The Security Intelligence Service appears to have known about the residency status of internet entrepreneur Kim Dotcom before another government spy agency unlawfully intercepted his communications.
This week, the Government Communications Security Bureau (GCSB) became the subject of an inquiry after revelations it unlawfully spied on Mr Dotcom and his colleagues.
Mr Dotcom, a German national, is fighting extradition to the United States to face copyright, money laundering and fraud charges.
The GCSB believed that Mr Dotcom and a co-accused were foreign nationals due to incorrect advice from police, but they have New Zealand residency.
Radio New Zealand's political editor Brent Edwards says it appears the SIS would have checked Mr Dotcom's background when he applied for and got residency.
Mr Edwards told Morning Report on Thursday the SIS has a close relationship with the GCSB and it is understood the application would have gone through a process known as silent approval.
"The SIS itself says it checks thousands of visas for people coming into the country, although these are mainly related to concerns over terrorism. In its report it says in terms of threat management, it does give border screening advice."
Kim Dotcom's US-based lawyer says he is seeking full disclosure of the Government's reasons for spying on his client to protect the rights of all New Zealanders.
Ira Rothken told Morning Report he also wants to know at what point they learned what they were doing was illegal.
"We're just interested in getting full and transparent disclosure - not only to protect Mr Dotcom's rights, but also for the benefit of all New Zealand residents who would prefer the Government not engage in such conduct."
Immigration Minister Nathan Guy is not commenting, apart from saying the matter will be covered by the inquiry looking into the GCSB's actions.