Billy Big Steps: at home with Kim Dotcomby Chris Barton
Dotcomedy has been keeping us all entertained, disturbed and often gobsmacked for nearly two years now. But is the Kim Dotcom story a farce or a more sinister thriller? What are his plans for that new political party? What does the timeline about his application for permanent residency reveal? And why does his phone go all funny? Chris Barton has been visiting the weirdest home and the highest courts in the land.
Photo: Simon Young.
The guard takes my name. Security check. The gate swings open. The winding white gravel driveway passes a “Mega” sign on the grass and ends in a turning circle between two houses — the ground where the helicopter briefly touched down on the day of the raid, kicking up a white mist and pinging stones at the cars. Inside is the only place in this mansion where everything is black and white — black round table, white leather couches, outrageously kitsch black chandelier, a black galley kitchen with 4.5m tropical fish tank splashback, hanging black bowler-hat light shades. The space is a pastiche of pointed gothic arched windows on one side, rounded arches to an adjoining lounge, then French doors to the courtyard.
Kim can’t come down, I’m told, but you can go up. Nothing prepares you for the sight at the top of the stairs. The big man is lying on his stomach, semi-propped up on his elbows, his chin resting on a pile of folded black towels, looking at a flat screen at the foot of the bed. The upper half of his torso is clad in his hallmark black garb, the lower half draped in a bright orange towel. Yes, his butt does look quite big in that. He’s hurt his foot. Goodness, what happened? He was walking the grounds, he says, lost in his thoughts, and fell over. His face is flushed with beads of sweat. “If I look a bit…” he says, gesturing around his face, “it’s because I’ve just had a hot shower.”
In bed with Kim Dotcom. Many in the media, and the odd politician, have been accused of that. I take the chair. According to a October 2012 feature in Wired, this is Dotcom’s bed of choice — a handcrafted Hästens from Sweden, a perfect matrix of horsehair, cotton, flax and wool costing around $100,000. It’s his “work bed”, his office. Computers at the foot of the bed — check. Chromed AK-47 lamps either side — check.
It’s a far cry from the 10cm-thick mattress on a concrete slab he had in Mt Eden Prison. Dotcom suffers from back pain and receives regular massages and special treatments — “electric therapy where they put a little electric current through your back”.
In prison he was in agony. “I couldn’t move at all, was in severe pain with muscle spasms and completely immobilised.” He told the guard who came to escort him to a meeting with his lawyers: “Sorry, I can’t move.” They got him a wheelchair. “But even then, driving me around in that, every bump…”
His lawyers suggested that perhaps they could reach out to Act MP John Banks. The prison was in his Epsom electorate. Banks didn’t want to know him.
How did he feel, having given Banks $50,000 for his 2010 Super City mayoral campaign? “That was disappointing. It’s not about the money. We became quite close. His wife and my wife got along quite well. They were here playing with my kids. There was a good vibe. He called me his friend.”
The Dotcom-ologue: he does it quite often on numerous subjects — the corrupt United States, the corrupt New Zealand government, the dastardly Hollywood conspiracy. Once started, he’s unstoppable. “If somebody is a friend of mine, I’m not going to abandon them just because there is an event that might make me look bad. That’s a weak character. You know what a real friend is when that person is there for you in your darkest hour.”
Money can’t buy you friends. A police investigation into the donation — and another for $15,000 from SkyCity casino — found Banks should not have recorded them as anonymous, but the detectives didn’t believe they could prove he “knowingly” signed a false return, so didn’t lay charges. A private prosecution was then laid against Banks. In a hearing in October — to which Dotcom was summonsed to give evidence — Judge Phil Gittos said sufficient evidence had been presented to send the matter to trial. That particular cabbage boat may yet come down the river.
Dotcom claims his association with Banks doesn’t mean his natural political inclination is to the far right. He gave a donation to the person, not the party. “He [Banks] told me that New Zealand needs to open up for the internet economy — that all we do here is grow grass for our cows and sheep. He gave me this whole speech. I was impressed. I know today the guy conned me.”
