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Key releases Dotcom report, says GCSB made 'unacceptable error'


Prime Minister John Key says the GCSB let themselves down in the Dotcom spying affair and he is "extremely disappointed ... pretty appalled, actually."

It is illegal for the Government Communications Security Bureau to spy on NZ residents, such as Kim Dotcom.

The GCSB's admission is the latest in a series of setbacks and blunders for authorities in the Megaupload case. High Court rulings have already found the warrant for the original raid was illegally issued; that the search and seizsure of Kim Dotcom's property was illegally carried out, and that the NZ Police wrongly sent evidence offshore to the FBI.

Speaking in Christchurch late yesterday, Mr Key says the GCSB made "basic errors" and that any consequences would be taken up by director Ian Fletcher with his staff.

Mr Key says the GCSB was not being "overly enthusiastic" in trying to help the FBI.

The material it gathered is still held by the GCSB and has not been given to the US agency.

He says there would be no further independent inquiry (as demanded by opposition parties) because one had just been done by Inspector-General of Security Justice Paul Neazor.

Asked what effect the revelations would have on the Dotcom matters before the High Court, Mr Key says he did not believe the case would be jeopardised.

He says the material was "not directly related to that case".

2.30pm yesterday:

The Government Communications and Security Bureau should not have relied on the police as to the immigration status of Kim Dotcom, Prime Minister John Key says.

He has just released the Inspector-General of Immigration and Security Paul Neazor's report into the illegal spying which occurred on Kim Dotcom and his co-accused Bram Van der Kolk before their arrest in January.

The GCSB is only permitted to intercept communications between foreign nationals, and it was wrongly informed by police that Kim Dotcom was not a resident or citizen.

He was, in fact, a resident.

"The GCSB originally relied on the police's information about the residency status of the people in question

"They did not check further," Mr Key says.

"In my view, reliance on another party by the GCSB is unacceptable."

Mr Key says the Inspector-General notes in his report the GCSB may have been confused about Mr Dotcom's immigration status due to changes to the Immigration Act in 2009.

However, he says this is not an excuse.

"GCSB had a responsibility to fully understand what the change to the immigration legislation in 2009 meant for its own operations, including whether individual visa holders were protected or not."

GCSB director Ian Fletcher has apologised for his agency's mistakes.

"We got this wrong.

"Both factual errors and unacceptable errors of legal interpretation were compounded, most especially by our treating those interpretations as fact for too long.

"It should not have happened," Mr Fletcher says.

Mr Key has ordered the GCSB to come up with a plan so it can "agree with police and other law enforcement agencies how to confirm immigration status before operations in support of law enforcement activity are undertaken within New Zealand".

The GCSB must also "establish new approval processes in the support of police and other law enforcement agencies. This type of operation is halted meanwhile".

Key 'irresponsibly loose'
Opposition politicians weighed in with their own criticism.

"The fact a security agency responsible for such serious matters is not able to understand the law that governs them is staggering. John Key's oversight of these agencies has been irresponsibly loose," deputy Labour leader Grant Robertson told NBR ONLINE.

New Zealand First leader Winston Peters has called for a commission of inquiry into the illegal spying affair. 

He says Justice Neazor's hastily-arranged inquiry is too little too late for an issue of such importance. 

"The lack of communication between government ministers, senior police staff, the GCSB, the SIS and the Prime Minister's Office is evidence of systemic failures. 

"Details around New Zealand's shambolic role in the FBI investigation are going directly to the White House and could well harm our international reputation," Mr Peters says. 

More by Caleb Allison and Chris Hutching

Comments and questions

"The GCSB originally relied on the police's information about the residency status of the people in question

"They did not check further," Mr Key says.

What no Google available in GCSB?

Try this:

Go to Google and enter Kim Dotcom

1st listing is:

Kim Dotcom - Wikipedia, the free encyclopedia
Kim Dotcom, born Kim Schmitz on January 21, 1974, also known as Kimble and Kim Tim Jim Vestor, is German but is now a resident of New Zealand.

Yeah Google search would have had a straight forward answer. GCSB asked OFCANZ if Dotcom was a NZ Citizen or NZ permanent resident. OFCANZ answered that he was a foreign national and GCSB went away happy with this vague reply. This way they both covered themselves against future scrutiny, by pretending that nothing illegal was going on. We'd better get Paula Bennett to drug test GCSB & OFCANZ lol

The need for a fully transparent enquiry going back as far as needed is even more pertinent now. No doubt it will expose dodgy dealings right through the years regardless of which party was running the country. Apologies and compensation for wrongdoings must occur. Anything less and the public will never have complete faith in the Police, Secret services, Judiciary or Government ever again. An enquiry will produce embarrassments for all ruling parties over the years, but it must happen. The cat is well and truly out of the bag and one whitewash report will not cut it. Any politician believing it will, is a fool.

