Springing The Trap: Did the FBI turn New Zealand into Dotcom’s holding-cell?


Kim Dotcom in courtIT 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?

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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 the latter’s 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 onto 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 Minister of the Crown. 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 ability to protect 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 Dotcom’s 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 the right to use every legal means necessary to defend his liberty, and New Zealand has the right to tell Hollywood, the FBI and the American Government to go to hell.


* Journalist David Fisher would like it to be known that he reported on this.


  1. Such a superb post Chris… I remember speaking on RadioLive on this very angle on July 25 2013 immediately after the public meeting at Mt Albert War Memorial Hall.

    By memory, and this is a paraphrase, but I recall suggesting on air that if Dotcom’s claim was accurate then at the very least the Prime Minister would need to explain why [not just the GCSB but also the SIS] our Security Intelligence Service was operating on behalf of a foreign power, orchestrating an entrapment manoeuvre – perhaps illegally.

    But then… the MSM failed to be turned on by the angle, the Opposition parties were also mute on it, and consequently John Key was not pressured into responding to the revelation/allegation.

    Should the evidence stack up… One has to wonder what’s happened to the rule of law in this country… and why no one within the establishment is/has been brought to account and why no one really seems to care!

    Anyway, I haven’t re-listened to it, and hopefully my recollection is better than John Banks’ and the PM’s… well whatever, here’s a link to me babbling on RadioLive about it…

  2. I would say, however fleetingly, the thought that KDC was granted residency here may have been a set up, has crossed most everyone’s mind, at some stage.

  3. “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!”

    With all respect, Chris, I think your imaginations are running amok now. This is absurd, and the FBI will not need to be directly guided by Hollywood interests in that kind of manner.

    And Dotcom was not “lured” into New Zealand, he had thought about moving here for some time, for various reasons, primarily for having a better environment for him and his wife to raise their little kids. Hong Kong was good for opportunities and so, but is not the best place to raise kids, I suspect. And the Philippines may be less so, as that is where his wife comes from.

    I agree that the FBI got some pressures and hints to do things from the top guys in and around the White House, and from some sitting in Congress, but they will not act upon some Hollywood film studio boss bringing a request.

    Much of what Dotcom is being charged for is just trumped up, and in reality he should only face a civil case, we know that. We know he has been pursued by breaching the law, and not all surrounding the granting of PR is that clear.

    But while you may raise some perhaps valid considerations re the change of heart within the SIS, they may though have simply thought, that Permanent Residence is not what we would recommend he be granted, but if he ever behaves in ways that are illegal and unacceptable, that status can be revoked, especially over the first two years.

    The real worry that SIS and Police usually have is, that an undesired person granted PR may eventually also apply for citizenship, and if there is not enough evidence of the person not deserving this, is granted that. It is much, much harder to cancel citizenship than Permanent Residency.

    Hence they may have thought, he has some convictions, is not a “Mr Perfect”, but overall, he should perhaps be given a chance to show he has “reformed”. Nothing much else may have been their motivations, same as that of of the government.

  4. An insightful analysis, Chris.

    I might add that the big “fly” in the ointmint appears to have been the John Banks Element, which unexpectedly upset carefully laid plans. The one thing that the FBI, Hollywood, GCSB, Key, et al, had not considered was the ‘interference’ by a lonely MP from a lunatic fringe Party.

    Ironically, if the Police had arrested Dotcom in a far more low-key manner (sand helicopters and armed militia-police), this entire episode would hardly had generated such public interest and media scrutiny.

    But you’re right – there is far more to this than meets the eye.

  5. Kim Dotcom
    Julian Assange
    Andrew Snowden

    Three Human beings linked by the fact that they owe the internet for their rise.

    Have they made the world a better place?

    The answer must be yes.

    IT, information technology is no longer a monopoly of the rich and powerful.

    In the case of Snowden: No longer can the powerful use their control of the media, to hide ugly truths about themselves that they don’t want known.