January 20, 2012. Finn Batato awoke to the sound of rotor blades. He wasn’t overly concerned. People were flying in by helicopter to the mansion all the time. 6.47am did seem early. He climbed out of bed. The upstairs guest room looked across the estate’s manicured grounds to the giraffe and rhinoceros sculptures. Ooh, that’s very forceful, he thought, seeing a policeman taking down one of the mansion’s security guards in a flying tackle and cuffing him. He wondered what the guard might have done. Drug dealer? Batato shrugged. He was awake now. He may as well start his day.
As Megaupload’s marketing and advertising manager, he had emails to deal with. He put on a robe, grabbed his notebook, cigarettes and phone and headed downstairs. It was a beautiful day. There was that nice place behind the house where he and Mathias Ortman sat and worked when they were last here. The house slept as he exited through the back door.
As he strolled into the garden, two men erupted from the hedges, yelling and pointing semi-automatics at his head. That can’t be me, thought Batato, turning to look for somebody behind him.
“Are you talking to me?”
“Yes. Put the computer down.”
The police cuffed him behind his back. He was charged with copyright infringement, racketeering and other charges he didn’t fully comprehend. His mind was spinning. He’d never been arrested or charged with anything in his life.
Around the same time, Ortman, in another of the guest rooms, awoke to a ruckus downstairs, followed by pounding on his door.
“Open the door or we’ll break it open!”
Ortman jumped out of bed and opened the door to three men pointing semi-automatics at him. This might, he thought, be an armed robbery — the Coatesville property was, after all, a high- profile location. The gunmen introduced themselves as police.
Bewildered, Ortman was escorted to sit on the lawn beside the house. It was a surreal scene — police running with dogs, handcuffed guards, at one stage five or six gunmen on the roof. A war zone. He was read what seemed bizarre charges — conspiracy to commit copyright infringement. This is a big misunderstanding, he thought. I’ll clear this up quickly. He had to. Megaupload was undergoing maintenance at the time and, as chief technical officer, he needed his computer back by the evening to complete the job.
Across town at his Orakei home, Bram van der Kolk’s hell was just beginning. The chief programmer had been working until the wee small hours on new website features and was about to go to bed when there was a loud knocking. Huh? Weird time, he thought. He opened the door. Three police officers strode into the house and immediately grabbed his iPhone.
“We have an order from the United States.”
There must be some mistake. More police — about 15 — swarmed into the house. His cars were driven away. He was being arrested for money laundering. He had a rough idea what it meant, but always associated it with people selling drugs. Racketeering? The 29-year-old, who’d never been in trouble or arrested before, and never expected to be, had never heard of that.
He was to go with them to the police station.
“Will I go home after that?”
“Just say goodbye to your family.”
He kissed his wife, Junelyn, and two-year-old son, Xander, and left. He still didn’t realise he was about to be locked up.
Meanwhile, back at the mansion, Kim Dotcom sat on the floor, his back against a pillar, in the attic above his bedroom. It’s a forlorn space — devoid of all furniture, yet overpowered by a screaming-red carpet. Dotcom retreated there because of the intruder-on-the-property protocol he’d worked out with Wayne Tempero, his head of security. Hearing heavy banging on his bedroom door, Dotcom pressed the emergency button beside his bed that sent a signal to the security guards and Tempero’s room. As he entered the secret door and started up the stairway, he heard: “Police, police!”
He paused and decided not to press the button to engage three metal bolts to lock the door firm. There was a terrible hammering. The police were smashing the dumbwaiter to the kitchen with a sledge hammer. They thought Billy Big Steps, as they called him — all two metres and 130kg of him — was hiding inside. Dotcom decided it would be safer to wait upstairs. It took forever.
“I’ll show you where he is,” said a handcuffed Tempero on the lawn with Ortman, the security guards, a couple of Filipino butlers and Mona Dotcom — 27 weeks pregnant with twins. The team started up the stairs. Unbeknown to them, an armed offenders squad (AOS) member was already inside — gaining access from the roof via a small service door. Unaware of Dotcom sitting behind the pillar, the squad member headed for the gun safe at the other end of the room. There was a key in the lock. As he opened the safe and discovered a shortened pump-action shotgun, the entry team fanned out into the red room. Dotcom had his hands up. He was forcefully pushed face down.