Well done Mr Key.
Now, can we please have an inquiry into how a person who cannot pass a "character test" to become a NZ Citizen is able to buy "resident" status?

In short, who the 'ell let this prat land in NZ and why?

I would rather Kim Dotcom than some Somali refugee, boat person or lazy overstayer from the Pacific.


We are all clever have 20/20 vision after the event

you would have to be one of these lobbiest who are trying to keep there position secret ni suppose

John you need to think a little deeper. What has been exposed by the Dotcom affair runs right to the heart of our democracy, civil rights, etc. This is the core of legal system. This will not go away. national, Labour, the were all at it. The coverups are over. A proper investigation could be very refreshing for the country.

National Governments have a long history of screw-ups.

Paintergate, speedergate, naked man running from gay MP at midnight - nah, Labour never has screw-ups. After all, who sold all our state assets in the first place? that it....National Party screw ups wouldn't even fit into NBR forum.

1970s – Robert Muldoon and the National party lead NZ into bankruptcy. Think big!
1984 - Labour Govt wins elections but sells off assets to pay debtors.
1990s National Party deregulates the building industry in the 90s which lead to leaky homes.
1993 - National party Credit down grade. Over borrowing!
1998 Financial crash - Bank of America & JP Morgan accountable
2008 - Financial crash - Ditto

2011 - Credit down grade. Over borrowing and a lack of savings!
2011 – Blind trust plus shares in Bank of America the same bank as NZ foreign debt? Conflict of interest?
Rena oil spill, Who allowed a stricken Liberian flagged container ship to sail into New Zealand? According to the maritime
union deregulation in 1990 by a former National government has created a situation where substandard flag of convenience
shipping has been encouraged and enabled

Unemployment increased by 50 per cent, leaving 157,000 people out of work.
- 100,000 Kiwis left for Australia
- Prices up nearly four times faster than incomes.
- First credit rating downgrade in 13 years.
- 60,000 more on benefits costing $1b
- Wage gap with Australia increased by $32 a week.
- 55,200 people aged 15 to 24 not in education, employment or training.
- Economy grown by just 0.4 per cent

They surely have! One of the biggest ones yet to be exposed is the complete screw up they made with Hubbard! Plenty of Wellington 'white collars' are aware of it, just no-one has the guts to expose it for what it is worth!


@anonymous #4

I think you've watched Free Willy far too many times.\

This whale needs to be deported

A layperson could have written that report based on media stories in the past few days. I notice he left out the fact - reported this morning by Stuff - that police had the correct information from Immigration in early December and still engaged GCSB.

This sort of thing happens all the time - do an OIA on known activists to see what is kept on file and you'll be shocked.

Trouble is this time the GCSB got caught

So can anyone tell me why we have the archaic, bumbling GCSB? It used up $56 million dollars in 2011-2012 to do what?

come one - be fair, $56 million only buys so many pork pies and adult mags for leaving in ones briefcase

Mr peters

Our international reputation is allready in tatters because we allowed the FBI to meddle in New Zealand affairs. Our police took their orders against our own residents in our own country.
New Zealand having a pet status to the US is where we sit.

Dont talk to me about international reputation

Good only Johnny. He has found someone else to blame as usual.

He has set up Mark Ford to take the rap for Solid Energy, but how long can he cover up for incompetence by English, Joyce and Brownlee.

John Morrison, are you SIS or FBI or EMI?

Don't you know your alphabet? I'm J M.
Now why couldn't you work that out?

Nah. He's LOL

Just maybe the average NZ citizen isn't remotely interested in what this convicted criminal is doing on any subject? We just want to know why such a person of bad criminal character is even allowed to reside here. He can go and sit in a US jail - we don't care.

Go the authorities - let's get rid of him.

Very well put.

And yet we've been all to hospitable to these charlatan pseudo-businessmen who have been creaming investors money out as dividends then cutting and running when their finance companies have fallen over.

Dotcom provided a service for people to upload files to, just as Google Drive, Rapidshare and various others do. However, the US lobbyists, RIAA and FBI thought they had an easy target in him because he's been a somewhat obnoxious character.

Problem is, Kiwis don't really agree that the ends justify any means.

I'm sure the average NZ citizen is a bit more concerned about the fact that the police and security forces have run roughshod over the laws of the land; it could be you or your family next if their attitude doesn't change. Given the conduct of the USA in the past few years I also wouldn't jump to conclusions that Kim D is necessarily of 'bad criminal character', surely the allegations made aginst him could also be made against 'You Tube'? I'm not a great conspiracy theorist so I guess I'll have to go with it being incompetence - troubling though...

