How responsible is the NZ government for the Kim Dotcom fiasco?

by Jane Clifton / 06 October, 2012
Our resident friendly German has brought us a whole load of trouble.
Kim Dotcom and wife Mona

Talk about thrills and spills. Kim Dotcom must be tempted to believe New Zealand and its governmental architecture are a giant theme park adventure ride designed especially for him. As with any good fairground ride, there have been scary bits: when armed police choppered into his mansion, and then all that time in the clink with a lumpy mattress. But since then, it’s been fun fun fun.

After a trouble-prone career as first an internet hacker and later a buccaneer testing the margins of intellectual property law, he seems to have been doing what lawyers call jurisdiction-shopping when he applied for New Zealand residency. He knew the US Government had his Megaupload empire in its sights. Did he ever make a great pick. How lucky can you get that the evidential raid on your mansion could turn out to have been illegal; that some bozo in Crown Law sent documents to the US against a New Zealand judge’s order; that New Zealand’s police and the Government Communications Security Bureau both missed the rather well-publicised fact that you have residency, rendering their surveillance of you apparently illegal. Another stroke of luck – you decided to shore up your stocks by befriending and donating to a bigwig politician running for the Auckland mayoralty, and he later denied knowlege of the whole thing, making you look like the wronged victim.

You pick a couple of media outlets to confide in and get wonderfully sympathetic coverage. You pull a few stunts – inviting some influential Tweeters to #swimatkims, and happen to turn up to Parliament when MPs are discussing you: more great media coverage, laugh a minute. It’s not every remand prisoner who gets to cause a sovereign Government such conniptions. The long-run question is, how culpable are our politicians for this debacle? Bless his heart, the gazillionaire has said he doesn’t want to sue the Crown, because he loves us and doesn’t want to burden taxpayers. But the potential fiscal Crown liability for his loss of business is another deeply awkward question.

Dotcom was supposed to be a net fiscal gain, getting residency under the entrepreneurs’ immigration scheme in exchange for investing $10 million in government bonds. He wasn’t allowed to buy his rented mansion, because the relevant minister at the time, Simon Power, wasn’t satisfied he met the character test – a small matter of a string of convictions. But he did get permanent residency. Only a churl would say we should have known the jolly German giant would bring a global shoot-out over the future of the entire entertainment industry to our shores – and that we wouldn’t have the first clue how not to get implicated in furthering another country’s political fetish.


Dotcom’s cyber-warehousing empire let people get sound and video content for free that the purveyors of the material intended to be paid for. Hollywood being an influential federal lobbying force, the US Government has prepared an epic lawsuit against Dotcom and his confreres, which it hopes will succeed as a test case to enforce pay rules in cyberspace. No one would argue people should not be paid for their work. But at what point did downloading stuff for free become a major issue of national security for New Zealand? (There is a vigorous school of thought in the blogosphere that downloading Canadian band Nickelback is at least a humanitarian crime, but the Listener will leave that to the reader’s conscience.)

In order to assist with a US court case that is a matter of political concern, not economic security or in aid of counter-terrorism, we sicked armed police and our external spying bureau onto a New Zealand resident. That we seem to have botched every step in that process is almost irrelevant. (We totally cocked up our one domestic foray into mega-raiding with the Urewera debacle, so we already knew we were pants at this stuff.) We still don’t know the answer to the most basic question: should we have co-operated with the US authorities with as much gusto as we did, or even at all? Once you’re into extradition treaty territory, the normal rules change. Ordinarily, another country would not seek detention and extradition from our shores for anything less than murder, drugs or terrorism. The US authorities told our Government and relevant officials that they believed the Dotcom team were master criminals deserving of the full works: raid, detention and surveillance. The foreign policy implication of saying, “Nah, we think he’s just a chancer who got lucky” doesn’t bear thinking about. Next time we want someone extradited from the US, or need US support for a trade deal or humanitarian push, we’d be out of luck.


The bewildering thing, however, is the almost negligent remove our ministers seem to have had from the whole process. In even the most basic human terms, this is a fascinating stoush. The Dotcom story is a wild romp, the pending legal fight could be bigger than OJ, and along the way there have been Boy’s Own attractions like helicopter gun raids. Why did the relevant ministers not insist on being regularly and extensively briefed on it all? The guy had practically set up his own principality right inside John Key’s electorate, employing dozens of people and supercharging the Coatesville economy, yet Key says he didn’t even hear the name Kim Dotcom until after the raid. This seeming incuriosity is way out of character for our PM, who – witness Planet Key with its perma-holiday and endless golf course – has a lively fascination with luxury and Flash Harry behaviour. Sure, Key would have been silly to go calling with a fresh batch of scones, but his interest must have been piqued.

As for Bill English’s apparent lack of interest when as acting PM he signed off paperwork to confirm the GCSB was involved in the case, and didn’t bother to mention it when the boss got back … suffice to say, if they ever made me the minister in charge of our secret squirrels, I’d be unable to resist asking, “So, who are we spying on now?” Or meeting the PM off the plane with, “You’ll never guess who we’re spying on now!” It simply beggars belief that ministers weren’t positively avid for the next instalment of this saga. They can bear no responsibility for the operational cock-ups – although if there aren’t sore bottoms at Crown Law, the Police and the GCSB, it’s a very poor show, for they’ve made us laughing stocks internationally to anyone following the Dotcom case. And make no mistake, plenty of people are, because the entertainment industry is fighting hard and possibly even dirty to save or find ways to evolve its business model.

The Dotcom case is pivotal. We’ve shown the big guy such a great time, we may soon become an immigration magnet to all the global internet pirates keen to put a bit of jurisdictional tagliatelle between themselves and US justice. Maybe that’s our future: as a haven to the Dotcoms, Assanges and sundry rockstar hackers of the world. And, ahem, their money. And no, that wasn’t a real quake in Wellington on Shakeout Day – just the reverberations from Kim patriotically doing the “Drop, cover and hold” thing, all the way to the Beehive, as usual.
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