Original subtitles

It's really like a Hollywood script. That's how I see it.

This whole thing is a live movie

that's playing out for, like, four and half years already,

and I'm the main act.

Ridiculous.

So what about the notion of being innocent until proven guilty?

Yeah, exactly, where did that go?

You know?

Guilty until we say he's guilty,

you know, which is now.

I mean, it's crazy.

As local people, we just knew there was a very large house.

Because the house itself was not easily seen,

it became more noticeable

when they started building the stone wall,

which pretty much surrounds it.

And there were all sorts of rumors about

who was gonna move into it,

and our favorite one was that it was Tom Cruise

who was gonna put a Scientology center there.

We thought that would be kind of exciting.

This person turned up who had changed his name to Dotcom,

and we just thought, well, that was fascinating,

but otherwise, I mean,

it's not as if we saw him walking along the street.

Then the cameras went up.

I don't know whether there were listening devices on the end,

but I always wondered

whether we were being listened to or watched.

It didn't mesh very well with the community.

And then, there was a little bit more digging into the background.

And then it was, "Oh, my God, who's just landed in Coatesville?"

So I started looking into who our new neighbor was gonna be,

and I went onto all sorts of websites.

And the more I looked into it, the more frightened I became

of what kind of person was gonna be coming into our community.

Ground unit, gates are opened.

Top story this hour.

New Zealand is at the center of one of world's biggest Internet piracy investigations.

Police conducted dawn raids on behalf of the FBI.

Kim Dotcom, the founder of massive file-sharing site

Megaupload was...

The notorious Dr. Evil of the information highway.

Some say he's a criminal master mind,

others, an online innovator,

but he has to be the most wanted man online.

I was a hacker.

Hackers were wizards.

Any kind of system,

any kind of network,

you know, a hacker right away identifies weaknesses...

...and I'm really good at that.

Kim Schmitz wasn't the only identity that he assumed.

He became Kimble,

styling himself after Richard Kimble from The Fugitive.

He claimed that he'd hacked into the Pentagon,

that he had reduced the credit ratings of world leaders down to zero.

You know, there were all these stories,

and some people didn't believe them.

They did seem sort of very fantastic in some ways.

They seemed sort of, you know, the sort of Hollywood version

of what a hacker must be.

My impression was that, you know, it was someone

who seemed to be bragging quite a bit

for someone who's clearly breaking the law in certain cases.

All the other things that he did were about reputation

and learning how stuff worked.

The thing that he was convicted for,

that was a very obvious criminal enterprise.

It was a scam using phone cards

that would then generate cash that would be Dotcom's.

And he got caught.

The judge rightfully ruled that, you know,

I should get a two-year probation sentence,

and he also said that there was an important factor

which was my youthful foolishness.

Not understanding enough at my young age

you know, that I shouldn't have done this.

But it actually launched my career.

That arrest actually helped him boost his reputation.

He set up this whole business

around the idea of protecting companies

from hackers like him,

and when you're dealing with businesses that really don't have

any sort of computer security expertise internally,

that's a really good business to be in

because you can say anything.

He used his hacker mythos to build his credibility

as this security guy.

I do know that his reputation that he built up

by the things he said he did

allowed him to get investment from people

and to build up his company.

All my life, I've been an innovator,

and all my life, I've been a little bit ahead

of what everyone else was doing.

In the data security space,

we were one of the first companies

to create firewalls that alert you of a hacker attack.

MegaCar.com.

When no one was thinking

about computers and cars,

I created the MegaCar,

real time video conferencing from a car,

that was driving on the highway at 200 miles an hour.

You know, all these things I thought about early on,

you know, and again patented it and sold it.

Kim Schmitz.

He did everything he could to exude this new image of himself

as this hyper successful hacker

to really turn everything about his personal life

into a promotion for his professional life.

He has this weird appearance of the big guy

with this black suit,

and then, he is just nice,

nice like a nice bear to cuddle with.

He wrote me an email and asked me,

"Well, I see you like motor-sports.

Why don't you come? We're having a weekend in Monaco,

Formula One race weekend. Why don't you come?

I invite you and your girlfriend,

and let's have a party, and I can meet you."

He likes the music we do with the band,

and me as a character,

and I said, "That's interesting," and he got me there.

He uses all these status symbols,

cars, girls and being together with celebrities like myself,

but he is not. He himself doesn't really act like that.

Everybody is having champagne.

"Hey, have champagne," and all the girls,

but there is no girl on his lap,

and he doesn't drink alcohol.

And he probably feels that it makes himself likable

when he's in this picture 'cause people like girls and champagne and stars.

I was a complicated child.

My mum and I went through hard times

with my father, who was an alcoholic.

This guy broke my mother's bones

and hit me many times and was just evil

when he was drinking.

He's the reason why I've never drank any alcohol

'cause I saw firsthand what that stuff can do to you.

After the divorce, my mum, even though times were tough,

she tried to find ways to get me my first computer.

Once I had my computer,

for me, school was a waste of time.

I wanna learn about computers.

I wanna learn about the future.

LetsBuyIt.com is an online marketplace,

very early version of Amazon, if you will.

Dotcom had talked of his plans

to invest a large amount of money into LetsBuyIt.

When he said he was going to do that,

the share price took off.

It was ramped massively,

and then he sold his shares.

I was in Thailand because I was on a holiday...

...and it didn't take long for some people

that didn't like my attitude, my lifestyle,

to make allegations that there's something fishy here,

and then the government started an investigation around insider trading.

And they arrested me,

and they took me to a Thai prison,

the worst living conditions that I have ever experienced in my life.

And the embassy people arrive,

and they say, "Look, if you want to leave,

we can give you a travel document.

You can fly back to Germany."

And of course I agreed.

The way that German authorities recast it,

they had to go to Thailand to drag him back.

Dotcom would have it that he came back willingly

to face the charges.

In the end, I agreed to a plea bargain.

I simply didn't want to deal with it anymore.

I wanted to leave Germany behind

and start a new life somewhere else.

If there is any place in the world

that is left as sort of the edge of business,

of finance, of legality...

It's a wild west sort of town.

Hong Kong is all about capitalism.

Companies start there daily and disappear the next day.

It was both at the center of the world

and on its edge.

He felt it was really easy to restart

what he was trying to do in Germany, there, without much oversight.