    In the case of Snowden: No longer can the authorities crimes against their peoples be hidden.

    In the case of Dotcom: No longer can culture and art be what the rich and powerful say it is.

    What can we expect will happen to these people?

    We can expect that their very real human frailities will be used against them.

    We can expect that they will be made examples of, so that others aren’t encouraged to emulate them.

    We can expect long decades of imprisonment, or even unexplained disapearance or mysterious illness even death.

    But maybe, just maybe, the rich and powerful will be humbled, and each will escape from the wrath of their once all powerful persecutors, to earn a place in the history books.

    • Jenny – this is a bit naive:

      “IT, information technology is no longer a monopoly of the rich and powerful.”

      While there are of course many individuals who know how to work, set up and use systems, the fact is, that the bulk of what happens on the internet now is owned, controlled and dominated by a few mega rich and powerful.

      Also has the internet, as it is being used by the wider public, now totally commercialised. Without advertising few can run larger websites, and while many can set up their own wordpress or other pages, only few will get “popular” and known enough, to attract wider attention.

      Wait another year or so, and the internet will be so commercially dominated and controlled, we will have much only accessible on a pay for use basis, that is unless there is heaps of commercial advertising keeping funds flowing so that sites can be kept running.

      MSM are already planning to bring in pay-walls this year. That is just the start.

  6. Marc,
    None of us, except the parties involved, can know for use what transpired in this matter. Hollywood does have a lot of power, after all one of their own was President and they work closely with the military and other branches of government, so I suspect you may be underestimating their influence in this matter.
    It’s certainly true workers employment rights were changed and financial benefits given to Warner Brothers so they would film here.
    I have often wondered why the film director has not been held to account over his union bashing and blatant lie on a T.V. interview that Warner Brothers had no interest in a financial reward for filming here.

    • “It’s certainly true workers employment rights were changed and financial benefits given to Warner Brothers so they would film here.”

      That had nothing to do with the Dotcom saga, as it was a purely “commercially motivated” decision by Hollywood film-makers to put pressure on the NZ government, to get more favourable terms, by threatening to film elsewhere.

      Key and his government caved in, as to them workers’ and actors’ rights are not that important anyway. I think it is stretching the bow overly wide – to suggest this was part of a range of “deals” of the types “you scratch my back, I scratch yours”, when it comes to Dotcom.

      I fear we are a bit too close to conspiracy theories with this post by Chris.

      • Perhaps you’re right in this one Warner Brothers incident, Marc,
        we’ll never know for sure as we’ll never be told, but surely you are not suggesting that Hollywood as a whole doesn’t has a vested interest in shutting down Dotcom’s Megaupload.

    • Hi YobiBare – You mention Hollywood, relating to the power and influence it wields, re the Warner Bros matter here. The illegal raid, arrest and subsequent spying activities still being carried out on Kim Dotcom, is also evidence of your point. Our government is dancing to the tune of the Hollywood motion picture industry, but not in the best interests of Kiwis it seems!

      Re Hollywood. It’s interesting to note the Motion Picture Association of America (MPAA), is privy to the contents of the TPPA, along with a few select corporations! At the same time, the rest of us are deliberately kept in forced ignorance of the contents!

      The inference of this point, indicates the MPPA and its parasitic hangers on, will have some clout in the administration of the TPPA. Heaven help us should this one become a reality, because the Kim Dotcom case is an example of what could be in store for Kiwis, further down the track!

      Both issues indicate a threatening undercurrent, through the odious Hollywood and MPAA connection and influence!

  7. Dotcom, who met him when, where and why and exactly what was said is the hysteria point of the moment.

    Distracted moments when John Key is defending his Government’s $30 million payout to the owners of the Tiwai Point aluminium smelter after parent company Rio Tinto showed a US$3.7 billion profit. “The global mining giant announced a 15 per cent increase in dividends to shareholders.”

    One person’s holding cell has turned into the holding cell for us all.

