As Dotcom, his name was his website, his presence, business, and legacy. How stupid and inefficient to be Kim Schmitz of Megaupload whom you could find online at Kimble.org—what a mouthful, what a bulging pocket of tiny keys. Who listens that long? But “Dotcom”—it was the Megakey. The rights to the Kim.com domain cost a small fortune, but it was worth it. It would pick up where Kimble.org had left off, a source of worldwide inspiration. You might laugh when he compared himself to the great innovators, but once Kim revolutionized the way we bought and shared and thought and knew, Kim.com would be the stuff of legend. Kimble.org had made him a joke. But with Kim.com, Kim could still be a hero. All he needed now was a mega-success story.
The idea was simple, and the team was small. Ortmann and van der Kolk alone controlled access to the servers. To generate buzz and draw advertisers, they needed volume, high traffic. To build it, they offered cash rewards to anyone who uploaded popular content.
Megaupload users had quickly graduated from sharing racing videos to sharing everything else—including porn and copyright-infringing material. Kim says they realized early on that their service was being used that way and looked at what they needed to do to deal with it. According to their lawyers, Kim says, the answer was simple: Take it down when asked. Kim says they did; the indictment from the Department of Justice says they did so only on a “selective basis.”
Kim says they did their best to comply with the law, better than most, even putting the power to take infringing material off their servers directly into the hands of the studios themselves. “All the major studios had direct access,” he says. “Nobody else did that.” He says they believed they had done enough. They never imagined they were risking jail time.
The truth was that by 2010, Kim and his partners had more to lose than ever. Kim had met a young woman named Mona Verga in the Philippines; they’d married and started a family. Kim said he chose New Zealand because it was clean and green and the most likely to survive an uncertain future. It was an ideal place from which to run a legal and successful Internet company with more than one hundred employees.
It’s the legality of that success that will play out in the court system. The DOJ cites several Megaupload e-mails as evidence of criminal “willfulness” (van der Kolk: “We have a funny business … modern-day pirates :).” Ortmann: “We’re not pirates, we’re just providing shipping services to pirates :).”). Kim says the FBI can’t take a joke and points to the 45,000 seized e-mails they didn’t cite. “They’ve read our internal correspondence,” Kim says. “They know we were good corporate citizens.”
Certainly the Megaupload technology itself wasn’t criminal—depending on how it was used, the service had the power to connect pirates with illegal downloaders or major artists directly with a major audience. With the site attracting some 4.9 billion annual visits by 2011, Kim was charging premium ad rates and making legit deals for the backing of premium stars like Kanye West, will.i.am, Jamie Foxx, Sean “Diddy” Combs, Alicia Keys, and Chris Brown. It was all leading up to the launch of a service called Megabox, which would allow musical artists to make money from ads attached to free downloads of their songs. Free downloads with permission wasn’t piracy, it was a new media model that would kill the incentive for most illegal downloaders and get everyone paid. He had a similar product ready for Hollywood movies and TV shows. Dotcom was ready to go super-mega. But by that point, though he didn’t yet know it, it was too late.
On January 5, 2012, a federal grand jury filed its sealed seventy-two-page indictment of Megaupload, based on a two-year FBI-led investigation. A few days later, members of the FBI contacted officers from the New Zealand fraud and antiterror forces and began planning what they then called Operation Debut.
By January 18, two American special agents and an assistant U.S. attorney were in New Zealand. On the nineteenth, a local constable was sent into the Dotcom Mansion with a camera pen to secretly record the layout and security features. The next day, two sections of New Zealand’s Special Tactics Group and four sections of the elite antiterror Armed Offenders Squad were mobilized to Coatesville. Operation Takedown was a go.
Rich men hire security for the same reason that banks do; they’re where the money is. Robbery, gang attack, and kidnapping were always within the range of possibility for Kim’s family. They had never imagined a raid by a tactical antiterror team.
The morning of the raid, Kim heard the noises and, remembering Tempero’s security protocol, reached for the panic button at the side of his work bed. It looked like a Jeopardy buzzer in black lacquer, protected from accidental activation by a clear, hinged safety. Kim pressed the button, sending a security SMS alert across the compound.
