David Fisher

David Fisher is a senior reporter for the NZ Herald.

Dotcom's bailhouse rock

Photo / Herald on Sunday
Photo / Herald on Sunday

"This is going to be number one around the world," says Kim Dotcom. Music is booming through the kitchen of the home he shares with his wife Mona, their five children and associated staff and retinue.

The track is Welcome To The Good Life. The German-born internet mogul's accented tones sing: "Sleep all day, party all night / have whatever you want, whenever you like."

The lyrics are like a title track for Dotcom's life-or what it once was. The one-time playboy had transformed into a family man by the time the police arrived at his Coatesville mansion two months ago with an arrest warrant from the United States.

Now, the man accused of the world's biggest copyright violation is making his own music.

"This is what I am doing now," says Dotcom. "I'm an artist!" He high-fives, beams a smile and hustles through the playlist for another song. "Listen to the lyric," he says, over-excited. There's a joke coming. His voice thunders through the kitchen - "You don't need no copyright to dance" - as Dotcom's smile beams wider and he laughs.

When Dotcom goes to play the track, the computer throws up an error message: "iTunes could not connect to the iTunes Store." One of the restrictions of being on bail, which he will seek to overturn tomorrow, is that he may have no internet connection. It will be this way until August, when the case for his extradition to the US on charges of criminal copyright violation will be tested.

Dotcom's head rocks forward and back in time with the beat. Motorcycle- designer to the stars Alex Mardikian tip-taps on the kitchen table.

The microphone Dotcom sang into is coiled on the other side of the table. Bail conditions mean he can't leave the smaller (still palatial) home neighbouring the mansion.

His voice leaves Coatesville on a memory stick and is taken to Neil Finn's Roundhead Studios, in central Auckland, where Printz Board oversees production of the album, to be released this year.

Printz is musical director for the Black Eyed Peas and writer of Don't Funk With My Heart. He has worked with an eclectic range of artists, including Macy Grey, Katy Perry and Eric Clapton.

Early last Sunday morning, Printz and his wingmen from the ultra-cool side of Los Angeles music life explored Auckland's nightlife looking to get Dotcom's track played. This would be a musical launch party that the main man wasn't allowed to attend.

This has been Dotcom's life since being released on bail. His nascent musical career competes with the demands of an expanding family and the extraordinary legal case that is consuming the lives of some of the best lawyers money can buy.

Those lawyers are not being paid because Dotcom can't get access to his money. That's one of the three strands in the case: the first was the battle for bail and - eventually - they will be fighting the extradition order.

If Dotcom is extradited, the actual meat of the matter will be chewed over in US courts. The offending website has been gone for two months now. Data shows the 4 per cent of the internet that had used Megaupload is now using other file-sharing sites.

The case is as if John Grisham and Phillip K Dick sat down to write a book - a techno-legal cyberpunk thriller. It began in early January with the shock-and-awe legal orders and raid. A secret legal order obtained in the United States triggered a request for assistance in New Zealand. Police here had been told of the investigation in early 2011 and had set up"Taskforce Debut" to help. Crown Law staff spent the early part of a dreary holiday season studying theUScase, preparing for the legal assault. They had, on hand, agents from the Federal Bureau of Investigation to advise.

Before the raid, Crown lawyers went to a High Court judge to have confirmed a separate order to freeze Dotcom's assets. The effect would be to deprive Dotcom of his day in court and the resources with which to get the best advice he could. As it turned out, they got it wrong. The legislation dictated that Crown Law should have given Dotcom notice. Its failure to do so was an error that could yet have a significant bearing on the US case.

With freezing order, search warrant and arrest warrant in hand, the police launched their surprise dawn raid by helicopter. It was carefully timed to coincide with action in eight other countries- Australia, the Philippines, Hong Kong, Germany, Canada, the Netherlands, the UK and the US. Police planning for the raid underscored the importance of acting quickly to preserve evidence. Their concern was such that their national electronic crime expert Maarten Kleintjes was monitoring the computer networks in the mansion.

The raid was later applauded in the internal police magazine as showing "careful planning". In reality, police job sheets from the raid showed it took 10 to 15 minutes to find Dotcom, who was hiding in fear over who was assaulting his house. Armed police smashed in a cupboard and a dumbwaiter before asking his bodyguard to show them the house's panic room-even though it was clearly marked on the property's building plans.

By the time the police hustled Dotcom and his three co-accused into court that Friday, it was too late for a proper bail hearing. He was locked up for the weekend, and then for a month. One of the top lawyers in the country, Paul Davison, QC, argued Dotcom's case, eventually successfully. There was no flight risk, he said.When Mona Dotcom had the couple's twins 10 days ago, Dotcom thanked the judges. Being out of prison for the birth of his daughters (Kylee and Kiera) "means a lot to us", he said. As always, the impish sense of humour is not far away. "Guess what? I'm still here!"

While Davison has handled the criminal aspect, Simpson Grierson's senior litigation partner Willie Akel, and another partner Rob Gapes, have tackled the restraint of Dotcom's fortune. Crown Law was left embarrassed when it emerged they had acted in an "unlawful" manner to seize the funds. The courts have allowed Dotcom $60,000 a month to fund his life while Crown lawyers have gone back to square one. A new hearing is due on the freezing order this month - the "day in court" that Dotcom should have had before the January 20 raid.

