All you need to know about Kim Dotcom's judgment day

Almost nine years after Kim Dotcom was arrested, the Supreme Court will deliver at 11am tomorrow its judgment on whether he is liable for extradition to the United States.

It's a different world from January 2012 when the Special Tactics Group stormed Dotcom's Coatesville mansion in a spectacular raid, arresting Dotcom and three others on behalf of the US as part of a massive FBI copyright infringement investigation.

Since then, Dotcom has been a larger-than-life figure in New Zealand with high-profile efforts to break free of the US case while having a good time in luxury.

Senior writer David Fisher has followed the case since the outset. Here he answers key questions about the case, and New Zealand's life with Dotcom.

Kim Dotcom appearing in Auckland District Court for the decision on his extradition. Photo / Nick Reed

Kim Dotcom? Is he still here?

Most definitely. It would seem Dotcom has no interest in going anywhere, which is understandable given he potentially faces decades in jail if he gets extradited to the United States. Since he was arrested on January 20, 2012, the German citizen-turned-New Zealand resident has done everything he possibly can to resist being extradited to the United States on copyright-related claims that have been extrapolated into charges of mass fraud and organised crime under the mantle of Megaupload.

Dotcom - and wife Liz Dotcom - live in Queenstown in the stately elegance and sumptuous splendour to which he has become accustomed. There are occasional trips to Auckland where Dotcom's lawyer Ron Mansfield is based.

So what's the Supreme Court decision about?

At 11am tomorrow, the Supreme Court will deliver its judgment on whether Dotcom and three other men are liable for extradition to the United States on charges relating to the Megaupload business.

Dotcom and his co-accused would have it that Megaupload was a website that allowed users to share content. When that content was reported as copyright infringing, they say they would remove it or provided copyright holders the means to remove it.

In practice, Megaupload allowed users the opportunity to watch movies and listen to music that they would normally have to pay for. Instead, Megaupload made money by charging users to ensure they got high speed downloading/streaming services.

Alleged copyright infringement by Megaupload and its principals was the focus of an FBI investigation that was vast in its ambition, with raids across the world on January 20, 2012. Dotcom happened to be in New Zealand, along with wizard computer programmers Mathias Ortmann and Bram van der Kolk, and suave marketing manager Finn Batato.

The extradition process requires another country (the US in this case) to ask the court to confirm the targeted people (Dotcom plus three) qualify to be extradited according to the treaty between New Zealand and the US, as described in our Extradition Act 1999.

The early days of the Megaupload saga - Bram van der Kolk, Kim Dotcom, Mathias Ortmann and Finn Batato, outside the High Court at Auckland. Photo / File

To qualify for extradition, the US (with NZ Crown lawyers acting on its behalf) needed to show the alleged offence is set out as an extradition offence according to our agreement with the US, that evidence produced would justify a trial in NZ if the alleged offending had happened here, and whether any of the restrictions on surrendering the accused apply.

The courts found the extradition offence had to amount to a criminal offence in both the United States and New Zealand. There were two pathways created where the Court of Appeal found the alleged copyright infringement would breach Section 131 of our Copyright Act but also the alleged conduct matched with various offences under the Crimes Act.

That sounds, er, straight-forward - why has it taken so long?

Dotcom doesn't want to go, although a reluctance to have one's day in court doesn't generally lead to the extraordinary delays this case has suffered.

Rather, there have been two main factors to the case stretching out so long it has seen Dotcom become father to two new children (total five), end one marriage and start another, to make millions of dollars and to spend it, for three elections and three Prime Ministers go sailing by, and for the type of service Megaupload offered to become mainstream (and legal) through Netflix and Spotify and other streaming services.

The first of those factors was the extraordinary mess police, the country's electronic spy agency (Government Communications Security Bureau) and other parts of the state apparatus seemed to make of the January 20, 2012 raid. The country's elite anti-terrorism unit carried out a helicopter dawn raid on Dotcom's Coatesville mansion using a search warrant found by the current Chief Justice to be defective (tick of approval given on appeal). And the GCSB was exposed as illegally spying on Dotcom which, it turned out, was because this agency with the most intrusive powers had little understanding of the legal harness in which it operated.

The second factor was our Extradition Act. It is a mess, which was the finding of barrister Geoff McLay who as a Law Commissioner led a review of the law (ordered by National's Judith Collins while Justice Minister). McLay, who is Professor of Law at Victoria University, and others made a string of recommendations that have yet to be enacted.

"The Extradition Act works for defendants because it's so unclear and inefficient," says McLay. As a result, Dotcom and the Megaupload accused - and one other notable extradition target - have argued every point of possible confusion in the wording of the law.

What will the Supreme Court decide?

It's awfully presumptuous to get ahead of the five learned judges who have sweated out a finding over the past 12 months.

However, McLay believes it would be unlikely for the Supreme Court to not follow the reasoning and result (more or less) laid out in the District Court, High Court and Court of Appeal.

McLay summarises the attitudes and findings of those courts as reflecting a conviction that "basically he was doing something illegal" and, as a result, he and the three others are valid extradition targets.