Welcome to the Kimpire.

Using a PC to download music

is one of the hottest of today's computer trends,

and that has the recording companies up in arms

and heading to court.

Members of the entertainment industry

are fighting new websites like Napster

which allow you to download music

off of the Internet free of charge.

It's a surprisingly simple idea

known as file-sharing.

Napster is providing a service that give people

the opportunity to steal our music.

It started with the music industry.

They were no longer in charge

of how they distributed their wares

because we had Napster.

If it was digitized,

then you could copy it and send it across the globe.

Any one person could do that.

When I wanted something special, a certain song,

I couldn't find it. I couldn't buy it in a record store,

and I couldn't order it.

I just went online and got it from Napster

or from some other dark corner in the Internet.

It was a little en vogue.

It was a little radical.

Everybody did this in this transition times

when the legal market,

legal online market, started to establish.

In that time, everybody did this.

Every aspect of music has changed,

how it's consumed, how it's disseminated,

how it's marketed.

It's this shifting climate,

and the old guard's trying to hold on

and penalize anyone who impedes their revenue streams.

So they had these crazy lawsuits

against suburban housewives

who had downloaded illegally 20 songs,

you know, trying to like sue them for millions of dollars.

Well, I don't think this is about record companies.

I think this is about whether or not people

who create music, and invest in music,

have a right to get paid.

The record companies never gave a damn

about the artist anyway.

95% of them have problems retrieving their money

from the major corporations anyway.

Four major corporations, four of them,

and Hilary is fighting to protect them.

Ms. Rosen, isn't this strictly about your profits and your money?

Well, it's about everybody's profits and money.

Originally the film industry was quite naive

in believing that they were immune

because they thought, you know,

we've got two gigabyte, three gigabyte files,

and if you're sharing those, you know, on dial-up modems,

it would take days to download.

But, of course, in the current state,

it's trivial to download that kind of content.

And so that industry is threatened as well,

and the business model of that industry

is very different from music.

You know, when you get access to music,

you want a song that if you like it,

you're gonna listen to it a thousand times.

If you watch a movie,

it's not likely you're gonna watch it two or three times.

So they had a stronger reason to be anxious

that people not get access to their movie

and to bleed the potential revenue.

You can copy on a digital format 10,000 copies,

and the ten thousandth copy is as pure and pristine

as the original.

If you allow that, you don't have copyright

to protect you on the Internet,

we're dead.

They had no understanding.

The music industry had been decimated.

The film industry had the same problem.

They didn't understand what was coming

until things had already gotten out of hand.

As you can see, 250,

this is the Gumball speed, ladies and gentlemen.

Gumball Rally is where the richest car nuts in the world

get together to cover thousands of miles across Europe.

Dotcom treated it like it was a race

because he likes to win everything.

This is the winner.

This is the winner.

I've been a hacker in my early years,

and then I started...

You know, always when I was there,

there were videos made about it,

and I wanted to share them with my friends.

And I could not because the files were too big

to send via email.

And I was like, well, let's create a site

where you can upload a file,

and then instead of emailing the file,

you just email the link.

And no matter how large the file is,

people can download it, and problem solved.

That's how it started.

At the time Megaupload really took off,

we were a relatively small team of developers.

There are not many people that I know

that I can call a genius, but Mathias is.

He was the brains behind the code.

He is really a genius.

Bram was kind of a fan of Kim

because of his Gumball racing,

and I think that way they met

because he said, "You know, I can-- I'm a coder too.

Can I do something for you?"

I was not part of the founding members.

I met him at a club in Munich.

Kim got in touch with me because Megaupload grew,

and there was a need for marketing and advertising.

So because we knew each other, and he trusted me.

There was this boom in remote storage locker services

that people were using for both infringing

and non-infringing purposes

to store information in what we now call the cloud.

I guess you could really say

that Megaupload was among the innovators

of consumer cloud services.

Certainly the interface design was dead simple.

As we talk about Megaupload,

we're gonna be talking a lot about music and films,

but it's not just that.

Academic research, data sets...

This is the promise of the Internet, right?

That across the globe we can share access to all of this stuff,

and build upon it and share it,

and that's really, really amazing.

And that's the underlying technology

of cloud computing that Megaupload used

that's really so exciting.

There was a high demand.

We had crazy rates of growth.

Say you have a million visitors on your website,

and every user that came to our website

is potentially advertising income.

It doubled in size almost every month,

and we needed to get new servers,

more bandwidth, new servers, more bandwidth.

I was surprised.

I was so surprised that something simple

would grow into such proportions,

but I also immediately understood its potential.

Now, whether Dotcom ever envisioned what it was gonna turn into,

I don't know, but users did.

Once users could see

the latest Hollywood movies on Megaupload,

the use of the site exploded.

They would Google a movie they wanted to see

or a song they wanted to hear.

It would be one of the top hits.

They'd click on the link,

and, oh yeah, I guess I'm at Megaupload,

and by the way, if you want it to go faster, pay here.

Then they would pay there,

and get a premium account and have it go faster.

So it actually, it was very well designed

to attract people who weren't even thinking

one way or the other about legal, illegal.

They just wanted to see the movie

and were happy to pay somebody for the privilege,

and a company like Kim Dotcom's was cashing the checks.

A girlfriend, I saw her watching Mad Men on her computer,

and I'm like, "Where did you get that?"

And she's all like, "Megaupload," and I'm like, "What is that?"

And she told me that Megaupload was the in place

at the University of Kansas,

where she had just graduated earlier,

to find free movies.

How did you hear about it?

She said her 63-year-old professor

at the University of Kansas turned her on to Megaupload.

And then I was like, this is big.

They're essentially streaming to you,

and it was easy.

If they make this this simple to do,

this means it could go mainstream.

I was traveling a lot in Asia,

and I was in the Philippines at a disco,

and I saw Mona dancing on the dance floor.

And she immediately caught my eye

because she is so incredibly beautiful.

I was a bit shy, so I sent my PA to go to Mona

and ask her if she wants to join us.

He was just this guy sitting alone in the corner.

So it's like, why is no one talking to him?

I thought we really connected.

We both grew up in a tough life,

but, yeah, we were just friends.

I just knew that I wanted to be with her.

Look at me.

I'm not a supermodel, right?