Let's focus on the real issue here. Take the blinkers off and you will see how incapable this government has become. How could GCSB make such a basic error? It really makes you wonder what GCSB have done with the $56mil that the taxpayers have paid them for the last financial year.

Perhaps you would see things differently if one day GCSB started spying on you (which is against the law) and the police decided that you are a criminal even though you have done nothing wrong.

Kim Dotcom's website was no different than the YouTube website.

The FBI and the US government must be kept out of NZ's legal system.

You should be interested. This can of worms has the potential to impact any one of us, born here or not.

You would expect Ian Fletcher to offer his reisgnation in response to Key's scathing comments on GCSB's failure to "overcome the most basic of hurdles".

Hi ass will be covered - he is only a sacrificial scapegoat and as John Keys says 'he doesnt need to go'.... Draw your own conclusion.

Perhaps it is just the tip of the ICEBERG...any more digging will definitely reveal the full cover-up, eh?

And years of really dodgy stuff by all political parties. Will be worth watching.

This promo released today by Dotcom on YouTube. MegaBox, launching soon to shake up the US record industry, and perfectly legally. This is why they want to stop him folks... "unchaining artists and fans". 15,000 + likes in a few hours vs 17 dislikes.!

All that does is confirm the certain knowledge that dole bludgers spend a significant amount of their time playing with themselves on you tube hoping to find a way to pirate "freebies".

"While Kim Dotcom awaits the outcome of the increasingly scandalous efforts by the US and New Zealand governments to extradite him to face charges of copyright infringement, the founder of Megaupload is preparing to launch a new business line soon—a cloud music service called Megabox. Dotcom told TorrentFreak that he already has a number of artists signed up for the new service.

To listen to songs through Megabox, users will have two options—purchasing the music through the service, or installing "Megakey" software onto their computer to listen for free. The Megakey software, as Dotcom explained to Torrentfreak, acts like ad-blocking software—except that it isn't. Megakey allows most advertisements to appear, but replaces about 15 percent of the ads served up by websites with ads hosted by Megabox.

"These new solutions will allow content creators to keep 90% of all earnings and generate significant income from the untapped market of free downloads," Dotcom told TorrentFreak. "I created an innovation that could solve the piracy problem."

It seems to me that law enforcement agencies are itching to put their cutting edge tools & toys to good use. Always easier to seek forgiveness after than get permission ahead of time.

So Mr Fletcher apologised to the Prime Minister - perhaps relevant given the PM is in charge of the GCSB. But where is the apology to Mr Dotcom? I know that if any proceedings are filed for breach of Mr Dotcom's rights then it is the taxpayer who will be liable. But in this case I would be quite happy for the taxpayer to fork out - it will all go to John Key's reputation, ability to be trusted and likelihood of being elected next time round.

To Anonymous above. Ah but we do you see. The rule of law a[p[plies in the country of ours and long may it continue.

Regardless of whether you agree with KD Com being granted residency status, the facts are he has that and is accordingly entitled to be treated by all NZ Govt agencies as such.

Just by the by, Megaupload may just have been in the process of becoming a MEGA company internationally. We could do with some more owners of such Company's based here surely? Last time I looked we had ONE. Fonterra and that is owned by 10000 approx dairy farmers.
having a BIG talented German with Maga company ownership in our midst could do no harm, you annonymous tall poppy clipper.

What really galls me is that there are so many decent people who could make a real difference to the future of NZ not being allowed in and we let this convicted crim in the country.

Agree. It sadly seems that unless you are paying a premium *if ya know what I mean* to the immigration office in Shanghai, or New Delhi, or you use the proceeds of crime to buy $10 million in government bonds, then it seems you ain't got a shhhhhtshow in hell getting into New Zealand anymore. And if you get found out after you get here the Prime Minister will apologise to you.

...or you could just wait for 20 years or so when the Labour Party might have a slight chance of getting into government - then all it will take will be a $15K "donation" - in return for a "no questions asked citizenship because I have a few names and Interpol are chasing me"

And what crime has he committed in NZ? He was 'let in' as a big spender, which is what he and others are. His money is what goes round and no doubt some ends up in your pocket too.

Has anyone read the inspector general's report? Point 2 " That pursuit may well involve an attempt by Court proceedings to extradite Kim Dotcom ....." Is he serious? May well involve an attempt by court to extradite?
Part 3 "It was believed by Police Officers that these persons could present potential danger to officers...." So why don't the Police regularly request the GCSB to spy on targets? This is hardly an acceptable excuse.
It hardly gives any confidence as to the attitude to such obvious incompetence that appears to pervade gung-ho ninja turtle police action against a computer nerd, obviously incapable of posing a serious threat to a few experienced policemen. Given this episode, how can we be confident of their dealing with really serious genuine threats to New Zealand?

