finally departs from ICANN sometime in the spring of 2016, he would be leaving a mixed leadership record and legacy at ICANN. The following summarizes what he inherited and/or did at ICANN:

  • The ICANN new generic Top-Level Domain Name Internet Expansion program which he has been shepherding as a work-in-progress during the past three years.
  • He also inherited an ICANN Strategic Planning process which he cancelled and started another 5-year ICANN Strategy afresh. Under this charter, he commenced plans to internationalize ICANN by establishing overseas offices in different regions, and also appointed Vice-Presidents for Multi-stakeholder Engagement for different ICANN regions.
  • Following the National Technology and Information Administration (NTIA) announcement to Transition the IANA Technical Functions to a Global Multi-Stakeholder Group, it was Fadi’s ICANN that took the responsibility of facilitating and coordinating the IANA Transition process.
  • As part of Fadi’s internationalization strategy and his close engagement with countries such as Brazil, the announcement of the IANA Transition plan in March 2014 was quickly followed by the establishment of the NETMundial Initiative (NMI) which came out of the ‘Global Multi-Stakeholder Meeting on the Future of Internet Governance’ that took place in Sao Paulo, Brazil in April 2014.

In a nutshell, Fadi Chehade attempted to consolidate his professional legacy at ICANN based on achieving internationalization, completing the IANA Transition, and causing a paradigm shift in Global Internet Governance by introducing the NMI as ‘a new kid on the block’ that would help strengthen the structures of Internet Governance.

The non-completion of some of these programs and initiatives that Fadi Chehade started before deciding to step aside as ICANN CEO would cause his leadership achievements and professional legacy at ICANN to remain mixed and incomplete.

The concerns and anxieties engendered by this premature departure of the ICANN helmsman caused the NTIA’s Larry Strickling to issue a statement which tried to reassure the community that: “a successful transition does not depend on the leadership of a single individual” and urged the community to remain focused on developing the IANA Transition Proposal.

NETMundial’s Birthing Problems and the IANA Transition

The NMI was not thoroughly embraced because its roles, organization, and activities were ill-defined, for which reason it attracted the frantic attentions of different polemicists who argued strenuously against it.

The truth behind the NETMundial idea, namely, preparing it as a possible vehicle to handle the IANA Transition, has not been mentioned at anytime. It was obvious to any interested analyst that there was a link between the NTIA’s intention in March 2014 to devolve the IANA Technical Functions to a Global Multi-Stakeholder Group, and a Global Multi-Stakeholder Conference that was convened in April 2014 to discuss the future of Internet Governance. Even so, efforts were made to carefully distance the NMI from the IANA Transition; for instance, by ensuring that Hon. Larry Strickling, Assistant Secretary and Head of the U.S. NTIA, who announced the IANA Transition Plan, was not on the NMI Inaugural Coordination Council; and instead, indicating that the US Government was supposed to be represented on the NMI—Inaugural Coordination Council by the Hon. Penny Pritzker, US Secretary of Commerce. In other words, a very senior cabinet-level official in the US Administration would be involved in the NMI that is still under-formation whilst the head of an executive agency under the same U.S. Department of Commerce would oversee the IANA Transition.

Post Transition IANA (PTI)a wholly-owned ICANN subsidiary

Notwithstanding, those people within the Internet Governance Community that were suspicious, fought against the NETMundial Initiative, with the result that the NMI continued to falter, because of lack of cross-cutting stakeholder support since its clear mission and purpose has not been clearly articulated apart from the general concepts contained in the Terms of Reference that was issued after the Stanford Meeting Communiqué.

These factors have caused the process of the IANA Transition Proposal to move faster than the NMI; and when it became obvious that the NMI will not be realized in the near future, a quick decision was made to ensure that the IANA Transition Proposals would be centered on a model that is entirely ‘internal to ICANN’—whereby a Post-Transition IANA (PTI) will be based on a wholly-owned ICANN subsidiary. This implies that the ‘IANA Transition’ in essence will simply replace the NTIA’s current role with ICANN, whilst ICANN’s present role as the IANA Functions Operator will be transferred to an ICANN-owned subsidiary. The PTI ICANN Subsidiary will be accountable to ICANN but not to the Global Multi-Stakeholder Group that was originally given responsibility for the IANA Transition.

The Brazilian Connection & NTIA’s Stamp of Approval

Fadi’s connections to the Government of Brazil—as a spirited high-level outreach and engagement effort that was meant to give a more substantive voice to the ‘Global South’ in Internet Governance affairs—was the impetus that created the nexus of ‘ICANN and Brazil’ that was used to drive the NETMundial Initiative. The NTIA’s Larry Strickling has tacitly approved of this relationship by mentioning China, Iran and Russia as countries that oppose the multi-stakeholder model by seeking to increase governmental/inter-governmental control of the Internet using bodies like the International Telecommunications Union (ITU) and United Nations; whilst singling out Brazil for special commendation as a country that promotes the multi-stakeholder model of Internet Governance on account of Brazil’s successful hosting of the NETMundial Conference.