Dotcom presumably has a different view?

Most definitely, as with the other Megaupload accused here in New Zealand. They have always maintained they are not guilty, and - among other things - that Megaupload was a neutral file-sharing and cloud storage site covered by the "safe harbour" protections that protect internet service providers from any legal repercussions related to material trafficked by users.

Dotcom has argued that Megaupload was a legal business worth $2 billion that was destroyed by the US government at the behest of Hollywood. According to his theory, Motion Picture Association of America conspired with political leaders in the US and NZ, who in turn coerced spy and law enforcement agencies to bring down Megaupload.

Part of that conspiracy has New Zealand granting Dotcom residency, despite his former convictions and absence of critical information in his residency application, just so the US could have our police carry out the arrest (with the unlawful help of the GCSB) and bundle him off to the US to stand trial.

In light of the @JoeBiden corruption scandal unfolding in the United States I have recorded a short message to the New Zealand government which raided my home and destroyed my business for @JoeBiden and his Hollywood donors. Background information: https://t.co/3X6XEAsyxK pic.twitter.com/YymZjZyVeV

— Kim Dotcom (@KimDotcom) October 28, 2020

Through the course of the case, Dotcom has highlighted those he believes are villains in the conspiracy. Former Secretary of State Hilary Clinton (whose signature was on the extradition request) was a focus for some years. Currently, Barack Obama's vice-president Joe Biden - a pro-Hollywood figure who appears key to that administration sidelining copyright reform - is his current focus.

Kim Dotcom as Darth Vader, one of the greatest villains of popular culture. Photo / Supplied

Dotcom's version of events is quite a conspiracy - is that actually what happened?

Not in any way that has stood up in court. There are events Dotcom has strung together to build a circumstantial case, which can look compelling.

Often, though, it appears to be better evidence of blundering state agencies failing to appreciate the possible downsides involved in tangling with highly intelligent multi-millionaires who have a fight-to-the-death mindset, a keen sense of self-preservation and an extraordinary ability to self-promote.

For example, in 2010, the NZSIS (as is normal practice) screened Dotcom ahead of him getting residency. He had applied under a new scheme where the wealthy were given residency in exchange for investing $10m in NZ.

The NZSIS warned Immigration NZ that the FBI was investigating Dotcom and Megaupload. Emails obtained by the NZ Herald referred to "political pressure" to grant Dotcom residency. While Dotcom takes this as proof of the conspiracy, it seemed more likely that the "pressure" was a fledgling immigration minister given charge of an immigration scheme for the wealthy that was failing to produce any wealthy immigrants and an agency that was under the cosh to come up with results.

And what of the other Megaupload accused?

The three others in New Zealand are computer coders Ortmann, van der Kolk and marketing manager Batato.

While Dotcom has taken a high-profile route, the other three have knuckled down to day-to-day jobs and built lives in Auckland.

Ortmann and van der Kolk continue to work on Mega.co.nz, the encryption-based cloud storage site they built with Dotcom in the year after the 2012 FBI raid. Dotcom hasn't been involved in the company for the past five years. Batato is working as marketing manager for a New Zealand company.

All have built lives in New Zealand, with van der Kolk and Batato raising children and Ortmann in a long-term relationship. After nine years, they have developed deep roots in their communities.

Former Megaupload employees Bram van der Kolk and Mathias Ortmann (right) arriving at the Supreme Court in 2019. Photo / File

While Dotcom was Megaupload's primary shareholder and decision-maker, the comparatively lesser roles of others hasn't proved a buffer from the FBI's interest.

That's most clearly shown with the plea deal the FBI cut with Andrus Nomm, Megaupload's software development manager. Like Batato, he wasn't a shareholder and was paid a salary from Megaupload. Nomm's deal saw him serve 366 days in prison and get landed with a $260m judgment. He's done his time and returned to Estonia.

Others sought by the US include Sven Echternach, who is in Germany, and Julius Bencko, a graphic designer, who is in Slovakia. Germany has rejected extradition attempts and no agreement appears to exist with Slovakia.

What happens next?

Kim Dotcom will be here for years, even if the Supreme Court finds he is liable for extradition. In 2017, he predicted it would take another seven years.

If the Supreme Court decides Dotcom and others are liable for extradition, the task then falls to the Minister of Justice - Kris Faafoi, as of this week - to sign the warrant that authorises the relocation of the accused from New Zealand to the United States.

The Minister doesn't go into such decisions cold. Along with the bundle of court information, officials will provide extensive material to assist the decision making.

The Dotcom family during "Star Wars weekend" at Kim and Liz Dotcom's Queenstown home. Photo / Supplied

"It loomed large," former Minister of Justice Amy Adams recalls of her entry to the portfolio. She held the warrant from October 2014 through to the 2017 election. "It was one of those things coming down the pipeline and when the music stopped, the Justice Minister of the day would have to deal with it."

It had been Adams' expectation it would happen during her time in the role, but such is the nature of the case we are three years further down the track.

"Any extradition or Royal prerogative of mercy issues are big, grunty decisions for any Justice Minister. It's not something you take lightly."

