(Updates with Assange appearance in 31st paragraph.)
Aug. 25 (Bloomberg) -- Kim Dotcom strides on stage at a Wellington nightclub, turning a late-night dance party into a political rally.
“Are you ready for a re-vo-lu-tion!” the Internet tycoon, who faces extradition to the U.S. on piracy charges, booms to the 200 partygoers. “Don’t let your parents decide who rules this country.”
The millionaire entrepreneur and convicted fraudster, whose Megaupload file-sharing site was shut down in 2012 after a police raid, is emerging as an unlikely power broker in New Zealand politics ahead of a Sept. 20 election. In a race that may be determined by just a few seats, Dotcom is exploiting a loophole in the nation’s electoral system in a bid to oust Prime Minister John Key from office.
Key, who’s seeking a third term, says Dotcom is trying to buy political influence to avoid extradition. The part-time techno musician says he’s fighting for Internet privacy after Edward Snowden’s revelations of U.S. spying.
“It’s extraordinary, and it’s changed the dynamic of what could have been quite a bland campaign,” said Bryce Edwards, a political scientist at Otago University in Dunedin. “New Zealand isn’t used to these plots of international intrigue, big money and brash personalities.”
Dotcom’s nascent Internet Party, bankrolled with NZ$3 million ($2.5 million) of his own money, has entered an alliance with the Mana Party, led by a Maori activist, to form Internet Mana and boost his chances of gaining political clout.
Internet Mana kicked off its election campaign in Auckland yesterday promising free tertiary education and more than 50,000 new digital jobs if it is part of the next government.
While German-born Dotcom, 40, can’t stand for parliament himself, polling shows Internet Mana could win as many as five seats -- a decisive bloc whose support the main opposition Labour Party would likely need to form a government.
Mana says it fights for “the poor, the powerless and the dispossessed,” among whom New Zealand’s indigenous Maori are over-represented. The Internet Party’s flagship policy is to deliver ultra-fast, cheaper web connections with greater freedom and privacy.
The combination has the potential to mobilize young people who wouldn’t normally vote, said former Labour Party president Mike Williams. “This could be a game changer,” he said. “It could change the outcome of the election.”
Dotcom has named Laila Harre, a cabinet minister in a former Labor-led government, to head the Internet Party and is holding dance raves across the nation to capture the youth vote.
Internet Mana doubled its support to 4 percent in a Colmar Brunton poll published Aug. 17. Labour was on 26 percent, the Greens 11 percent and Key’s National had 50 percent. The survey of 1,000 people had a margin of error of plus or minus 3.1 percentage points.
No party has won an outright majority since New Zealand introduced proportional representation in 1996.
While National has the most support, its potential coalition partners are smaller than those likely to side with Labour and a swing of just a few percentage points could be enough to unseat the government.
Dotcom is exploiting a quirk in the Mixed Member Proportional system to better his chances. Parties need 5 percent of the vote to get into parliament unless they win an electoral district. In that scenario, their slice of the national vote determines how many seats they get.
Mana Party leader Hone Harawira holds the Maori electorate of Te Tai Tokerau and if he retains it, the Colmar poll shows Internet Mana would win an additional four seats.
The Internet Mana alliance is “totally illegitimate” and amounts to Dotcom buying his party entry to parliament, Russel Norman, co-leader of the Green Party, Labour’s biggest ally, said in an interview. “This is money undermining democracy.”
Sue Bradford, a veteran political activist for the under- privileged, said that’s one of the reasons she left Mana when it teamed up with Dotcom.
“It’s attempting to buy political influence and power,” she said. “I also saw Kim Dotcom’s political beliefs and history as fundamentally incompatible with the philosophy and principles of Mana.”
Dotcom, who changed his name from Kim Schmitz, has been convicted of computer fraud, data espionage, stealing business secrets and receiving stolen goods, according to New Zealand Security Intelligence Service documents released under freedom of information laws this year.
After the dawn raid on his mansion in January 2012, involving two helicopters and officers armed with assault rifles and gas canisters, he was indicted in Virginia for what prosecutors called the biggest case of copyright infringement in U.S. history.
They allege that Megaupload, which once accounted for 4 percent of all Internet traffic, generated more than $175 million in criminal proceeds from the exchange of pirated films, music and files. Five Hollywood studios are seeking more than $100 million in a separate civil case.
The final decision on Dotcom’s extradition, which is due to be heard by a court in February, rests with the justice minister.
Dotcom denies he’s trying to gain political influence to avoid extradition, saying he’s motivated by Megaupload’s closure and the extent of U.S. spying revealed by former security contractor Snowden.
“Those combined events made me decide to engage politically,” he said in an interview last month at Wellington’s James Cabaret nightclub, in a roped-off area guarded by security. “My case is very political. It’s the first of its kind in the world, where they are trying to make me responsible for the actions of my users.”
James Dicks, 19, who attended Dotcom’s dance party in the New Zealand capital, said he’ll consider voting for Internet Mana.
“Kim Dotcom was possibly breaking the law by hosting his website,” he said. “But essentially, if you are going to punish people for illegally downloading movies, then you’d be punishing everyone.”
Dotcom and his lawyers claim the prosecution is “propelled by the White House’s desire to mollify the motion picture industry in exchange for campaign contributions,” and that the New Zealand government is beholden to its U.S. ally.
The SIS documents show New Zealand gave Dotcom residency in 2010 despite knowing he was the subject of an FBI investigation. The declassified papers have prompted speculation in the local media that Key’s government granted Dotcom residency at the behest of the U.S., as it would be easier to extradite him from New Zealand.
Dotcom has clashed with Key over spying laws and says he’ll embarrass the prime minister five days out from the election with new evidence about New Zealand’s subservience to the U.S. He’s enlisted Glenn Greenwald, the Pulitzer-prize winning journalist who published Snowden’s leaked documents, to help deliver the promised revelations.
WikiLeaks co-founder Julian Assange, who’s taken refuge in Ecuador’s embassy in London to avoid extradition to Sweden for alleged sexual offences, will take part in the Sept. 15 event via video link, Dotcom told Television New Zealand today.
Claire Robinson, a specialist in political marketing at Massey University, said Dotcom appears to be driven by “a personal crusade against the prime minister.” Rather than help to defeat Key, he’s more likely to splinter the opposition vote, she said.
That’s a concern for Greens co-leader Norman, who said he tried to convince Dotcom not to launch a political party.
“For those of us who want to change the government, Internet Mana is a real problem,” Norman said. “The thing he started has become a circus. It just makes our side of politics look disorganized. It’s a gift to Key.”
--With assistance from Emma O’Brien and Tracy Withers in Wellington.