The door behind him was cracking now. Kim moved away from it, heading toward a hub for the staircase and various wings. Ahead lay a supersized bathroom and the blue-lit atrium of a one-lane, thirty-meter swimming pool. Towels for both were stored in a closet. The shelving hid a secret door to a hidden staircase.
This was what Tempero called the Red Room. It was a simple carpeted attic following the curved roofline. Kim went to the far end and placed himself behind a pillar. He heard crashes and booms and shouts filtering through the corridors and up the stairs. One was the word “Police!”
Kim knew what was happening then. He could stop. He could head down the stairs, emerge into the noisy scene. But that seemed unsafe. He wasn’t going to pop out and surprise them. He’d follow the protocol.
News reports would later claim that he was found hiding near, or even clutching, a sawed-off shotgun. There was, in fact, a shotgun stored there, but in a safe on the opposite end, about thirty feet away. And Kim wasn’t hidden—his frame was easily visible behind the pillar—but at least his head was protected. He’d wait there.
Kim waited for what felt like a long time. The noises grew louder. Within minutes of the tactical team’s arrival, dozens more men arrived in a second helicopter and several black-windowed vans, fanning across the gated suburb in the dawn light. A small army was combing the property now.
But the police were having a rather difficult time locating Kim. They knew there was a safe room—somewhere. But they didn’t know exactly where the door was located. So the special forces men zeroed in on a dumbwaiter.
Gonglike booms echoed through the mansion as the police labored against the metal doors with sledgehammers. Finally a member of the house staff opened the dumbwaiter from the kitchen. Kim wasn’t inside. The elite antiterror squad was losing a game of hide-and-seek against a giant computer nerd. The man supposedly armed with the doomsday button had been missing for a full ten minutes.
Tempero had heard the commotion when the first helicopter landed. He headed outside and was met by a guy in black tactical gear who put a gun in his face. “That’s good as gold, mate,” he said, and got on the ground. He was still there when the police came back to question him. Tempero was worried for his boss. He showed them the hidden Red Room door. It was still unlocked.
Kim says he was kneed in the ribs, punched in the face, and his hand was stepped on until his nails bled. (Police dispute this.) He was then laid out and briefly cuffed before being led back to the main stairwell. When he passed the windows, Kim finally grasped the full scale of the operation.
Cops were everywhere. In uniform, out of uniform, some with body armor, most with Bushmaster rifles or tactical semiautomatics. They had a dog unit and guys on the roof with binoculars. There were so many people involved in the raid that the cops had brought in chemical toilets and a craft services truck. Kim couldn’t believe it. Guys were hanging around, having coffee and sandwiches, high-fiving.
The impound inventory would read like a Robb Report shopping list, including fifteen Mercedes worth hundreds of thousands of dollars, two Mini Coopers, a ’57 El Dorado, the pink Series 62 Cadillac convertible, a Lamborghini LM002, a Rolls-Royce Phantom Drophead Coupe, Harley and Von Dutch Kustom motorcycles, eight TVs, and works of art of obvious value—including a towering
Planet Hollywood–style statue of the Predator.
But the real prize would be the cash—millions from more than fifty bank accounts around the world. If the Mega-Conspirators were going to defend themselves against the might of the U.S. legal system, they’d have to do it on credit.
Police led Kim to the lawn, where most of the household was gathered. “I was so worried about Mona—she was pregnant with the twins. I kept asking where she was, where the kids were.” Kim couldn’t see the kids, but he saw Ortmann. He and Batato had flown in for the birthday Kim shared with his son, Kimmo. It promised to be an epic event, complete with A-list entertainers from the United States. The bouncy castle hadn’t even been blown up yet.
The police found Batato by the back of the house with his laptop; he was still in his robe. Ortmann was in bed when the tactical team burst in. He looked freaked out and shattered. He wasn’t the sort who pretended at the gangsta stuff. He didn’t even play shooter videogames.
Kim asked a police officer, “What are the charges?” He imagined that, with more than fifty staff members from around the world, maybe one of them was mixed up in something.
