Springing The Trap: Did The FBI Turn New Zealand Into Dotcom's Holding Cell?

Right Where They Want Him: It is now clear that New Zealand Government agencies connived with the FBI and other US agencies to trap Kim Dotcom in New Zealand. While the US Department of Justice struggles to get all its legal ducks in a row, his Coatesville mansion has become a luxurious holding-cell.

IT WAS THE EVENING of 25 July 2013, at the anti-GCSB Bill meeting held in the Mt Albert War Memorial Hall, when Kim Dotcom released his information about the SIS. Although the news media was well represented in the hall, his revelations received scant journalistic attention. With intense controversy once again swirling around Dotcom, putting an end to that journalistic neglect seems timely.

 

Because what Mr Dotcom told New Zealanders on 25 July was profoundly disturbing.

 

In the course of legal discovery, Dotcom alleges that his defence team discovered that the New Zealand Security Intelligence Service had suddenly and inexplicably reversed its position on whether or not he should be granted permanent residence status in New Zealand. The question that hung in the air as he laid out the sequence of events was: “Why?”

 

In the months leading up to November 2010, when Dotcom was finally granted permanent residence status, the SIS had consistently advised against it. According to the SIS’s vetting team, the German IT entrepreneur’s past crimes and misdemeanours made him an unsuitable candidate for permanent residence in New Zealand. Then, quite suddenly and without explanation everything changed. The SIS reversed its position, informing Immigration NZ that they no longer had any objections to Dotcom being admitted to the country.

 

Officially, Dotcom was granted permanent residence under the “Investor Plus” scheme whereby high-net-worth individuals willing to invest more than $10 million in New Zealand’s domestic economy were fast-tracked through the system. In the light of subsequent events, however, the sudden removal of all SIS objections to Dotcom’s entry may have been inspired by considerations that had nothing to do with his investment plans.

 

Dotcom’s spectacular arrest by the New Zealand Police took place at his Coatesville mansion on 10 January 2012 – just five days after the FBI filed copyright-violation, money laundering and racketeering charges against him in a Virginia court. It is, however, very clear that the operation to secure his apprehension and extradition to the United States had been planned for many months. Equally clear is the more-or-less continuous role the spy agencies of both the United States and New Zealand played in monitoring and gathering evidence against Dotcom, his partners, and their Megaupload business.

 

Dotcom’s revelations to the public meeting on 25 July 2013 point very clearly to the possibility that the FBI may have advised the New Zealand authorities, including the SIS, that they would be doing the US Government a very big favour if they allowed Dotcom into the country. New Zealand, as part of the now notorious “Five Eyes” intelligence-sharing agreement, was the perfect holding-cell for Dotcom while the months of evidence-gathering (i.e. covert surveillance) required to secure his extradition was organised and executed.

 

Why would the FBI ask such a favour of a supposedly sovereign state? What reason did they have to suppose that the government of New Zealand would be prepared to connive in an American-driven exercise designed to eliminate an enterprise that was fast becoming a significant threat to the profitability of US media corporations?

 

Most probably because, in the weeks immediately preceding Dotcom’s permanent residence being granted, the FBI, along with the Hollywood moguls on whose behalf Dotcom was being hunted, had witnessed the New Zealand Government ride to the rescue of Warner Bros.’ production of The Hobbit. In the space of a day the New Zealand Parliament passed legislation which made the unionisation of New Zealand’s film industry a near impossibility. A government that was willing to strip away the employment rights of its own citizens to keep Hollywood happy was unlikely to lose too much sleep over the fate of a German IT entrepreneur who had somehow incurred its wrath. Indeed, it’s entirely possible that Hollywood may have pointed the FBI in John Key’s direction!

 

If such a request was received, then all the evidence subsequently extracted from the individuals and institutions involved in Dotcom’s surveillance, arrest and extradition suggests that it was granted. Certainly, the ease with which the FBI enlisted the “fraternal” assistance of the NZ Police and the GCSB indicates strongly that ever since the signing of the UKUSA Agreement in 1946 any and every request for assistance from the national security apparatus of the United States has been granted. Why else would Key respond to the New Zealand courts’ determination that the GCSB acted outside the law with legislation making its hitherto illegal activities legal?

