The Dotcom case

September 27th, 2012 at 11:00 am by David Farrar

Later in this post, I’ll come to how the NZ law enforcement agencies have behaved, but initially I want to cover Dotcom himself. While I admire his intelligence, technical, gaming and PR skills, I’m not quite in the category that he is a poor little innocent victim.

First of all, it is worth recalling he does have a less than clean record to date, before . Specifically:

  • hacking, including selling access codes
  • arrested trafficking in stolen phone calling card numbers
  • convicted of 11 counts of computer fraud and 10 counts of data espionage
  • accepting gang-related stolen goods
  • guilty of insider trading in Germany’s then largest ever case of its type
  • guilty of embezzlement

The pattern is someone who is very focused on making money, and pushes the rules, sometimes breaking them.

There is also a reasonable amount of evidence he is a bit of a fantasist, as detailed here. No that’s fine – we all want to be James Bond to some degree, but it is perhaps a reason not to regard everything he says as the holy gospel.

We then have Megaupload. This case is essentially about infringement. I think most people know I was a prominent campaigner against the original S92A and the blackout campaign as it would have seen people lose Internet access upon accusation.

I’ve generally been against most of the demands of the music and film industries with NZ copyright law, and am involved in the fair deal campaign to support NZ standing firm in the TPP negotiations against any provisions which would require a change to our domestic intellectual property laws.

I’m also very firmly in the camp that Internet sites should not be held responsible for the actions of their users, so long as they comply with the law.

However on the basis of evidence seen to date, I don’t quite buy the argument that Megaupload was merely a file-sharing service the same as YouTube or Rapidshare. Their business model is one that arguably encouraged peoplee to not just share popular infringing material, but to make money from it – as did Megauplaod. Quite different to non-commercial torrent sharing.

It is claimed for example that one user, VW, uploaded 17,000 files over six years resulting in 334 million views, and none of the files had ever been deleted, despite takedown notices. My understanding is that links to files were deleted, but not files.

In my personal opinion, Dotcom built a business absolutely based on making money from people sharing popular files, that they did not have copyright of. There is a reason it become 4% of all Internet traffic.

However there is a big *If*. He may have done it legally. While one can debate the ethics of certain actions, it is the law which states enforce. He may have managed to set up his business model in such a way that he made tens of millions from the site, and didn’t break US laws. Ultimately this issue will be decided by Judges – initially in NZ on whether there is enough evidence of offences that would be illegal in both NZ and the US – and then if extradited in the US in a trial.

As with his previous actions, I think Dotcom set out to push the law to its boundary. He may have stepped over. He may not have. That is for the legal system to decide. But I don’t accept the analogy that Megaupload operated just like YouTube or Rapidshare, and that a guilty verdict for Dotcom would affect those other sites greatly.

We then come to the NZ side of things. The exact details of the role should be made public soon, and will be fascinating. Graeme Edgeler has an excellent post on this issue. He raises the issue of should the GCSB have been involved at all, even of Dotcom did not have residency.

The overall impression I have of NZ law enforcement agencies is they were desperately keen to impress the boys from the US. To have the FBI and likes over here saying this guy is wanted for hundreds of millions of dollars of charges, and this case will be globally massive seemed to have got people into a mindset that we have to make sure we don’t disappoint Uncle Sam by just sending in Constable Smith to interview Dotcom.

Caution seems to have been thrown to the wind, in an attempt to impress that we are up to the job. Ironically the opposite has happened, and NZ authorities have ended up with egg on their face several times. Nowhere it seems were senior officials saying “Hey, let’s slow down and make sure everything is watertight and double checked”. The list of mistakes include:

  • An arguably over the top use of resources in the original raid. Armed were warranted as Dotcom did have weapons and did not initially surrender, but not sure quite that much force was needed.
  • A paperwork error saw his property seized without giving proper notice
  • Invalid search warrants for the raid
  • The probable unlawful interception of communications by the GCSB

NZ authorities absolutely have an obligation to assist the US with legal extradition efforts. I am not one of those saying we should not have co-operated. If someone broke the law in NZ, and lived in the US, we value the fact that extradition treaties allow them to be sent to NZ.

Whether or not Dotcom broke US law is a matter for Judges. It is unknown at this stage if any significant evidence will be inadmissible due to mistakes made by NZ authorities.  Time will tell. And as I have said, I think Dotcom’s strategy was to push the boundary of the law as far as he could, and he may or may not have stepped outside it. Ultimately that is not a matter for us.

What is a matter for us, is the response from NZ law enforcement agencies. I doubt I am alone is concluding the culture was shall we say too overly enthusiastic, and not cautious enough. The end result has been considerable embarrassment for them, for the Government, and potentially a significant weakening of the case against Dotcom. Hopefully there will be lessons learnt.

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62 Responses to “The Dotcom case”

  1. berend (1,630 comments) says:

    Can we just abolish the police?

    The amount of money they cost and the amount of lawlessness that surrounds the whole agency makes it a serious question it’s worth the cost.

    For those who attended public schools and need an history lesson: professional police is a recently new invention, and most societies have managed fine without them. Having guys with uniforms running around amok is not a good trade off IMO. At least they don’t have that many guns. Yet.

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  2. barry (1,317 comments) says:

    Some good points DPF – but in many respects if Megaupload is guilty of simply storing stuff that might questions over it – then so are people like NZ Post guilty of delivering stuff that might be illegal, or the local DIY self storage outfit.

    However it doesnt matter a lot if he did or didnt break US laws, what is the really big concern is the seemingly insane way the police and other agencies are acting in this case.

    We should all be very worried that the upper levels of the NZ Police and other enforcement agancies seem to be so incompetent

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  3. BeaB (2,056 comments) says:

    I just wish the media weren’t so starry-eyed about this awful man in his fat clothes. He is playing us all for suckers and the media dance to his tune like Bieber fans.

