On September 24th, New Zealand Prime Minister John Key announced that he had requested an inquiry by the Inspector-General of Intelligence and Security regarding the Megaupload raid that happened in January because of  “unlawful interception of communications of certain individuals by the Government Communications Security Bureau.”

The GCSB is New Zealand’s electronic intelligence-gathering agency, and part of ECHELON, the worldwide communication interception network that also includes the NSA and security agencies of the United Kingdom, Australia and Canada.

The Prime Minister was informed by the director of the GCSB,  Ian Fletcher, last September 17 that in their haste to aid the US authorities in locating and arresting the Kim Dotcom and his party, they’ve acted unlawfully such as acquiring communications without statutory authority.

“I expect our intelligence agencies to operate always within the law. Their operations depend on public trust.

“I look forward to the Inspector-General’s inquiry getting to the heart of what took place and what can be done about it,” said Prime Minister Key. “Because this is also a matter for the High Court in its consideration of the Megaupload litigation, I am unable to comment further.”

The inquiry was led by Inspector-General, Paul Neazor, who is an independent statutory officer with the power to enquire into any matter related to a government intelligence agency’s compliance with the law.

The NZ Prime Minister admitted that the GCSB did spy on them and stated that he was  “appalled” at the agency, as they had “failed at the most basic of hurdles.”

“Of course I apologise to Mr. Dotcom, and I apologise to New Zealanders,” said Key.  He added that New Zealanders were entitled to be protected by the law “and we failed to provide that protection to them.”

Key also stated that though data were collected, he doubted that they were given to the Federal Bureau of Investigation though he stated that the location of Dotcom and his party were given to local authorities.  The Prime Minister also added that the collected data would probably be inadmissible in court.

Though the admittance and apology would probably help Dotcom and his colleagues fight their battles, their party as well as other opposing parties is calling for a more detailed independent inquiry.

“I accept your apology,” Dotcom tweeted.  “Show your sincerity by supporting a full, transparent & independent inquiry into the entire Mega case.”

Neazor’s report concluded that though spying did occur, the GCSB’s action was legal since they thought the Immigration Act 1987 doesn’t apply to Dotcom and his party since they were granted a residence visa in November 2010 which GCSB interpreted as they were not permanent residents dot the Act 1987 doesn’t apply to them.  But on  November 29, 2010 the new Immigration Act 2009 came into effect which means Dotcom and his party were permanent residents of NZ.

“The request was made on the basis that the information sought was foreign intelligence contributing to the function of the New Zealand police and supporting the prevention or detection of crime.

“The GCSB action on it was proper,’ Neazor stated in his report.’

Key acknowledge the fact that what happened to Dotcom and his party was a case of human error: the GCSB did not do a thorough background check regarding the residency status of Dotcom and his allies, but relied on police information, and that the GCSB misinterpreted the law.

Opposing parties stated that the apology wasn’t sufficient, as Key was as much to blame for the incident.

Labour Leader David Shearer stated that the report filed by Neazor wasn’t completely detailed as “ it doesn’t deal with the real accountability, which is those right to the very top which is John Key’s accountability. He is control as the Act says of this agency which seems to have been acting without proper control.”

As for GCSB, Fletcher already apologized to Key and deputy Prime Minister, Bill English, for what transpired and vowed to make the appropriate changes needed in order to not have a repeat of the incident.

“We got this wrong. Both factual errors and unacceptable errors of legal interpretation were compounded, most especially by our treating those interpretations as as fact for too long, It should not have happened,” Fletcher stated.

Fletcher added that they know the implications of their actions such as loss of trust and confidence  in the agency but they believe that they can overcome this and “re-establish the high standard of accountability expected of us.”