Former ICANN CEO Fadi Chehadé appears to have a connection to the latest big deal in the domain name industry.
This morning, Internet Society announced it is selling Public Interest Registry, the non-profit that runs the .org domain name, to Ethos Capital.
Ethos Capital isn’t exactly a household name. In fact, it appears to have been set up in recent months. It just acquired its domain name EthosCapital.com at the end of last month.
The founder of Ethos Capital is Erik Brooks. He left ABRY Partners this year after spending two decades at the investment firm.
Does the name Abry ring a bell? That’s because it’s the company that bought new top level domain name company Donuts last year.
That deal involved Abry Senior Advisor Fadi Chehadé. Chehadé is the former CEO of ICANN, the group that oversees the domain name industry.
Now we have a twenty year veteran of Abry, who worked on the Donuts deal and was (or still is) a member of Donuts’ board, leaving this year to form a new entity that buys a registry, much like how Abry bought Donuts.
And the CEO of Public Interest Registry is Jon Nevett, one of the founders of Donuts.
Things get even connected.
On May 7 this year, Fadi Chehadé appears to have registered EthosCapital.org. He is listed as the owner in Whois. That was just before a Delaware company by the name Ethos Capital, LLC was formed.
I wonder why Abry didn’t invest in PIR? Was Ethos set up as a special entity to invest in PIR, and why? What is Chehadé’s connection?
The other person listed on Ethos Capital’s website is Nora Abusitta- Ouri. She worked for Chehadi at ICANN as SVP, Development and Public Responsibility Programs.
I’ve reached out to Ethos Capital, Chehadé, and Abry Partners about this and will update this story if I hear back.
David Thornton says
ethos.capital
Creation Date: 2015-09-07T09:18:19Z
Registry Expiry Date: 2020-09-07T09:18:19Z
Registrar: Lexsynergy Limited
Andrew Allemann says
Thanks
Richard says
FBI open up!
Charles says
I just the last couple of minutes the link your provided went from being accessible without being logged into to LinkedIn to now requiring login:
https://www.linkedin.com/in/erik-brooks-2ba2955/
John says
Pieces of the puzzle look quite bad:
In March of 2016 – Fadi Chehade, ICANN CEO resigned from his post and joined ABRY Partners, a Boston-based private equity investment firm as Senior Advisor on Digital Strategy.
In September of 2018 – ABRY Partners (with Fadi Chehade acting as the lead partner/principal) acquired Donuts – the world’s largest portfolio of new top level domains, which was created as a result of the gTLD program (which Fadi oversaw.) How many millions will Fadi collect from this deal? Both Fadi Chehade and Eric Books are now on Donut’s board.
In October of 2018 – Akram Atallah quits ICANN (past president of ICANN Global Domain Division and twice interim CEO) to become CEO of Donuts.
Shortly after Akram Atallah joined Donuts, Dontus announced major price hikes on almost all of its extensions across the board, even though the company vowed never to raise prices as a result of the Uniregisty fiasco (Uniregistry hiked the prices on all of its stings as well.) Thus, Donuts acted opportunistically by increasing prices on its customers who bought into these new domain extensions – even though they were told prices would never go up.
The US Government (NITA / David Redl) expressed serious concerns about “ICANN Revolving Doors” and conflicts of interest and suggested cooling off periods.
Abry Managing Partner (who also sits on the Donuts board) formed Ethos Capital LLC in Delaware on May 14, 2019. ICANN opened its public comment on the removal of all pricing caps in .ORG on March 18, 2019, closed public comments on April 29, 2019 and the staff report occurred on May 13, 2019. The formation of Ethos Capital LLC occurred one day after staff comments were released about removing prices from .org in the “Proposed Renewal of .org Registry Agreement”
Two prior ICANN CEO’s are have acquired significant interest in the largest registries?
Andrew Allemann says
Where do you see that Erik Brooks was on Donuts’ board?
Richard says
https://donuts.news/donuts-appoints-akram-j-atallah-as-ceo
““We thank Bruce for his stewardship of Donuts, during which in his tenure as president and chief executive officer, the company raised over $100 million in debt financing to acquire Rightside, and successfully engaged in a process to sell Donuts to Abry Partners,” said Erik Brooks, managing partner at Abry Partners and Donuts board member.“
Andrew Allemann says
Thanks!
KdS says
Lets not leave out that the only other person listed on Ethos Capital’s website, aside from Erik Brooks is Nora Abusitta-Ouri. As Andrew pointed out in the original article, “She worked for Chehadi at ICANN as SVP, Development and Public Responsibility Programs.”