    I am glad you reminded us that sometimes we need the FBI – it’s not that long ago we were all thrilled they had found Little Pumpkin’s horrible father.

    Let’s all wait for the report, let’s accept everyone makes mistakes and we can learn some lessons for the future, let’s stop this Left-driven effort to undermine the agencies that protect us and our security. Let’s let the law take its course and with luck he will be extradited and we can forget all about him and his odious habits.

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  4. Pete George (22,731 comments) says:

    Gordon Cambell warns thet the Neazor inquiry may be destined to be inadequate.

    Who watches the watchers? Putting in place effective oversight mechanisms for intelligence agencies is a chronic problem in Western democracies.

    …the public is supposed to feel re-assured that an inquiry into these breaches will be carried out by former judge Paul Neazor, who is the current Inspector General of the Security Services.

    Yet as Brent Edwards pointed out on RNZ this morning, Neazor may well be in the interesting position of having to inquire into his own oversight failings with respect to the issuance of interception warrants.

    That is a concern, depending on how detailed and transparent Neazor’s report is.

    The alacrity with which the GCSB (and it silent partner, the SIS) acted on the FBI allegations against Dotcom would suggest that it has learned nothing from the Zaoui affair, and is still inclined to jump to conclusions of guilt and offer assistance whenever an ally singles out a target.

    That culture of gullibility – and the related willingness to surrender our autonomy to the wishes of our friends and allies – seems endemic within our security services.

    For all of these reasons, the inquiry by the Inspector-General into the Dotcom breaches is almost guaranteed to be inadequate.

    Gordon Campbell on the flawed inquiry into the Dotcom security breaches

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  5. Longknives (4,389 comments) says:

    “First of all, it is worth recalling he does have a less than clean record to date”

    Doesn’t matter that the guy is a known crook- Once Sainsbury and Campbell start spouting his “innocence” the rest of New Zealand seem to follow like sheep.
    I’m waiting for this big,loveable fellow to be awarded New Zealander of the year..(After Sir David Bain’s knighthood, of course..)

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  6. David Garrett (6,308 comments) says:

    Good post DPF…I have to confess I dont know very much about – and am actually not that interested in – the intricacies of “file sharing” and whether one can or should make money off it…

    But I AM very interested in the other issues surrounding the big gent from the Fatherland…Even for one as right wing and pro-police as me, the level of general incompetence in this whole affair is very disturbing … as is the “we had better be good little boys for Uncle Sam” aspect….Not to mention the GCSB acting completely illegally….

    The Neazor report will be interesting…surely Key will have to release as much of it as possible?

    BeaB: As I recall, little pumpkin’s father was located by a small town police force after some good old boys recognised him and called them…

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  7. Than (425 comments) says:

    I disagree with the criticism that the police were over the top when conducting the arrest. The police could not be certain they knew how many weapons they would be facing. And if you have decided to use force, it is best to have overwhelming force available. If an offender sees they have no chance of shooting their way out they are much more likely to surrender. Or if they don’t, overwhelming force lets the police end the situation as quickly as possible.

    If resources used in the Dotcom raid were needed elsewhere at the same time then I would accept that as a reason they shouldn’t have been used. But apart from that, asking police to only bring the absolute minimum number of people/weapons to potential shooting situations is stupid. Politics needs to stay out of operational matters.

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  8. Dirty Rat (383 comments) says:

    lesson One: dont associate with anyone who accepts dirty money from international criminals
    Lesson two: dont promote them to being a minister outside cabinet

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  9. David Garrett (6,308 comments) says:

    Than: I haven’t heard much criticism of the carrying out of the actual raid – dramatic though that was…it seems it is the police and “other agencies” actions since, especially in the legal sphere, which have quite rightly given rise to much concern…

    Simply put, we are neither a state nor a colony of the US, we are a well established sovereign state with a well developed rule of law…that seems to have been all badly trampled on if not ignored in many instances here…the Neazor report will be interesting and may shed a lot of light…

    Dirty Rat: Bit early to be on the turps isn’t it?

    [DPF: I'm not worried about the raid per se. But I think it shows that there was a bit of a culture of having to impress the Yanks]

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  10. RF (1,260 comments) says:

    The police on the ground executing the warrant were only acting on instructions from someone up high in Bull Shit Castle. Thats where the criticism should be directed. No problem with them being armed as the bodyguard appears to have been in possession of an illegal firearm.

    I suspect the Big Boy will milk this right to the bitter end..the poor thing

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  11. peterwn (3,140 comments) says:

    Thanks very much. I have been waiting for a balanced review of the situation. Some ‘takes’ I have:
    1. A key issue IMO is whether the prosecutor can prove that a party related to Megaupload or Mr Dotcom, etc unlawfully uploaded copyright material to generate ‘traffic’ for the site especially by paid users who pay a premium for speed, etc.
    2. Whether copyright law breaches can be proved on the ‘balance of probabilities’ – this would ‘enliven’ proceeds of crime legislation at least for NZ based assets, and may ‘enliven’ similar law in other countries or the equity concept of ‘unjust enrichment’ in Common Law administrations (including USA).
    3. GSCB is supposed to be there to help protect national security. I have no problem with the Police using their facilities to help solve/ prosecute major crimes, but commercial copyright breach carries 5 years maximum which hardly places it in the league of murder, slavery, kidnapping, brutal assaults etc.
    4. I have pondered whether this would have happened under a Labour government. I strongly suspect that the shadow cast by Helen Clark and Heather Simpson would have been a serious restraining influence on the Police and GSCB in this particular instance. John Key on the other hand as allowed these agencies to get along with the job operational-wise, and they have badly let him down. They have placed him in an untenable situation.
    5. IMO John’s only sensible response is to seek the dismissal of those responsible even at the risk of pay-outs – this may include the Police Commissioner and GSCB chief. There would be an unsubtle difference from the Smiling Assassin – no smile this time round.
    6. Assuming Mr Dotcom’s residency was obtained using false information or non-disclosure of required information, his residency should be cancelled and he should be allowed to leave NZ on a flight of his choice. Presumably Immigration can ‘remove’ someone despite the person being the subject of an extradition attempt.
    7. The whole episode may have a longer term benefit in that USA may not press NZ so hard with respect to IP law, and NZ is better empowered to resist international pressures to strengthen IP law.
    8. The whole matter of extradition should be reviewed. For starters the Government should unilaterally pass legislation placing reasonable limits on extradition and then be prepared to renegotiate treaties. In particular the alleged offence would need to be allegedly committed by someone physically present in the requesting country at the time, or at the very least by a person who is a citizen or resident of that country and has asserted citizenship or residency eg by applying for a passport.
    9. Various instances have made me very worried about certain police activities, especially high handedness and violence concering some arrests. Unfortunately the popularity of ‘P’ means the police need to be cautious. However I get the impression that the police deliberately set out to humiliate arrestees for example by insisting the lie face down on the ground. See: http://www.stuff.co.nz/dominion-post/news/7734181/Hutt-teens-strip-searched-by-police – ‘Upper Hutt area commander Inspector Mike Hill said he stood by his words describing the handling of the investigation and the action of staff as an “aberration”. ‘ – Yeah Right! IMO he should have kept his trap shut. He and his supervisors and / or the Police College has got it badly wrong.

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  12. berend (1,630 comments) says:

    DPF: But I think it shows that there was a bit of a culture of having to impress the Yanks

    And where does that culture come from? We can blame just the police, but who wrote the original S92A?

    Who did the US contact when they wanted to arrest Kim? Did the powers that be instruct the police to help the FBI whatever it took?

    Than: If an offender sees they have no chance of shooting their way out they are much more likely to surrender.

    You’ve watched too many movies Than.

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  13. tristanb (1,133 comments) says:

    . The police could not be certain they knew how many weapons they would be facing. And if you have decided to use force, it is best to have overwhelming force available.

    Why don’t we raid Mongrel Mob gang houses with this much force? Why don’t they respond to domestic assaults with that much force? What a waste of police time.

    This guy hasn’t committed any crime. And if it is made a crime, it will be an unjust law. Why should the US government be able to control what files I upload to share on the internet?

    Our cops should worry less about people downloading MP3 and movies and more about rapes, murders, burglaries and assaults. You know, things that actually affect people in our country, rather than American organisations wanting to interfere with citizen’s private use of data.

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  14. Weihana (4,496 comments) says:

    berend (1,165) Says:
    September 27th, 2012 at 11:14 am

    Can we just abolish the police?

    The amount of money they cost and the amount of lawlessness that surrounds the whole agency makes it a serious question it’s worth the cost.

    For those who attended public schools and need an history lesson: professional police is a recently new invention, and most societies have managed fine without them. Having guys with uniforms running around amok is not a good trade off IMO. At least they don’t have that many guns. Yet.

    I’m not sure they operated “fine” as such. I’m not a fan of police power and my inclination is always to distrust, but they do exist by necessity in my view, especially in large concentrated populations.

    It’s probably worth considering that civil rights in a modern sense are very new. The presumption of innocence has only been around since the likes of William Garrow and in his time anyone finding themselves before a court were often guaranteed to find themselves hanging by the end of a noose in short order. I prefer a modern, and restrained, police force over a barbaric justice system such as that.

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  15. ross69 (3,652 comments) says:

    > Armed Police were warranted as Dotcom did have weapons

    As do most farmers…let’s hope a farmer isn’t accused of shooting and killing someone. Oh that’s right, Ewen Mcdonald!

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  16. berend (1,630 comments) says:

    Weihana: The presumption of innocence has only been around since the likes of William Garrow

    I realise you want to a government school, but really, a classical education has its advantages. Here’s how the Greek, 8th century BC, solved their problems: http://ideas.repec.org/a/kap/pubcho/v145y2010i3p461-482.html; look Ma, no police, no prisons.

    All this was is a private dispute between two private entities. And there it should have been solved.

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  17. kowtow (7,581 comments) says:

    All this started when a government agency was prepared to overlook this man’s criminal convictions when granting him residency because he was mega rich!

    That may not be outright corrupt but it is outright immoral.

    But then morality is no longer an important part of modern society.

    Key and Co will be rueing that grant of visa,and rightly too.

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  18. Stuart (40 comments) says:

    I have been of a similar opinion DPF for a long time, yet every time I have tried to convince people that KDC is not innocent and that megaupload was designed for copyright infringement, I was vilified. I have always said, I used and loved the site, I even paid for a subscription, but it was not just sharing copyrighted material, it was profiting from it.

    I hope now more people will understand the realities, thank you so much for this balanced opinion piece, unlike Stuff.co.nz

    Berend, I truly hope you are trolling.

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  19. wreck1080 (3,721 comments) says:

    How did he get let into the country based on what you’ve said?

    This is appalling.

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  20. Dave Mann (1,168 comments) says:

    @DPF: Yours is one of the fairest, most rational and balanced commentaries of this Dotcom affair that I have read. Thanks for that.

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  21. ross69 (3,652 comments) says:

    According to Andrea Vance and Kate Chapman:

    “Police requested the immigration file on Dotcom a week before GCSB began spying on him.

    Immigration officials had confirmed they released the file – which confirmed Dotcom held New Zealand residency – to police.

    “The information in the file included Mr Dotcom’s New Zealand residence status,” a spokeswoman said.