And now we are going to the Tower de Eiffel.

So I have to spend extra time and extra work

to get someone to fall for me,

but she ultimately did,

and we were really happy together.

We went on a holiday to New Zealand,

and we just fell in love with the place.

Run for your lives.

Bye bye.

What's happening?

OK, we are up here on the hill at Coatesville.

This is our house.

We found that house in Coatesville

and we just made that our second home.

Yeah.

Megaupload was huge,

and there were tens of millions of dollars coming in.

At that time, he was largely unknown in New Zealand.

He was a reclusive, wealthy foreigner who was living

in the grandest house in the land.

Now for the biggest fireworks display

ever seen in New Zealand,

a gift from Mr. Kim Dotcom

as he hovers up here over our beautiful harbor.

Happy New Year, Auckland.

Happy New Year.

Dotcom had a very slow entry

into New Zealand life,

but then, he spent about a half million dollars

on that fireworks display.

That was a celebration of getting his residency.

These thieves are now migrating offshore,

locating themselves in places

that're beyond the jurisdiction of U.S. courts.

And so we need to come up with a mechanism

to protect our jobs

and protect the intellectual property

by going after those sites

or those search engines

that allow these illegal criminal foreign sites to exist.

Dotcom had a plan to list Megaupload.

He wanted to float the company,

and he reckoned it was worth about two billion dollars.

This is next level stuff.

We wanted to launch several new sites.

One of them was Megamovies,

which was a Netflix competitor,

and the aim was to license content

from the big studios.

We have Megabox.

It would give the artist 90% of the earnings.

It would give them an online platform

where they can sell directly to their fan base.

Because we were thinking about how can we reinvent this whole copyright model?

How can we make it work

for the artists and creators directly?

Kim was definitely talking about new business models

that he was working on and new services that he was working on.

And you got this idea that

like many other platforms that started out

as being very focused on kind of infringing uses,

a legitimate and authorized business model

might actually come out of it.

This technology is live and in place now, correct?

Yes, that's correct.

I will happily do a deal with you guys,

not an issue.

Amazing, great, I'm happy to hear that.

We have gotten a lot of fire from everyone,

you know, in the content industry for,

you know, Megaupload.

There are certain people I can have conversations with

where you'll be moved onto a different list

-as opposed to a bad list.

If it would be from evil to neutral,

and then later from neutral to good,

I think that would be fair.

- That, we can do that. - OK, good.

One of the things that I thought was,

maybe this was the sign that Megaupload was making

that sort of shift to a legitimate platform.

The movie industry did not react that way.

I think they sort of freaked out.

They don't go past this whole, "There's infringement.

It's bad. End it."

Megaupload was effectively a copy cat

of some pirate services that already existed at the time,

so there was no creative innovation in what they did.

They just did it better in the sense

that they bested their pirate competitors

in terms of growing.

So the entire business model was based

on distributing content that Megaupload didn't own.

This guy is becoming a multi, multi millionaire,

and dual use, this is not people sharing their vacation photos

and then others paying a premium

to download them a little faster.

This is just movie after movie after movie.

Kim Dotcom made a lot of money for himself.

Did he make a lot of money to fund all of the art

that he was distributing for free?

No way.

Also remember that like creators have rights.

I mean, in the Universal Declaration of Human Rights,

which was signed by the UN, not the MPAA,

you know, you have the right

to moral and material interests of your work.

That's a big deal.

You wanna give it away for free? Give it away for free.

You wanna stream it? Stream it.

You wanna put it on LaserDisc,

beam it into space, show it on airplanes?

That's your choice.

But Kim was violating the rights of a lot of people.

When someone like Kim Dotcom put up a site,

and he collects millions of dollars

of advertising income off that site

to pay for his yachts, his mansions,

and his private jets,

that's, to me, parasitical.

He is a parasite,

and he is sucking the blood out of the artist's corporate body.

Just one more time, are you ready?

So he's a criminal, and it's just that simple.

You know, he deserved, he should be in jail.

That wasn't right. Let's do it again.

And then the other one.

I was working on a music site called Megabox.

Megabox was actually a real threat

to the music labels because it empowered the artists,

and cut out the middlemen,

these monopolist labels that are just stealing money from them,

and the artists loved that.

Hey, we have our hit, man.

And they were all excited.

They wanted to be a part of that,

and that's why they decided to promote Megaupload

in the way they have done.

I use Megauploads, man.

I like to use Megaupload.

I like Megaupload.

I like Megaupload.

I love Megaupload.

A whole bunch of A-listers, well-known faces

singing a Megaupload jingle,

...suggest that I might be.

I mean, that was really sticking his fingers

up the noses of the record companies and Hollywood.

But it was surprising because I'm sure

that many of the labels that represent these celebrities

were incredibly unhappy to see

that promo because their message was one

that does not align very easily

with the copyright industry's message,

that any kind of copyright infringement hurts them, not helps them.

Like, what is this?

Here are the artists backing Kim Dotcom

and Megaupload at a crucial time.

Listen, Kim Dotcom is a PR genius.

He knows what really makes impact.

He knows what people wanna see.

He knows what's gonna affect them.

The guy's a genius when it comes to that,

and Hollywood had no idea that he'd be able to do this kinda thing.

That came out of nowhere.

Hey, I'm Alicia Keys, and I use Megaupload.

Hi, I'm Naomi Campbell.

What up, doe? Megaupload.

I am Demi Moore.

Hey, what's up? It's Kim Kardashian,

and I love Megaupload.

These people are whores.

They're-- they're, you know,

wave a little check in front of them.

They'll show up anywhere,

and that's what's so sad, you know.

I mean, the music business didn't use to be that way,

but now whether it's brands or Kim Dotcom,

people are so anxious to get some cash

that they'll do anything.

He seemed to them

he was rubbing their nose,

that he was living in this huge mansion

with all these cars, living this high life,

and to them, he was doing that with their money.

It was like, he had to go.

So he kinda, in a way, he invited some of this.

He has long been viewed

as an adversary of the film and entertainment industry in Hollywood,

and that industry wield

enormous political power inside the United States,

and therefore it wields great influence

within the halls of power of Washington.

Top lobbyist for Hollywood told FOX

his industry is threatening to cut off money to the President.