I find this so frustratingly ironic. A previous SVP of ICANN, who worked for “public responsibility programs” is now involved in another “behind closed doors” deal which affects the entire Internet community, which is being unfolded in a grand showcase of how corrupt ICANN and the registries really are and highlighting all the issues which need serious investigation and oversight!
Fadi – where are you? Why is your name not listed on the current website at http://www.ethoscapital.com? Why are you a shill behind this master plan to screw every .org registrant? Why are you not publically associated with this new ‘screw the nonprofit” company/brand?
This corruption stinks to high heaven. I am so utterly sick to my stomach!
Danny C. says
Akram Atallah was hired in Sep. 2010 as ICANN’s CEO and was a big help for his long-time friend Fadi Chehade to become ICANN’s CEO in 2012. Both also brought some of their friends to high positions at ICANN, including Cyrus Namazi, who more or less replaced Kurt Pritz after Kurt resigned. The fact that Fadi and Akram were subsequently hired by registries or companies that invest in domain name businesses is concerning. It even makes sense. However, I believe that the fact that these 2 still have some friends within ICANN’s senior staff, who could be potential moles, is much more concerning.
kip says
Well well. Very interesting find Andrew! Fadi, the former CEO of ICANN now has his hands in Donuts as well as getting into the .org game through this deal.
Also, as of December 22, 2017, EthosCapital.org was owned by the following according to DomainIQ:
Registrant Organization: Ethos Capital Group
Registrant Street: 3605 Virginia Drive
Registrant City: Plano
Registrant State/Province: Texas
Registrant Postal Code: 75093
Registrant Country: US
Registrant Phone: +1.2143173704
And EthosCapital.com, the current site for this was owned by this in 2016 as well:
Registrant Organization: Ethos Capital Group
Registrant Street: 3605 Virginia Drive
Registrant City: Plano
Registrant State/Province: Texas
Registrant Postal Code: 75093
Registrant Country: US
Registrant Phone: +1.2143173704
So, not only is Fadi’s name on the old whois of the .org, but the .com and .org variants of the domain were both previously owned by the same company in Texas. Per my best guess, given we know the .com sold through Afternic (again, due to DomainIq), it is most likely that Fadi is a part of this. And clear that Fadi has his hands all over the transaction.
Shame shame. ICANN, your hands are so far up the cookie jar.
Nobody cares about registrants. It is all a money grab for who can get more money out of this filthy monopoly and cartel that only works for its own best interest.
Jack says
SHUT DOWN ICANN, they are all crooks !
Robert McLean says
Seedy ICANN machinations, a mirror image of the new gtld fiasco, is a reflection of the domain name business, as a whole. Wrought with conflict of interest, unchecked.
Mark Thorpe says
I told you .ORG smelled like Donuts!
Rajiv says
One of the most important domain extensions with millions of nonprofit registrants around the world and there is no review of this acquisition, who is behind it, and its potential impact on the pricing and overall stability of the extension?
ker says
Why does the registry get to sell all future rights to impose taxes on the internet? Why is this not a competitive bid process whereby POTENTIAL SUITORS are asked to submit bids to get competitive prices, competitive bids for technical abilities and plans to maintain the domain extension? Why is this even up to the registry to be able to sell itself? Insanely stupid.
Brad Mugford says
From ICANN.org –
“ICANN is a not-for-profit public-benefit corporation with participants from all over the world dedicated to keeping the Internet secure, stable and interoperable. It promotes competition and develops policy on the Internet’s unique identifiers. Through its coordination role of the Internet’s naming system, it does have an important impact on the expansion and evolution of the Internet.”
Public-benefit…
Promotes competition..
Sure.
Brad
Jack says
JAIL TIME for (ex) ICANN executives !
ICANN is supposed to promote competition so
.ORG / .NET / .COM contracts must be put out to tender NOW !
jim says
Why in the world did ICANN grant unlimited price increases for .org, and months later have PIR sell out to someone who wants to raise prices?
Why in the world is ICANN not promoting competition and forcing this the other way? Why is ICANN and its board not voting to put the contracts out to competitive bids which would in turn reduce prices and the obscene amount of profit PIR was already pulling in? This is bad all around. ICANN is the ringmaster allowing this circus to get worse by the minute. Nobody is the police. Even ICANN’s ombudsman is compromised as we have recently and clearly seen with the .org fiasco! These comments we are submitting and speaking out on are merely just “spam” anyway.
