New Zealand govt apologises to Dotcom over illegal spying

The New Zealand Prime Minister and Minister Responsible for the Government Communications Security Bureau (GCSB) John Key has publicly apologised to Kim Dotcom after it was revealed that GCSB illegally spied on the Megaupload founder.

The revelation was confirmed in Inspector-General of Intelligence and Security Paul Neazor's report (PDF) into the unlawful interception of communications of individuals involved in the Megaupload case.

In it, Neazor noted that GCSB did not verify the residency status of Dotcom.

"At the time in question, Kim Dotcom was not a New Zealand citizen. He was, however, classed as the holder of a residence class visa, but it was not interpreted by the police or GCSB at the time that he fell into the protected category of permanent resident."

As a permanent resident, it means that the GCSB's surveillance of Dotcom between December 16 and January 20, prior to the police raid on his home, would have been illegal.

Dotcom's residency was also overlooked due to GCSB's misunderstanding of the very legislation that governs it.

"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," Key said.

GCSB Director Ian Fletcher has formally apologised to Key for the bungle, stating that is simply "should not have happened," even although Fletcher only came into the role after the illegal activity had occurred.

"We got this wrong. Both factual errors and unacceptable errors of legal interpretation were compounded, most especially by our treating those interpretations as fact for too long," Fletcher said in a statement.

"I am very sorry for the way the bureau has handled its part in the Dotcom case. I have apologised on behalf of the bureau to the Prime Minister and the Deputy Prime Minister, and the Prime Minister's own statement has made clear his views."

Key accepted Fletcher's apology, but held no reservations at lambasting the GCSB, even though he is responsible for it. At a media conference yesterday, he said it had "failed at the lowest hurdle," and that he was "appalled" at the agency.

"It is the GCSB's responsibility to act within the law, and it is hugely disappointing that, in this case, its actions fell outside the law. I am personally very disappointed that the agency failed to fully understand the workings of its own legislation."

While accepting the apology, Key made several of his own.

"Of course, I apologise to Mr Dotcom, and I apologise to New Zealanders," he said.

Dotcom accepted Key's apology, and asked him to show his sincerity by launching a full inquiry into the entire Megaupload case.

@johnkeypm, I accept your apology. Show your sincerity by supporting a full, transparent & independent inquiry into the entire Mega case.

— Kim Dotcom (@KimDotcom) September 27, 2012

"Our rights have been subverted. We have been treated inhumanly & without due process. We have been abused & terrorized. INQUIRY!" he tweeted to Key. "Show the world that your government is not an American dancing bear & that fairness & due process matter in New Zealand."

However, despite the apology, Key will not open an inquiry into the Megaupload case.

"We know what's wrong, we know what we have to do to fix it," he said on Wednesday night, on NZ TV One's Close Up program.

Key has already ordered the GCSB to establish new approval processes for the surveillance of targets, agree with police and other law enforcement agencies as to how they confirm immigration status before an operation, and submit the changes to the Inspector-General for scrutiny before they are implemented.

Fletcher said that GCSB would be doing more in the next few weeks to overhaul its compliance framework and regain the trust of New Zealanders.

"That will involve changes tightening our processes significantly. We will consult closely with the Inspector-General on the changes we propose to make, and we will, of course, follow his recommendations. Separately, an internal audit process will continue to look at what we need to do differently," Fletcher said in a statement.