Don't make the false assumption this year

that because we did it in the years past

we're gonna do it this year.

This industry is watching very carefully

who's going to stand up for them

when their job is at stake.

Chris Dodd, the head of the Motion Picture Association of America,

the most powerful lobbying group for Hollywood in America,

was very explicit about the fact

that if you're not gonna give us what we want,

we're not gonna give you what you want when it comes around time

for you to raise money to fund your campaigns.

Now that was more explicit than he should have been

'cause it just sounded so grotesque,

but what he was saying was understood by everybody to be true.

I've heard a lot of suspicion

about whether Hollywood really did put pressure

on the President to take down a site

that they believed was pirating music and films.

And I would say, "Yeah, absolutely."

That's what we do. He shouldn't be surprised by that.

That's what happens.

You get in between America and its money,

and you're gonna have big problems.

They've been arrested on warrants relating

to breach of copyright offenses in the United States,

money laundering and racketeering.

Within New Zealand,

we have seized an excess of six million dollars worth

of top-end motor vehicles and over $10 million in cash

from several New Zealand finance companies.

More details of Kim Dotcom's actions during the raid have emerged.

Police say when they arrived in two helicopters,

Dotcom retreated into an electronically locked panic room.

They found him clutching a sawed-off shotgun,

and they had to cut him out of the room.

The firearm that was found, sir, was illegal.

Here's a photo of it,

and it was loaded.

The FBI claims that Kim Dotcom made $175 million

in criminal proceedings

and that Megaupload cost half a billion dollars in harm to copyright owners.

He was put into the criminal category

because he was a criminal,

and he is a criminal,

and he was a pretty significant criminal.

Just because he is not violent

doesn't mean his conduct isn't criminal.

People go to jail for securities fraud every day

without ever having taken a bat to the side of someone's head.

So the harm that Kim Dotcom causes

really does affect real people.

It affects those 1.9 million people that go to work every day

trying to earn a living in the film and television industry.

It affects the small businesses

that are trying to start up new legitimate online platforms

and that are playing by the rules.

So the conduct that Kim Dotcom engaged in

was criminal, and it had real victims.

- Hi, Kim. -Hello.

Well, I'm relieved to go home to see my family,

my three little kids and my pregnant wife,

and I hope you understand

that that's all I want to say right now.

How have you been treated?

I just want to go home, and see my family.

Gentlemen, just... Excuse me.

What about the extradition hearing?

You will obviously be fighting that one?

Yes, I will be fighting that.

And in New Zealand, Megaupload tycoon Kim Dotcom

was released on bail today after 31 days in prison.

A hearing will be held shortly

to determine whether the Megaupload co-accused

will be sent to Washington to stand trial.

If found guilty, the men could face

up to 80 years in prison.

Hi!

Yeah, but they didn't say no.

We were living in this happy bubble, ya know?

Everything was perfect...

until the raid.

Yay...

it's happening.

Oh, I'm scared.

Oh, what's that?

Oops.

- Hello.

Number one is out, baby...

- Number two. - ...and number two.

-Babies are super pretty. -Super healthy?

Super good, baby, don't worry, all good.

Today I'm a daddy again.

Two more kids, two tiny girls,

two beautiful little pirates.

That was really good that I was able

to be outside to watch the twins get born.

You know, that gave me a lot of energy.

It reminded me that I really need to fight for them.

I knew we were innocent.

I knew these allegations were wrong.

I actually read the indictment on the day we got arrested,

and I had to laugh.

I said to my co-defense,

this will be over really quick.

This is such a nonsense.

It will be so easy to discredit

and show that they got it all wrong, you know?

While I was remanded,

I got all these press clippings,

and they were saying that I was found

with a sawn-off shotgun,

you know, that they had to use this kind of force

because I had weapons in the house

and, you know, the whole description of the case,

and who I am was just completely unrealistic and not true.

-Speak with... -Mm-hmm.

So I decided that I want to set the record straight.

Of course, everybody knows

that the Internet is being used

for legitimate and illegitimate uses,

and I think every online service provider

has the same challenges that we had.

YouTube, Google, everybody is in the same boat,

and our legal advisers have always told us that we are secure

and that we are protected by the DMCA

which is a law in the U.S.

that is protecting online service providers

of liability for the actions of their users.

Kim's legal team would argue that they're no different

than any other cloud storage service.

They are not responsible for what the users do.

They have no liability.

End of story as far as they're concerned.

What the government alleges, what the entertainment industry alleges

is that, well, no, the website was set up to give incentives

for people to upload valuable material,

meaning, you know, newly released films,

newly released music, things like that.

That's also very important to mention.

I shouldn't ever have been in a situation

to defend myself against extradition

because there is simply no basis in law

in New Zealand to extradite me.

They have to prove to a New Zealand court

that the treaty between the United States

and New Zealand, extradition treaty, covers copyright.

And from what I've seen,

there's nothing in there about copyright.

They're concocted,

and they're piling them on to figure out a way

to make out a case where none should exist.

But like a house, you know, like dominoes,

if there is no criminal copyright infringement,

all the others will fall.

The whole Dotcom Megaupload process

turned out to be

far more than New Zealand ever bargained for.

Anything that we could get wrong, we got wrong.

The New Zealand authorities managed to pretty much screw up every step

of the process along the way.

The search warrant that was used to execute the raid,

it has to be directed towards

whatever the alleged criminal enterprise is.

This document didn't do that.

It was an incredibly vague document.

The authorities in New Zealand cloned Dotcom's laptops,

which had been seized during the raid.

The court had effectively said

this evidence remains in New Zealand.

The FBI took the clones

and sent them back to the United States.

It's extraordinary.

Dotcom's rights, the process of law had been thwarted,

and there needed to be some sort of redress for that.

The Internet millionaire has been back in court

for a three-day hearing.

Police were quizzed about what level of threat he posed

and whether the elite special tactics group

was needed to execute the search warrants in January.

The police are not every day

going into domestic houses

armed to the teeth with automatic weapons,

bashing down doors,

quartering the household in a paramilitary fashion,

shouting orders at one another.

That's not ordinary police practice in New Zealand, is it?

Or have I missed something?

I think you've missed something.

If the risk assessment is that there are firearms in the property,

the police will not execute that search warrant

without armed police.

When one reads the indictment of Megaupload,

I notice that there were references

to child pornography and terrorism.

