Key, Dotcom clash over GCSB bill

PM calls Dotcom a 'conspiracy theorist', tycoon calls bill 'morally indefensible'

Prime Minister John Key last night described former Megaupload tycoon Kim Dotcom as a "conspiracy theorist" after the internet mogul again claimed that the Prime Minister knew about him before his Coatesville mansion was raided in January 2012.

Mr Dotcom called the GCSB bill that Mr Key is promoting "morally indefensible" and said that, in reality, NZ's foreign spy agency was a subsidiary of the National Security Agency (NSA) in the United States.

Mr Dotcom told TV3 last night that he would produce evidence during his extradition hearing to the US that Mr Key had lied about not knowing of him before the raid.

That hearing could be next year.

Earlier, Mr Key told reporters that Mr Dotcom "is a well-known conspiracy theorist. He has never ever found a piece of evidence to support that."

The PM and Mr Dotcom had clashed earlier at a packed committee hearing in Parliament to discuss changes to the GCSB (Government Communications Security Bureau).

The changes to the bill were prompted by the unlawful spying on Mr Dotcom and a subsequent review.

A member of the US Embassy media team, Sean Gillespie, was at the hearing taking photographs of Mr Dotcom. He said later that he was there in a private capacity.

Mr Key and Mr Dotcom disagreed not only about whether the PM knew about the tycoon, but about whether the raid would be lawful under the proposed law and about whether the GCSB should be outsourcing its spying equipment to other agencies, such as the police and SIS.

In a prepared statement before facing questions, Mr Dotcom made indirect references to Labour leader David Shearer's bank account, United Future leader Peter Dunne's emails, Act leader John Banks' donation and Mr Key's childhood friend Ian Fletcher, whom the PM shoulder-tapped to become director of the GCSB.

Speaking about the power of information in the "spy cloud" shared by Five Eyes intelligence partners - New Zealand, Australia, United States, Britain and Canada - Mr Dotcom said: "Can you imagine the power that comes with a system like this? Theoretically you can know everything about your opponents instantly. How much money someone has in their New York bank account, who leaked secret government reports to the media, or who called one of their donors to thank them for a political donation that he later declared anonymous. This is the kind of power that makes you want to hire a trusted school friend to run the whole thing."

Near the end of the 20-minute session, Mr Shearer asked Mr Dotcom if he thought Mr Key had known about Mr Dotcom before the raids.

Mr Key said he hadn't. "You know I know," Mr Dotcom said.

"I know you don't know actually, but that's fine," Mr Key said.

"Why are you turning red, Prime Minister?" Mr Dotcom asked.

"I'm not. Why are you sweating?"

"I'm hot."