Further embarrassing details about the role of government spies in the Kim Dotcom case are set to be unveiled in court today.
It emerged yesterday that the Government attempted to cover up how the Government Communications Security Bureau (GCSB) gathered intelligence on the internet mogul, who is fighting extradition to the United States.
As acting prime minister, Bill English signed a ministerial certificate barring disclosure of GCSB activities a month ago but Prime Minister John Key only learned of its existence on Monday.
Court papers, also released yesterday, show GCSB was incorrectly assured by police that German Dotcom and his Dutch co-accused Bram van der Kolk were foreign nationals. The agency is barred from spying on New Zealand residents, which makes its surveillance of the pair illegal.
The bungle has only just been discovered - nine months after extensive coverage about the Megaupload millionaire's immigration status.
Police agency Organised and Financial Crime Agency New Zealand had asked GCSB to track Dotcom down and ascertain if he would be a risk to police during an arrest.
The spying began on December 16 last year and lasted until January 20, when Dotcom's Coatesville mansion was raided and he was arrested on anti-piracy charges. The snooping did not involve installing or connecting devices, documents show.
It was revealed during a court hearing last month that mystery officials attended a police meeting in the run-up to the raid - Dotcom's lawyers wanted to know who they were.
English, acting because Key was in the US, sought advice from the GCSB. The agency told him disclosing the information would "prejudice the security of New Zealand".
He signed the ministerial certificate, a document which ensured GCSB activities could not be made public.
However, almost two weeks ago agents were forced to confess to Key their spying had broken the law. He immediately ordered an inquiry by Inspector-General Paul Neazor, the results of which are expected by week's end.
A further hearing is set to take place in the High Court at Auckland today.
Dotcom's lawyer, Greg Towers, said the court "agreed very quickly" to release the court papers and it is likely more details will be disclosed. A judge can set aside the ministerial certificate.
Key was dogged by questions about the scandal yesterday. But he urged caution until Neazor has completed his report.
Labour leader David Shearer said it was "ridiculous" that intelligence agents were unaware of Dotcom's immigration status, which was granted in late 2010.
"Dotcom threw the biggest party, the biggest fireworks party, I think in Auckland's history. He threw that party to celebrate his residency. Surely our intelligence agencies would have picked that up?"
Dotcom's US lawyer, Ira Rothken, said his legal team was awaiting the outcome of the inquiry. But he was sure it would canvas the spying methods used.
"We are not going to rule anything out. National security and spying could include everything from satellites to drones . . . we'd be speculating right now about any manner and method. The spying agencies have a whole range of methods."
The investigation would also include when the Government first learned the spying was illegal, "what their response was and whether or not there was any attempt at a coverup".
Former GCSB director Simon Murdoch, in charge at the time of the spying, said it would be "silly of me to try and comment".
Government agency blunders
The case against Kim Dotcom and his co-accused has seen a series of embarrassing blunders by government agencies:
The restraining order which saw Dotcom's cash, cars and property seized in January was declared null and void. Police commissioner Peter Marshall and the Crown Law Office had applied for the wrong order.
Chief High Court Judge Helen Winkelmann ruled search warrants executed by police were illegal because they "did not adequately describe the offences to which they related”. She also said it was unlawful that data cloned from Dotcom's computers was sent to the US.
The Government Communications Security Bureau (GCSB) illegally spied on Dotcom and his co-accused Bram van der Kolk - they were wrongly told by police the pair did not hold residency. The GCSB is banned from intercepting the communication of New Zealand residents.
Acting Prime Minister Bill English signed a ministerial certificate which blocked any disclosure of the role of GCSB agents in Operation Debut. But revelations the agency had acted illegally forced Prime Minister John Key to go public on Monday. A further hearing at the High Court tomorrow could see the ministerial certificate set aside.
The Court of Appeal is deliberating on whether US authorities should be forced to hand over evidence against Dotcom. In August, Justice Winkelmann had upheld an earlier decision by Judge David Harvey in North Shore District Court that the US Government must reveal the information.
Judge Harvey was forced to resign from the extradition case in July when it emerged he made comments suggesting the US was the "enemy" at a discussion on copyright infringement during an internet conference.