They do not have any relevance

to a claim of copyright infringement,

but that is part of the effort

to paint the defendants as extremely dangerous

and ugly and nasty persons.

And that, Your Honors, one that I referred to.

They had a message.

The guy is dangerous.

He has weapons,

and so everybody thought this Kim Dotcom guy

is not just into piracy.

They gave the impression that he was much more dangerous

and there were other things that he might be into,

and of course, that turned out to be a lie.

One was taken at a resort

called Cape Kidnappers in Napier,

and I was there with my family for holiday,

and we had an afternoon where we had clay shooting,

and the other event was a similar occasion

in Ireland over 10 years ago.

I was almost seven months pregnant.

I was having contractions, but that was not my focus.

I just thought to myself,

"Oh, my God, the kids,"

'cause I could see the guys with their weapons,

with their guns.

How silly is that?

So I was just like, "Can you please let me go to my kids?"

They're like, "No, you just have to stand there.

You have to stand there."

I'm like, "I need to go to my kids.

I need to see my kids.

Those are my kids in there."

It's 'cause I was just worried that, you know,

they're gonna come in their room with their guns.

So you were relying upon

the intelligence information

which the FBI were providing to you?

-Is that right? -Yes.

The FBI and the Department of Justice

were involved from the very outset,

and that's perhaps not surprising.

What's surprising is how keen

the New Zealand authorities were

just to adopt what we assume to be

the recommendations from the FBI.

When they went in fast and hard,

it was because the police were under the impression

that there was this Doomsday device

that was in the mansion somewhere that would,

if activated, destroy evidence

of wrongdoing anywhere in the world.

What destruction devices?

Well, the laptop and the iPhone

or the PDA, whatever it was that was found.

They were not destruction devices, were they?

What do you expect? A box with a red button on it?

The mission was to arrest me

as quickly as possible

so that I could not use any Doomsday device.

In actuality, it took them 15 minutes

to find me in my own house.

There's never been any such device, and it was never found.

It was all bullshit.

I think that the rationale is clear.

It was meant to send a message around the world.

Don't mess with the United States on copyright issues.

The only other raid that I can think of

that sounds similar was the raid on Osama Bin Laden,

and these are vastly different levels of importance.

You know, it sort of looked like

you were taking down a South American dictator.

I thought it was bizarre,

and I thought it was also quite symptomatic

of how we've gotten into such an extreme position

around some of these issues.

Things that I might not even agree with

that Megaupload was doing,

I think warrant proper address in court and so forth.

It doesn't mean you need to send helicopters

and masses of teams with machine guns and so on.

That's it.

You just made history, man.

It's fucking huge, man!

Later.

OK, bye.

Oh man, this is good shit.

They fucked up!

They fucked up.

They fucked up.

They fucked up.

They fucked up. They fucked up.

First tonight, a ruling in the past hour

on the Kim Dotcom case

as he fights FBI attempts to extradite him to the United States.

A high court judge says search warrants

for the Internet entrepreneur's Auckland mansion were illegal.

Justice Helen Winkleman has decided

the warrants used were invalid.

New Zealand police seized bank accounts

on behalf of the FBI

and took away property worth millions.

Now they may have to give it all back.

It's a damning judgment, illegal,

unlawful, invalid.

Justice Winkleman doesn't hold back.

Embarrassed about this? I am, a wee bit.

Ah, absolutely.

That we appear to almost be puppets of the FBI.

There was a feeling that the machinery of state

had been exercised against Dotcom

in a way that was unjust or unfair.

Suddenly, New Zealanders saw

that there was two sides to the story...

I love you, Com!

...and maybe this was the U.S. state bullying someone

that was a spanner in the works of Hollywood productions.

Suddenly, people wanted to fight against injustice.

Suddenly, he became a cause celeb.

The war for the Internet has begun.

Hollywood is in control of politics.

There is huge contradictions in Kim Dotcom.

Even in the face of these huge legal battles he faces,

he seems to have a huge sense of humor

and likes to taunt the U.S. government.

What about free speech,

Say hello to my little friend.

I think that playful attitude is one reason

that a lot of people who might otherwise be

really skeptical of what he's done,

knowing that, you know, the primary driving force

behind many of these companies is to make money,

nevertheless, kind of, can appreciate him.

It's quite interesting that a lobby group

around entertainment content

can get the White House to move against

an Internet nerd with military force.

I mean, think about that for a moment.

Isn't that-- It's funny.

And none of it will change anything.

None of what they have done has changed anything

to alter the way the Internet works

or the levels of piracy.

When Megaupload shut down,

in the 18 weeks following that shutdown,

sales through legitimate outlets went up six to 10%,

and that's just one site.

It was one of the major sites at the time,

but that's just one site,

and you saw an uptake of use of legitimate sites

by an amount of six to 10%.

So that's a really significant amount

of impact on the legitimate market.

You can't really trust the industry numbers

on that problem,

and you certainly can't trust

the industry's analysis and understanding

of the operation of the Internet.

One of the strongest drivers for piracy

is when people are hearing all this buzz

about something that really is fantastic,

but they can't get it legally in their country,

and then they turn illegally to download it.

Well, we may disapprove of that behavior,

but we can't stop that behavior,

and there's actually a very simple solution

that doesn't involve sending out S.W.A.T. teams.

It involves, "Hey, change your business policy."

Everything that you are selling in one country,

sell it in every country,

and if you don't, don't be surprised if people are pirating it.

I'm an avid gamer.

I play Modern Warfare on Xbox,

and I noticed that my speed, my Internet speed,

went down by about 20, 30 milliseconds.

And a normal Internet user

would never ever identify that,

but me being a competitive gamer, I noticed it,

and only after the raid did I figure out what happened.

They rerouted all my traffic

in a way that they could capture all my data

that went through my connection.

During the high court hearings,

Grant Wormed was being cross examined,

and he was being asked about his notebook,

and he looked extremely awkward.

On the 14th of December, 2011,

was there a further meeting

that you attended to plan this operation

where there was a range of people there?

Someone from the Justice Department, was it?

Yes.

And was there another group of people

represented as well at the meeting?

Yes, there was.

What field of activity were they involved with?

They worked for the government.

Right.

Are you not able to tell us who they were?

I'd rather not.

