Who could forget the cops, in silly ninja commando gear, terrifying the local inhabitants while sealing off an entire town in the Ureweras? The Tuhoe people were maligned by the media and their people were traumatised by the raids.
I said at the time the whole thing was bogus and that our spies, police and politicians - including then-Prime Minister Helen Clark - got into "group think" head space and believed their own fiction.
The 18 suspects were imprisoned for nearly a month. Some were told they had no rights and that they may never get out of prison. Despite efforts by interrogators, none of the defendants owned up to anything. That was because there wasn't anything to own up to - except they were up in the Ureweras talking politics and some of them were shooting guns off.
Within days of the raids, it became clear to the Solicitor-General and senior legal minds there was no terrorism and the main charges were dropped and defendants released. Even so, they were bailed on strict conditions of no contact with each other and were denied jury trials on the remaining charges.
Few of the arrestees were able to find work and the financial cost to them over the years has been huge.
This week the game was up and the State had to come clean. Of the remaining 15 defendants, all but for four have had their charges dropped. These four have now been granted jury trials and, even if convicted, at most they will be fined.
I suspect this decision is for face-saving purposes for the police bureaucracy.
The freed suspects will all be claiming substantial compensation for their imprisonment and legal costs for those who didn't have legal aid. The final bill to the country will reach millions of dollars.
I said in a previous column that I believed the charges would be dropped once the main players such as Clark and Police Commissioner Howard Broad left office. And so it has come about. At the time of the arrests, Broad went on television confidently stating: "I stake my reputation on this". No knighthood for you in your retirement, Mr Plod.
Broad's confidence reminds me of then-US Secretary of State Colin Powell when he claimed a similar thing about weapons of mass destruction being in Iraq. And look where that got us.
We do need to be protected from terror crime. But we must always be sceptical when nonsense is dished up by our bureaucrats when exercising their power over us.