    The request was made on December 9, and the snooping operation began on December 16, a week later. Police did not get the file from Immigration New Zealand until December 22.”

    So police realised on December 22 (if not earlier) that Dotcom was a permanent resident. Naturally they would’ve informed GCSB of this fact? What (if anything) did police do after they realised that Dotcom had permanent residency?

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  22. Yoza (1,515 comments) says:

    The lesson for the NZ security apparatus is: Do not attempt to arrest someone who can afford to buy a legal team capable of deeply scrutinising all aspects of your investigation.

    Dotcom is just the sideshow who can afford to shine a light on the shady antics of the New Zealand establishment’s attack dogs. This case is about the abuse of power official agencies regularly exercise because they realistically expect it is something they will get away with.

    It should come as no surprise to anyone that National party hacks are attempting to turn this into a Dotcom ‘arch-villain’ personality cult in an attempt to distract attention from the hierarchy of the National party’s colluding with the criminal activities of New Zealand’s security apparatus.

    Personally, I’m all for deporting the bastard for donating $50,000 to John Banks, but Dotcoms past and present activities are not the story. The story here is the illegal abuse power by New Zealand’s ‘security’ agencies.

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  23. Adolf Fiinkensein (2,787 comments) says:

    Excellent piece of commentary, David.

    Is the the same gang of NZ bureaucrats who failed so dismally to draft decent terrorism legislation in Clark’s time?

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  24. ross69 (3,652 comments) says:

    What is also rather odd is that police requested info from Immigration about Dotcom (presumably including info about his residency status), then proceeded to spy on him (via the GCSB) before it had received an answer!

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  25. flipper (3,533 comments) says:

    I have absorbed your piece, DPF and also Mai Chen’s column in today’s Horrid with interest.
    • There are a few matters that Neazor J. (Retd), given his antecedents, will probably ignore.
    • This is no longer a “legal” matter. It has the potential to cut to the very heart of the highly questionable legal framework in which the GCSB and the SIS operate.
    • Neazor is a Crown Law child who, moved from SG to the Bench.
    • Neazor is known to lean to the Crown, whatever the arguments.
    • Paul Buchanan flagged concerns on this a few days ago.
    • The NZ SIS has with considerable success chased down matters relating to UK espionage cases, notably among them the Kruger connection with NZ (Blake!!!!).
    • Now in 2012 we need some clear, unequivocal statements from Neazor,
    • Claims that NZ’s national Security interests are at stake are just plan BS.
    • NZ’s Echelon partners (Aus., Can, UK, US) have been embarrassed by NZ’s GCSB actions since Echelon does NOT involve itself in “crime” unless it involves terrorism
    • Ergo, NZ’s GCSB is embarrassed and is seeking to get out from under.
    • Neazor has apparently already drawn attention to two (2) previous instances of the GCSB stepping outside the Law.
    • As Armstrong in the Herald said: Neazor barked but the GCSB ignored him.
    • There are time lines and associated matters that call into question the whole ”security” issue, namely:
    1. On what date was the English certificate prepared?
    2. Who prepared it?
    3. Who advised English he should sign it?
    4. Was Crown Law involved?
    5. If so, names please.
    6. Did Crown Law tell Heron as Solicitor General?
    7. Did Heron (or, whoever) give a “heads up” to Finlayson?
    8. Was this all done under (young) Palmer’s watch?
    9. If Finlayson knew why did he not tell Key?
    10. How is it that “legal” processes can occur outside the purview of the NZ Attorney General?
    11. AD nauseum…..
    12. So, please Mr Neazor, demonstrate that you are really neutral and not simply a Crown Law (FiB) surrogate.

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  26. Viking2 (11,125 comments) says:

    I guess the point really is how much was hollywood file shares and how much was other people going about their ordinary business. One part seemingly illegal and a private transaction and therefore private remedies and another part absolutely legal and not a part of this dispute.

    That others used a sharing device to carry out their activities is surely the problem for the FBI and not the total business.

    Yankee cowboys.
    the SEC have recently closed down another large business using the reason it was a ponzi scheme. They claimed there were thousands of victims. Walked in and shut it down. Left nearly 2 million people without rights and now victims of that action, 600 million in the banks which has been handed to a receiver.
    Problem is that it was perfectly legitimate business which the SEC has now conceded and we have 2 million victims who the receiver says will have to wait up to 5 years for a result and is now suggesting that the recievership will eat up that 600 million.
    SEC are now in the crap and will likely get sued.

    Nothing very clever about the yanks.

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  27. Dave Mann (1,168 comments) says:

    Oh and another thing. Its good to read all the comments so far on this from people who have put up differing views without resorting to name-calling. And enjoyable debate.

    For my two cents worth, I don’t think NZ should become a colony of the USA’s entertainment industry….. but given the guy’s known criminality, I think serious questions need to be asked about how he got residency in the first place.

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  28. ricknz (16 comments) says:

    I’m a believer in intellectual property, I own trademarks, patents, and trade secrets.

    What I’m not a believer in is the subsidizing of commercial businesses who have a business model where theft can occur so easily that anyone can do it and that we the tax payer must pay for its protection.

    This business model makes no sense whatsoever and if they want to continue to make a product where they ship it out and it can be easily copied they need to pay for the enforcement of their rights in civil court not one paid for by the tax payer.

    Just because this product exists today in its current form doesn’t mean it should exist or they have a right to this business model.

    When someone violates one of my trademarks or patents I don’t call the police, I file a civil lawsuit.

    Please stop this madness.

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  29. rolla_fxgt (311 comments) says:

    Yeah DPF I’m a little worried about your seeming okayedness (yes I think that’s a made up word) with the use of the STG (not the AOS or ordinary armed police). The STG originally were set up to be a civillian counterpart to the SAS, for use in domestic counter terrorism operations, and laterly their area of operations expanded to include operations like Aromoana, and Hopital hill, where the standard AOS tactics/weapons weren’t up to scratch, and specialist surveleilance of drug operations, and help with specialist searching/security for large scale events.

