Kim Dotcom and the Redefinition of American Corruption

Kim-Dotcom-Robert-AmsterdamThis week I am here in New Zealand where we have announced my joining the legal team of Kim Dotcom, focusing on issues of international law and human rights.  On Jan. 20, I had the privilege of participating in the wild launch event for Mega, Dotcom’s newest encrypted cloud storage service.  The launch took place on the same day as an unlawful FBI-directed raid on his home and the seizure of his former company, Megaupload, one year earlier.

For those of you who haven’t followed the case, the raid on Kim’s home, his subsequent detention, seizure of assets, and destruction of his business by prosecutors from the U.S. Department of Justice (DOJ) has represented one of the most flagrant abuses of power in recent memory.  The case is quickly becoming one of the textbook examples of excessive over-reaching by governments to control the Internet through copyright extremism.

The prosecution’s case is essentially bogus.  Kim’s lawyer Ira Rothken has picked apart the allegations in a number of interviews, exposing the flaws in every point of the indictment.  As an Internet services intermediary, Megaupload diligently complied with takedown requests to remove infringing materials, and went even further to allow some 180 content-producing companies direct access to the servers to delete infringing materials themselves, which was unprecedented for any cloud storage provider.  Despite never once having been sued by any movie studio or record company, the DOJ wants to hold Megaupload liable for infringement via third party cases of piracy by users – however there exists no federal criminal statute for secondary copyright infringement, so essentially they are trying to unlawfully apply civil law in a criminal law context.  As Rothken has argued, the aggressive persecution of Kim Dotcom and other Megaupload founders has been full of “dirty tactics” by U.S. prosecutors.

The case is particularly interesting to me given my usual work in countries facing serious issues of prosecutorial independence.  But here we have two of the most advanced legal systems in the United States and New Zealand, and yet their prosecutors and police are behaving in a manner not often seen in rule of law countries.

These prosecutors and law enforcement authorities conducted a reckless armed raid on his home, featuring some 70 rifle-toting commandos knowingly invading a dwelling with children, a pregnant wife, and zero threat of violence.  The raid was preceded by unlawful spying and Orwellian violations of privacy against Kim that should make every free citizen concerned about the willingness of these governments to violate the law.  The media was tipped to this theatrical show of force ahead of time, apparently in an attempt to taint the reputations of the accused and violate their right to the presumption of innocence.

You cannot help but feel that there must be some explanation for this conduct that transcends the concept of prosecutorial independence.  Adding to these questionable justifications for the use of force on foreign soil, the case is being backed by a prosecutor who formerly worked for the Business Software Alliance on anti-piracy issues.  There are also legitimate concerns about the role of former Sen. Chris Dodd, chairman of the Motion Picture Association of America (MPAA), whom Vice President Joe Biden describes as “one of his best friends.

During the Mega launch party, Kim disclosed some interesting facts that should raise questions about the political motives behind the raid and seizures.  Having monitored all their emails, prosecutors were fully aware that he was going to be in the United States just a few months later on vacation.  The tickets were booked, the house rented, so the federal authorities knew full well they had the opportunity to conduct their raid on U.S. soil to avoid any extradition issues.  If this were a real criminal investigation instead of a contract prosecution, why wouldn’t they just wait?

What’s interesting is that on Jan. 19, 2011, on behalf of the Hollywood lobby, former Sen. Dodd issued a threat to the Democrat Party and the reelection campaign of President Barack Obama, saying that the movie studios may withhold campaign funding if they didn’t see an immediate show of action.  “Don’t ask me to write a check for you when you think your job is at risk and then don’t pay any attention to me when my job is at stake,” Dodd said.

Ever since the New Zealand raid one year ago, Kim and his partners have been vindicated by many court decisions.  The warrants used to raid the property were found to be deficient.  The Prime Minister of New Zealand has had to publicly apologize to Kim and his family for the illegal spying that took place at the behest of the United States.  Canada has refused to hand over server data requested by the United States, while a German court has refused to execute a seizure of assets based on insufficient evidence.

This case highlights not only the issue of “state capture” by the Hollywood lobby, but at the same time should lead to a thoughtful discussion on how we define corruption.  No one would venture to allege that there is any form of cash payment taking place when official bodies appear to act at the behest of special interests motives.  Because that’s not how these groups work.

It is a demonstration of the growing ambiguity of the lines between regulators and the regulated, and the proper role of intellectual property in the digital age.  As we’ve seen in the sad and tragic case of Aaron Swartz, for whom Prosecutor Carmen Ortiz was seeking 13 criminal charges and more than 50 years in jail, the American justice system is increasingly flawed by this prosecutorial exuberance aimed at future political reward.

It is one thing when the victims of these abuses are American citizens, who live at the whim of an unaccountable prosecutorial machine driven by personal political ambitions and an appetite for headlines.  It is something else entirely when these prosecutors visit their ambitions upon foreign citizens, charging them with heinous crimes with no basis under law, even if that person has never once set foot inside the United States (like Kim Dotcom).

With this attempt to “colonize” the global internet under U.S. laws, Washington is quickly making a bad name for itself, and putting its considerable influence on the wrong side of digital rights, free markets, and competitive innovation.  They do this in the name of protecting a broken business model, subsidizing monopolies, and seeking to destroy crucial online functions instead of adapting to the incredible opportunity afforded to them through mass connectivity.  We deserve better, we can do better, and everyone can benefit from a more reasonable approach focused on the best interests of the public, not the best interests of lobbyists and the politicians in their pockets.

We see this as a grand ideological debate with far-reaching implications, and sadly, my lengthy experience in countries where special interests control the levers of power may have some utility here.