In this case, ISOC should almost certainly lose their 501(c)3 status, as the transaction is unrelated business income, and may or may not have been sold at fair market value (I don’t believe it was). In either of these cases, the penalty is at minimum the removal of their 501(c)3 status.
I believe they may be preempting this by converting themselves to a “B Corp.”
The case of ICANN is more interesting. I believe they knew what was going on here, and facilitated this transaction to their former CEO. In this case, the IRS has good reason to revoke ICANN’s 501(c)3 status, as this transaction was self-dealing.
Unrelated business income does not cause a loss of 501(c)3 status, it's just that the unrelated income is not tax exempt (i.e. the org which otherwise does not pay taxes on income has to pay income tax on the unrelated income).
Also, if I understood correctly, it is PIR that is considering becoming a B Corp, which they can do since they cannot remain a 501(c)3 now that they are owned by a for-profit entity.
Last, it would be very difficult to prove this wasn't a fair market value transaction. There was an investment banker involved (Goldman), so I assume they shopped to a number of different parties, in which case it's hard to argue that the price paid (assuming it was one of the highest bids) is not the FMV.
As I said in my original comment, I don't like the transaction, so don't take this as a defense of the appropriateness of selling it to a for-profit. But I think it is difficult to challenge on the basis that the transaction itself was illegal.
Excessive unrelated business income causes a loss of public charity status due to failing the public support test. In this case it’s moot because ISOC is giving up on their status regardless. I was wrong saying 501(c)3 status is lost- instead, the organization becomes a private foundation with accompanying restrictions and regulations (e.g. disbursement requirements).
In the case of ICANN, I can see the IRS dropping 501(c)3 status. While the final purchase price of the .org asset may or may not have been at fair market value (as you note, having GS involved gives credibility), it’s undeniable that ICANN made it possible by lifting price hikes. I don’t see how it isn’t self-dealing, unless ICANN truly had absolutely no idea their former CEO was going to acquire .org. I think it’s more likely that they were convinced to lift the price hikes by their former CEO.
you raise an interesting point that caused me to look deeper into the 990s filed by ISOC and PIR. So, I share this in case you are curious (or getting sucked down this rathole like I am:)).
In 2017, ISOC created the Internet Society Foundation (like PIR a wholly owned subsidiary of Internet Society). PIR was a cash machine, generating ~$75M in cash, which they recorded as having been paid out in grants. ISOC split that so that ~30M showed up as revenue on Internet Society's 990, and $43M showed up on the newly created Internet Society Foundation's 990 as revenue. This may have been to avoid ISOC failing a public support test? (I'm operating at the limits of my understanding at this point and haven't taken the time to dig into this question). I am going to speculate that the proceeds from the sale of PIR will also go into the Foundation.
Interestingly, the ISOC 990 does not show their ownership in PIR as a material asset on the balance sheet. One would think that a wholly owned sub that has $90M+ in revenue and throws off $75M in cash would be treated as an asset of value? It's possible there is something about non-profit accounting that makes this okay under GAAP - not something I know much about, but it caught my eye.
I don't know how to evaluate the self-dealing question - I have dealt with some of the other issues here (eg disposition of non-profit assets, unrelated income, etc) as a non-profit founder, board member, or treasurer, but I have never wrestled with a self-dealing issue (thankfully!), so I don't know what the courts would look for there.
Edit: source here is 2017 990s for Internet Society, Internet Society Foundation, and Public Interest Registry, pulled down from Guidestar. 2017 is the most recent year available for all three.
The mass complaints work very well when backed by an organized effort to lobby, press attention, etc. There are people vulnerable to political and social pressure who make decisions based on this stuff, e.g. the CA attorney general (in the case of ICANN)
ICANN, by lifting the price restriction, was likely “in” on this deal.
When a nonprofit does something to greatly enrich a former CEO, that’s likely self dealing and illegal in the IRS’ eyes. The CA attorney general should also take action (ICANN is CA based).
I don’t understand how this “sale” is legal in the first place.
PIR is a legal 501(c)3 nonprofit. You can’t really sell a nonprofit to a for-profit company except in unusual and rare circumstances.
In California, I know you need a letter from the state Attorney General to do so.
There are also federal restrictions on sales like this, particularly around self-dealing transactions. This transaction was obviously self dealing.
