Enemy of the State: The Ahmed Zaoui File - Episode 3, A Rock in the Road

What do you do when the state locks you in jail and calls you a terrorist - but refuses to say why? John Keir tells the inside story behind New Zealand's biggest security scandal in Enemy of the State: The Ahmed Zaoui File. Today: Episode 3, A Rock in the Road.

New Zealand refused to budge on the Ahmed Zaoui case because Helen Clark's Labour-led Government needed to look tough in front of its overseas allies.

That's the view of two close observers of the story – featured in the podcast Enemy of the State: The Ahmed Zaoui File – who also think trade may have played a part.

Clark had just refused to join the 2003 United States-led invasion of Iraq, a big departure from New Zealand's traditional position on overseas conflicts involving Britain or the US.

Security expert Dr Paul Buchanan notes that the arrival of Zaoui, one of the world's most dangerous Islamic terrorists according to Western intelligence agencies, was a chance to win back some lost diplomatic ground.

"When Zaoui showed up here, he presented New Zealand with the opportunity to show that they were tough on Islamists because you may recall it was George W. Bush said, 'you're either with us or against us when it comes to the fight against terrorism'.

"And so this is a way of showing that we were with them. Giving the appearance of being tough was foremost in the minds, certainly of the security officials, and for the Government of the day it was just a convenient excuse to demonstrate their willingness to participate after years of estrangement, particularly with the United States but in this particular instance with France."

Journalist Selwyn Manning (no relation to Zaoui's lawyer Deborah Manning) covered the story for years and thinks the French connection was important, particularly since the head of the SIS, Richard Woods, was a former ambassador to France and Algeria.

"At that time for example, New Zealand was embarking on a very ambitious programme of exports to Algeria. Fonterra was at the front of that.

"At the same time Algeria being a big oil producer was seen as a significant country to develop two-way trade."

A protest held in 2004 outside the Mt Eden Prison demanding the release of Ahmed Zaoui after twenty-four months imprisonment. Photo / Amos Chapple

Woods and current SIS chief Rebecca Kitteridge declined to take part in the podcast.

The Government was forced to rely on a security risk certificate issued by the SIS after the Refugee Status Appeals Authority ruled Zaoui was a genuine refugee in an almost 200-page decision which comprehensively demolished many of the terrorist claims against him.

Former chair Ema Aitkin, now a district court judge, says it remains one of the most memorable cases she ever heard.

Initially she thought she'd be agreeing with the decision of Immigration New Zealand which said that Zaoui's criminal convictions in Europe excluded him on bad character grounds.

"I had a quick read of [their] decision and… I didn't know what all the fuss was about," she remembers. "It looked as though their decision was probably correct. That's what I thought."

And she laughs now at how wrong she was.

Enemy of the State: The Ahmed Zaoui File was made with the support of NZ On Air.