The bureau is prohibited by law from spying on New Zealand citizens and residents, which meant Mr Dotcom and co-accused Bram van der Kolk should have been protected from the GCSB's high-tech intrusions.
The bureau has claimed it did not realise Mr Dotcom and Mr van der Kolk were protected under the visa they held.
However, the Herald has found Mr Wolfensohn held all the information needed to judge the spying illegal from mid-February - seven months before the Prime Minister admitted his own department had broken the law.
The illegal spying blunder left Mr Key apologising to Mr Dotcom, who faces an extradition hearing in August with three colleagues to face charges of criminal copyright violation.
In the weeks following the admission, Mr Wolfensohn was placed on leave while Mr Key appointed Cabinet secretary Rebecca Kitteridge as associate director of the agency. Her job was to review the agency's systems and ability and put in place new procedures for assisting law enforcement. The initial three-month posting was extended to six months.
The bureau had told the Herald her report is expected in weeks and would be largely made public. A spokesman also confirmed Mr Wolfensohn no longer worked for the bureau.
Mr Wolfensohn has created a detailed profile on the LinkedIn online networking service, detailing his rise to the top of New Zealand's most secretive spy agency.
Mr Wolfensohn joined the GCSB in 1988 as legal officer. He began a steady rise through the bureau's ranks from 1996 and was appointed deputy director in 2000 and led the bureau's strategic policy and corporate services division before being appointed to oversight of mission enablement and chief legal officer in 2010. He lists the end of his employment with the bureau as 2013.
New chief must revive public trust
The job description for the new GCSB spy chief says a key result is making sure the public understands and trusts the bureau more than it does now.
Those applying to be Associate Director of the Government Communications Security Bureau will also be required to make changes identified in a review ordered by Prime Minister John Key.
Green co-leader Russel Norman said the unreleased review overlooks the need for an entire restructuring of New Zealand's spy agencies. He said there was not enough accountability, with spies at the GCSB and Security Intelligence Service answering only to a minister, an Inspector-General appointed by the executive and an oversight committee of senior politicians.
Labour leader David Shearer said he believed a review of oversight for the GCSB and SIS was necessary.
Hugh Wolfensohn
*Studied law at Oxford University in early 1970s before joining the Royal Navy.
*Moved to New Zealand in 1986 and joined the NZ navy.
*Went on to become NZ Defence Force legal officer.
*Worked at the GCSB from 1988, rising to deputy director and chief legal adviser.