Someone seriously needs to dig into this. The PIR board members could be in big legal trouble. And also ICANN, which is a 501(c)3 nonprofit as well and is subject to self-dealing restrictions.
This is obvious, plain as day corruption. In the business world, not much can be done. But these are two nonprofits (PIR and ICANN), so something can and should be done. These kind of transactions aren’t normally legal.
Like, just read the examples of what an illegal self dealing transaction is in the eyes of the IRS:
“Keep Our City Beautiful, a membership organization, plants a city alley with elaborate flowering bushes. The alley is not heavily traveled but the decorations increase the attractiveness of the city’s main restaurant whose owner is a member of the organization.”
ICANN clearly engaged in an illegal self dealing transaction by allowing their former CEO to enrich himself with a deal that would otherwise not be possible.
Not only that, isn't there a sense in which a TLD is not actually property at all? The DNS operates by consensus. There are a bunch of root server operators who all agree who operates the .org TLD and then list those NS records in their root servers.
What stops people from getting together, agreeing that a private equity firm would be a poor steward of the .org TLD, choosing somebody else to operate it instead, and pointing the NS records there instead?
Nobody really owns the DNS. It's a thing that works because there is a broad consensus on how it should work. If the consensus is that this is a dumb idea then what's stopping people from choosing not to go along with it?
And staging a coup over this would set a good precedent that these types of flagrant money grabs are not to be tolerated.
It’s correct enough to say that DNS is an application of consensus, but rather than considering that a distinction vs property, one might consider asking themselves in what sense property itself isn’t consensus.
Property is not based on consensus. Even if millions of people think Jeff Bezos has too much money, with nowhere near consensus that he should have it, a court will still convict anybody who tries to take his stuff.
The DNS really does operate on consensus. There is nobody forcing everybody to do it a particular way. We get real consensus because everybody has a strong interest in not creating global namespace conflicts through forks. But that doesn't mean you can't make a change to fix a mistake, it only means you need to get enough support behind it for it to become the consensus position.
However, a sufficiently large mob can easily take everything Bezos has, no matter what any court says.
Property is absolutely based on consensus, property beyond anything you control with your direct person is very much one of those polite fictions society collectively agrees to, like money and laws.
If the large majority of people, for whatever reason, decided to stop agreeing, such fictions would cease to exist.
A thing doesn't exist by consensus just because a consensus against it could destroy it, because a consensus against pretty much anything could destroy it. What makes it exist by consensus is that a rough consensus in favor of it is required to sustain it.
This isn't true of things like property rights which could be sustained even with only minority support provided the minority had a sufficient military advantage.
It is true of DNS because consensus is inherently required to prevent it from fragmenting and ceasing to exist as a single global namespace.
If tomorrow somehow everyone's memory got wiped so they could no longer remember how to make Pad Thai then it would cease to exist as well (unless someone independently reinvents it). That doesn't mean Pad Thai exists by consensus.
If so much as one person still remembers and can prove it to everyone else, or it's documented somewhere on paper, then it would still exist. Likewise all Bezos would need is that documentation. Which is really how it works in practice. There are only a handful of people and documents concerned with exactly what someone owns. The large majority of people have no idea who owns an arbitrary piece of land or share of stock. The information comes from an authority, not a consensus.
Whereas if we're talking about the concept of property rights in general rather than specific ownership records then we're back to them being enforced by a government which it is in principle possible for them to do via superior force independent of popular support.
If everyone agrees that Jeff Bezos has too much money and that we should make an exception to normal property laws and strip him of his assets, that's exactly what would happen!
But most people don't think that. They wish they had as much money as him, maybe they think society is unfair to allow someone to have so much money. But you'd be hard pressed to find anyone who supports arbitrarily stripping someone of their (current) property.
I agree, even the current political elites aren't so daft as to say if 80% of the population is vehemently opposed to any US citizen having say more than 1 billion dollars in wealth, the Congress can surely enact taxes to insure that happens. Lucky for Bezos there is only a (large) minority that would like to see that happen so his Billions are currently safe.
> the ruling will be enforced if there is a consensus that it is a just ruling
The Supreme Court regularly makes rulings that are contrary to popular opinion. I see no evidence that the rulings are not being enforced despite the lack of consensus that they were just. They also regularly make rulings that align with the slight popular majority but the popular opinion is still about evenly split with no clear consensus one way or the other, and those rulings are enforced as well.