Why is ICANN ignoring the groundswell of opposition to these horrid things and just doing what it wants with no remorse for how it is RUINING THE INTERNET, and NOT MAKING THE INTERNET A BETTER PLACE!?! This is a very sad organization and shows how corrupt, inefficient, and misguided ICANN is. Why does ICANN and all it’s various tentacles continue to justify what it is wrongfully doing to the Internet and to the world?
The answer is quite clear: ICANN is literally run/controlled by those who jump in and out of the registry business. ICANN is a fully captured organization that can’t effectively say “no” and do the right thing. It is driven by profit and the profit of those who are in every working group, and have conflicts of interest abound. And this is just yet one more example of the issues/corruption and misguided governance of the Internet. And how the people who care the most, those that are USERS of the Internet and people paying the registrations are totally trumped by the cartel and all its best buddies.
John says
Fadi Chehade left his CEO post at ICANN to join private equity Arby partners.
Arby purchased the largest gTLD provider Donuts (with Fadi being the lead partner on the deal.) Erik Brooks was also on the deal and is/was on the Donuts board of directors.
Shortly, thereafter, Donuts increased its prices on almost all of its TLD’s across the board. Donuts acted opportunistically by raising prices on its captive base of consumers who had registered its domains. Despite the fact that Donuts went on record and publicly said it would not raise prices (especially existing registrants.)
With regards to the gTLD program – the DOJ Antitrust division strongly advised ICANN establish TLD prices upfront to prevent abuse by registry operators. DOJ also told ICANN to put TLD contracts out for bid when the term ends.
But ICANN ignored US government advice and did not take into consideration any of Antitrust division recommendations.
Because Fadi is behind this most recent acquisition of PIR / The Internet Society who operates .org – it is only a matter of time until PIR ditches its back end provider Afilias and migrates over to Donuts, pumping even more revenue into Arby partners.
So within a few years (or when the Afilias contract expires) Donuts will be operating .org
Arby partners found an opportunity. That opportunity was based on the insider knowledge that ICANN does not give any consideration to competition issues in the DNS. ICANN only cares about its bottom line and extracting as much money as possible from its largest ratepayers.
Fadi advised Arby partners that it should acquire PIR / The Internet Society and it would have the ability to raise prices on end-user registrants by however much it desires – without having any corresponding impact on demand. That is because domain name are highly inelastic.
This will harm consumers.
Registrants are beholden to their domain name. They are locked in and it is extremely difficult to switch.
When consumers are locked in – this type of business is the “dream” for any private equity shop. Having the ability to raise prices – without impacting demand – because of the enormous switching costs = profits and profits and profits for the operator.
Fadi – as past ICANN CEO – was armed with the knowledge that ICANN does not give any consideration to competition issues or care if consumers pay supra-competitive prices – advised Arby on a strategic direction which will likely pay enormous dividends.
Unless competition authorities want to step in and protect consumers.
Jay says
“ – the DOJ Antitrust division strongly advised ICANN establish TLD prices upfront to prevent abuse by registry operators. DOJ also told ICANN to put TLD contracts out for bid when the term ends.”
Do you have a source reference for this?
Rubens Kuhl says
While Fadi can be linked to this deal indeed, there is a possibility he might not. I can imagine things like “Hey, you know domains, right ? Can you register one for me ?” or “Hi, I registered xxx domain for you since you forgot to” happening.
John says
Rubens,
The fact that Fadi Chehadé registered the domain name ethoscapital.org May 7 2019 tells me everything I need to know.
It even looks suspicions Fadi made this registration a week before ICANN posted its summary of public comments. Inside information?
Arby partners is behind this deal.
They attempted to cover their tracks for optics – to avoid scrutiny.
And someday, .org backend will be in the hands of Donuts / Abry partners.
Nicolas says
Rubens Kuhl will always defend ICANN, as NIC.BR/CGI.BR is one of the sponsors of the new ICANN model.
CCTLD .BR has been delegated to CGI.BR and is operated by NIC.BR without bidding and public tender.
CGI.BR Advisors took the money domain holders pay and created NIC.BR without bidding and tendering.
The CGI.BR advisers also included a clause stating that NIC.BR is private law and that the law belongs to them.
Rubens Kuhl says
I am known as a vocal critic of ICANN, notably GDD, so there is some disconnection there…
.. and ccTLDs in general have been for years very critic of ICANN mission-creep and lack of financial responsibility, so you probably should read and watch more transcripts and video archives.