The answer surprised him: “Copyright infringement.”
As the cops led him to a police van, Kim passed Mona. She seemed frightened. “All this for copyright?” he said to her. “Bullshit.”
In the police van, Kim was given a copy of the charges. He saw the copyright infringement and, more surprisingly, conspiracy to commit money laundering. The first charge on the list he didn’t understand. “Racketeering?” he asked an officer.
“That’s a criminal organization charge, like Mafia,” came the reply.
That didn’t sound right. Kim had a license plate that said MA-FIA—but then he had ones that said god and police and evil too, and they didn’t accuse him of being those. There had been some sort of mistake. They’d spent a lot of money and time to understand every facet of the business—including the DMCA. “That’s why we bothered putting servers in Virginia,” Batato says. “To be protected by safe harbor.” They were prepared for all sorts of claims in civil court. But they’d never prepared for criminal charges, or jail.
The Megaupload boys were brought down the road to the North Shore Policing Centre for processing, then driven to the Mount Eden Corrections Facility. It was nearly dark by the time they entered the induction unit. Kim’s cell had a concrete-block bed with a three-inch mattress. “Which, for me, with my weight, it’s nothing,” he says. Within a few days he was immobilized with back spasms. They gave him ibuprofen and a wheelchair and put him on suicide watch. “The shrink had talked to me. He asked, did I feel like killing myself, and I said no. I didn’t, you know?” Kim says. “But they put me on the watch list anyway, so they could come back to my cell every two hours, see if I moved.”
The Mega crew were all on the same cell block. During open cell hours, they could sit together and pore over the indictment. The more Kim read, the more bullshit it appeared.
They’d win, Kim promised. Then they’d get their lawyers to recoup every penny taken from them, every penny of lost revenue, and even more for pain and suffering. He told Ortmann, “I’m going to name my boat Paid For by the FBI.”
The Americans were the enemy here. Hollywood had backed Obama; maybe the mega-takedown was mega-payback. Trying to make a difference in the election would be part of their comeback, but as hackers they needed something bigger. Hollywood hadn’t taken the hand Kim had offered them. Now he would offer something else.
Hollywood had busted them as pirates on the grounds that they were aware of and responsible for what their Megaupload customers uploaded and downloaded. But what if they created a cloud storage locker that nobody—including themselves—could look into? That would be the ultimate safe harbor. And it would entirely change the conversation about data policing.
Once again, jail forced Kim to think creatively. He sat with Ortmann, van der Kolk, and Batato in a cell; they puzzled over the problem, building a new technology from scratch in their heads. The idea was simple: One click and a file would be encrypted and uploaded. Only the uploader had the key to unlock the file. If the uploader shared the key, that was his business. Because the data was encrypted, you couldn’t search it. Even if you raided the servers, they’d be meaningless without the key. Welcome to the newest gray gray area on the planet.
They called it Mega. Like Megaupload, it would combine off the-shelf technologies into a user-friendly app. It might not enrich them quite as much as Megaupload had, but they still believed that corporate subscriptions would make it a profitable business. More important, it promised to offer Internet citizens an unprecedented level of private data-sharing while sparing the provider most legal headaches and liabilities. In other words, Mega was beyond takedown.
Kim had been worried about Ortmann. He’d seemed so fragile when he entered jail; now he seemed energized by the challenge. The tough talk wound up all the Mega boys, and Kim was genuinely enthusiastic about their new project. But privately he feared that the larger dream was dead. He might become a dotcom millionaire again. But he’d never be a dotcom hero.
As I wait for Kim on my seventh day at the estate, Saturday morning becomes afternoon becomes evening, and frost reglazes the sweeping lawn. Finally, there is a tweet, then a text. “Come.” It’s nine-forty-five at night and Kim is having breakfast.
When I arrive in the kitchen, one of the Filipinas has laid out waffles, pancakes, fruit, sliced bologna of various types, as well as pickles, fruit juice, and a glass of Fiji water, which she refills from tiny plastic bottles.