Dotcom was taken downstairs and read the charges. Mona was frantic because the police were keeping her separated from her three children.
“You know my wife is pregnant. Can I just calm her down? I know she must be very scared. If I talk with her and tell her everything is okay she will feel much better.”
The police were unmoved.
The remarkable display of police force at Dotcom’s home at 186 Mahoenui Valley Rd, Coatesville, might have seemed like a slightly more farcical Kiwi version of the raid on Osama bin Laden’s compound in Pakistan, but this was not part of the war on terror. It was a show of American might reaching across the globe. Shock and awe with an unequivocal message. The war against illegal movie and music downloaders is far from over.
Some 70 armed police, including members of the Special Tactics Group (STG) and AOS, plus police dogs and their handlers, deployed in two helicopters and several police vans, descended on the property called the Dotcom Mansion.
Operation Debut, carried out at the behest of United States authorities, was to arrest individuals associated with the Megaupload group of companies and seize its assets, records and information. It was part of an international operation co-ordinated to take place simultaneously at 7am New Zealand time in the United States and eight other countries. Megaupload servers were seized in Virginia, Washington, DC, the Netherlands and Canada, and raids were carried out on premises in Hong Kong and Munich.
The Americans expected the extradition of those arrested at Coatesville and Orakei would be like the raid — in and out with brutal efficiency. They hadn’t factored in a number of unpredictabilities: some monumental bungling by our police force and security services; the slow-grinding but scrupulously independent wheels of New Zealand justice; and the media maelstrom unleashed by the incredible hulk known as Kim Dotcom.
The unravelling began at the preliminary extradition hearing in the North Shore District Court on May 29, 2012, when Judge David Harvey ruled that those arrested had a right to see the evidence against them. The ruling was subsequently upheld by the Chief High Court Judge, Justice Helen Winkelmann, then overturned by the Court of Appeal and is currently awaiting a judgment by the Supreme Court. That’s 18 months just to get the issue of disclosure sorted out.
Enter the Keystone Cops. On June 28, 2012, Justice Winkelmann dropped a bombshell, ruling that the search warrants the police used in the raid were illegal because they were unreasonably broad. That ruling is to be challenged in the Court of Appeal at the end of November.
The High Court also heard evidence about the aggressive and excessive search and seizure. Calling in the STG and the AOS was using a sledgehammer to crack a nut, especially for a household that had shown no propensity to resist police. During the interrogation of the evidence of the operation’s leader, Detective Inspector Grant Wormald, the police revealed they had sought the assistance of the Government Communications Security Bureau (GCSB) in gathering intelligence.
Surveillance. Spying. All hell broke loose. The GCSB is permitted to spy only on foreigners. Megaupload founder Kim Dotcom and chief programmer Bram van der Kolk had been granted permanent residency in New Zealand in 2010. A mistake so bad the Prime Minister, as head of the GCSB, publicly apologised. The Dotcomedy begins.
Other matters were unresolved too — such as the way in which the FBI had, highhandedly and against a direction by the Solicitor-General, whisked clones of Megaupload servers back to the United States. Then there’s the vexed question of the return of irrelevant material held by the police. In their zeal, police took everything — including the home entertainment system, family photos and videos, and the computer system that controlled the mansion’s doors and lights.
There’s also a question of access to material seized and the small matter that the foreign restraining order obtained for the seizure was deemed “null and void”.
After much to-ing and fro-ing, including another trip to the Appeal Court, the end result is that Kim Dotcom and his co-accused can seek compensation for the unlawful actions of the police and the GCSB. A civil claim for $6 million is set down for a hearing in March next year. Meanwhile, the District Court extradition hearing languishes — set down for April next year.
Whatever the outcome, it’s a given there will be an appeal path — to the High Court, the Appeal Court and probably the Supreme Court — not to mention new legal twists and turns likely to emerge in the coming months.
What a mess. American shock and awe has become botch and bore. In the meantime, Dotcom, the man at the centre of this debacle, and his co-accused are not going anywhere fast. Expect at least another two years of legal manoeuvres, probably more. The Dotcomedy goes on.