Following unpopular laws is itself a consensus, one where abandoning the rule of law altogether is seen as more harmful than enforcing one unpopular ruling.
How is it a consensus when people on the losing side often respond with violence, riots or protests? Lacking effective means to overthrow the government hardly implies agreement.
The current Supreme Court is hard right and currently under Executive Mandate, I wouldn't put anything past them if their overlords demand something of them.
Edit: sorry, re-reading your coup plot I see you wanted the owners of {A..M}.ROOT-SERVERS.NET to collude in direct action. It’s not an implausible idea at all, if the worst comes to the worst, even if it’s quite extreme. My original comment misses your point a bit...
...
If you want to fix this by direct action on the root servers, rather than ORG’s nameservers, the it doesn’t matter who owns the current root servers.
Their config is baked into your resolver’s installation files or source code, and my naive understanding is that it takes only one patch to change each one:
...though the changes would be fragmented until the patch had been rolled out to 100% of resolver codebases and all instances of each resolver updated and restarted. Not an easy solution without coordinating people as well as software.
It takes two to tango. Once you get majority support then the holdouts are the ones forking the TLD, and since forks are not in anybody's interest a consensus would be reached.
If I recall correctly it was OpenNIC which established some TLDs independent of ICANN. ICANN stomped on one of them, and ultimately won, with OpenNIC conceding control of the TLD. (Everyone peered the ICANN data and no one the OpenNIC, and OpenNIC stopped registering or serving the conflicting domain themselves.)
Someone a few days ago linked to this snippet of an interview with Naval Ravikant on Joe Rogan's podcast. Their lack of differentiating themselves from publishers has put them on a slippery slope
What this snippet misses is the fact that FB, YT, G+, and Twitter determine what is presented and offered to users. Algorithm or no, their fingers, hands, feet and bodies are all over the scale.
Isn’t this just a natural consequence of Facebook being huge and having a huge amount of influence in the world? So naturally people are going to blame Facebook for things they don’t like that Facebook has a lot of influence on, and that will probably include people from different political backgrounds. You seem to mock that or find it ridiculous, but it seems perfectly reasonable to me. Both of those examples you give could very easily be true.
As for it being impossible for Facebook to win, well yeah, maybe you’re right. Maybe we shouldn’t have any individual media companies with so much power.
When a company touches more than a billion kinds of the world, I think criticism—actionable or not—is perfectly warranted.
If people suspect Facebook isn’t simply an equal propagator of information, but rather has a (potentially uncontrollable) AI that is optimizing for hate and outrage, it seems both reasonable and meaningful to have a discussion around it.
“Well what are they supposed to do with all the opposing criticism?” It’s not about making people happy, it’s about responsible use of their power, and part of that is at least informed by what critics say.
You believe Facebook to be the victim, or otherwise unfairly maligned, despite it being one of the world’s most powerful and influential companies in existence?
I have deleted all friends and everything from Facebook and I still get almost non-stop recommendations from Facebook with clickbait videos and friend suggestions for social media personalities that I have no interests in. They should not be trying to push crap on me like this and I find it disgusting.
I think accessibility is very important, but I share your worry about the future for very small startup projects. I think it’s already almost impossible.
I worry about it getting much worse, especially with the animosity the larger tech companies face from the public. What people don’t understand is that those big companies will weather any of these regulations, and that they will stop smaller startups from ever happening.
Besides the tremendous onus laws like this may place on small startups and side projects:
Does anyone know how companies are supposed to comply if “user data” literally cannot be deleted? I’m thinking in the case of blockchain type applications, where one users’ actions feed into another users’ actions, and you can’t deleted user A’s actions without deleting potentially tons of other stuff and destroying the application.
Like does this law basically ban GitHub and code collaboration too?
For the 1) you just don't commit data in the blockchain itself. You can commit an ID that points to external data and drop these external data if requested. This clearly looks like an anti-pattern but putting personal data in an immutable data structure is an anti-pattern too, since those data don't belong to you.
What if a bank put the gold of their customers in a concrete pillar instead of a vault? Fuck the back, I guess. I don't see why not.
Again, the GitHub example is a good one. I have some commits in Django core from years ago. What if I “request” my data be deleted from GitHub? What are they supposed to do? If they rewrite the history it will destroy the project; and if anyone can rewrite the history in the future it leaves projects open to hostile actions.