  8. Hence they may have thought, he has some convictions, is not a “Mr Perfect”, but overall, he should perhaps be given a chance to show he has “reformed”. Nothing much else may have been their motivations, same as that of of the government

    Strong on maybe.

  9. And after all that, why is Key sticking with the line that he didn’t know about KDC before the raid. Sorry it just don’t wash. They are using the SiS, and all the other ‘funny men in black rain coats’ organisations and Key is the Minister in Charge of all the NZ dirty tricks brigades.

  10. As much as I have sympathy for Kim Dotcom (his original name is Kim Schmitz, from Kiel, Germany, of Finnish and German parents) and what happened to him, and as much as I usually disagree with Fran O’Sullivan, I fear that the Dotcom saga is on the verge of an unexpected termination:


    The man has serious financial difficulties, some information that was gathered on him has been “aged off”, his legal team may follow the security staff that have left him, and he may lose all and be evicted from his mansion, in the worst case scenario.

    Maybe then he may turn into a “socialist” after all, given new life experiences as a very “lonely” man, as a down and out person, like so many of us at the bottom have been at one time or another? The loyalty of his wife may also wane, and she may pack up once the luxury life is over.

    I suggest that some that have “flirted” with him and his ideas, better start preparing for an outcome that few may have expected.

    The house of cards is apparently falling down now.

    Of course, the government and the NSA will do all they can, to speed this up. I have sadly seen too often, that the dirty tactics of the NZ state and its agencies lead to them “winning” in the long run. They have more resources and connections, and no matter whether right or wrong, whether law was broken or not, they know they will mostly be able to work the machinery of the justice system to serve their purposes.

    John Key knows this, and challenging them is an uphill battle.

    • Marc both articles in the NZH this morning about KDC were on the money, Fran O’Sullivan’s and Paul Thomas’s.

      • fran osullivan become a gossip columnist now? or maybe a conspiracy theorist? i see the new spin is kim dotcom is now poor…tall poppy syndrome mebe?

    • Which branch do you work for? SIS or GCSB? Or are you in the Cyber Security Centre? On the ground NSA? Or maybe just on the 9th floor. Astro-turfing, bigtime.

  11. Hi Chris

    A god piece, as per usual, but I really have to ask who cares. KDC is a convicted criminal. His internet activities are unquestionably depriving artists of revenue that is rightfully theirs. If we help the FBI in bringing this guy to justice, then I’ll be the first to applaud.

      • Indeed, Manbat. One can find entire movies, songs, albums, and tv programmes uploaded onto Youtube.

        I await Youtube being closed down and it’s owner(s) residence stormed by ninja-paramilitary police, leading the “culprits” away in chains and hoods. Trial an hour later. Execution to follow ten minutes after that.

        That’ll teach those monsters for uploading episodes of “I Love Lucy”, “Z Cars”, and “Bonanza” without permission! Fiends!

        • Frank,as usual you have no idea what you are talking about. There are a number of old shows that have been allowed to become public domain. You Tube do monitor their content. KDC doesn’t. What he’s doing is illegal, plain and simple. Why do you spend time defending criminals? Does it have something to do with KDC’s obsession with John Key?

          • “You Tube do monitor their content. ”

            Are you serious?!?!

            There are millions of uploads on Youtube. There is no way they can monitor the uploads unless complaints are lodged.

            Only then are uploads removed. Even then, the process takes time.

            Dream on, IV. As per usual, you live in your own naive world… 😀

            • Yep, I am serious. I happen to be serious fan of UK football. You search YouTube for highlights of any recent Premier League games and they are invariably taken down within 24 hours. YouTube have mechanisms for detecting illegal content. AT least they try to comply with the law, unlike KDC.

      • No they don’t. As for youtube, they actively seek out, and quickly remove, offending content. KDC is nothing more than a ‘fence’, and his orange suit is already being custom made.

    • Ever counted the cost to artists of the invention of the photocopier. Why weren’t Rank Xerox and others ever held to account?