    Basically the STG are only meant to be used when all other options are exhausted, or there is a high probability of terrorist activity. They are not meant to be a first line use unit, except in the case of terrorism.
    Since no one is alleging that Dotcom is a terrorist, or had terrorist capabilities, then they shouldn’t have even entered the planning equation.
    The police arguments of that they’re might have been firearms on the premises, upgrades it to perhaps the AOS, but even then the use of armed standard officers should have sufficced. Otherwise as others have said, we better increase the size of the STG, so they can be used on any gang raid, any farmers property, or indeed any citizen who happens to have a firearms licence (whaleoil better watch out!). Which would either leave the AOS pointless, or perhaps we could use them to enforce traffic stops?
    Given that the police haven’t in the past used the STG for these type of raids, suggests it was indeed just bignoting to the FBI on the NZ Polices behalf.
    Even their argument that the STG were the only group trained to use helicopters is false, as the helicopter could land to disenbark police, somthing the AOS can, and does do.
    And if the police were worried about speed/secrecy of the raid, they could have been like most normal tactics people, and gone in at night, and either raided at night, or waited till the early morning onsite, and raided at dawn, when people would all be in bed, and less risk of running and hiding in a panic room. They have the technology to defeat most security systems that Dotcome may have had operational anyway.

    I agree though that there also needs to be a thorough review by an outside expert of the Police, and OFCANZ involvement in this case, and heads need to go. The commissioner of Police, or his assistants should resign in embarrasement, if nothing else. The detective head of OFCANZ who appears to have lied in court, needs to be dismissed, and charged with suitable offences, and jailed for his troubles. And most of the senior members of OFCANZ need to be removed, or moved on within the police.

    And if there isn’t all ready, there needs to be a new law sorrounding knowingly providing false (or could reasonably believed to be false) information to another agency. With punnishment being a term of immprisonment, rather than a fine, that we the taxpayers end up paying.

    Personally I don’t think that Dotcom has broken any laws in regards to this Megaupload case, as I thought it had been reasonably established that service providers couldn’t be responsible for what their clients got upto, unless they were set up specifically, and only to allow the criminal act to take place. Which given that large numbers of businesses, and individuals used his service to move large amounts data from one place to another, clearly can’t be the case.
    After all we don’t shut down banks that have customers who have illgotten gains in their accounts, or shut down power companies because they supplied electricity (perhaps even reasonably knowingly) to canabis growers, or water supplies because someone used water to manufacture drugs.

    But I do think that Dotcom thought his friendship and donations to Banks would have brought him some political leverage at some point in the future. And when it wasn’t given he wasn’t used to being told no, and threw a smart hissy fit over it. By running parrallel PR campaings, one to get the public on his side over the heavy handedness of the police actions, and the other to use Labour to get information into the public domain to put pressure on the government to back down on their actions. As well as a well though out legal strategy to tear apart the case, before he can be extradited and tried in the US. Where as the Apple v Samsung case has proven, justice isn’t always blind.
    He’s no different than a kid having a hissy fit in the middle of a supermarket, when things go wrong, but he may have a reasonable reason for his hissy fit in this case.

    Doesn’t mean I like the person, just that I can see there may have been a wrong committed against him.

    [DPF: I don't disagree the STG were overkill]

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  30. alex Masterley (1,489 comments) says:

    Flipper,
    Answers to some of your questions.
    If you have a look at the certificate you will see who prepared it or at least on whose behalf it was prepared for submission to Mr English.
    The certificate would have been accompanied by an explanatory memorandum from that person.
    It is quite clear from the certificate that it was prepared by crown law.
    Mr Heron’s appointment as SG only took place this month. He may have been briefed about the certificate which was signed by Mr English on 16 August 2012.

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  31. annie (537 comments) says:

    Why don’t we raid Mongrel Mob gang houses with this much force? Why don’t they respond to domestic assaults with that much force? What a waste of police time.

    That’s the heart of the current issue, right there. Since when did copyright infringement, a civil matter in NZ, warrant a boys-own cluster**** with the NZ police making panting fools of themselves over having US involvement? Meanwhile, violent crime and theft continues on its merry way back home. I am quite sure most NZ taxpayers would prefer the cops to stick to dealing with actual crime.

    And how is it justifiable to rort their constraints by getting GCSB to do the dirty work they’d never get a warrant for themselves?

    Let’s not get diverted by the copyright argument or Dotcom’s worthiness – our civil liberties have been violated and will continue to be at risk unless police behaviour and culture are sorted out.

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  32. Matthew Holloway (19 comments) says:

    On Megaupload making money from popular downloads, the same could be said of YouTube which invites owners of popular videos into a revenue sharing model from the advertising associated with the video. According to Kim Dotcom they only had revenue sharing for files less than 100MB which is smaller than most movies and tv shows (although not most music albums).

    DPF wrote: “It is claimed for example that one user, VW, uploaded 17,000 files over six years resulting in 334 million views, and none of the files had ever been deleted, despite takedown notices. My understanding is that links to files were deleted, but not files.”

    Without wanting to comment on the specifics of the Dotcom case, the approach of deleting links but not the files is very common in all software. When you delete a file from a harddrive it’s almost always the case that it’s just a link* being deleted and not the file itself (and that’s why data recovery software can work because it restores data by slowly trawling a harddrive for unlinked files). You can also have multiple links to the same file on OSX, Linux and Windows which can help minimise wasted space — imagine that you’re categorising photos into folders and you want one photo to appear in multiple categories… you could make several copies of that file but that wastes file space, or you could make a link** that points back to the same file.