I suppose the argument would have to be made that it’s not personal data; it’s an act of public publishing or something. So in this case it’s akin to me publishing a blog and other people quoting it years later. I can delete the original blog but not the reprints in newspapers or quotes.
Or that it stops becoming “your” data and becomes instead “the other user’s” once eg the Django project accepts the PR. So you can delete user A’s PR but not the Django project’s now-integrated copy. I think this rationale makes the most sense. After all, someone could still have the repository on their computer and push it back to GitHub again.
I realize this is an edge case that doesn’t apply to 99.9999% of companies, but as an engineer I find it interesting!
Edit: after thinking this through more, I suspect that e.g. GitHub could argue they comply as long as they delete User A’s repo. Subsequently integrated PRs, etc wouldn’t have to be deleted because they could argue they’re no longer User A’s.
I kinda feel like if language to allow this was added to the law explicitly it would be open to abuse, so I suppose this kind of thing has to remain vague and open to interpretation in e.g. the courts if someone is being nasty.
>Besides the onus laws like this may place on small startups and side projects:
Startups and side projects are a non-issue. They can just comply from the get go. It's the too small to afford compliance but too big to easily change their business model that are going to be hurt by this. However, that brings up the question as to whether those business models should be able to exist profitably in the first place.
Git does have a mechanism to remove data from history. It's ugly, and you end up with new commit hashes, but it works. It was designed for situations in which a developer accidentally adds something sensitive, like a production database snapshot, to source control.
Yeah so you could do a rebase and remove all of the user’s commits, but their work would likely still remain in the subsequent history- integrated as changes in some way. It would be a real mess.
I believe these vaping cases are from using elicit, underground THC vaping products and not the usual e-cigarette / nicotine vaping we usually associate with the word “vaping.”
That thread seems like speculation without much to back it up. Not everyone showing symptoms smoked THC cartridges and the article makes it clear that experts have not yet identified a specific cause
This comment section is also a bunch of speculation without any evidence. Seems to be the same with every other story or conversation about this topic.
Whereas people on Reddit have no bias at all? Why is it FUD? Why do we equally blindly believe "oh, no, this is all Chinese tainted shit - 'real' vape cartridges are all goodness and light"?
Having an article titled "Mysterious [XXX] illness" is pretty much the dictionary definition of FUD but even if you can't accept that, the national health organisations of UK[1] and New Zealand[2] have conducted studies about vaping, you can find a lot of data there (something that can't be said about the NYT article).
Well, some of us have been vaping (in the traditional sense - nicotine/PG/VG) since those people in the article were in kindergarten. This kind of problem hasn't been a thing until recently.
If you're coming from the oversimplified perspective that things are always horribly evil or "goodness and light", then sure. But you have to understand that many of us here are different in that we're capable of understanding nuance, and that facts and details matter in building a model of a complex world.
The health effects of vaping still aren't settled science, but that doesn't make these article any less FUD: The fact that headlines like this and others are eliding the critical fact that the cases they describe are limited to bootleg cartridges is pretty much a central case of FUD.
Where in my comment am I saying anything about the Reddit post? The GP comment by mastazi says "I wish the article gave more details instead of spreading FUD", you responded with a complete non sequitur about people who assume legitimate products are risk-free, and I pointed out that disliking FUD doesn't automatically mean you're Pollyannaish about the risks of legitimate products.
Again, what I'm trying to explain to you is that for some of us, there are more than two possible positions here. Mastazi complaining about FUD in a WaPo article (or the original nyt one posted here) doesn't mean he agrees with a random Reddit commenter who also disagrees with the article.
The problem is that vaping is NOT safer than NOT smoking.
The issue is that vaping is seen as "absolutely safe" rather than "relatively safer". Since vaping is now seen as "cool" (look at the "Game of Thrones" stars being shown vaping--especially the attractive, young women), it is converting non-smoking, non-vaping people into vapers.
Given how long smoking was deemed to be safe, what studies have you seen that show that vaping hasn't and won't turn out to have long term health effects on par with smoking? A decade is not a very long time to run the kind of large scale longitudinal studies that are needed to accurately gauge long term health effects. Making significant claims about the long term safety of e-cigs without this data seems quite irresponsible.
Edit: lots of downvotes but still nobody actually willing to provide evidence for these ridiculous "several orders of magnitude safer" claims.