 

In assessing all of this information it is important to bear in mind that the key motivation for Hollywood’s appeal to the Obama Administration for legal intervention against Dotcom was his alleged violation of the studios’ intellectual property rights – i.e. for breaches of copyright.

 

The studios’ problem is that in just about every civilised country (and that includes New Zealand) breach of copyright is a civil – not a criminal – matter. That makes securing an alleged copyright violator’s extradition next to impossible. It is, therefore, difficult to avoid the conclusion that the charges of racketeering and money laundering were only added to Dotcom’s ticket to ensure that an extradition hearing could take place. One can only speculate about how long such serious felony charges will remain on the ticket should the FBI be successful in getting Dotcom on to American soil.

 

The law relating to extradition in New Zealand is based on the understanding that since it is a matter involving two or more sovereign states its ultimate resolution will always be political. A Judge may find that the state seeking extradition has presented her with a plausible case, but the final decision is left to a representative of the Government. The Judge’s opinion should be taken into account but it is not determinative. Under Section 30 (3) (d) & (e) of the Extradition Act 1999:

 

The Minister may determine that the person is not to be surrendered if ...

 

it appears to the Minister that compelling or extraordinary circumstances of the person including, without limitation, those relating to the age or health of the person, exist that would make it unjust or oppressive to surrender the person; or

 

for any other reason the Minister considers that the person should not be surrendered.

 

Among those “other reasons” could be incontrovertible evidence that the applicant state was guilty of entering into a conspiracy to apprehend “the person” on behalf of private commercial interests seeking to nullify the effects of rapid technological change on their enterprises’ ability to protect their intellectual property; and that in seeking to give effect to this conspiracy the applicant state was guilty of inciting illegal acts by agents of the host country’s police and security forces.

 

In those circumstances, it would be entirely proper for a Justice Minister to refuse to grant an order for extradition. Nor would it be improper for Opposition politicians to indicate that while the facts continue to point to the obvious conclusion that if Dotcom is guilty of anything at all, it is of offences for which no citizen or permanent resident of this country should be extradited.

 

Hollywood wanted to make an example of Megaupload and the FBI agreed to help. If part of that assistance involved persuading the New Zealand Government to first lure Dotcom within its borders and to then engage in illegal acts of surveillance and evidence-gathering until it was ready to spring the trap, then Dotcom has every right to use whatever legal means necessary to defend his liberty, and New Zealand has every right to tell Hollywood, the FBI and the American Government to go to hell.

 

This essay was originally posted on The Daily Blog on Friday, 14 February 2014.

 

[Author’s Note: Unbeknownst to me at the time of writing this posting, the investigative journalist, David Fisher, in a NZ Herald article dated Monday, 25 March 2013, had already exposed the connivance of the New Zealand authorities in allowing Kim Dotcom to settle in New Zealand . The full credit for the uncovering and breaking of this story belongs to him.]

Spooks In The Spotlight

Permanent Interests: Elected politicians come and go; political parties move backwards and forwards between the Treasury and the Opposition benches; the news media reports, critiques and, very occasionally, exposes the actions of the powerful; but the Permanent Government endures - and its servants are almost never held accountable for their actions.

 

WILL THE GOVERNMENT Communications Security Bureau (GCSB) end up in the dock? Is it really possible that senior GCSB officers will be required to give evidence in the Kim Dotcom Case? The answer is: “probably not.” The maintenance of state security is arguably the most important function a government has. It is, therefore, extremely unlikely that anyone will sanction publicly exposing the blurred lines of authority, legality and accountability so basic to effective state security.
 

Though it is nowhere clearly spelt out, it is nevertheless firmly believed by those who inhabit them that the vital institutions of a fully-functional modern state: the professional civil service; the Armed Forces and Police; the Judiciary; senior local government officials; constitute the “Permanent Government” of the Realm.
 

