They can't both be right, can they?
The verdict is that Key would be right if the exact same circumstances were applied, but Dotcom could also be right under certain circumstances.
Looking at Key first, he has consistently claimed that surveillance of Kim Dotcom was unequivocally illegal because he was a permanent resident of New Zealand - and the GCSB can't spy on Kiwis or New Zealand residents.
(There is an inconsistency in some of Key's statements because he has accepted the conclusion that the surveillance of the 88 other New Zealanders mentioned in the Kitteridge report and investigated by former Inspector General Paul Neazor was legal).
The fact is that surveillance of Dotcom by the GCSB from December 2011 to January 2012 was unlawful for two reasons, because he was a New Zealand resident and secondly because it was done without a warrant.
The GCSB was helping out the New Zealand police with interceptions of Dotcom's communications under the Mutual Assistance in Criminal Matters Act 1992 (MACM).
Under the Act, countries such as United States can ask for New Zealand's help in conducting an investigation, as it did.
The US cited five offences it believed had been committed under US law, including conspiracy to commit copyright infringement and conspiracy to launder money instruments.
The act allows for New Zealand to execute a search warrant to help a foreign power - but there is no authority under MACM for a foreign power to ask New Zealand authorities such as the GCSB or the police - to intercept communications.
That situation does not change under the new GCSB legislation, the Government Communications Security Bureau and Related Legislation Amendment Bill.
It would still be unlawful. So yes, Key is right when he says that same surveillance in order to assist a foreign power would still be unlawful, though not for the sole reason Key has given.
Even if Dotcom were officially a foreigner, the interception of Dotcom's communication while helping the police under the MACMA would have been unlawful because there was no warrant for it, and the police and GCSB need explicit authority in law to undertake such activities.
However, if Dotcom were deemed a foreigner, he could have been spied on lawfully under the current GCSB Act - with or without a warrant - under the foreign intelligence objectives and functions of the GCSB. A warrant would not have been needed if, for example, the GCSB had the capability of intercepting mobile phone calls without the need to physically install a listening device.
Now looking at what Dotcom says: he claims that spying on him would be lawful under the proposed legislation. In fact while he was giving his submission on the bill at Parliament, he claimed Key was passing the bill to make such spying legal.
The bill will allow the GCSB to lawfully spy on New Zealanders when its helping another agency that is duly warranted to carry out whatever activity it wants help with, or when the GCSB is conducting its cyber security role.
Under the proposed law, if the police have reason to believe a serious enough offence is being committed, they could get an interception warrant themselves and then ask the GCSB to spy on him with its special equipment. But in those circumstances, the suspicion must be that the offence is against New Zealand law, not United States law.
In that respect, Dotcom is correct that it could be lawful to spy on him under the propose law. There is an important issue, however, and that is whether the suspected offence meets the threshold for a warrant.
To meet the test for obtaining a surveillance device warrant under New Zealalnd's Search and Surveillance Act, the alleged offence under investigation has to be punishable by a term of imprisonment of seven years or more.
Money laundering is punishable by seven years if the money allegedly being laundered is from an offence punishable by five years or more.
Copyright offences are generally punishable by a maximum term of two years imprisonment. But some serious copyright offences carry criminal liability and heavier sentences up to five years imprisonment under section 131 of the Copyright Act 1994.
So if the police had reason to believe a suspected offence met the threshold, and it convinced a judge it merited the interception of communications, they could obtain a warrant for intercepting communications and get the GCSB to do their spying.
It would depend on the severity of the suspected offence.
It is not correct to say it would be unequivocally lawful to spy on Dotcom under the proposed law but it could be lawful to spy on him if he were suspected of breaching New Zealand law.
There are other circumstances under which it would have been lawful for the Police or SIS to spy on Kim Dotcom preceding the raid, despite him being a permanent resident.
If the police had had reason to believe he had been violating New Zealand law or the SIS had believed he had been a threat to New Zealand's security interests, they could have sought warrants to intercept his communications.
But again, that would have to have been about an alleged violation of New Zealand law, not United States law.
