Kim Dotcom - Political Fallout From Dotcom's Arrest

Political Fallout From Dotcom's Arrest

On 28 June 2012, Dotcom had another victory in the New Zealand High Court when Justice Helen Winkelmann found the warrants used to seize Dotcom's property were invalid because they were too broad. "These categories of items were defined in such a way that they would inevitably capture within them both relevant and irrelevant material. The police acted on this authorization. The warrants could not authorise seizure of irrelevant material, and are therefore invalid." News emerged later that the Crown knew it was using the wrong order while the raid was in progress. The Crown also revealed that police had handed seized hard drives to FBI staff who copied them at the police crime lab in South Auckland and sent the copies back to the US. Justice Winkelmann ruled that handing the hard drives seized in the raid to the FBI was in breach of extradition legislation and the FBI’s cloning of the hard-drives was also invalid.

Declaring the search warrants to be invalid was a significant victory for Dotcom because he was struggling to pay his mounting legal bills. At a hearing in the High Court on 28 August 2012, Justice Judith Potter allowed Dotcom to borrow approximately €6 million ($4.83m US) against a €10 million government bond. He was also allowed to sell nine of his cars. The amount released was to cover €2.6 million in existing legal bills, €1 million in future costs, and another €1 million in rent on his New Zealand mansion.

On September 24, 2012 Prime Minister John Key revealed that, at the request of the police, the New Zealand Government Communications Security Bureau (GCSB) had spied on Dotcom, illegally helping police to locate him and monitor his communications in the weeks prior to the raid on his house. The GCSB is not allowed to spy on New Zealand citizens and Dotcom had been granted permanent residency. Three days later, the Prime Minister John Key apologized for the illegal spying. "I apologize to Mr Dotcom. I apologize to New Zealanders because every New Zealander…is entitled to be protected from the law when it comes to the GCSB, and we failed to provide that appropriate protection for him."

The mistakes by authorities have attracted widespread media coverage and John Key's handling of the affair has come in for some stinging criticism from Opposition parties in Parliament. Political commentator Bryce Edwards said the GCSB's involvement and the botched search warrants have "turned the pursuit of (Dotcom) and the operations of our law-enforcement agencies into the stuff of farce". A Waikato Times' editorial said that the announcement of the illegal spying has "heightened suspicions that this country's relationship with the United States has become one of servility rather than friendship... It is preposterous to suggest Mr Dotcom threatens our national security. The Government's unquestioning readiness to co-operate with American authorities seriously corrodes our claims to be an independent state." Another commentator compared the Dotcom saga to Watergate and suggested it may eventually 'bring down' John Key. The story has also made headlines overseas including in the Wall Street Journal, New York Times, The Guardian and the Hollywood Reporter which specialises in legal and entertainment issues.

Mr. Key added to speculation about Hollywood's role in October 2012 when it was announced he was going on a four day visit to meet top studio executives. Key said the trip was intended to promote New Zealand as a good country to produce movies, but he will have dinner with former US Democratic senator Chris Dodd who now heads Hollywood’s lobby group, the Motion Picture Association of America (MPAA) - which has described Dotcom as "a career criminal". Using Twitter, Dotcom said that Dodd was "responsible for the destruction of Megaupload & the abuse of my family".

By November 2012, the restrictions placed on Dotcom's ability to travel had an unexpected positive side effect – he would now be able to buy the Coatesville property he has rented since moving to New Zealand without having to go through the Overseas Investment Office, which had denied his earlier attempts to buy it.