Elected politicians come and go; political parties move backwards and forwards between the Treasury and the Opposition benches; the news media reports, critiques and, very occasionally, exposes the actions of the powerful; but the Permanent Government endures. Over the centuries, it has been forced to concede a number of important roles to the people’s elected representatives, but obstructing the duties of the Permanent Government isn’t one of them.
 

The Kim Dotcom Case is unusual because the conduct of the Permanent Government is being disrupted by one of its own – the Judiciary. While there are many examples of politicians frustrated by the actions of a security apparatus only notionally under their control, it is rare to see the “spooks” brought to heel by lawyers and judges. So rare, in fact, that it raises the possibility that Kim Dotcom and his legal team have unleashed some kind of rogue judicial energy. It has already seriously embarrassed the Prime Minister and his National Party Government, and now threatens to compromise the operational reliability of the GCSB.
 

This is no small matter. New Zealand’s signals intelligence operation is inextricably bound up with those of the four other Anglo-Saxon powers: the USA, the UK, Canada and Australia. It is barely conceivable that the global security reach of these “Five Eyes” might be compromised by some arcane dispute over the intellectual property rights of the American film and music industries.
 

Even more unlikely is the prospect that the FBI – a principal player in the Dotcom Saga – will meekly submit to the orders of a New Zealand High Court Judge (or even our Supreme Court). The FBI may include the entire planet in its jurisdiction, and consider every Western police force to be an extension of the already very long arm of American law enforcement, but, when it comes to external scrutiny of its own investigations, the FBI answers solely to the Attorney-General of the United States.
 

The most likely outcome of the Dotcom Saga, therefore,  is that, somehow, the case will be made to disappear. Somewhere – both here in New Zealand and (hopefully) in the United States – a collection of wise old heads will be reviewing the succession of public relations, political and security disasters which followed the spectacular arrest of Mr Dotcom in January 2012 and asking how many more disasters it’s going to take before someone in authority locates the “Off” switch.
 

The whole extraordinary story calls to mind a knitted jersey with a loose thread. The garment which once comfortably covered the naked power of the Permanent Government has, thanks to Mr Dotcom’s legal team, unravelled to the point where all manner of formerly hidden things are now on clear display.
 

Before the arrest of Mr Dotcom how many New Zealanders were aware that the GCSB regularly co-operated with the New Zealand Police by intercepting the cell-phone and e-mail messages of their fellow citizens?
 

Who among us was aware that it was within the power of our Prime Minister to sign a document suppressing any and all references to the GCSB in a New Zealand court of law? When was that extraordinarily undemocratic and dangerous power conferred upon a politician?
 

Did anyone suspect that the FBI in Washington had only to pick up the phone to the New Zealand Commissioner of Police to set in motion a full-scale armed assault on the property of a man accused of nothing more sinister than copyright violation?
 

And, how many Americans would have believed that a handful of irritated movie moguls and record producers could activate the enormously complex and expensive machinery of the National Security Agency, the Department of Homeland Security, the CIA and the FBI for no better purpose than to scratch a longstanding commercial itch?
 

Is it really all that likely that this litany of embarrassing revelations is going to be lengthened by the FBI handing over its evidence to Mr Dotcom’s lawyers? Or that one of this country’s most distinguished Queen’s Counsels is going to be unleashed on our top spooks?
 

I don’t think so.
 

This essay was originally published in The Press of Tuesday, 8 January 2013.

The Kiss Of Fealty

The Kiss Of Fealty: In return for their protection, we place ourselves in the thrall of those powerful enough to provide it. Their enemies become our enemies, and when they ask for "a service", or "make us an offer", we dare not refuse. No matter whether the powerful be kings, gangsters or nation states, the relationship is always the same.

 

NEW ZEALAND is a vassal state: always has been; probably always will be. We are a small and vulnerable country whose security remains the obligation of much stronger powers. For a quarter-century, while the rest of the world re-arranged itself after the Cold War, we have enjoyed the illusion of independence. Now, thanks to Kim Dotcom, the age of illusion is over.

