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Israel, Spyware and Corruption: NSO ties to Netanyahu, Bennett and other politicians

Everyone today has heard of NSO, the spyware firm whose technology can be used to hack any telephone, even if its owner didn’t click on a suspicious link.

Its products have been used, and apparently are still being used to hack the phones of journalists, human rights activists and even the partners of people whose relationships have gone awry.

The Israeli company is once again making headlines at home and abroad, and its future is very unclear, but many people mistakenly believe that this is a business story, or maybe a business-security story. It’s not.

It’s a political story about corruption of people in power, which begins with the prime minister, seeps down to other ministers and reaches the very heart of the culture and the actions of the Israeli government in general, and the Defense Ministry in particular.

That is where the moral failing is, and that is where the system must be repaired. Why?

In recent years local media have reported NSO’s huge profits, its sale to an overseas entity and reacquisition by the founders, and attempts to initiate an IPO and an exit by stockholders. The latest chapter in the history of the company began in July, when journalists and media outlets across the globe, including TheMarker in Israel, cooperated in a campaign to reveal thousands of phones that had been hacked by NSO’s proprietary Pegasus spyware, or were suspected targets of hacking, on the orders of various countries – including the phones of government officials, journalists and human rights activists.

NSO denied any connection to the findings, but due to protests and complaints by various countries, among them France, Israel had to intervene, and promised to create an investigative committee. However, no one knows whether such a panel has actually been established, or what its findings are.

About two weeks ago the United States decided to place NSO on a blacklist, together with another Israeli firm named Candiru, a company from Russia and another from Singapore, citing damage to national security.

Last week, another two developments sparked media attention: Itzik Benvenisti, who until recently was CEO of Partner Communications and was appointed CEO of NSO at the end of October, replacing the company’s founder, Shalev Hulio, decided to abandon ship and resigned shortly afterward. In addition, according to The New York Times, Hulio wrote a secret letter to Prime Minister Naftali Bennett, asking for help in getting the Americans to remove NSO from the blacklist of companies banned from operating in the United States, and with whom Americans are not permitted to work.

What is the source of the great business success of NSO, which can sell its systems for many millions of dollars to a client, in some cases for as much as $100 million?

This is where Israel’s government and its politicians enter the picture:

The advantage NSO has in terms of its business dealings is that the State of Israel and the Defense Ministry have given their stamp of legitimacy to its systems, along with the understanding that Israel and NSO will not interfere in the decisions concerning who purchases the system and whose phones are hacked.

This is a crucial point:

The advantage of Pegasus is that NSO will make sure that the system will always function, while the State of Israel will turn a blind eye to whom its purchaser decides to surveil – even if the company knows for sure that the targets are not terrorists or violent criminals.

In exchange for this service, which is not granted by the manufacturers of other such systems, in recent years rulers of various states were willing to spend tens of millions of dollars for a single installation.

One politician who made use of Pegasus is former Prime Minister Benjamin Netanyahu.

During his term in office, Netanyahu realized that purchase of the system, in addition to the promise not to ask embarrassing questions, was a dream-come-true for leaders of countries that are not exactly democratic.

And so, he decided to package proposals for supplying the system in return for the warming of ties that would constitute diplomatic achievements for himself – which he could then cash in for votes in Knesset elections.

That is how Pegasus and NGO became the main attraction in the development of Israel’s closer relations with the United Arab Emirates, Morocco, Azerbaijan and Saudi Arabia – and that’s only a partial list.

But this story is about more than just ballots:

A number of people involved in talks with the leaders who purchased the spyware knew the day would come when they would move from government to the world of business – and they sought to take advantage of the contacts they’d made when the big opportunities presented themselves.

One such person is Yossi Cohen, former head of the Mossad, who was very active in warming up Israel’s diplomatic ties with the Gulf states and in signing the Abraham Accords.

Cohen, according to foreign media reports, had planned to establish an investment firm in cooperation with the rulers of the Emirates and former US government officials including former President Donald Trump’s treasury secretary Steven Mnuchin, and Trump’s son-in-law Jared Kushner.

It was not only Netanyahu and those in his orbit who took advantage of NSO.

Another Israeli politician who has had a connection with the cyber company is Ayelet Shaked, currently minister of the interior, whose best friend, Shiri Dolev, is NSO’s president.