More complex question would be if I vape my dessert flavor with or without nicotine is that better for me than eating said dessert? I have had so many people tell me how they 'cant resist' sweets, and I'd rather vape my cake.
Before I switched from smoking 12-ish years ago my lungs would physically hurt in the morning and I would cough when I woke up. To me, and other people who legitimately view vaping as something that was life-changing in a very positive way that comes off as a very uncaring attitude. Vaping dramatically improved my health.
A lot of the resistance you describe comes from the fact that vaping is illegal in many countries (interestingly, smoking is legal in almost all of those places) and people living in places where vaping is legal, are concerned that there might be a push towards prohibition.
I agree with you that the amount of evidence we have is not conclusive and if you browse the various vaping forums online, you can see that most vapers openly admit that as well, the problem arises when the lack of conclusive evidence is used as an argument in favour of prohibition, that is what drives many vapers to respond.
In other words, if something is “possibly harmful but we’re not sure yet”, is that a sufficient reason for making it illegal? Most vapers think that the answer is no.
> people living in places where vaping is legal, are concerned that there might be a push towards prohibition
Spreading false, misleading information doesn't help legitimize your cause.
> the problem arises when the lack of conclusive evidence is used as an argument in favour of prohibition, that is what drives many vapers to respond
I haven't see anyone here doing that, I certainly haven't.
> In other words, if something is “possibly harmful but we’re not sure yet”, is that a sufficient reason for making it illegal? Most vapers think that the answer is no.
I do not thing there is any doubt that vaping is harmful to some degree (that appears to be the scientific consensus). The unresolved questions are "how harmful?" and "is it a net negative for society?". However, even if the answers are "almost as harmful as cigarettes" and "yes, it increases public health risks overall despite reductions in smoking", I still would not support banning e-cigs (though I would support advertising restrictions).
From EPA "Propylene glycol and dipropylene glycol were first registered in 1950 and 1959, respectively, by the FDA for use in hospitals as air disinfectants. At one point, there were approximately 190 pesticide chemical companies having active propylene or dipropylene glycol registrations."
This entire report details safety information, including aerosol use for almost 70 years.
The more research you do on pharmacodynamics and pharmacokinetics the more the 96% less harmful than smoking figure appears likely to be in the correct ballpark for harm-reduction vs smoking. Source: https://pneumonia.biomedcentral.com/articles/10.1186/s41479-...
One way of knowing this would be by reading studies conducted by the national health organisations of several countries, see my other comment in this thread.
The one study says that current best estimates place vaping at ~20x safer, or a single order of magnitude. The other provides no concrete numbers.
There appears to be a lot of dispute about those numbers are unrealisticlly high and concerns about conflicts of interest. The wikipedia article provides lots of references on those disputes:
Smoking tobacco is remarkably dangerous. It would be surprising for vaping to be anywhere near as dangerous as smoking tobacco, especially because you don't have the tar.
I agree in that I would also be surprised to find out that smoking is overall safer than vaping. (Though I do suspect there are certain risks that are still higher with vaping while others are lower than with smoking)
Claiming that vaping is orders of magnitude safer than smoking, without proof, is still highly irresponsible. We simply don't know how safe vaping is.
The history of making safety claims about addictive products is quite fraught with delibratly misleading and false statements. Please take care not to exacerbate this.
"...[R]ats were nose-only exposed to filtered air, nebulized vehicle (saline), or three concentrations of PG/VG mixtures, with and without nicotine...Compared with vehicle exposure, the PG/VG aerosols showed only very limited biological effects with no signs of toxicity."
While there is evidence showing the short term safety of inhalation, there is no evidence as to the long term effects of consistent repeated exposure.
> Propylene glycol has been used as a carrier for pulmonary inhalers as well as in food and cosmetics for decades.
Propylene glycol was deemed safe for oral consumption, not inhalation. I have not seen any sources of information indicating its use in pulmonary inhalers, do you have some sources you can link?
In this case, ISOC should almost certainly lose their 501(c)3 status, as the transaction is unrelated business income, and may or may not have been sold at fair market value (I don’t believe it was). In either of these cases, the penalty is at minimum the removal of their 501(c)3 status.
I believe they may be preempting this by converting themselves to a “B Corp.”
The case of ICANN is more interesting. I believe they knew what was going on here, and facilitated this transaction to their former CEO. In this case, the IRS has good reason to revoke ICANN’s 501(c)3 status, as this transaction was self-dealing.