It is easy to speculate that Fadi’s absence from the scene would cause NMI to rapidly lose traction and become orphaned in the coming months. Even so, Fadi Chehade’s tenure would be remembered within the ICANN Global Community for the high number of Independent Review Panel (IRP) juridical proceedings that were instituted to challenge ICANN Board and Staff actions; unsettling issues of accountability improvements that were inextricably tied to the IANA Transition; and increased Congressional focus on the IANA Transition.

Why FIFA is reminding us of ICANN!

About three (3) months ago, Fadi Chehade was a Panel Witness at the United States Senate Commerce, Science and Transportation Committee hearing on ‘Preserving the Multistakeholder Model of Internet Governance’ that was convened on February 25, 2015 to look into aspects of the IANA Transition, and assess the level of preparedness of the NTIA and ICANN regarding the Transition. At that hearing, the Honorable Senator John Thune, Committee Chairman, had been more concerned about ICANN’s accountability and continuing government oversight in a Post-IANA Transition regime when he commented that:

“Some worry that, in the absence of U.S. involvement in the IANA functions, ICANN may be subject to capture by authoritarian regimes, and these are valid concerns.”

“But I also worry that, in the absence of the contract with the U.S government, ICANN could become an organization like FIFA—the international soccer organization that is flush with cash, unresponsive to those it supposedly serves, and accountable to no one.” (See Chairman Thune’s Majority Statement)

These statements unmistakably convey the notion that senior members of the United States Government have been seriously concerned about FIFA’s (‘Fédération Internationale de Football Association’) lack of accountability.

They didn’t get it!

Whilst some of the Panel Witnesses at the Senate Hearing like Fadi Chehade and Larry Strickling were busy trying to demonstrate that the focus of the IANA Transition Proposal that was being developed by the IANA Stewardship Transition Coordination Group (ICG) would ensure that no government-led or inter-governmental solution will commandeer the IANA functions in the absence of the U.S. NTIA’s direct oversight, these officials failed to address this other very important concern: that without any robust accountability and legal safeguards, including governmental oversight, the IANA Transition could be hijacked by an unaccountable and corrupt system, similar to the type that FIFA had unwittingly created to govern the sport of global football (soccer).

This is where both Mr. Fadi Chehade and Hon. Larry Strickling failed to convince the US Senate Committee on Commerce, Science and Transportation that they have thoroughly addressed the most important concerns regarding the ‘IANA Transition’—which like they say in the US ‘we got this’. In a nutshell, what Senator Thune actually alluded to was that some governmental involvement or control was necessary in addition to ICANN accountability improvements that would be attendant to the IANA Transition. This is what the NTIA and ICANN leaders failed to grasp or ‘did not get’.

It was this clear understanding that led me to posit in my Post-Mortem Analysis of the Senate Committee Hearing that:

“Only proper regulation by an independent agency with full Congressional mandate will ensure that a ‘FIFA-Mafia type’ organization of systematic corruption does not emerge. ICANN should not be trusted by Congress to regulate itself.”

This partly explains why increased oversight of the NTIA-ICANN framework relationship with respect to the IANA Transition has now become a more regular Congressional activity in recent weeks.

The FIFA Global Corruption Scandal—“World Cup of Fraud”

It was therefore not surprising to me when many executive committee members of FIFA and some sports marketing executives were indicted and arrested last week in Switzerland and the Americas following a spirited investigation that was led by the United States Department of Justice’s Federal Bureau of Investigation (FBI); in collaboration with the United States Federal Internal Revenue Service and the Swiss Federal Police. Many high-ranking executive committee members of FIFA were arrested in Zurich as they congregated there to attend a FIFA Congress.

In announcing the indictment, the Head of the US Internal Revenue Service Commissioner John Koskinen, called FIFA a “World Cup of Fraud” and was quoted as saying: “today, we are issuing FIFA a red card”. After the scandal broke, this became CNN TV’s leading headline on 28th May 2015. The Hon. Loretta E. Lynch, United States Attorney General and Secretary of Justice, accused FIFA operatives of “corrupting the business of world-wide soccer to benefit themselves” through profiting about US$150 million from awarding media and marketing rights; and charged them with many serious crimes including bribery, money laundering, racketeering, wire fraud, violation of United States banking laws, income tax evasion, obstruction of justice, structuring of financial transactions, etc.—the sort of conspiracy crimes that would be typically mentioned in an indictment of Mafia mob bosses by the FBI and a prosecuting US District Attorney.

From the events of the past week, it is obvious that if the United States of America can go after FIFA which is based in an extra-territorial jurisdiction as part of leading a determined global effort to clampdown on FIFA’s corruption. An organization that is resident in the United States like ICANN can be readily pursued at any time, if lack of accountability leads to an official investigation for corruption.