 

“Nuclear-Free New Zealand” may have ruffled the feathers of the American eagle and turned the ANZUS Treaty into a dead letter, but it did not amputate the New Zealand pinky finger from the Anglo-Saxon fist. Our membership of the UKUSA Agreement linking the intelligence agencies of the United States, the United Kingdom, Canada, Australia and New Zealand remained intact throughout.

 

The United States may have excluded the New Zealand Defence Force from its military and naval exercises and blanked our diplomats at Washington cocktail parties, but its National Security Agency (NSA) never shut down the continuous feed of signals intelligence (SIGINT) from our Government Communications Security Bureau (GCSB).

 

Labour and National Governments may come and go, but “Echelon”, the NSA’s global SIGINT collection and analysis network, is forever – as are the GCSB’s electronic eavesdroppers at the Tangimoana and Waihopai “listening posts”.

 

It’s what vassals do: they pay their dues.

 

Medieval lords held their lands from the king and within the boundaries of those lands their word was law. In return, the king’s vassals were obliged to take the king’s part in all quarrels, pay his taxes and send men and supplies to fight in his wars. Those who served a medieval vassal needed two good eyes. One to watch over their lord’s needs and the other to look out for the interests of their king.

 

It did not suit the United States to make too much of their vassal state’s breach of fealty in the late-1980s. It’s anti-nuclear policy may have posed “the threat of a good example” (to use Noam Chomsky’s trenchant phrase) but for the makers of the Washington Consensus that threat was more than off-set by the Lange Government’s radical example of free-market economics. So long as New Zealand remained a part of the Echelon network, a few relatively gentle diplomatic slaps would suffice as punishment.

 

Had David Lange and his ministers got serious about severing New Zealand’s military and intelligence connections to the US, and attempted to pull the plug at Tangimoana and Waihopai, then the reaction of the Reagan Administration would have been very different – and much more painful.

 

The full force of American retribution was, however, avoided because the servants of the New Zealand state all had two good eyes. While Treasury kept Washington’s good-will by persuading the Lange government to implement the most radical structural adjustment programme ever attempted in the OECD, the New Zealand foreign affairs, defence and intelligence communities quietly reassured their American counterparts that a bi-partisan policy of incremental reconnection to the United States was the New Zealand (if not the Labour) government’s Number One priority.

                                                                                         

The king was thus reassured by his errant vassal’s own servants and men-at-arms that their lord’s lapse of loyalty was purely temporary and that his successors would doubtless prove considerably more obliging.

 

And so it has proved. The smiling face of Mr Leon Panetta, the US Secretary of Defence, and his good news about New Zealand’s warships’ re-admittance to America’s naval facilities, was startling vindication of our foreign affairs and defence establishment’s patient diplomacy. The king’s favour has been restored: the kiss of fealty given and received.

 

Fitting, too, that just days after receiving our liege lord’s blessing, New Zealand’s Prime Minister and his deputy were forced to reveal its price. Remembering always that a king’s enemies are his vassal’s enemies also. And Mr Dotcom is, without doubt, the United States’ enemy.

 

Those New Zealanders who were surprised and alarmed by the extreme light-handedness of the political oversight of our security and intelligence services are still trapped in the illusion of independence. Our political leaders learned long ago what lapses in loyalty can mean for a vassal state. Much better to leave these matters to the permanent guardians of our own – and our masters’ – interests.

 

How else to explain Bill English’s casual admission that, were he given it all to do again, he wouldn’t hesitate to re-order the suppression of all evidence relating to the activities of the GCSB. Why else would John Key refuse a comprehensive and transparent inquiry into the illegal surveillance of Mr Dotcom? And be backed in his refusal by a former Labour Prime Minister, Sir Geoffrey Palmer?

 

 “You can’t have an open inquiry like a commission of inquiry with evidence in public about that,” Sir Geoffrey told TV3’s The Nation, “because these agencies will cease to be any use if their secrecy is not preserved”.

 

Of use to whom?

 

This essay was originally published in The Press of Tuesday, 2 October 2012.