    For online File Lockers having multiple links is useful because people do upload identical copies of the same file and I would be surprised if YouTube didn’t do something similar to Megaupload. For example, it’s entirely legal and useful for people to copy legally purchased mp3s to a cloud provider, but if 100 people have purchased the exact same song file then that File Locker (megaupload, youtube) would waste a lot of space if they stored 100 individual copies. They may as well just store 1 copy and then hand out 100 links instead, and that’s what most cloud providers do.

    The DMCA takedown law (similar to our Section 92C) is unclear on how copyright takedowns should be processed in this scenario of 100 users and the same file. Do you delete the file for all 100 users, or just the link that was accused? What if 1 user has legitimate access but another doesn’t? The DMCA case law hasn’t really defined how cloud providers should store files, or how they should handle takedowns, and this grey area is a lot of what this case is about.

    * in a File Allocation Table (or similar)
    ** typically a symbolic link

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  33. flipper (3,533 comments) says:

    ALEX
    Stop digging.
    Your post raises more questions than it answers.
    Perhaps you will assist by posting/embedding copies of both docs.

    BUT you are saying that Crown Law did NOT advise the Attorney General, are you not?
    You are one dumb some of a bitch,who thinks he knows mutch, but in reality is a babe in the woods.

    The Courts may have all their, my lord, doffing, scraping, bowing and legal pussy footing rules/crap. But finally it is politics that count and whoever it was that advised English to sign should be DCM….,And all those that supported the move.

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  34. trout (898 comments) says:

    Excellent summary.

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  35. MH (624 comments) says:

    I’ve said it before a deal involving exchanging Assange for dot.comedy is looking more and more likely. Anyone speaka Equadorian or Australian? What does Sir Peter Jackson say on the matter? Dot is the one without the beard.

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  36. boredboy (250 comments) says:

    PM releases Dotcom report

    By Adam Bennett and Claire Trevett
    1.49PM

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10836884

    KEY:
    “First, the GCSB originally relied on the Police’s information about the residency status of the people in question. They did not check further.

    “Second, this error was compounded after the operation was concluded by a simply wrong interpretation of the law.

    “The Inspector-General noted there was potential for confusion between the relevant agencies about changes to the Immigration Act in 2009 and the subsequent effect on the GCSB legislation.

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  37. Elaycee (4,286 comments) says:

    MH:

    I’ve said it before a deal involving exchanging Assange for dot.comedy is looking more and more likely. Anyone speaka Equadorian or Australian? What does Sir Peter Jackson say on the matter? Dot is the one without the beard.

    Oh dear….. Someone must have spiked the contents of the water cooler. :D

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  38. T-Dee (6 comments) says:

    Thank goodness more people now seem to be seeing the reality of Dotcom. But unfortunately not the MSM. He’s not an innocent victim and while DPF says his record shows he’s someone keen on money and a fantasist, a slightly harsher reading would be that he’s a con man. And he’s very good at it, having conned most of NZ, and certainly our MSM. If you read the indictment (http://legaltimes.typepad.com/files/mega-indictment.pdf) it’s pretty clear he has a case to answer.

    A couple of things to consider:

    - If he was able to make hundreds of millions from an innocent file sharing service, then how come other companies aren’t doing this too. It’s hard to monetise the Internet, and what he was doing required nothing special, except illegal use of copyright material. That’s why there aren’t legitimate companies making the millions he was.
    - When someone is planning an internation con, they usually pick a jurisdiction where they will have the best chance of getting an easy ride. He has chosen well, playing on our gullibility and anti-US feeling. You can’t tell me he moved to Coatsville for the local schools.
    - The Banks thing was brilliant PR. He knew the media had it in for Banks over Teagate and would jump at the chance to skewer him. It was a warning not to fuck with him. But no-one in the MSM has asked him, as far as I am aware, if he’s donated to any other politicians or parties.
    - And why have all that security and a shot gun in Coatesville? Not for protection from the local P-addict; more likely as protections from the pornographers and other shady types whose content he was also ripping off.

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  39. MH (624 comments) says:

    elaycee. I get it this time. You are a water meter reader who suffers from a rabid fear of water. What do you think is Jackson’s view on this as one who survives on Hollywood filums and has influenced the industry incl Parliamentarians and the possible theft of copyright by persons such as Dotty? Do you have an opinion? Water boy,assuage yourself,wiki leaker? You can get pads these days that will absorb your run off nature.

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  40. Weihana (4,496 comments) says:

    Dave Mann (929) Says:
    September 27th, 2012 at 1:01 pm

    Oh and another thing. Its good to read all the comments so far on this from people who have put up differing views without resorting to name-calling. And enjoyable debate.

    For my two cents worth, I don’t think NZ should become a colony of the USA’s entertainment industry….. but given the guy’s known criminality, I think serious questions need to be asked about how he got residency in the first place.

    This is how the process works:

    A5.25 Applicants normally ineligible for a residence class visa unless granted a character waiver

    Applicants who will not normally be granted a residence class visa, unless granted a character waiver (see A5.25.1(b) below), include any person who has been:

    c. convicted at any time of any offence involving dishonesty; or

    A5.25.1 Action

    a. An immigration officer must not automatically decline residence class visa applications on character grounds.
    b. An immigration officer must consider the surrounding circumstances of the application to decide whether or not they are compelling enough to justify waiving the good character requirement. The circumstances include but are not limited to the following factors as appropriate:
    i. if applicable, the seriousness of the offence (generally indicated by the term of imprisonment or size of the fine);
    ii. whether there is more than one offence;
    iii. if applicable, the significance of the false, misleading or forged information provided, or information withheld, and whether the applicant is able to supply a reasonable and credible explanation or other evidence indicating that in supplying or withholding such information they did not intend to deceive INZ;
    iv. how long ago the relevant event occurred;
    v. whether the applicant has any immediate family lawfully and permanently in New Zealand;
    vi. whether the applicant has some strong emotional or physical tie to New Zealand;
    vii. whether the applicant’s potential contribution to New Zealand will be significant.

