As I See It: The Man Who Would Be Kim
February 25, 2013 Victor Rozek
He was born in West Germany, the product of a German-Finish union, and for most of his life he bore the surname of Schmitz. From an early age he proved to be a poor model of German conformity, contemptuous of rules and indifferent to authority. But by the time he entered his teenage years, he had found a profession and a place of refuge from the pangs of conventionality: his refuge was the Internet; his profession, hacking.
Although he never got beyond junior high school, Kim managed to engineer a thriving career breaking and entering into other people’s phone systems. He hacked his way into PBXs, sold access codes, made a bunch of money, and bragged about all of it. But his lack of discretion proved costly. While still a teenager, he managed to get himself convicted for computer fraud (11 counts) and data espionage (10 counts)–the legal precursor to hacking. Unexpectedly, the sentence was suspended, his actions dismissed by the judge as “youthful foolishness.” In retrospect, it must have been a formative moment: to his natural propensity for risk, it added a belief in his own invulnerability.
As his legend grew, so did the boy. In every respect he became a very large man. Standing 6 feet, 7 inches and weighing more than three spins of the scale, he was a mountain of appetites, hungry for money, women, cars, yachts, guns and, above all, digital celebrity. He became a self-invented digital action figure, with a website dedicated to all things Kim, bigger than life, like Shaquille O’Neal but with more brains and fewer ethical constraints.
He started a series of Internet companies and, nine years after his first brush with the law, he was charged with insider trading and embezzlement. To avoid prosecution he fled to Thailand where he was eventually arrested and deported back to Germany. He pleaded guilty to embezzlement, spent five months in jail awaiting trial, and was again given a suspended sentence of 20 months. (Who knew the Germans could be so lenient?)
Miffed with the German legal system, he moved to Hong Kong, a place where business scruples are only rumored. There, by any statistical measure, he spawned his most successful idea: a website that would, in due course, boast 50 million visitors per day, and account for an astonishing 4 percent of global Internet traffic. It was the infamous Megaupload.
And in a move that was quintessentially Kim, he changed his surname to Dotcom.
Ostensibly, Megaupload was, in Dotcom’s words, “a provider of cloud storage services.” But whether by accident or design, it soon became the repository for all things pirated from software and video games, to books, TV shows, music and, of course, movies. Hollywood was not amused. Producers, who invested millions in the latest soon-to-be-forgotten epic, looked unkindly on their product being ladled out like Halloween candy. Losses were mounting, and estimates placed them at half a billion dollars.
Kim had danced in the ethical margins for a good many years, and reveled in tugging on Superman’s cape. His latest venture, however, had upset some powerful and influential people, and Superman was about to demonstrate his powers.
By this time, Dotcom had had another legal skirmish in Hong Kong, and decided to take his talents to New Zealand. Residency there is not automatic, but one of the criteria is the ability to contribute to the local economy. And that he did, tossing money around like confetti. He bought a dozen cars, rented a helicopter, leased the most expensive mansion in the country, and greased the political skids. He even funded an extravagant fireworks display for the city of Auckland. What’s not to like?
But unbeknown to Dotcom, while he was busy reveling in excess, indictments were filed in Virginia accusing Kim and his management team of piracy, racketeering, conspiracy to commit copyright infringement, and money laundering. For Kim Dotcom, a dangerous corner had been turned. These were not civil charges to be disposed of by paying fines and damages. These were criminal charges punishable by up to 55 years in prison.
The invasion of Dotcom’s mansion took place on January 20, 2012, and it had all the trappings of a Hollywood movie. It took place at the behest of the FBI, which probably bigfooted the operation, because for New Zealand, it was uncharacteristically overkill. In a country where police don’t even carry guns, two helicopters descended on the property followed shortly by tinted vans with dozens of men in full combat regalia. A preposterous total of 76 armed cops and intelligence operatives came to arrest one geek, so many that a Wired article by Charles Graeber reports they brought their own port-a-cans and food truck with them–just like on a film set.
Dotcom was locked up, his assets were seized, and the Feds demanded his extradition. But once again, Kim Dotcom dodged yet another legal bullet. Unlike our FBI, which has been emboldened by the Patriot Act, New Zealand intelligence services are not allowed to spy on legal residents. But no doubt inspired by the scofflaw attitude of America’s spooks, they did so anyway. New Zealand courts were not pleased.
The search warrant, used to justify the invasion, was judged to be too broad. Some of Kim’s assets were returned so that he might pay his legal and personal bills, and he was released on bail. But the FBI got something it urgently wanted–it was allowed to copy the contents of Kim’s computers, an act that the New Zealand courts later ruled to also be illegal.
In an amazing reversal of fortune, the Prime Minister actually apologized publicly to Dotcom, thus opening the door to future lawsuits against the agencies that arrested him. For the moment, deportation looks as remote as the island nation itself. To recoup its losses, maybe Hollywood should make a movie of his life: To Catch a Geek.
For his part, Dotcom clings to professions of innocence. He notes that he even allowed complainants to delete links to proprietary work. Too little too late, says the FBI, ever hopeful of extradition. But if Dotcom is worried, his concern doesn’t extend to letting go of his death grip on Superman’s cape. In January of this year, he opened a successor site called Mega, which does exactly the same thing Megaupload did, but uses encryption to ensure the “privacy” of users.
There’s a sad irony in the fact that Aaron Swartz, who never made a dime from his hacking escapades, was hounded to death by the government for “stealing” scholarly papers and making them available online, while Kim Dotcom made a fortune and lives like a modern-day Louis XIV. Clearly, Dotcom is resilient, but he might just think about making his mansion drone proof.
Whether or not the Internet should be free and open is a topic for legitimate discussion. But imposing those values on those whose living depends on control of their content is not an issue open to debate. There is a fundamental difference between posting a body of your own work online and inviting the world to partake, and posting the work of others without their knowledge and consent. It’s akin to several hundred people showing up at Kim’s mansion, suitcases in hand, demanding to move in because they believe mansions should be free and open to anyone who wishes to live in them.
But then again, given what we know about Dotcom, he might just invite them in.