Why Did ICANN Compensate Dr. Twomey’s Company for His Recruitment?
ICANN documents indicate that five months after Dr. Twomey became ICANN’s President and CEO, ICANN agreed to pay up to $20,000 to Dr. Twomey’s consulting firm for expenses related to his recruitment and hiring.

In what appears to be an unusual arrangement for obtaining the services of a chief executive, ICANN did not directly hire Dr. Twomey but instead entered into a Managerial and Consulting Services Agreement with ArgoPacific, the consulting firm of which he was Managing Director. Dr. Twomey’s compensation is paid to ArgoPacific.

The relationship between ICANN and ArgoPacific was not mentioned in either the Preliminary Report from the March 18th 2003, Special Meeting of the Board at which Dr. Twomey was elected President and CEO, or in the Minutes of the Meeting. Instead, the Preliminary Report and Minutes discussed the terms of “Dr. Twomey’s employment.” Similarly, ICANN’s March 19th, 2003, press release announcing that Dr. Twomey had been “appointed” as ICANN’s President and CEO, made no reference to the organization’s having retained his services through a consulting contract with ArgoPacific.

In addition to electing Dr. Twomey as ICANN President and CEO, the Board at the March 18th Meeting also approved a “salary” for Dr. Twomey of $260,000 per year as well as “the other terms and benefits to secure Dr. Twomey's services...” The nature and cost of the “terms and benefits” is not discussed in the Minutes or Preliminary Report.

The issue of ICANN making payments to ArgoPacific arose during ICANN’s Board Meeting on June 26, 2003. A resolution to authorize ICANN’s Acting Secretary to sign the checks for Dr. Twomey’s compensation had to be modified at the last moment so that the checks could be made payable to ArgoPacific rather than Dr. Twomey. It is not clear from the real-time captioning of the Meeting whether ICANN Board members, other than the then-General Counsel, the next Chairman and Dr. Twomey, were previously aware that ICANN’s business arrangement was with ArgoPacific. Dr. Twomey abstained from voting on any Board resolutions concerning payments to ArgoPacific.

At a Special Meeting of the Board held August 19, 2003, the Acting Secretary’s check signing authority was modified to also include authority to approve “reimbursements and sign checks to ArgoPacific for expenses related to the recruitment and hiring of the services of Dr. Paul Twomey under the terms of the Managerial and Consulting Services Agreement entered into by ICANN and ArgoPacific, not to exceed US$20,000 in the aggregate.”

Thus, ArgoPacific appears to have received compensation from ICANN for unspecified expenses that occurred prior to their reaching an agreement with ICANN to be paid for those expenses. Furthermore, the issue of ICANN paying ArgoPacific for expenses related to the recruitment and hiring of Dr. Twomey does not appear to have been brought to the Board’s attention until months after ArgoPacific’s Managing Director became ICANN’s President and CEO, while still receiving his compensation through ArgoPacific. The resolution, however, does suggest that the expenses issue should have been dealt with at June 26th meeting, three months after Dr. Twomey assumed office.

The relationship between ICANN and ArgoPacific raises a number of questions including:

1. Why is ICANN’s business arrangement with ArgoPacific rather than directly with Dr. Twomey? Why has ICANN, in the interest of transparency and accountability, not publicly explained the reason for retaining ArgoPacific?
2. Do any legal issues or consequences arise from ICANN securing Dr. Twomey’s services through a contract with ArgoPacific rather than direct employment?
3. Why does ArgoPacific’s agreement with ICANN include payment for expenses related to ICANN’s recruitment and hiring of the services of Dr. Twomey? What were those expenses? Was ArgoPacific authorized by ICANN to incur such expenses?
4. Why were ArgoPacific’s expenses associated with ICANN’s recruitment and hiring of Dr. Twomey’s services not discussed in any publicly available documents prior to the Special Meeting of August 19th? Does the Board being asked to authorize the payment of recruitment and hiring expenses for Dr. Twomey after he became President and CEO of ICANN raise any conflict of interest issues?
5. Does ICANN have any consulting or other financial relationships with ArgoPacific or any of its personnel in addition to the contract for Dr. Twomey’s services?