Megalomania greets you at the stone wall by the gatehouse — a sign proclaims “Dotcom Mansion”. Why would anyone put up such a sign? Or is it an ironic joke? I shouldn’t be surprised.
This is the man who lives via the media — playing 100 Call of Duty gamers for charity, in ads promising to lead us out of our internet poverty, headlining at celebrity debates and at protest rallies, releasing bad music videos, launching websites with lavish parties, embarrassing politicians, putting on fireworks displays, tweeting to his 320,000 followers and frequently visiting our courts.
This is the man who’s going to get New Zealand a new submarine internet cable, put millions into our next America’s Cup challenge and start his own political party. Oh, and he’s going to save the internet. He is the internet. He’s a giant dotcom.
The mansion befits a man who likes to flaunt his wealth. Until the FBI froze his bank accounts, Dotcom had plenty. He was intending to buy the place — once home to Chrisco founders Richard and Ruth Bradley — for around $30 million. The Overseas Investment Office said no because, in keeping with the general air of farce, he didn’t pass the good-character test.
He did, however, cross the character threshold when seeking residency here. That was despite Immigration New Zealand knowing about his previous convictions for hacking and insider trading, that he was “persona non grata” in Thailand, and adverse media coverage here and on the internet portraying him as “an undesirable”. Then again he was prepared to put $10 million into New Zealand government bonds. Staff were concerned, however, that approving Dotcom’s application might “attract ‘buying residence’ criticism”.
The decision to enter New Zealand politics followed Dotcom’s participation in the “Stop the GCSB Bill” campaign, aimed at preventing the expansion of the GCSB’s surveillance powers. Dotcom loved it — except perhaps the old-school Labour Party-style fundraising at a packed Auckland Town Hall meeting in August. “When it took too long, I told the event organisers, ‘You have enough now. I will top up the rest. Just stop this now.’”
People approached Dotcom after the protests and encouraged him to do more. “‘You should start a party. You should get into politics. I will vote for you. I was, like, ‘Wow.’” News of his plans got out on August 31. “My Twitter timeline filled up with people saying, ‘This is great. This is awesome. Kim for PM.’”
Dotcom is not a New Zealand citizen, so can’t stand for Parliament, but as a permanent resident he can be president of a political party. Mr President is convinced he has a groundswell of support. “When I tweeted @KimDotcom, I got 400 emails in two hours. I was like, okay, this is real now.”
From the comfort of the Hästens, Dotcom is serious. He’s done the numbers and reckons he needs just 112,000 votes to cross the five per cent threshold. He’s currently interviewing potential candidates. All will be revealed on January 20 next year, on the second anniversary of the raid. “I want to surround myself with a dream team of achievers — people who get it and want to bring this country forward and into the future.”
The party will focus on the internet and technology and job creation. His ideology, echoing MP Peter Dunne’s, is common sense — “best of the left, best of the right”. He believes everyone should pay their share in tax. “You can’t have someone who is a billionaire and lives in New Zealand and effectively pays five per cent net tax or less simply because he has good advisers.”
Yet that’s precisely what Megaupload did in Hong Kong — striking a deal with its Inland Revenue for a 4 per cent tax rate. In the same breath, Dotcom talks about the need to attract foreign investors to build a strong internet economy. Tax policy is clearly a work in progress.
Will he implement measures against mass surveillance? “Totally.” Including withdrawal from the Five Eyes (Echelon) spy network? “I don’t think New Zealand should be part of those efforts because they are really about spying internationally. They are leading to death of people.” Closing the Waihopai spy base? “I think that would be one of the topics — definitely.”
Expect also a cooling in US-NZ relations. Example: “When they invaded Iraq and it all became clear it was a big lie and they killed over 100,000 people, we should have said to the US, ‘Fuck you. You are the devil.’’’ Sounds mad, should be interesting.
Prime Minister John Key’s response: “I think it’s all part of his campaign to stay here… He has very good PR people.” Dotcom’s reply: “I don’t engage anyone for PR. I do all my own tweets.” At last count he has tweeted more than 6000 times.