Also Naftali Bennett, who is now prime minister, tried to work with NSO – at the beginning of the COVID pandemic, when the government wanted to surveil private citizens to cut the chain of infection.

The Defense Ministry, then headed by Bennett, sought to promote NSO so that it would create a national system to do that – without a bidding process.

According to an April 2020 report in TheMarker by Refaella Goichman, the Defense Ministry approached NSO on several occasions, directly and without inviting bids from other firms.

Moreover, Shaked, the justice minister at the time, was also a member of the Knesset Subcommittee on Intelligence, where the Shin Bet security service’s scheme to surveil Israeli citizens was discussed.

During at least one meeting, Bennett presented the possibility of collaboration with NSO, and Shaked failed to mention that her best friend was the company’s president.

When asked about this by Haaretz, Shaked offered this statement: “Shiri Dolev and Ayelet Shaked have been friends for many years, which is a well-known fact, and they even gave interviews about their friendship. A remark during a Knesset committee meeting doesn’t require proper disclosure. Unfortunately, Haaretz chooses to cling to petty insignificant things instead of focusing and mainly encouraging Israeli high-tech firms to join live-saving efforts.”

This, of course, is not the only time Shaked participated in government processes in which a possible conflict of interest existed, without disclosing it.

Just last week it became known that she sought to expedite a construction plan that would benefit Barak Rosen, a controlling shareholder in the major real estate investment group Israel Canada, from whom in the recent past she received an invitation to serve as chairwoman of Cannbit (in which Rosen has shares held in trust). Shaked has also been a guest at private events hosted by Rosen.

The Defense Ministry: Benny Gantz

Because Pegasus is an offensive-cyberware system, its sale outside of Israel is monitored by the Defense Ministry.

The latter is supposed to approve its use only to government entities, only for the purpose of preventing terror or violent crime, and to ensure that by supervision.

The ministry can even actually do this:

As opposed to conventional weaponry, even after its sale, Pegasus is still under the control of its operators at NSO, and they can know which phones are being surveilled by their clients.

But Israel’s defense establishment encourages weapons sales, including cyber-offensive systems, to anyone and that includes various wealthy and important individuals around the globe. For example, the ruler of Dubai, Mohammed bin Rashid al-Maktoum, hacked the phone of his second wife, Princess Haya, from whom he is separated, as well as her lawyer’s phone – as part of a legal dispute underway in London over custody of their children – using NSO’s Pegasus spyware. This fact was established by no less than the ruling handed down by the British court.

The verdict was reported by the British Financial Times last month, which stated that the systems in question are meant to be sold only to prevent terror and crime, and that their use is supervised by the Israeli government. In fact, such supervision never existed and the whole sham landed on the doorstep of Israeli Foreign Minister Yair Lapid. How? A representative of his ministry sits in the Defense Ministry department that oversees security-related exports – the body tasked with supervising what’s being done in the world by means of NSO systems. This representative, of course, also never raised the issue. It’s therefore not surprising that some 10 British ministers and MPs turned recently to Prime Minister Boris Johnson to ask that he, like the United States, would place the NSO on a blacklist of entities with which British citizens are prohibited from doing business.

Now of all times, Israel sides with NSO

According to a report in The New York Times last week, senior Israeli government officials recently began lobbying the Americans to remove NSO from the blacklist.

The Times drew a line between those efforts and another suspicion that’s arisen, involving NSO: that Pegasus was used by Israeli security agencies to surveil the phones of Palestinian human rights groups, including those recently outlawed by the Defense Ministry, as approved by Minister Gantz. In the eyes of the Times, this constitutes further proof of that Pegasus is not being used to fight terror or crime – and this time by the Israeli government itself, which is supposed to be overseeing its cyber companies.

But the whole effort – as seen in a secret letter sent by NSO founder Hulio to Bennett, Lapid, Gantz and Finance Minister Avigdor Lieberman asking for Israel’s official support – to get NSO removed from the U.S. blacklist, according to the news website Walla, could also be seen as a kind of threat. Why?

“If the government does not help save my company,” Hulio’s letter intimated, “I have the ability to release a great deal of information that would embarrass politicians and their friends in Israel.”

And in that, he is certainly right.

Source: Eytan Avriel = HAARETZ