FIFA Scandal Implications for the ICANN-led IANA Transition

Taking the FIFA as a good example of an unaccountable institution, the present FIFA global scandal and corruption probe by the US Department of Justice Federal Bureau of Investigations is an important lesson applicable to the need for sound corporate governance for any institution tasked with global responsibility. Thus, this imperative now requires that the entire IANA Transition Framework should be re-evaluated immediately.

FIFA’s corruption was propelled by massive revenues of about US$5.7 billion and cash reserves of US$1.5 billion. Since the first new gTLD Program was launched, ICANN has also garnered significant revenues of about US$400 million or more from new gTLD application fees and extra revenues generated from the auctioning of some new gTLD domain names. ICANN also takes a ‘cut’ from all domain name registration fees, and its cash balances would be further bolstered with increased uptake of more new gTLD domain names. Huge cash balances should not be left in the hands of an organization that is widely perceived as unaccountable and which also habitually pays very large financial claims, hefty travel allowances and per diems to its Board Members.

Need for Fresh Thinking and New Beginnings at ICANN and NTIA

Fadi’s departure from ICANN, and the FIFA global corruption scandal that has caused Sepp Blatter’s resignation as FIFA Chief less than four days after being elected to a fifth term as FIFA President, should now compel a rethink of what has been happening at ICANN and the NTIA regarding the IANA Transition—against the backdrop that US leaders like Senator John Thune have already expressed their concerns about this important matter.

  • Need to Investigate the Conflicts of Interests of ICANN Board Members: Fadi’s resignation as CEO should also cause ICANN to be re-evaluated and its Board Members numerous Conflicts of Interest to be thoroughly investigated by the US Department of Justice and the pertinent Congressional Judiciary Committees.
  • We need not remind ourselves once again that there is still no governing legal framework for the IANA Transition.
  • ICANN should first of all be given a clean bill of health before the IANA Transition is allowed. A US-centered organization like ICANN must not become like FIFA.
  • Only the establishment of a proper regulatory environment would help avoid any potential criminal mismanagement of funds generated from the governance and technical administration of the Internet.

FIFA mistakes should not be repeated at ICANN—without anyone to oversight, it will!

The entire world became scandalized by the misconduct of FIFA executives simply because FIFA was not regulated by any over-sighting authority in the first place. The same mistake should not be allowed in the case of ICANN that is now being given the responsibility for the Post-IANA Transition regime by the U.S. NTIA. As Attorney-General Loretta E. Lynch said when announcing the FIFA indictment, “FIFA was too powerful to go unchecked”. Similarly, I believe that a Post-Transition IANA regime that will create an all-powerful ICANN will be too dominant to go absolutely unchecked.

The last U.S. House Sub-Committee on Communications and Technology hearing on ‘Stakeholder Perspectives on the IANA Transition’ that was convened on May 13, 2015 did not invite the ICANN and NTIA leaders to attend as Panel Witnesses. Does this in any way suggest that the NTIA and ICANN no longer enjoy the complete trust of the U.S. Congress who now wanted to hear only from other stakeholders?

Who else should resign?

I personally think that in addition to Fadi Chehade, the ICANN Board Chairman Dr. Stephen Crocker should also probably resign; and the NTIA’s Hon. Larry Stickling too—so that both ICANN and NTIA will benefit from fresh thinking regarding the IANA Transition. Only new people that can inspire and win the full confidence of the U.S. Congress should now take responsibility for the IANA Transition at ICANN and the NTIA; and at the same time ensure that the mandatory ICANN Accountability Improvements that are now being sought will not just be a pro-forma effort.

The IANA Transition will be held up for some time at Congress, and only those who can work properly with Congress will be trusted to deliver this effort based on far-reaching accountability safeguards.

Accountability structures on their own are not sufficient to stop corruption—after all, FIFA has an Audit and Compliance Committee

But this did not stop a pervasive organizational culture of corruption to develop. Governmental oversight is a very essential preventative measure that is also used correctively whenever infractions occur.

Therefore, the time to act is now and the re-evaluation of ICANN and the IANA Transition should not be put off until ICANN’s reputation is seriously damaged like FIFA’s before doing that which should have been done at the beginning. A future scandal of global proportions that will cause widespread angst and hand-wringing within the Global Internet Community must be avoided.

By Sophia Bekele, CEO of DotConnectAfrica Group

Ms. Bekele is a former ICANN generic Names Supporting Organization (gNSO) Council policy advisor & contributed to policy over the new gTLD programme & IDNs. She was also policy advisor to various UN Agencies on ICTs. Founder and spearhead of the Yes2DotAfrica campaign. Bekele is a business and corporate executive, an international entrepreneur, a thought leader in Corporate and ICT Governance, international policy, Business Strategy, Internet, ICT & development. Her Profiles on sophiabekele.com / wikipedia.

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