To tangle with Dotcom — politicians, the police, the United States, the media, business, New Zealand — is to enter a hall of mirrors reflecting a distorted image, a largely unflattering portrait... What is Billy Big Steps under his orange towel but unfettered capitalism and naked ambition?
Dotcom’s skill in handling the media was honed by his high media profile in Germany. “It’s about being real,” he insists. “I’m just honest. I’m just telling it how it is. I’m not bullshitting anybody.”
Initially, the press coverage here was all bad: stories blaming him for child pornography and terrorist videos uploaded to Megaupload; stories that his lavish lifestyle was based on criminality; stories from neighbours that he was frightening the horses. “Everything changed after I did the interview with [TV3 host] John Campbell and really explained to New Zealanders how ridiculous the charges are and what we’ve actually done.”
Now the media can’t get enough of him, with a trail of journalists beating a path to his door — including, in September, CBS 60 Minutes veteran Bob Simon, and the Herald’s David Fisher, who has just published a book. Dotcom employs his own videographers who turn up at every court appearance and public event. “We have hundreds of hours by now. In the end there will be a product, when all of this is over, that will tell the whole story.”
For now he’s devoting all his time to politics. “I’m a perfectionist. I want to be the best at everything that I do.”
Where does that come from? “It is just inside me. I don’t know. I can’t explain. I don’t like mediocre.”
The Dotcom refrain: bigger, better, faster, first.
He has always been out there. Before he changed his name, he called himself Kimble and his website kimble.org. “I had my personal home page and I shared my life experiences with my visitors. I opened my life up to the media and invited them to come along on holidays and see how I work and how I live.”
Often that involved lots of pictures of driving fast cars and partying in exotic locations with beautiful women. “It backfired, because people thought I’m a loud mouth, I have a monstrous ego, I’m full of myself, I’m doing all of this just to show off.”
He insists he was trying to motivate others. “Germany is a very unique culture when it comes to dealing with success. In Germany, we don’t have heroes. After World War II, it was taboo to idolise anybody. Young people do not have anyone to look up, to be motivated by and create a drive and ambition to be successful themselves. I wanted to change that.”
It went horribly wrong when he was convicted for insider trading. “I felt I was a white knight. I was saving this company and I did the right thing at the right time.” He says he became a scapegoat for the new-economy bubble bursting — the dotcom crash in 2002 — and for “being a media hate thing”.
The last straw was when Germany’s RTL television interviewed his estranged father, whom he hadn’t seen since he was about 10. “I was just charged with insider trading and locked up in Germany in jail waiting for my trial and I saw him on TV saying: ‘You know, my son is driving this big Mercedes and has all this money but he never comes to see me.’”
Dotcom was so incensed that he decided to leave Germany. “That broke my relationship with German media, which disgust me the most, because here they are giving this guy a platform to accuse me of being a bad son when he has done all these horrific things to my mother and myself.”
Growing up in Kiel, northern Germany, Dotcom had a troubled childhood. His Finnish-born mother, who worked as a cook, left his German father, a ship engineer, when he was six. “My father was an alcoholic and he used to beat my mum and myself.” He describes having to sleep in the cellar of their apartment, barricading themselves in the bathroom and sleeping in the bathtub, and often fleeing to a Frauenhaus (women’s refuge).
Seeing what his mother went through made him want to make things better. “My biggest goal in life was to be successful to give her a good life. That was my number-one ambition — to be successful.”
The relationship remains strong and Dotcom delivered. “I sent her a lot of money. I made sure that she can get a reward for all the hard work she had done to get us through all those difficult times. If it wasn’t for my mum I wouldn’t be here.”
His father, however, remains loathsome. “If he is dead right now I don’t care. To me that person is plain evil and I don’t want him anywhere near my kids. I don’t ever want to be in touch with him.”
“Chilling, chilling, chilling.” At his spacious Victoria St chambers, Paul Davison is reflecting on the wider implications of the Dotcom story. Relaxed, amiable but with a penetrating gaze — as though he’s interrogating your soul — the Queen’s Counsel with a formidable reputation for winning seemingly impossible cases focuses on New Zealand’s part in the dragnet mass-surveillance system known as Prism. “To have an indiscriminate gathering of information that is stored against the day that somebody might want to look into it has a Big Brother connotation.”