Reason?

Just because of the nature of the organization.

It was clear that something

had gone horribly, horribly awry.

The intelligence agencies had somehow become involved

in the Megaupload case.

The GCSB, the Government Communication Security Bureau,

New Zealand's equivalent to the National Security Agency,

was spying on Dotcom.

It's also a part of the what's called

the Five Eyes arrangement.

The five eyes between them spy on the world.

The power that they have is immense.

Once Kim Dotcom was in New Zealand,

the U.S. began exploiting the relationship that they had

with the GCSB and the New Zealand Government

to ensure that getting Kim Dotcom

became one of their principal priorities

to the point where they engaged

in illegal surveillance to do so.

The GCSB is controlled by quite specific legislation

that says you're not allowed to spy

on New Zealand residents or citizens.

There's something I'd really like to point out that is important for me.

When they tapped into my iPhone.

Because if that happens to you,

it alters the way you think completely.

You realize that it wasn't just my emails that they read.

They were there when I was private with my wife.

They were right there.

They have no business doing that, to anybody, at all.

I find that more than a little bit disturbing.

Is that a way the government is supposed to act

with communications monitoring?

Are you supposed to be turning the antennas

that are meant to protect your country from outside threats

back on yourself for the prosecution

of what I'm not even sure in New Zealand

is necessarily a criminal act?

Tonight, the Kim Dotcom affair

is leaving John Key's government increasingly red-faced.

The boss of the Intelligence Bureau, Prime Minister John Key,

has ordered a probe into illegal bugging of the Internet millionaire.

Of course, I apologize to Mr. Dotcom.

I apologize to New Zealanders

because every New Zealander that sits within

the category of holding a permanent residency

or a New Zealand citizen is entitled to be protected from the law.

This is really a matter of mistake and human error,

not one of a great conspiracy.

Shutting down the Internet.

Truth...

integrity...

knowledge...

independence.

This is a crime scene, an illegal gathering.

-You are all being detained.

Nobody move.

The four Megaupload accused did a remarkable thing

in the year after they were arrested.

They built a business called Mega.

It is the launch of Mega.

-You are all upgraded.

Dotcom says that he was motivated

by a desire to create an encrypted cloud storage site

so that nobody could be spied on

in the way that he had been spied on.

The U.S. government is investing billions

into massive spy-clouds

to capture all your data and communication.

By using Mega, you say no to governments

that want to spy on you.

Lord knows what's on there.

It could be copyrighted files.

It could be ISIS planning documents. It could be child porn.

It could be whatever it might be.

They've built it so that nobody can see inside.

That, by the way, is also what's going to beat the surveillance state.

I will be one person that will be remembered

as somebody who has fought mass surveillance

with technology that gives you your freedom back.

The innermost workings of our top spy agency

have been exposed in a damning report.

Police have found the GCSB breaks a law

by spying on Kim Dotcom and 85 other New Zealanders.

Prime Minister Key's solution to the debacle

is to change the law, giving more power

to our top intelligence agency.

If passed, the law will permit the GCSB

to now spy on all New Zealand citizens.

Kill the bill.

Kill the bill...

Thank you all for coming today.

The U.S. government is the most power-hungry government out there,

and GCSB is one of the puppets

on the strings of the U.S. government,

and the biggest puppet of them all is John Key,

your Prime Minister...

...and I will never settle my case.

I will fight until we know the truth,

until we know every single detail.

There were fireworks today at Parliament

as the Prime Minister John Key went head to head with Kim Dotcom.

The Internet tycoon was making a public submission

on the proposed changes to the country's spy laws.

You feel that the-- or do you know or believe

that the Prime Minister was aware

of what you were doing before the raid took place?

He knew about me before the raid.

I know about that.

I didn't, no.

You know I know.

I know you don't know.

I know you don't know, actually, but that's fine.

Why are you turning red, Prime Minister?

I'm not. Why are you sweating?

- It's hot. -Oh, OK.

-I have a scarf.

The question was if the Prime Minister knew about me before the raid,

and answer to that is yes.

They gave me residency in New Zealand

for the purpose of extradition.

Warner Brothers was already in talks

with the New Zealand government

to shoot the Hobbit films here,

and we're talking about you know, triple digit million dollar budgets,

lots of opportunity for New Zealand.

So the Prime Minister has seen this as a double strike opportunity.

Number one, we can make these Hollywood studios happy

so they will shoot more movies here,

and on top of that,

we can please the White House,

because on the highest levels, they wanted me shut down.

Certainly, there's a lot of evidence

that suggests that that conspiracy theory is true.

He was allowed to stay in the country

despite having a criminal past

which would normally preclude him from getting residency.

This occurred at the same time

that the New Zealand Prime Minister John Key

was meeting with Hollywood officials.

Can I go through the list of people we believe

-knew about Kim Dotcom? -Yeah, sure.

-Simon Power and some officials. -Yep.

Jonathan Coleman and some officials,

the Solicitor General's office,

Crown Law, New Zealand Police, the Attorney General,

the Organized and Financial Crime Agency of New Zealand,

Nigel Bickle and an unknown number of people under him

at Immigration New Zealand, your electorate office,

Hillary Clinton, the U.S. Department of Justice,

the FBI, the U.S. Attorney General's office,

senior members of the U.S. police force, but not you.

Correct. I mean, look, I hate to tell you the bad news.

There's no great conspiracy.

The facts of life are that Dotcom

is someone the United States thinks had broken the law.

He's somebody that they're trying

to extradite to the United States.

That's where it starts and finishes.

Kim Dotcom has failed in a last ditch attempt

to have the 2012 raid

on his Coatesville mansion ruled invalid.

The Supreme Court's found the search warrants were legal.

The police won't be charging anyone

at the GCSB in relation to a complaint

about spying on Kim Dotcom.

Every time we win, they appeal.

It's a default.

We win. They appeal.

And, you know, every time they appeal, they win.

It's all very political.

Hello, good morning.

Thank you all for coming.

Today is a big day.

We're launching the Internet Party.

I couldn't believe it.

I said to Dotcom, "Are you really gonna do it, then?

Are you gonna go into politics?"

And he said, "Yeah."

And I thought, "God, you've lost it.

That's completely mad."

I couldn't care less about politics. Are you kidding me?