I hope Kim Dotcom seeks asylum at Marie, and then from his political sanctuary proceeds to sue the New Zealand goverment for as much as he can. That is the only language the government department breachers of human rights, privacy and the law understand - money.

Problem with that approach is that government employees never get hammered with personal responsibility, it is the ratepayer or taxpayers that pay the bills for their incompetence. Like if you sue your local council, they use the best lawyers around, no worry about cost because YOU are paying the bill to fight your representatives whom you pay for in the first place. A very dumb system with one very clear outcome : unaffordable housing is just one example.

How 'intelligent' are our NZ 'Intelligence' Services?

And we're expected to believe that the Minister responsible for NZ 'Intelligence' Services - Prime Minister John Key - knew nothing???

Those at the HIGHEST levels don't know the law - or don't think the law applies to them?

Seriously - you couldn't make this stuff up....................

Penny Bright
'Anti-corruption campaigner'

Isn't it comforting to know that New Zealand is in such good shape that the most important thing we have to talk about is the Kim Dotcom saga?

Traveller you are missing the point - what happened is illegal. Dotcom has the same rights as a NZ citizen, rights enshrined in the Bill of Rights. If we don't defend his rights how can we expect anyone to respect mine or yours?

You'll be talking about it a lot more when its finally revealed John Key had indeed, heard of Dotcom prior to the time he publicily stated he had never heard of him. You'll also be talking about it a lot more when Dotcom ponders on whether to sue the NZ taxpayer for an amount greater than our GDP. The NZ Govt conspired with the USA Govt to unlawfully destroy a legitimate, $billion (plus), NZ based business. Get your head around that

You'll be talking even more when a proper enquiry uncovers all the dodgy stuff going back years, irrespective of parties in power. You'll be on the edge of your seat. It will be unlike anything a movie maker could dream up.

Now, we'll have to wait until Julian Assange and Co. makes the confidential documents publicly available on Wikileaks.

Might not be able to - The US have now labelled Assange and enemy of the state. Unbelievable.

There are systemic problems with senior members of the NZ Police force that they are the enforcers of NZ Law but that it doesn't apply to them. That can be the only conclusion to be drawn from the learned decisions of the judges that have reviewed every step in the Dotcom saga.

Given that GCSB and the PM are all blaming the police the question that now needs to be answered is who in the NZ Police force is going to resign for the continued unfolding of events that can only be described as gross negligence by the officers concerned.

Until New Zealand public demand accountability of our senior public servants the systemic problems allowing this behavior to occur will continue unabated.

My question is how does one go about demanding accountability?

The rot goes right to the top. The Police are usually only pawns.

A blunt sorry isn't enough for a man who's been humiliated. Heads will have to roll at GCSB and National for their incompetency!

The apparently unimpeachable John Morrison and others are getting their wires crossed and conflating two issues that need to be kept separate. The fact that KD was granted residency has no bearing on the issue of the GCSB's stuff up. There is a principle at stake as far as the GCSB's actions are concerned. Regardless of how we feel about an individual person's actions there is a thing called the rule of law that requires public agencies to act competently within their mandate. If you want to suspend this arbitrarily to pursue individuals you might be happier in Russia. Stop obfuscating and making disingenuous arguments JM and co.

your readers clearly don't understand irony.

If we get back to the root of all this, maybe trying to implement the trumped up charges of a foreign govt. beholden to special interests is not such a wise move.

Did the GCSB write to the police to find out whether Dot Com was a NZ resident, or did they write to the police to try and get some legal cover to help if events later went against them.
I suspect that everyone involved(GCSB, Police etc) knew exactly what the residency issues were, right from the start.
A full public enquiry, where the participants are subjected to cross examination, has a good chance of getting to the bottom of what has been occurring.

The problem with this massive screw-up by pollies and public servants is that we the long suffering taxpayers will have to pay the damages cost,which will doubtless be substantial.

The points to focus on are that Key takes the cheap option and blames the GCSB for the stuff up by himself, English and the Police.
Secondly the raid occured Simon Murdoch's tenure as the head of the GCSB. Murdoch was earlier the head of several PMs department and the NZ Ministry of Foreign Affairs and Trade. Very high ranking diplomats and Chiefs of Defence are regularly appointed head of CGSB. They are appointed for a variety of reasons- to automatically approve GCSB actions, or possibly to ignore them, or possibly they have little real expertise in the Pacific wide and submarine listening activities of the GCSB ,operating on behalf largely of the USA and USN and therefore they could not actually conduct much supervision and policing of the GCSB even if they wanted. Another significant point is that while NZ has numerous spy agencies most are glorified clip joints like NAB or resting places for retired airforce officers and gung ho policemen. Only the GCSB and the armed forces intelligence divisions are of more than local significance in gaining real intelligene and furthuring NZs interest.