    In terms of (i) there was no imprisonment. In terms of (vii) Dotcom’s potential contribution was significant.

    The decision to grant residency was not unreasonable given these instructions. Criminality is not automatically prohibitive for gaining residency. Considerable wealth and a very successful business were presumably points in his favour, which is reasonable, and on balance it is arguable that his potential contribution outweighed his prior bad acts. Subsequent legal action by the United States is irrelevant and so far stand only as allegations.

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  41. Nostalgia-NZ (4,896 comments) says:

    DPF wants to have it two ways. Immigration carefully considered Dotcom’s past offending when granting permanent residency. At that same time megaupload was functioning, something also considered no doubt. But at the moment NZ is asked for assistance, suddenly Dotcom becomes something the NZ authorities had already decided he wasn’t, a threat of some sort, with a criminal background and running an allegedly illegal business in the USA.

    In the instance of the proclamations that such an over top raid was needed, we quickly saw the truth of the matter. Dotcom poses no danger to other nzers, as was confirmed when he was granted residency, and has been confirmed since gaining bail. He is not a danger, he is not a flight risk. DPF is too generous in excusing the authorities. Also, for those that criticise Dotcom’s flamboyancy etc, they should remember that it was the authorities that first filled the public with the idea of how dangerous he was and relatively soon after nz willingly took his investments here.

    This is not a popularity issue with Dotcom – it is about a chain of events that began when NZ made offers to potential immigrants who were wealthy. Wealthy enough for politicians to knock on the door asking for money in return for ‘help.’

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  42. Dazzaman (1,123 comments) says:

    Just the response I thought Farrar would have…he’s an establishment nigger at heart. lol

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  43. Lee C (4,516 comments) says:

    I liked what tristan b inferred about why gang HQs appear to exist with impunity, yet this geyser gets a small army descend on him. Surely this arrest could have been undertaken with a maximum of four officers. It’s not like DotCom was holed up with an M16 in his possession.

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  44. berend (1,630 comments) says:

    Nostalgia-NZ: But at the moment NZ is asked for assistance, suddenly Dotcom becomes something the NZ authorities had already decided he wasn’t, a threat of some sort, with a criminal background and running an allegedly illegal business in the USA.

    And you can bet permanent residents will have a very careful look at this case.

    Dotcom didn’t have his day in court, and his business is destroyed. Something DPF conveniently forgot to mention now the Dotcom case threatens John Key.

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  45. Reid (15,904 comments) says:

    It’s very telling of Key’s management style that he’s now distancing himself from any responsibility whatsoever. I suspect he learned that at Merrill Lynch – it’s an American management tactic.

    However fact is, the best managers are those who heap praise on the team when things go well and personally step up and take it on their own chin when things go badly. That’s leadership 101 and it makes people in the team willing to go to hell and back for their leader. But clearly Key, just like Hulun, doesn’t have it, at all.

    Take a look at this article. http://www.stuff.co.nz/national/7734301/Key-to-Dotcom-I-m-sorry It’s all..

    “If they had done their job properly they should have worked it out,” Key said.

    “I’m personally disappointed. New Zealanders should be very disappointed. They have failed on the most basic of levels.”

    He said he had made his disappointment “quite clear” to the director of the GCSB.

    As if the GCSB like all the other involved agencies weren’t bending over backwards to fulfil the will of their political masters to suck up to the yanks lest the TPP be endangered.

    For once the opposition are correct. Notice that Key was absent at QT. Just like Hulun used to absent herself when she was in trouble.

    I’ve had serious doubts about Key for some time. A real leader steps up. A real leader never deflects blame to others. Lots of politicians do this. And every single one of them are execrable creatures who deserve complete and utter excoriation for it.

    Key, you’re behaving like a gutless spineless malicious little man over this. Prove that you’re not. Hulun couldn’t. Can you?

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  46. Keeping Stock (10,088 comments) says:

    If Megaupload was a legitimate “file-sharing” site, why did they PAY people to UPLOAD unique content to the site? Perhaps it was so that they could CHARGE people many times over to access said unique content…

    @ Reid – Key is never in the House on a Thursday; it’s his community day. That practice was started by Helen Clark. Nor was David Shearer in the House today either, on a day when you could have been expecting him to lead the attack against the Government and Key. Vilify Key all you like, but get your facts right first.

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  47. Nostalgia-NZ (4,896 comments) says:

    Keeping Stock

    ‘If Megaupload was a legitimate “file-sharing” site, why did they PAY people to UPLOAD unique content to the site? Perhaps it was so that they could CHARGE people many times over to access said unique content…’

    So that explains the illegal search, evidence being spirited out of the country despite orders from the High Court, GCSB operating under their own will. Got ya. If it was all so straight forward why are the authorities breaking so many laws. They don’t need to break laws if it’s such a straight forward case as you suggest, from another aspect are you fine with the law being broken by the authority tasked with upholding it?

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  48. Keeping Stock (10,088 comments) says:

    Nothing excuses the incompetence at this end Nostalgia. But as Bill Hodge noted yesterday, if the FBI has a strong enough case against Dotcom (and the evidence that went to the grand jury was pretty compelling), all the sideshows here will matter not a jot,. The decision to extradite will be made solely on the basis of the evidence against Dotcom and co.

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  49. Reid (15,904 comments) says:

    Vilify Key all you like, but get your facts right first.

    Thanks for the correction KS. So you agree with everything else I said?