Why would I get involved, you know?

And then I found out all these things.

Firsthand, being abused,

being subject to the abuse of power.

Yeah, of course. I wanted to replace the government.

Why else would I do it, you know?

For Mathias Ortmann, Bram van der Kolk,

Finn Batato, I think that Dotcom's involvement

in politics was a sideshow and a distraction.

They struggled to see how it was going to stop

an extradition process that was under way,

how it was going to change the charges

that they might face in the United States.

We are a part of this Five Eyes global spy network.

Thank you, guys.

Kim is always the super confident,

and I'm always the one worrying.

But still, I'm a woman. I would worry, of course.

That's my thing. I'm a worry wart.

You're still kinda, like, left hanging.

Like, I don't even know what's gonna happen six months from now.

Like, Kim's hearing is still going on.

I just don't know.

I think the whole stress really got to me,

and, you know, the raid, of course, was part of it.

We were really happy before, you know. Yeah.

Mona had great difficulty dealing with the raid.

She struggled with it,

and it affected our relationship.

That's probably the most regrettable outcome

of this whole case against me,

that our relationship fell apart.

She was the love of my life.

It became apparent as the election year of 2014

was rolling on that the Internet party was not going to succeed,

so Dotcom started to look around for alliances.

The party that was willing to work with him

was the Mana party,

which had a more left wing and activist base.

Kim Dotcom has told One News

he's now forked out a whopping $4 million

for the deal with the Mana party.

Kim Dotcom has a particular legal interest

in not being sent back to justice elsewhere.

Everybody knows that Kim Dotcom

is putting money behind the political party

to try and stop himself from being extradited.

Is Kim Dotcom that big fellow?

It was important for the Mana party

to be able to introduce its new political partner

to its constituency.

Town by town...

...marae by marae,

they would go down the country.

Everyone was quite surprised at how successful they were.

People took them seriously and wondered whether they would play

an important part in a new government.

And the media reported everything they did.

I'm not sure that Internet Mana handled that scrutiny very well.

You work in news.

You puffed-up little

You're a thief!

You're a thief, John Key.

The Internet Mana road show had aspects

that appeared to be targeting John Key personally.

Are you ready for a revolution?

Are you ready to extradite John Key?

Fuck John Key.

Fuck John Key.

Fuck John Key.

Attacks on John Key have hit new heights this campaign...

...this effigy burning the latest online outrage.

Fuck John Key.

It was probably the nastiest election

that New Zealand has seen if not for many, many decades, then forever.

Fuck John Key!

Kim Dotcom has promised to drop a number of bombshells

that could topple the Prime Minister John Key

at an upcoming event billed "The Moment of Truth."

The day that the Moment of Truth was to be held,

I'd received an email

which purported to show

that everything Dotcom had said about the conspiracy was true,

that New Zealand served him up on a plate.

So I rang Dotcom, and I said,

"Is this what you're gonna be pulling out at the Moment of Truth tonight?"

And he said, "Yes, it is."

So what kind of impact could there be from all this tonight?

Well, it is-- these are extraordinary revelations

to be laid out five days before a campaign.

John Key is fighting really for his political life.

Remember, he has said he would resign

if there was any evidence to show mass surveillance,

and of course we also have this email on the Hollywood links.

Come on, give him a kiss, ladies.

The Moment of Truth for John Key

would've been a high risk scenario

because the two things that Dotcom had promised to produce

were things that he said he was gonna resign

if they turned out to be the case.

Tonight, we welcome the world

and to extend the welcome of Aotearoa

to Glenn Greenwald...

Julian Assange.

Welcome, Edward Snowden.

Hello, New Zealand.

The U.S. has this war for control of the Internet,

and it is a war.

They don't feel that there should be an organization like Wikileaks.

They believe that the spying that they do should be kept secret.

They believe that when it comes to copyright,

the approach that they have

should radiate out across the world.

What we saw there in that town hall,

that was the resistance.

You've got this network of sensors around the world,

so I can see everything.

I can see what book you looked at at Amazon.com.

I can see who you talk to.

I can see who your friends on Facebook are.

I can see the text messages you sent.

I can read the emails you wrote, and I can set up things

...exactly the kind of mass surveillance

that Prime Minister Key not only vehemently denied was being done,

but which he promised he would resign

if it were determined his government were actually engaged with.

Further, intelligence agencies

by definition are designed to operate

outside the law,

and so they cannot be trusted.

No matter what Assange or Snowden were gonna say,

Dotcom was still the emperor with new clothes.

He hadn't produced the thing that he had pledged that he would,

that he had been talking about for ever so long...

and that was a real problem for Dotcom

and for pretty much anybody

that had backed him up until that point.

What people have been waiting for tonight

is when Kim Dotcom came to the parliament

and said that he would prove that John Key was a liar,

-tonight, we're, excuse me-- - Which he did.

Which I did, absolutely--

No, about knowing about you before the raid.

And let me just reply to this, OK?

I think, and I want to address all media here tonight.

You have an obligation

after what you have learned tonight

to take the information that you were told here

by Glenn Greenwald and Edward Snowden

to the Prime Minister and this government

and hold them accountable.

We have focused on the much bigger lie,

which is not about my case,

which is about every single New Zealander

who is subjected to mass surveillance.

That is the story that you should focus on.

Get your priorities right.

We will. We will--

I hope you will,

because in the past, Patrick,

you have let New Zealanders down.

I don't understand how you let the Prime Minister

get away time and time again

with his lies and his spin.

You need to do your job,

and everyone here needs to do their job.

I'm doing my job by asking you.

Kim Dotcom, what's gone wrong? Kim Dotcom, what's gone wrong?

Why couldn't you front the evidence tonight?

-What's gone wrong? -I think that's it.

Thank you, thank you very much.

That email, I know it comes from hacker circles.

You know about the famous Sony hack.

The same people who were responsible for that

were responsible for this hack.

I was assured that that email would contain headers,

which is what allows you to identify all the details.

You know, what mail server was used,

the date stamps that would have allowed anyone

to verify the contents,

but unfortunately the email was not leaked

with that information, so it became useless for me. Yeah.

And I regret that I could not use it in the event.

...and welcome to Decision '14.

The campaign is over.

The voting is over, and the counting has begun.

Now, politics is very serious business.

