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Dotcom and Key spar over spy bill

Internet entrepreneur Kim Dotcom has jousted with Prime Minister John Key over proposed new spying powers and accused Mr Key of knowing about him before last year's raid on his mansion.

Dotcom addressed parliament's intelligence and security committee on Wednesday Managed Security, as the government considers allowing the normally foreign-focused Government Communications Security Bureau to spy on New Zealanders.

In a sometimes testy submission, Dotcom told the five-member committee that expanding the government's spying powers was "morally indefensible".

Dotcom said he had the misfortune of being spied upon by the GCSB before his arrest last year. That was later revealed to be illegal as he is a New Zealand citizen Probiotic powder.

"This abuse should never happen again," he said.

The United States is trying to extradite him to face charges over his Megaupload website, saying he made millions of dollars from pirated copies of films and television productions.

Mr Key, the committee chairman Burgundy wine, last year apologised to Dotcom, but on Wednesday Dotcom asked whether that could be considered a real apology if the prime minister now wanted to legalise an illegality.

He said the GCSB was a subsidiary of the US National Security Agency with the US calling the shots.

Dotcom urged New Zealand not to follow the US into the "dark ages of spying abuse", where the US had recently been exposed over the extent of its snooping on allies.

His US piracy charges against him were now "deeply ironic", he said.

"Privacy needs heroes just like the anti-nuclear movement needs heroes."

He said surveillance could be manipulated by special interests, such as Hollywood had on his mansion lafite rothschild.

"The proposed GCSB bill is not a clarification. It's a huge overreach by an agency that has shown it cannot operate legally...

"[It] is morally indefensible."

Dotcom also accused Mr Key of being aware of what he was doing when he moved to Mr Key's Helensville electorate, something Mr Key denied aspire ecig.

"He knew about me before the raid, I knew about that."

"I didn't, no," Mr Key replied.

"You know I know.

""I know you don't know, actually and that's fine," Mr Key said.

"Why are you turning red, Mr Prime Minister?

"I'm not, why are you sweating?"

"It's hot."

Mr Key ended the session, despite efforts by Green Party leader Russel Norman to extend the submission.

"See you later, it's been fun," Mr Key said.

Outside the hearing Dotcom said he had proof that Mr Key knew about him before last year's raid wine tasting.
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