Court papers have also revealed the case is reverberating at the highest levels of government. The High Court at Auckland has told the Crown it faces losing any order to restrain Dotcom's funds if it doesn't agree to accepting the possibility of technical liability if the case goes awry. Effectively, taxpayer money will be gambled on the success of the US case - and if it fails, it then creates the possibility of Dotcom trying to recover his losses from the Government. The stakes are high-the US Government's raids led to the destruction of a billion dollar business.

And then the extradition case comes into view with Davison again representing Dotcom. It is set for August and Justice David Harvey, regarded as New Zealand's most tech-savvy jurist, will preside. The argument is whether the process is mechanical (the US asks and our agreements mean we send) or evidential (they have to prove there is a case to answer).

Akel has already started to tease this out in court. The crimes the US allege Dotcom and others have committed are criminal copyright violation, money- laundering and racketeering. The critical allegation is that of copyright violation. If it does not succeed, then there are no ill-gotten gains to launder, no racket to be racketeered.

In New Zealand, the trigger for extradition is that the crime must be punishable by five years or more in prison. In court, the Crown has conceded that the NewZealand law allows only four years for copyright violation.

However, there is another tack the Crown intends to take. Being a member of an organised criminal gang earns five years in prison and meets the extradition trigger - although the Crown would need to show what they were doing is criminal. Doing so, when the punishment bar for the crime is under the five-year trigger, creates a chicken-and-egg argument. Which came first?

There is doubt over how successful the case can be in the States anyway. Specialist US copyright lawyers Tony Falzone and Jennifer Granick have argued the debate over file sharing and copyright violation is already under way - and the Megaupload case pushes boundaries that have already been set. Falzone and Granick found two cases that indicated the "safe-harbour" protection of the US Digital Millenium Copyright Act offered protection to services just like Megaupload.

The law was set up to protect online service providers from liability over material placed on their websites.

Falzone and Garnick said the cases found "general knowledge that infringing activity is occurring on a service" does not eliminate safe harbour protection. They found precedent that seeking out infringing material was not enough to eliminate protection and neither would emails such as "we're not pirates, we're just providing shipping services to pirates".

Intent was the key, with an onus on the FBI to showMegaupload was showing a "wilfulness" in violating a legal duty. Falzone and Granick said massive amounts of time and money had been invested in finding the limits of safe harbour protection. They wrote: "Until now, the risk of guessing wrong has always been civil liability, not jail time."

It is five months until the extradition case is heard. The work continues. FBI agents are still in Auckland. They are intent on leaping those legal hurdles. Our police are still assisting. The stakes are getting higher. Police Commissioner Peter Marshall is about to underwrite the risk, accepting potential liability.

Dotcom's camp operates on the understanding every move is monitored, every call is listened to. They may be paranoid - but when this all began with black helicopters, it is easy to become a conspiracy theorist.

Dotcom's musical career is starting without him. Printz, Mardikian, Sleep Deez and Mario "Tex" James head into Cassette Nine on Auckland's Vulcan Lane. Dotcom is stuck at home on bail. The club is packed with 20-somethings heaving on the dance floor to drummers from a sequence of African nations.

Almost any club in the world would find space on its playlist for anything Printz Board brought to play. Not here. The DJ takes the memory stick but the track is never played. In our hemisphere, local stars shine brightest. Again, Dotcom's desires are thwarted.

It happened with the mansion purchase. It even happened when he rented the entire Albany cinema complex to take staff out for an evening. He went to take his seat, munching on a favourite brand of potato crisp. "Only food bought on the premises is allowed inside the cinema," he was told.

It is not that Dotcom seems unwelcome. The interview on Campbell Live five weeks ago was a revelation. Talkback was abuzz with chatter for days, with listeners saying how compelling they found Dotcom. When he visited Auckland City Hospital to check on Mona and the twins, people would come up to shake his hand-his two-metre tall, 170kg figure is instantly recognisable. "Good luck mate," says one. "Stay strong," says another.

Instead, it is more the scale of the disconnect between our way of life and the life Dotcom led. There are not many people in New Zealand. For all the room we have, there is a tendency to bump elbows. We are a small village.

Printz drops in and out of the Coatesville house. Dotcom sings, raps and speaks to tracks recorded at Roundhead Studios. Dotcom isn't trained musically. He is, says Printz, fiercely intelligent and determined and "really talented".

"If he wants it, he has to have it. If it's knowledge, he has to get it." At the time of the raid, says Printz, his business colleagues had been finding Dotcom drawn away from work and towards the recording studio.

"He's considering music as being his new career. He can always do the computer stuff as well. But he has been spending the majority of his time over the past six months doing music with us."

Dotcom and Printz met in Paris just over a year ago. Dotcom told Printz he wanted him to be one of his producers for a new musical project. Printz said he would be the only producer. "I loved his vibe and he loved what I was about."

Printz mixes with musical royalty. He says he has had some people he works with express concern about having a connection to Dotcom. It is not a judgment around what Dotcom might be doing, he says. It is a concern they might get caught in the crossfire, if it all goes wrong. "I've said 'I don't care. This is my friend'."

Being trapped at home, offline, is enforcing a new understanding on Dotcom. "I think that part is good for him," says Printz. "Not being able to connect with the internet ... being able to spend more time with himself." It has enforced on Dotcom an unusual harnessing, at odds with his usual no barriers lifestyle. Printz says: "It's been all family and all music."

Not every track is a dance track. One featuring Nikola Bedingfield, was written by Dotcom for his children: "Your life is precious ... you decide who you are."

In Coatesville, on bail, Dotcom is again deciding who he is.

- Herald on Sunday

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production apcf04 at 26 Oct 2014 18:09:27 Processing Time: 453ms