This has been a fairly serious,

and at times thoroughly unpleasant, campaign.

Now will be hoping that they've got something to celebrate tonight.

Right at the start,

there was quite a swelling of support for Dotcom

because they saw him as someone that had been the victim

of the big Goliaths of the U.S., FBI,

the New Zealand Police, but suddenly he was seen

as a more aggressive player,

and it was John Key that was the underdog.

The Internet Mana party is in trouble.

Oh, my goodness, in the last 20 minutes,

it's all completely changed out here.

This is phenomenal. What we are seeing here is the Internet Mana alliance

is not in Parliament,

and Kim Dotcom's millions and millions of dollars goes down the drain.

Good evening, everybody.

We lost tonight because of me.

No. No! No.

I take-- I have to say this.

I have to say it. I am sorry.

It's how the media portrayed you!

I'm-- I'm really sorry I have to say this.

I have to say this.

I take full responsibility

for this loss tonight

because the brand-- the brand Kim Dotcom was poison

for what we were trying to achieve,

and I did not see that before,

and it only became apparent to me in the last couple of weeks.

So to all of you who have worked so hard,

I say, thank you very much.

Three more years.

The day after the election,

the Solicitor General of New Zealand

has approached my lawyers and asking

if I was willing to leave New Zealand,

the case would be resolved.

There wouldn't have to be an extradition,

and this whole thing could go away.

You don't do a raid like this

and destroy a man's family and his business

and cause so much pain

and get away with it with some piece of paper

that says, "Yeah, I've done something wrong,

but now I am free. Thank you very much."

Well, fuck them.

After four and a half years of delays,

the extradition hearing

against Kim Dotcom and the Megaupload co-accused

starts in Auckland, New Zealand today.

The Judge will determine whether the four men will be free

to remain in New Zealand

or whether they will be sent to the U.S.,

where they could face decades in prison.

This is cited as the largest copyright case

that our world has ever seen.

We still think we should win, and we are hopeful that we will.

We are.

Are you worried about what the decision might be?

Please don't fall, OK? Be careful there.

I am very confident in my legal team.

All our submissions are excellent.

Any unbiased legal mind is going to see

what has happened here.

The case is really important

because it raises important legal issues

in relation to the extradition process,

but first, they've got to show that the conduct they complain of

is, in fact, a crime.

We say, look, what you allege on the facts is not a crime.

And Your Honor will see that there is a specific piece of legislation

called the Copyright Act,

and it provides protection for Internet Service Providers.

Simply providing that technology

to its users does not expose a company

to civil or criminal liability.

They seem very confident.

They always point to the same things.

There's nothing in New Zealand-U.S. treaty that covers copyright,

and they think that they're gonna win.

OK. Miss Gordon.

The dishonesty at the core of Megaupload's operations

may be expressed in straightforward terms.

The evidence boils down to a simple scheme of fraud,

not a passive dumb pipe service provider,

but a massive hard drive of infringing material.

Christine Gordon represents the United States of America.

She has to be, I'm sure, tutored by the DOJ,

and the United States has gotten

every ounce of effort out of her.

We have some good glimpses of how the respondents

thought and acted behind the scenes.

We have some highly revealing communications between them.

As Mr. Ortmann privately put it,

copyright owners would find,

and these are his words that now follow.

"We are not the dumb pipe we claim to be."

Bram van der Kolk marveled at the position they had attained,

and these are his words:

"If copyright holders would really know how big our business is,

they would surely try to do something against it.

They have no idea that we are making millions

in profit each month."

Ortmann told van der Kolk,

and these are Mr. Ortmann's words:

"We did some things right.

We allowed fraud for a long time, fueling our growth."

I was startled.

I mean, the whole court shuts up.

Everybody stops because they're startling.

On or about August 16, 2010, via Skype,

Dotcom told Ortmann in German, Mr. Dotcom's words:

"At some point, a judge will be convinced about how evil we are,

and then we're in trouble."

Objectively translated, it should read,

"Because at some stage,

a judge will be talked into how bad we allegedly are,

and then it will be a mess."

The United States had the ability to select

what evidence it wanted to present,

and we sat and cherry-picked it.

It was very selective and biased

about the evidence it picked and placed before our court,

and a lot of the conversations were also in a foreign language.

They were in German,

and as a result, the United States relied on translations

which we were able to show were incorrect and, in fact, misleading.

Your Honor should also have received this morning

a bundle that looks like this.

Part of section 101 is set out in the submissions at page 65.

It's the 21 October red bundle, sir.

And you need to understand that this judge was spammed

with thousands of pages of submissions

by the U.S. government.

They basically drowned him in material,

and I knew he didn't understand anything about the case.

He had no clue about the Internet, about copyright.

At one point in one hearing,

he asked if Mega was cow storage?

Not cloud storage, cow storage.

It was a pretty frustrating hearing.

We had prepared over many hours,

and we had committed significant human and financial resources

into mounting what we thought was

a very credible defense to extradition,

and most of our arguments were marginalized

or not even considered by the court.

The overwhelming preponderance of evidence

produced by the applicant

in the Record of Case and its supplements

establishes a prima facie case

to answer for all respondents on each of the counts.

The decision has found that all four respondents

are all eligible for extradition.

Therefore, the sentence...

Time has passed by Megaupload.

There's always gonna be people who wanna pirate,

and there's always gonna be these services,

but are they gonna be mainstream?

I would argue no.

Piracy is in decline.

But, they told us all along, the tech side said,

"Hey, if you make it easy

to get our hands on at a cheap price,

it's easily accessible,

there's not gonna be any piracy," and that's what they did.

They've gotten the message.

What good is it to throw him in jail now?

Find out what the guy knows.

Make a partnership with him.

You got his money,

and I'd say the smart move is, right, like the godfather.

Keep your friends close and your enemies closer.

They should be doing that.

While we have perfectly good reason

to want to prevent piracy of content

and allow artists and the companies that support them

that make a profit off of what they do,

the mechanisms that we're using

to try and enforce these things

are also mechanisms for censorship

and for oppression of freedom of thought,

and it's a slippery slope.

That's a dangerous thing.

It's not about what's right any more.

It's about winning at all cost.

They wanna drag me down.

To win, that's all that matters to them,

but they picked the wrong guy

because you can't drag me down,

and I will win.