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  50. Nostalgia-NZ (4,896 comments) says:

    Keeping Stock

    ‘The decision to extradite will be made solely on the basis of the evidence against Dotcom and co.’

    In theory. While appreciating the tired lines of Bill Hodge, there might be compelling argument of the facts that it would be unjust to extradite Dotcom because of the illegal efforts of various law agencies in both countries that show their malicious efforts to avoid due process. Of course not forgetting other arguments that show the basics of the law and interpretation of it as applied to Dotcom are far from sound.

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  51. Viking2 (11,125 comments) says:

    Hmm, Grand jury. Fitted up bunch of locals behoven to the FBI.
    Evidence that was heard without contest. As is the case with an SEC shut down that I have an interest in.

    And it’s a civil matter, (copyright always is), not a matter that the Govt. should be involved in unless you are a democrat wanting funds.

    You should also consider that much of mega upload was used as file storing etc in a perfectly legitmate manner. Those that used mega upload as a “cloud ” storage have lost all their intellectual property to the State. Most will never see that stuff again. The FBI now has access to peoples files that contain all sorts of information that is no buisiness of the FBI. (Including I read files containing new processes and intellectual property which if they find will go to the highest bidder in the USA.) They have in effect stolen other peoples rightful possesions.

    Now one could argue successfully that they have committed the greater sin for they have trangressed the property rights of people who have done no wrong in favour of righting a percieved wrong on the part of mega upload. A wrong that should have been argued in court prior to any seizure.
    But the yanks have made this their modus operandi despite it being against natural justice.

    Worse they are using subtefuge to achieve the bullying of partners to extradition treaties etc.
    God help us if Grosser ever achieves TPP. The Secret TPP document.
    Mega is the thin end of a large wedge which NZ will come to regret.

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  52. RF (1,260 comments) says:

    Interesting to discover who actually supports our Police. Stuff ups such as what just happened sure brings out the armchair critics. Nice to be perfect.

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  53. Reid (15,904 comments) says:

    Interesting to discover who actually supports our Police.

    RF that comment reminds me of comments from people outraged that someone dares criticise say, Israel over some massacre or other, on the [inferred] grounds Israel lives under threat therefore she should be allowed to massacre anyone she jolly well likes, twice over if necessary.

    Sorry, I realise that’s a hyperbole in this context but the principle’s the same.

    I am reading through T-Dee @ 2:17′s link to the indictment however, it’s illuminating stuff. All of you should read it if you haven’t. Shame you gave yourself a pseudonym too T-Dee. That and the fact it’s your first ever comment here might make some think you were some sort of insider type, but of course that couldn’t possibli be true, we all know that.

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  54. RF (1,260 comments) says:

    Reid… Dream on. Love them or hate them we still need the Police. Maybe your choice is the Black Power to sort out any problems.

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  55. Weihana (4,496 comments) says:

    Keeping Stock (8,135) Says:
    September 27th, 2012 at 6:35 pm
    If Megaupload was a legitimate “file-sharing” site, why did they PAY people to UPLOAD unique content to the site? Perhaps it was so that they could CHARGE people many times over to access said unique content…

    But how does this differentiate it from other services? Paying people to upload unique content is not a crime. Charging people for said content is also not a crime. Fact is the technology can be used legally and illegally. Same with YouTube. Same with the IPod. Same with a lot of things. ultimately ISPs make a lot of money from high data limits which are often used for illegal content. How much is too much when it comes to making money off the illegal activities of users?

    The SCOTUS made a very vague law when they created “inducement” which arguably has a chilling effect on innovation and technology. But as silly as it is it was a matter for civil law. Turning it into a criminal offense for the purposes of extradition is another thing entirely.

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  56. Reid (15,904 comments) says:

    Reid… Dream on. Love them or hate them we still need the Police. Maybe your choice is the Black Power to sort out any problems.

    Yes, way to completely misunderstand everything I said RF, but never mind. Try reading it again. And again and again and again. Then try reading it in the mirror. Who knows? While most people don’t need that, maybe you do.

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  57. RF (1,260 comments) says:

    Reid

    It’s been a long night. Sorry if I took it the wrong way.

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  58. Reid (15,904 comments) says:

    RF, perhaps I misunderstood you. Anyhoo, take a look at that indictment, it’s serious eye-opening stuff.

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  59. Gdayglo (1 comment) says:

    Police stuff ups are OK in normal day-day work , but this was a high profile interagency, international case. There was ample time to do the basic homework and double check sources-no matter that Uncle Sam was breathing down their necks.

    Failing to check basic legality before storming in there like Rambo seems ludicrous-but somehow a bit Deja-vu..

    Our well paid professional ‘intelligence’ service is a joke. NZ looks like a laughing stock-Kim’s getting undeserved cult status via our lame efforts.

    This smells of incompetence , complacency (our spin-meister seems a deeply indulgent and careless minister) and a desire to toady up to the US…all in all a toxic mix.

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  60. RF (1,260 comments) says:

    Reid..

    We do agree. It just got lost in transation. That is serious stuff that appears to have been lost in the rush by the witch smellers.

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  61. sparky (235 comments) says:

    REID, get your facts right. What an idiot you are.

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  62. Viking2 (11,125 comments) says:

    Government agencies are increasingly trying to keep information secret, the office charged with ensuring fair access to public information says.

    “When the Government stonewalls information requests or tries to carve out special exemptions for itself, it’s throwing sand in the engine of our constitution

    A growing number of complaints were about agencies not responding in time to requests. All OIA requests must be responded to within 20 working days, even if it is to get an extension, Dame Beverley said.

    “Too often it’s just delay, delay, delay and no answer.”

    http://www.stuff.co.nz/national/politics/7740266/Agencies-stonewall-on-OIA-requests

    Not directly related to Dotcom but an clear indicator of the Attitude the exists within the administrative dept of NZ.

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