PM admits illegal spying on Dotcom – orders inquiry

UPDATE:

One of Kim Dotcom’s lawyers says he is not surprised by an inquiry into whether or not Kim Dotcom was illegally spied on ahead of his arrest.

But the inquiry, announced by Prime Minister John Key yesterday afternoon, is still being digested as to the possible implications for his fight against extradition to the US, where authorities want to charge him for criminal copyright infringement and money laundering of some $US500 million in relation to his Megaupload website.

Simpson Grierson partner Greg Towers says he understands the memorandum advising the High Court of unlawful acts by the Government Communications Security Bureau is subject to suppression orders relating to the January police raid on his rented mansion in Coatesville.

That means he has to be tight-lipped with comments about potential damage to Megaupload litigation.

“We’ll just have to see how the inquiry pans out.”

However, he says the three-page memorandum is correctly summarised in the Prime Minister’s statement, released yesterday.

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Yesterday 4pm:

Prime Minister John Key has ordered an inquiry into "unlawful" interception of communications relating to the Kim Dotcom case.

In a statement just released Mr Key says  he has requested an inquiry by the Inspector-General of Intelligence and Security into the "circumstances of unlawful interception of communications of certain individuals by the Government Communications Security Bureau".

A lawyer close to the case says he has seen the memo, which expands on the details given in the prime minister's press release.

He says essentially it means "the police had significantly more information than the High Court has been told they had" before they executed the search warrants.

Inquiries to the GCSB's director, Ian Fletcher, were referred to the deputy director, Hugh Wolfensohn.

He told NBR ONLINE: "There will be no comment from this department on this matter at all.

"The matter is before the court and as the prime minister's statement makes clear, also the subject of an inquiry by the Inspector-General."

Mr Wolfensohn would not confirm whether any individual within the GCSB was subject to the inquiry. 

Mr Key, the minister in charge of security, says he is disappointed unlawful acts had taken place.

"I expect our intellegence agencies to operate always within the law. Their operations depend on public trust."

Mr Dotcom was quick to respond via social media, tweeting "I'm now a real life James Bond villain in a real life political copyright thriller scripted by Hollywood & the White House."

The inquiry comes amid allegations unit's staff unlawfully acquired communications relating to the Megaupload case.

The Crown has filed a memorandum in the High Court in the Megaupload case advising the judiciary the GCSB "acted unlawfully while assisting the police to locate certain individuals subject to arrest warrants" by acquiring some communications without statutory authority, Mr Key said in a statement.

Inspector-General of Intelligence and Security Paul Neazor will investigate the matter and has been asked to recommend measures to prevent a repeat occurrence.

"I expect our intelligence agencies to operate always within the law," Mr Key said. "Their operations depend on public trust."

The memorandum comes just days after a Court of Appeal hearing in the Megaupload case where the US Federal government sought to quash a court order for it to provide evidence in support of its claim to extradite the file-sharing website's founder Mr Dotcom and three of his lieutenants.

Painful irony – InternetNZ
"We're disappointed the Government has apparently broken New Zealand law to pursue individuals alleged to have broken US law," InternetNZ chief executive Vikram Kumar told NBR ONLINE.

"Combined with judicial findings on the Megaupload case to date, the irony of breaking the law to arrest people alleged to have broken the law is painful."

End of law breaking?
"It also raises the question of whether this is the full extent of law-breaking [by NZ authorities] in this case," Mr Kumar said.

Labour leader David Shearer said "John Key must also come clean about his claim that he hadn’t heard of Kim Dotcom until the solicitor-general briefed him the day before the raid on the German businessman’s mansion.

"This is simply not credible given the range of people close to John Key who were involved in the Dotcom case.

“He is responsible as prime minister for signing off all intercept warrants by GSCB.

"While it’s been revealed that ‘some’ bugging was done illegally, it is not credible to think that other monitoring by the agency was not signed by the prime minister before the raid was carried out."

Crown Law had no comment.

"Stalling tactics"
The US authorities allege Mr Dotcom and his co-accused engaged in criminal copyright infringement and money laundering of some $US500 million.

Last week, Mr Dotcom vented his frustration at the US government's stalling tactics, telling reporters his accusers were "just dragging things out".

"If it was up to them, we would have no money for our legal defence, no evidence to defend ourselves, we would not even have our own computers back to show our own evidence," he said.

Kim Dotcom's extradition hearing is due to begin in March 2013.