Ombudsman forces release of defence spending on spy software

The Defence Force will have to reveal how much it spends on Peter Thiel's Palantir software. Photo / Getty

After a year of wrangling the New Zealand Defence Force has been forced to reveal how much it pays for software from Peter Thiel's secretive firm Palantir.

Contrarian billionaire Thiel founded the firm in 2004 and is its largest individual shareholder and chairman. He was controversially granted New Zealand citizenship in 2011 despite having only visited the country for 12 days in five years period - 1 per cent of the usual number of days required.

Palantir - named after the scrying and communication orbs used by villain Sauron in Lord of the Rings - specialises in big data analysis, with its principle clients being intelligence agencies in the Five Eyes alliance - Australia, New Zealand, the United Kingdom, Canada and the United States.

This month the firm won a billion-dollar contract to provide software to the United States Army, and the company has in recent years sought to expand its client base beyond the western military and spy community to include police forces, immigration enforcement agencies and Wall Street.

The Herald first requested information last January about Palantir's use by government agencies under the Official Information Act, and the NZDF initially declined to answer claiming even confirming contact with Palantir could prejudice national security.

"The Defence Force neither confirms nor denies the existence or non-existence of the information you have requested," it wrote.

After being made aware the adoption of Palantir had been reported in a 2012 copy of NZDF-published Army News, and that the NZDF hosted a publicly-available December 2015 briefing on its website detailing use of Palantir "analytical tools" by the elite SAS, the defence force reconsidered its position.

The NZDF confirmed contractual arrangements had been in place since 2012, covering the training of 100 staff, and licences for software, hardware and server integration, but declined to provide any further information - including how much it was paying the secretive analysis firm - on the grounds doing so could prejudice Palantir's commercial position.

The Herald referred the matter to the Ombudsman, citing public interest in knowing the extent of financial links between the armed forces and the controversial firm.

The matter was considered by Chief Ombudsman Peter Boshier, and the complaint is understood to have been protracted - spanning a year - due to objections from the Silicon Valley-based Palantir.

Objections from the NZDF and Palantir were this week dismissed, with Boshier writing this week in a letter to the Herald: "Having considered the issues raised, I have now formed the opinion that NZDF have not shown that the prejudice to Palantir's commercial position is likely, unreasonably, to occur if the information at issue were released."

Boshier went on to further dismiss objections saying that even if prejudice could be shown to occur, public interest considerations would outweigh this concern. "Therefore, the NZDF should not have relied on this provision to withhold the information at issue."

Boshier gave the NZDF until March 29 to advise on how it will release the requested information.