“I’m going to give all this food up soon,” Kim promises, smearing steak tartare across another hunk of bread. “Either I lose thirty kilos or I lose the case.” This was Kim the motivator, imagining himself transformed for his American debut in a tailored black suit. It was a nice image, like being dressed well for your own funeral.
Kim is a large man, but tonight he seems as vulnerable as a child beyond rest. He’s in a reflective mood and wants to talk, long into the night. He remembers so clearly how difficult it was to rise again after his takedown in Germany, the effort it had taken to emerge with a new dotcom business and a new Dotcom name. Megaupload was to be a dynasty for Kim Dotcom’s children to build on; Kim.com would provide the legacy of Kim Dotcom himself. He’d rekindle the ashes of Kimble.org to debut a site that revealed Kim as a self-made Ozymandias of a digital empire, an inspirational builder of worlds. After years of work, his mega-monument was nearly complete.
“But what sort of inspiration could I be now?” Kim asks. He will win the case against him and get his money back too. And then?
His wife is young and beautiful. “And me?” Kim says. I’m …” He gestures to himself. If the case drags on, if they are stuck for years in this dull empty mansion, Kim worries about the strain on his marriage. He isn’t so keen on his prospects either.
He’s thirty-eight years old. His kneecaps are shot, his back is in spasm, and he’s perhaps 150 pounds overweight. He’s exhausted. It would take a decade to build another empire with the next Big Idea. He doesn’t think he has it in him.
“But the mistake I made in Germany was, I gave up,” Kim says. It cost him his name. He wouldn’t make that mistake again. There would be no plea deals. He’ll stand and fight the DOJ. Even if it costs him everything.
It is five-thirty in the morning, and Kim Dotcom is just getting started.
Kim sleeps through the next day, resting up for three days of hearings. By midday Monday I find him at breakfast already on his new health regimen—500 milligrams of vitamin C, fruits and berries, eggs and yogurt. His wife sits next to him looking calm and radiant, her long dark hair freshly washed. “OK,” Kim says. He slips on the blue-tinted Cartiers and a scarf laid out for him on the counter. “Let’s kick some ass.”
The courthouse is a simple brick civic building near the park. There’s a metal detector nobody is much bothering with and a few TV crews waiting with fuzzy microph
ones. Mona and Kim file into the benches with his American lawyer, Ira Rothken, and codefendants Ortmann, Batato, and van der Kolk. Tempero and another security man wait protectively behind them.
Kim takes the stand, telling the story of the raid. “Our beautiful home was turned into a haunted house,” he says. Across the courtroom, reporters bend to their notebooks. That sets the tone. “I want to go again!” Kim says during a recess. He balls his fists like a kid at an amusement park. “That was so much fucking fun!” Over the next two days the raid will be dissected in detail, and judge Helen Winkelmann will interrupt the officers frequently. In New Zealand, police usually don’t even carry guns; the raid was viewed as an unprecedented use of armed antiterror forces on a civilian home, based on a faulty search warrant and misleading intelligence. On the stand, the head of New Zealand’s anti-organized-crime agency is asked whether the Dotcom Mansion was being monitored by any other agencies not yet disclosed to the public. He answers no. Unfortunately, that wasn’t quite true.
In fact, the compound had been under surveillance for weeks by New Zealand’s spy agency. What exactly they tapped—e-mail, phone calls, text messages—remains a secret, but there is no gray area in the law. The Government Communications Security Bureau is forbidden from spying on legal residents. In the coming weeks, Kim Dotcom will become the center of New Zealand’s own Watergate. Even New Zealand’s prime minister will issue Kim Dotcom a flat-out apology.
This court will eventually give Kim some of his money back—$4.8 million for his legal defense and living expenses. But before that decision can be rendered, there is evidence to go through. Some video. A bailiff dims the lights and starts showing footage.
It’s from one of the police helicopters, a beauty shot at dawn on January 20. We rise over the green New Zealand hills, over power lines, over a last hill, and, as police chatter comes crackling across the microphones, we see the Dotcom Mansion, a regal white U against the green lawn, where the helicopter lands, and we see the legs of armed men, running to the front door before the helicopter lifts again to circle.
Best American Magazine Writing 2013 Page 39