      And libraries that carry photocopiers! They’re as evil as Dotcom!!! I’ve witnessed heaps of copyright theft going on in libraries. Almost an exact analogy between them and Dotcom in that they both facilitate copyright infringement and pay lip service to policing it.

      Tear them down and throw library management into cold cells and have the police strip their houses bare.

  12. Proud of ya mate . Cheers . ( I used the public bar vernacular to counter balance a fantastic piece of writing just in case it came unstuck and flew out the window . )

    While my blinkered instinct tells me not to trust dotcom , compelling evidence shouts in my face to trust LA , it’s spin Dr’s and the USA’s demonic corporate thugs even less .

    My fear is that we’re rapidly approaching the Rubicon of where we et al know very well what they’re up to and they could care less that we do . I can hear them one day say ‘ Just do it bitches or else . ‘

    • @ Chris Trotter
      If your thesis is even [roughly] correct – and I think it is possible – then I am of a mind that John Phillip Key directed the SIS to reverse their decision and allow Dotcom permanent residence. And if that IS what happened, Key was acting on the instructions of his off-shore masters.

      Out of interest, where would that place JPK in the event of public disclosure?

  13. “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 the right to use every legal means necessary to defend his liberty, and New Zealand has the right to tell Hollywood, the FBI and the American Government to go to hell.”

    Yeah, nah. He has the right to use every legal means to defend his liberty even if he’s a mass murdering pedophile. The New Zealand government has the right to tell the seppos to go to hell regardless of the circumstances. That the whole extradition business looks like the fruit of a poisonous tree gives Dotcom more legal ammo, but doesn’t change his rights one iota.

    By the way, for the RWNJ trolls reading this, I do not believe Dotcom to be a mass murdering pedophile. I know you guys get easily confused.

  14. I will shock a few here, but yes, since I came to NZ and stayed here, I have for much of the time here felt myself to be in a “holding cell” or similar, as this country is a “fake free country”, it is full of narrow minded back stabbers, narcs, spies and cops that associate with all sorts, even committing crimes themselves.

    I know few places like NZ, but it is not a “normal” place, going by my experience as a widely traveled person.

    Freedom and democracy here are mostly a farce in my view, and it is only because most are not informed that the MSM and politicians get away with their at least semi criminal behaviour. There is NO other explanation for it.

    I still do not believe there is wide scale spying going on here by US agencies, but I feel the neighbourhood watch brethren are possibly the worst offenders re privacy breaches in NZ.

    It is sick how narrow minded so many are here.

    • You are more than welcome to fuck back off to whatever lucky country got rid of you when you came here. After reading your stupid comments, I wouldn’t go boasting of the powers of your mind. It’s clamped shut tighter than most. Bye.

    • Marc, I am pakeha and broadly agree with your post about privacy in Aotearoa. There is a horrible undertone of meddling in other people’s business running through Kiwi society. Kiwis are far too accepting. We don’t like to make a fuss. Those of us who do get labelled as nutters (to be fair, some of us are). Idiots like Bratt should be tarred and feathered and ridden out of town on a rail. We accept almost anything with a refined English accent, or a broad Texan one, no matter how ridiculous. We need to get over our idiotic colonial cringe and obeisance to gods of authority whose feet of clay begin just below their eyebrows.

  15. The Nats (and their trolls here), hate KD because his legal team has exposed the police and our spies to be a pack of law breakers who want to work for the usa ….

    The GCSB break the law …….. and the police let them off

    The police commit perjury and break the law ….. The National police minister lets them off.

    We have the prime ministers ex school chum appointed head of the spy agency to cover Key’s arse and help with Key’s ” i knew nothing ” line of bullshit.

    Kim Dotcom has helped show us just how much everything stinks in our ‘security services’ and what a disregard they have for the law.

    Hopefully with a change of government there will be quite a few sackings and a big clean out of this dangerous, power abusing, authoritarian culture.

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