MegaUpload and the White House: A case of curious timing

MegaUpload founder Kim DotCom, a man indicted by the U.S. government for criminal copyright violations, conspiracy, money laundering and wire fraud, alleges that Vice President Joe Biden ordered a U.S. Attorney to pursue its aggressive case against him and his company.

If true, that shouldn't come as a big surprise to even the most casual follower of the antipiracy debate. (DotCom cited no evidence for his claim, telling the site TorrentFreak only that a "credible source" informed him Biden ordered the crackdown.)

Whether or not Biden was involved -- and my sources say he wasn't -- DotCom's allegation parallels a question that has hovered on the fringes of this case since it began. Namely, that is, why the federal assault on MegaUpload began the very same day irate Hollywood elites started taking their discontent with the White House public, even issuing threats of withholding financial support for President Obama's re-election effort.

That, too, may just be a coincidence. But it's still a fascinating story that illustrates how closely Hollywood's interests and those of the White House dovetail.

The White House, it's fair to say, is no fan of illegal file sharing. Both Obama and Biden have frequently pledged to crack down on piracy, saying it robs Americans of jobs and their intellectual property. Two years ago, Biden compared pirates to ordinary street crooks, saying, "Piracy is theft. Clean and simple. It's smash and grab. It ain't no different than smashing a window at Tiffany's and grabbing [merchandise]."

The story began in January after DotCom and six other MegaUpload managers were arrested in different countries around the world, including New Zealand where DotCom resides. U.S. officials accuse DotCom of pocketing huge profits by encouraging users to upload pirated content to MegaUpload's lockers and share it with each other.

Back in January, I wrote that the timing of DotCom's arrest smelled fishy. The feds, though, said at the time that the government has every right to pursue a criminal case against someone if they believe laws have been violated. Industries in this country have the right to lobby elected officials for assistance.

Sen. Leahy meets Batman
Of course, the film industry has some very visible friends in high places. Not just at the White House but throughout the U.S. government. The most recent example, as described in an AP story from Tuesday: Vermont Sen. Patrick Leahy, a Democrat.

Turns out, Leahy is a big fan of Batman and will make his second cameo appearance in the latest Batman movie, starring Christian Bale and directed by Chris Nolan.

Leahy was one of the authors of the Protect IP Act (PIPA), the sister antipiracy bill to the Stop Online Piracy Act (SOPA). Had either bill passed, resulting law would have sped up the process for removing accused pirate sites from the Web. Critics said the bills would have led to government abuses and censorship. Both bills were sidelined earlier this year after major Internet protests.

According to the AP story, Leahy was invited to be in the movie. In "Batman: The Dark Knight," Leahy's debut in the Batman series, he gets roughed up by the Joker, played by Heath Ledger. Was Nolan really hurting to find a middle-age white guy with glasses? Was it Leahy's acting skills that got him the role? What's more likely is that this is a perk, the kind industries offer all the time to their friends in government. I doubt it's illegal, but a lot of people sure don't like it. To many, this kind of back slapping looks too much like a payoff.

Copyright owners also have ties to Neil MacBride, the U.S. Attorney for the Eastern District of Virginia and the man who filed the MegaUpload indictment. In his previous job, MacBride was vice president of antipiracy and general counsel to the Business Software Alliance. He's also one of Biden's former aides.

Meanwhile, back at the White House
So the hoopla over Biden's alleged intervention may not be such a big deal in itself. But it would still be good to know when the White House got involved.

MacBride's representatives have said the investigation into MegaUpload began two years ago. Last August, my film industry sources told me there was some kind of enforcement action coming against DotCom and his cloud storage service.

That means the case wasn't built over night. But it raised eyebrows when MegaUpload got busted immediately following the demise of SOPA and PIPA. The bills were defeated largely as a result of protests organized by the technology industry. The music and movie sectors were among the bills' biggest backers, and they thought they had friends in The White House.

At a critical juncture, when the bill's opponents were beginning to seize the momentum and legislators who once backed the bills began dropping their support, Obama's representatives said the White House could not support some important provisions in PIPA and SOPA. That was a death knell for the legislation and it occurred on January 14. Hollywood was not happy.

On January 19, when it was obvious that PIPA and SOPA were dead, Deadline.com, a blog that covers the film industry, reported that some important players in Hollywood were preparing to cut off financial support for the president.

The same day Deadline's story ran, New Zealand police knocked down DotCom's door -- at the request of the United States --seized his assets and tossed him in jail.

It's a curious coincidence, but it may be no more than that. Records prove MacBride filed the indictment under seal on January 5, long before the outcome of SOPA or PIPA was certain. To arrest DotCom three weeks after the indictment seems to be a reasonable amount of time.

As for Biden, I've heard from multiple sources that the vice president has helped to set the agenda for antipiracy but he has never gotten involved at the granular level and did not order the prosecution of MegaUpload.

My sources say they are interested in hearing what evidence that DotCom has to tie the vice president to the decision to raid his home because, they say, it couldn't exist. I've got more coming in a follow up story.

I haven't heard back from representatives for either Biden or MacBride. DotCom is scheduled to appear at an extradition hearing in New Zealand on August 6.

Update 9 a.m. PT: Added more information from my government sources and recast the story a bit.