If Faafoi signs the extradition order, expect it to be subject to judicial review at the High Court. The grounds on the review will likely be that Faafoi didn't properly consider the advice put before him, and factors such as the relative punishment the Megaupload accused face in the US versus that in NZ (decades v no jail time).

Faafoi will need to be mindful of the other Kim - Korean national Kyung Yup Kim, who was arrested six months before the 2012 Megaupload raid for extradition to China, where he is wanted for murder. Amy Adams twice signed an extradition warrant only to have the courts twice find she didn't properly consider Kim's fair trial prospects.

And if the High Court judicial review doesn't produce the required result, perhaps the appeal(s) will.

If the Supreme Court rules out extradition, is it over?

Yes, but no. Dotcom would still be wanted by the US. He would struggle to find anywhere he could get to from NZ where he would be safe from the long arm of the US.

Also, while Dotcom would be free from the threat of extradition, he would likely face the threat of deportation. When he originally applied for residency, he neglected to mention a driving conviction. That in itself might not have been an issue, but he had also earlier neglected to mention sharetrading convictions which, really, was his last chance to not mention things.

The former Dotcom Mansion at Coatesville where the 2012 Megaupload raid took place. Photo / Supplied

When the NZ Herald revealed the driving conviction and its absence on his residency application, it triggered an investigation by Immigration NZ. The report of that inquiry - believed to recommend cancelling his residency - has been sitting with Immigration ministers since 2015.

Deportation would likely see Dotcom returned to Germany, which has rejected US extradition of one of the other Megaupload accused. Getting to Germany without touching down anywhere the US would seek to arrest Dotcom would still be a problem.

Presumably, arguing that deportation would result in arrest and incarceration would be a good argument for asylum. In short, life wouldn't necessarily get any easier.

Has it been worth it for New Zealand?

Tough question. At the very least, we have fulfilled our extradition obligations to the US.

Doing so has consumed at least $10m worth of taxpayer-funded legal time and costs, even without adding the judicial cost and energy consumed.

However, our current level of knowledge about how our intelligence agencies work is immensely beyond what we knew a decade ago. Also, the way in which our intelligence agencies work is superior and even - dare it be said - more legal than the way they worked prior to the discovery the GCSB was unwittingly operating outside the law.

There are other benefits too. The extradition law has been given a thorough review by the Law Commission, although the recommendations have yet to lead to new and improved legislation.

And Mega, the company built after the raids and still operated by Ortmann and van der Kolk, appears to be going from strength to strength, going by reviews. It should be a New Zealand tech success story.

The decision is coming out on the US election day - what's that about?

Everyone connected to the case spoken to by the Herald has noted the unusual timing. Is it a massive trolling of the US? Or a massive trolling of the accused?

Dotcom tweeted: "Will New Zealand sell its soul and ignore its own laws which are supposed to protect me or will New Zealand right the terrible wrong that was done? We find out on US Election Day, the date chosen by the Supreme Court to ensure minimal international news coverage of this decision."

Liz Dotcom as Princess Leia from Star Wars, during "Star Wars weekend" at the Queenstown home she shares with Kim Dotcom. Photo / Supplied

Given the seriousness of the case, and the seriousness with which judges approach all cases, it will be coincidence. The judgment will be finished when it is finished, and released shortly afterwards.

Is there more to say about the case?

Volumes. The case has taken twists and turns every step of the way. Each strand of legal argument would fill a book. The various relationships involved, the different paths that careers have taken, the lives lived in different ways - each has taken on an epic quality that seemingly stretch to infinity and beyond.

It is the story of the US and its determination to police the internet. It is also, as Fergus Milner pointed out, the story of how our mode of consuming entertainment has changed - where the world had Megaupload a decade ago, it now has Netflix and Spotify.

The case has touched many lives, and some in ways that have caused lasting and permanent damage.

Is Dotcom still rich? And is he happy?

It seems so. There's the restrained funds in Hong Kong which Dotcom won the right to use for living expenses and lawyers fees a few years back. Also, he has an extraordinary ability to make extremely large piles of money. In the two years after the 2012 raid, Dotcom is estimated to have made between $30m-$40m. His lifestyle spending sees almost as much go out again, but he's a deal maker who prides himself on keeping a yin-yang balance in income and outgoings.

Camera operator and film director Fergus Milner spent years videoing Dotcom for the entrepreneur's private archive. He recalls Dotcom once saying: "If everyone in the world that had money like I have spent it like I do, everything would be fine."

As for happy, Dotcom describes himself as happily married to wife Liz Dotcom. He has five children with former wife Mona and, judging by his Twitter feed, gets plenty of family time.

He recently posted a photograph of Liz Dotcom at their 5-bedroom, 5-bathroom, landscaped palatial Queenstown home, with the text: "No matter what happened to me in New Zealand I'm not bitter because it all led to this. I'm a very lucky husband, father of five wonderful kids and happier than ever, despite the circumstances."

Kim and Liz Dotcom at Piha, near Auckland. Photo / Supplied