Davison uncovered the Big Brother component during his High Court challenge in early 2012 to the lawfulness of the search warrant. Along with the GCSB’s illegal spying, we learned how the information was gathered. “Metadata”, “selectors” and “Five Eyes” entered the common language — they were words that took on new meaning in May when whistle-blower Edward Snowden, the former contract employee for America’s National Security Agency (NSA), disclosed classified details about the NSA’s internet surveillance software. That disclosure told the world about a metadata collection program called Prism, a selector program called XKeyscore, and a phone monitoring and recording system called Tempora.
We now know that members of Five Eyes partner agencies (the United Kingdom, United States, Canada, Australia and New Zealand) can key in identifying information regarding an individual such as their IP addresses, telephone numbers and email addresses and then download their communications.
“What’s chilling to me is that somebody associated with the Five Eyes network can decide these people should be looked into. And that all manner of communications they might have had can then be looked at on databases without any judicial check or balance as to whether that’s a justified thing to be doing. The intrusion into privacy is as acute as one can get.”
Davison never anticipated this sort of issue when he took the case. He got a call from an old friend, Willy Akel of Simpson Grierson, to assist with the law firm’s client, Dotcom. Learning that several others — van der Kolk, Finn Batato and Mathias Ortman — had also been arrested, he arranged for his colleague Guyon Foley to attend as well.
“It was just an urgent need for someone to have legal representation in the face of a pretty draconian series of measures which descended upon them.”
What does Davison think of Dotcom’s big conspiracy theory — a theory so big it rivals the “Mega conspiracy” to commit the copyright infringement he’s accused of? Dotcom claims he was set up, that his residency application was put on hold and about to be declined because officials became aware of the FBI investigation. Mysteriously, the day after the Prime Minister met Warner Bros and the Motion Picture Association of America (MPAA) to resolve issues around The Hobbit being made here, Dotcom’s residency is granted. Why? Because the FBI wanted Dotcom in a location from which he could readily be extradited.
Documents released under the Official Information Act show that at least part of what Dotcom claims is true. In an internal memo dated October 26, 2010, the manager of Immigration New Zealand’s business migration branch (BMB), Gareth Grigg, writes about Dotcom’s residency application: “[Redacted] have indicated BMB suspend any further assessment on the application.”
It also says: “On 22 June 2010 [redacted] check was initiated on Mr Dotcom. On 13 October 2010 a message was received from [redacted] instructing the Business Migration Branch to put Mr Dotcom’s residence application on hold.”
A few days later, on October 28, memos indicate clearance has been received and the application can proceed. On November 1, 2010, Dotcom receives a letter approving his residency.
Davison chooses his word carefully. “What I can say is the timeline is incredibly interesting and revealing. There was a hold on his application and that hold was taken off at the 11th hour and he was granted approval. The extent to which people had knowledge of that, or were involved in it, is a matter I don’t wish to comment on at this stage.”
Herein lies the who-knew-what-when conspiracy. Dotcom contends the Prime Minister knew back in October 2010 about him, his residency application and the FBI investigation. John Key adamantly denies he knew anything about Dotcom until January 19, 2012, shortly before the raid. Dotcom claims numerous witnesses from Immigration New Zealand and the GCSB will be called at the hearings next year to uncover details they and others knew about his residency status. “We have done a lot of work through discovery and other documents that we have questions about and we want to see what people have to say,” Dotcom tells me.
On the flipside, the police, GCSB and others do have a trump card for not answering certain questions — that to do so would compromise national security. Dotcom says there will be no compensation deal. “We are not just interested in the money here. We are interested in the truth.”
He’s also convinced he will claim the PM’s scalp. “To me, John Key is a political zombie. He is on his last breath because when the court hearings take place and all the facts are coming out, it is game over for him.”
It sounds like a Dotcom revenge fantasy, to which the only rational response is probably, yeah, right. But if Dotcom can make any of his conspiracy stick, the implications for his extradition would be enormous. Evidence of collusion between US and New Zealand officials to entrap Dotcom would taint the extradition. It would no longer be a process seeking surrender of individuals for a crime. It would bring a political agenda to the offences, making surrender problematic for our courts.