As for NIC.br, it’s a non-profit that can’t be ever turned into a for-profit. It generates excess revenue by design and applies it to foster Internet growth in the country. Something that outsiders might not care about, but we do.
Felipe Loan says
NIC.BR was created without bidding or lower priced tender.
There are CGI.BR directors who hold positions and lifelong jobs within NIC.br.
In addition there is no transparency in financial transactions.
We can cite the losses from the .gom and .final gTLD failures, which were paid with money from domain holders.
There is a study by an expert from the Federal Court of Audit – TCU, who shows that CGI.BR has verticalized the market and created a monopoly through NIC.BR.
CGI.BR has become a raid aimed at stealing money from people.
Andrew Allemann says
I would hope the Ethos guy knows domains given that he is (or was) in the board of Donuts and was part of the deal time that did the Donuts deal.
Rubens Kuhl says
You would be surprised by the type of IT requests I got from high-ranking IT executives.
John says
You folks are like great investigative journalists.
Marcus says
Why did ISOC choose Ethos Capital? Why not announce they are selling PIR and open the bidding so they could maximize the price? Was dot org actively shopped around or was it quietly handed to this one entity?
robbob says
very interesting question. why is everything that happens in this industry secret backdoor deals that only benefit those behind the closed doors?
Marcus says
Right? I mean, dot org is a prize asset. A trophy asset that has been in the hands of ISOC for many years, Now it is available to outside bidders. I would imagine there would be many potential owners both inside and outside the industry who would love to bid for the rights to own the registry. Why sell this prize to a small entity like Ethos Capital with minimal experience in this area? Did Ethos have any operations at all before it was set up?
B says
What seems corrupt with ICANN & .org may be a blessing if this scandal generates concern over total lack of competitive tender for registry contracts. Best counters to corruption are transparency and open bidding. Dismantle backroom sweetheart deals & windfall profits as enjoyed by Verisign for .com and .net and the (so-called) “Public Interest Registry” for .org
Howie says
“What seems corrupt with ICANN & .org may be a blessing if this scandal generates concern over total lack of competitive tender for registry contracts. Best counters to corruption are transparency and open bidding. Dismantle backroom sweetheart deals & windfall profits as enjoyed by Verisign for .com and .net and the (so-called) “Public Interest Registry” for .org”
Please describe a specific action plan we can all get behind to achieve this outcome. Thank you.
B says
We might canvass among major players who potentially could compete with Verisign. A quote or two from potential bidders who might disrupt the Verisign insider monopoly, would be useful. (Even non-binding comments put them first in line for stay-away pay-offs). Maybe GoDaddy, Ethos, Epic, or a new team could challenge “MaBell Verisign” for billions in easy revenues…
Howie says
“I’ve reached out to Ethos Capital, Chehadé, and Abry Partners about this and will update this story if I hear back.”
Have any of these parties responded to your inquiries?
KiKi L'Italien says
What are the ongoing ramifications for associations/nonprofits? I see no price-cap leading to high renewal rates not budgeted for by nonprofits, but what else? What are the security/transparency issues for associations? I’m sure many of their CIOs/CTOs have never even thought much about their TLD owner. Are there security or additional financial issues that they should be concerned about with this?
zorrodp says
Is there a Texas connection? Ethos Capital Group LLC is a privately held company in Frisco, TX and is a Single Location business.
(removed)
Categorized under Investors (Unclassified). Our records show it was established in 2013 and incorporated in Texas. Current estimates show this company has an annual revenue of 139788 and employs a staff of approximately 2.
(removed)
https://www.manta.com/c/mb0b793/ethos-capital-group-llc
(removed)
Andrew Allemann says
No, that’s a different company. There are quite a few companies called Ethos Capital.
Martin Watt says
ICANN should never have been given the job by the US Congress. America does NOT own the internet. This should be a job for the UN or similar multi national body. Clearly being non profit is a joke, you make no profits by wild spending sprees.
Mark Jeftovic says
Does anybody have a copy of the ethoscapital.org whois record showing Fahdi’s name? Because it’s not there now and I don’t see a snapshot depicting this in domaintools.
Andrew Allemann says
It’s still there. You have to look it up on GoDaddy’s Whois:
https://www.godaddy.com/whois/results.aspx?domain=ethoscapital.org
Mark Jeftovic says
Ah of course, the web whois. Domaintools would only have port 43 output.