This doesn’t seem to be an allegation of unlawful surveillance, but a statement that it happened. Prime Minister John Key’s office announced yesterday that “he has requested an inquiry by the Inspector-General of Intelligence and Security into the circumstances of unlawful interception of communications of certain individuals by the Government Communications Security Bureau.” The statement says quite clearly “that the GCSB had acted unlawfully while assisting the Police to locate certain individuals subject to arrest warrants issued in the case. The Bureau had acquired communications in some instances without statutory authority.”
Just as the NSA in the US is not allowed to spy on US citizens, so the GCSB is not allowed to spy on New Zealand citizens or residents. Both the US and New Zealand are part of the international Echelon surveillance system (along with the UK, Australia and Canada). This would normally allow both countries a legal workaround: the NSA could spy on New Zealand, and GCSB could spy on the the US.
This is not what happened in this instance. GCSB said that it received incorrect information from the Organized and Financial Crime Agency New Zealand (OFCANZ). “GCSB sought assurance that all the persons of interest were foreign nationals. OFCANZ gave that assurance,” and GCSB accordingly “acquired communications involving the persons subject to arrest and forwarded any of those communications relevant to location to OFCANZ.”
But the advice was incorrect, and GCSB accepted “that it has acted unlawfully.” In announcing his consequent request for an inquiry, John Key said, “I expect our intelligence agencies to operate always within the law. Their operations depend on public trust.”
This latest development does not seem to have been prompted by Dotcom’s lawyers, who appear to have learned of it only from the prime minister’s statement. Nevertheless it is another setback in the case against Dotcom who seems to be winning most of the early skirmishes. A US law professor has said the prosecution is lawless, a US judge has voiced doubts over whether it will ever get to trial, Dotcom achieved bail in New Zealand, has had the search and seizure of some of his property declared illegal, and had millions of dollars released to pay for his defense.
Meanwhile, Dotcom himself is not sitting back waiting for the outcome. Over the weekend he tweeted, “Quick update on the new Mega: Code 90% done. Servers on the way. Lawyers, Partners & Investors ready. Be patient. It's coming.” It would appear that his promise of a bigger, better, more versatile Megaupload is on course for launch before the end of the year.