The process of extradition, if we ever get there, is not, as the Court of Appeal pointed out, like a criminal trial establishing guilt or innocence. It is more like a committal hearing to establish whether there is a prima facie case to answer — the key issue being that if the offences Dotcom is accused of in the United States were committed here, would they be offences under New Zealand law?
A sticking point, argued all the way to the Supreme Court, is whether the United States can simply show a “record of case” (ROC) summary of the evidence against Dotcom or whether, in the interests of his right to justice, he is entitled to more detailed discovery of the evidence against him.
The Supreme Court in Wellington. It’s like being inside a wooden egg — all oval with a curved, golden-timber lining of interlocking diamonds in beautiful patterns and sweeping arcs from floor to ceiling. Here, in the highest court of our land, are hatched legal precedents and judgments that establish how our laws work.
Here on July 30, before a bench of five judges, Davison argues for the primacy of New Zealand law’s fair process over the extradition treaty we have with the United States.
“Propositions are advanced in the ROC which are really not a summary of evidence at all,” Davison tells the court. “They’re submissions. They’re conclusory statements, and where those exist we would wish to have the documents or the materials that underpinned those propositions.”
The judges frequently interrupt — peppering those presenting arguments with questions.
Chief Justice Dame Sian Elias: “So will you say that if the evidence summarised referred to — to take a simple example — video footage of somebody conducting a transaction, selling drugs or something, that the tape of the transaction will have to be supplied?”
Davison: “If that was — I’m assuming in your example that that was really the key piece of evidence — yes…”
On the other hand, Solicitor-General Michael Heron, QC, argued: “It has been consistently held at the highest level that the person sought is not entitled to disclosure of foreign materials beyond those the requesting state relies on to meet the threshold.”
Later, Justice Susan Glazebrook asks him: “In a very simple ROC where it’s, say, a threat to kill, the summary might say, well, here is a letter that was sent by the accused person saying, ‘I threaten to kill you.’ Now the question is, do you have to provide not only the summary of that but the letter itself?”
Heron: “That’s a very good point. The answer is twofold…”
On and on. How the court rules could be a game-changer.
The significant aspect of the charges against Dotcom is that they are criminal charges. Even though it was the users of Megaupload who did the actual uploading and downloading of copyright-protected material, Dotcom and the others are accused of aiding and abetting them to engage in the illegal activity. This is the “Mega conspiracy”, and it’s from these secondary criminal copyright-infringement charges that the other charges of racketeering and money laundering arise. The criminal charges are necessary for extradition as copyright infringement by itself is not an extraditable offence.
The big problem with the United States’ case is that there is actually no such thing as criminal secondary copyright infringement. Contributory infringement has played a part in civil cases and was the key to bringing about the end to file-sharing sites such as Naptster, Grokster and Kazaa, which were active in the early 2000s.
To make its novel construct of secondary criminal copyright infringement fly, the US makes much of the fact that Megaupload offered financial incentives to premium subscribers who uploaded popular files: they would receive payments based on the number of downloads of the stored material.
Megaupload’s lawyers counter that all Cloud storage services — Dropbox, Rapidshare, etc and services like YouTube — are subject to illegal uploads. That’s the reality of the internet and service providers can’t be expected to police what their users do all the time. If they do become aware of copyright-infringing material on their site, they are obliged to take it down.
The principle is enshrined in the United States’ Digital Millennium Copyright Act, which provides “safe harbour” protection from liability for service providers if they comply.
Megaupload’s owners are adamant that’s what the service did — even providing major copyright holders with an “abuse tool” so they could remove infringing material from Megaupload’s servers.
In the Supreme Court, Davison argued the United States’ case misinterprets Megaupload’s business model and its rewards programme, and that it was not part of an unlawful conspiracy.
The Solicitor-General was unimpressed: “The submission [that] this is simply an interpretation of a business model, with respect, is a massive oversimplification. There is direct evidence, direct analysis, there’s undercover activity, first-hand. There’s actual emails. To say it’s interpretation of a business model is a lovely euphemism but it’s just not accurate at all. This is a massive copyright and other fraud alleged.”
