The Baku inhabited that world before the Federation existed, it wasn't a Fed planet. Dougherty only said that to BS justify it to himself and Picard.
Why would he tell a lie he would be caught of? And Picard didn't seem to think it was a lie.
I think we also have to differentiate between something that violates the Prime Directive and something which violates any other sort of interstellar law. The PD gets thrown around alot in situations where it really doesn't apply.
...Both in-universe, and out of universe. I mean, despite being trown around in this discussion, the PD
wasn't thrown around in this movie!
Picard initially thought it might apply to the Ba'ku. He was misinformed, though. Not necessarily lied to, but misinformed anyway. Nobody else ever claimed the PD would apply, nor acted as if it would.
We never learned if anybody really was breaking any laws to start with, in the "acting in good faith" sense. The Council may have been fully within its legal rights to deport the Ba'ku, based on what it knew; Dougherty may have been within his rights to execute the decision, based on what he knew; Data may have been within his rights to violently oppose the decision, since he knew a different set of facts from the Council's.
Dougherty clearly knew he was encouraging crime when he gave the Son'a permission to go after Riker, and covered for this particular Son'a action - but technically, there probably was no crime there, either. And Dougherty wasn't even withholding key evidence from the Council, because the real key - that the Son'a and the Ba'ku were the same people - was not known to Dougherty.
So in the end, only Picard would have acted completely in defiance of the law. Which he acknowledges, by effectively resigning his commission. His planetside posse would be accomplices to the crime, as would Riker and LaForge (although they might wriggle out of it by pleading ignorance of Picard's intentions).
Certainly, even if it was legal to move them, I don't believe Federation law would permit doing so using the subterfuge of a cloaked holoship to move them without their knowledge.
This was never stated to have been illegal in "Homeward". Certain other aspects of Rodzhenko's actions were the ones condemned by our heroes, Starfleet and the UFP.
Law today makes it possible to treat people against their will in various different ways. These include keeping people in the dark about facts pertaining to them. Why would UFP law be any different? Its intent seems to be the usual: to hold a society together. And holding societies together necessarily means (is defined by!) curtailing the rights and freedoms of their members.
Not to mention that the cloaked holoship itself is a violation of the treaty with the Romulans. (Where did they get that cloaking device anyway?)
Cloaks are a dime in a dozen in DS9 at least. And Starfleet certainly knows how to build those, even if it isn't allowed to.
However, we could argue that the treaty with the Romulans was already null and void, as the Dominion War had outdated the old wording and we have no knowledge of a new wording.
But from a legal perspective, I'd say the Federation was within the law to move them, but not in the way it was being done.
I could see UFP law allowing all sorts of underhanded tricks in the moving of a primitive people who would be harmed by exposure to the truth. However, we don't know if the Council thought that the Ba'ku were primitive. If they did, then PD protection should have applied, complicating things; if they didn't, how could they have thought that the move would go unnoticed, as the advanced Ba'ku would immediately realize they were no longer in Kansas when they looked at their new sky?
Naturally, the deportation scheme was engineered by the Son'a only to facilitate wholesale slaughtering of the Ba'ku, sooner or later. But neither the Council nor Dougherty would have gone along with that motivation, so they had to be believing in some different scheme. How illegal it would have been depends on the details.
Timo Saloniemi