About 10 minutes’ drive from the Dotcom mansion, off the Dairy Flat highway, Mathias Ortman, 40, and Bram van der Kolk, now 31, are hard at work. The pair have been working 16- to 17-hour days for months refining and developing mega.co.nz, the new encrypted cloud storage service launched in January. Today, the site has almost five million users and stores 8-9 petabytes of files. That’s only 20 per cent of the size of Megaupload in its heyday, but it’s a start. Mega isn’t making money yet, but will soon start charging for premium services and generating revenue.
Ortman, who was a substantial shareholder in Megaupload, says the upside of the site’s shutdown was being able to build with 2013 technology rather than the out-of-date software and hardware of the old site. The pair are also astounded by how productive they are working side by side rather than remotely. “Mega wouldn’t exist in the form that it is if we hadn’t been bailed to the same address,” says Ortman. A silver lining.
They’re just getting on with their lives. “What else should we do? If we cry all day it doesn’t help us,” says Finn Batato, Mega’s marketing manager. He now has a New Zealand partner, Anastasia, and an eight-month-old son.
“Mainly positive spirits. There are times when you get angry. You wonder, ‘Why us?’,” says van der Kolk, who was born in the Netherlands. “Why are all these other sites online and why were we singled out? Of course the uncertainty is still there. It is not pleasant to fight a superpower with our limited resources.”
Isn’t facing extradition and all these court battles like a living nightmare? “Of course it’s a nightmare — having no passport, no bank account,” says Batato, a German citizen who had been living in Munich. “And we have actual nightmares — I hear that from Kim and Mona and I have that too. You dream about that day and wake up and look around for the guns.”
Ortman, also a German citizen, had been living in Hong Kong. He and Batato were visiting on the day of the raid to celebrate Dotcom’s birthday. “It is quite hard for someone who has had a very busy life and who had to use his brain all the time continuously to suddenly sit there idle without internet access, without reading material,” says Ortman of being in prison. “The next morning, it was Kim’s birthday. We shook hands. That was the party.”
They all talk about missing family and friends and being unable to attend events such as weddings in Europe. Do they feel imprisoned here? “Yes, which is not a bad prison at all,” says van der Kolk.
On my second visit to the mansion, Dotcom is mobile again. We sit in the cool fresh air of the loggia near the pool where the “swimatkims” celebrated on social media happened. “I’m still being spied on with a targeted operation,” Dotcom tells me. Yes, he’s still being swept up like everyone else in Prism, but this is something else. How does he know? “There many things — for example, my iPhone battery. There are times when it is just flat for no reason — my phone is on idle, I’ve closed all the apps running, but my battery drains.”
He claims it’s a sign of some sort of Trojan technology being used to activate the microphone and the camera. It sounds ridiculously paranoid. “The other thing we have found out is that the New Zealand police assisted the FBI in Trojan-ising computers that we have ordered.” He claims computers bought online and shipped here were manipulated before they were delivered. “We have evidence of that.” What’s he doing about it? “The good thing is I really don’t have anything to hide.” He hopes one day to get access to the surveillance because he says it will show he has done nothing wrong. “All you will see is a law-abiding man.”
Then he tells me something which, if it’s true, is really disturbing. He was talking on the phone recently to his lawyer Willy Akel. “While we were talking, all of a sudden he went mute. I hear a little tone and then I hear a replay of 15 seconds of what we have just said before Willy went mute.” Dotcom engaged an electronic crime expert to give his assessment of what he thinks this is. He was told it couldn’t be a bug in the phone; that the phone doesn’t record your call and it doesn’t play it back. “So the conclusion was there was some sort of surveillance going on.”
Could this possibly be true — privileged lawyer-client communications being tapped? By whom? The United States? Like so much in the Dotcomedy, reality and cyber-fiction are hard to separate. Perhaps he likes it that way. “We will take that matter to court,” he says. Sure enough, an application seeking an order from the Auckland District Court is set for a hearing on December 5. To be continued, possibly forever.
Also on Metro Mag- Kim Dotcom: the Complete and Utter History.
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