Spyware firm seeks help from Israeli government as backlash continues

The Nov. 3 blacklisting by the US Commerce Department of the Israeli spyware company NSO took the company heads by surprise. As the announcement was made in Washington, NSO president and founder Shalev Hulio was in the US capital at a series of meetings and was apprised of the decision seconds before meeting with members of Congress.

“We did not get any advance warning, we were not summoned to a hearing, we were not asked about our operations; we simply heard it from reporters and were totally stunned,” one senior company official told Al-Monitor this week on condition of anonymity. According to another version, the Americans did give the company some warning — half an hour.

The NSO Group, developer and producer of the Pegasus spyware, has been the punching bag of human rights groups for years, drawing fire for selling hacking and surveillance software to authoritarian regimes. The US move, citing NSO spyware sales to governments that used the equipment to target officials, dissidents and journalists, has plunged the firm into a crisis.

“Our employees are sought after by all the cyber firms in the world. Once you are blacklisted, your ability to retain workers is considerably reduced,” another company source told Al-Monitor this week on condition of anonymity.

NSO argues that it is not a problem but offers crucial solutions and is the first cyber ware company in the world to have been placed under government regulation, meaning its activities are supervised and transparent. NSO also insists it is willing to be investigated at any time.

The company has been under attack in Israel, too, with critics arguing that it does not take advantage of its ability to control what buyers do with the products it sells, allowing them to violate human rights and infiltrate smartphones of journalists and world leaders.

NSO rejects these claims while conceding that it does have the remote capacity to shut down the programs it sells and had done so in the past. It can also determine what mobile phone numbers its spyware has targeted, but only with the customers’ permission. But even if it were to do so, company officials argue, they're not a spy agency that can investigate the targets.

NSO argues that it is not an intelligence agency and its employees are nor spies. It says it is a high-tech company making tools to combat terrorism, pedophilia and other crimes on an increasingly encrypted and impenetrable internet. To undermine the company, its officials say, would be to shoot law enforcement in the foot.

NSO says it does not know why it made the Commerce Department’s blacklist, but believes the move was in retaliation for Israeli Defense Minister Benny Gantz designating six Palestinian human rights groups as terrorist organizations Oct. 22. Among the Palestinian activists targeted, two are US citizens. Company sources also point to the United States designating two Israeli firms as violating its national security interests: NSO and another Israeli cyber ware firm, Candiru.

NSO claims the United States has no reason to target the company because it also benefits from the technologies it develops. The Americans, company officials insist, knows full well that NSO does not sell its Pegasus program to private entities and that the Israeli Defense Exports Control Agency is involved in every negotiation between NSO and a foreign government and has to approve every sale. In short, the company is claiming to be a victim of growing tensions between the two countries over the terror designation of the Palestinian groups.

Pegasus was found to have infected the smartphones of senior officials of these organizations, according to newly emerging media reports, as well as on phones of senior Palestinian officials involved in filing complaints against Israel to the International Court of Justice in The Hague. NSO says it cannot be blamed for such use of its products. While no one at the company will say so explicitly, it has been widely suggested that the Shin Bet used NSO tools against the Palestinian targets and that NSO is paying the price of the Shin Bet’s operations.

Founder Shalev Hulio recently wrote to Prime Minister Naftali Bennett asking the government to step in and come to the company’s defense, but there are currently no indications that Israel plans to do so.

NSO says it is willing to give the American authorities the information needed to prove it has not engaged in any illegal activity or human rights violations. Al-Monitor has learned that in the past, NSO did shut down the Pegasus software sold to Saudi Arabia after the 2018 murder of dissident journalist Jamal Khashoggi — even though its investigation did not find proof that Khashoggi was ever a Pegasus target. After all, NSO officials point out, Khashoggi himself was the one who called the Saudi Embassy in Ankara to set up the meeting from which he never emerged. The decision to shut down the software sold to the Saudis was meant as a protest, according to company sources.

Many countries make use of NSO products to defend their citizens against terrorism and crime, NSO officials say, adding that there are no other means to do so, with so much cyber traffic encrypted from end to end. “The only way to deal with terrorism and crime in this day and age is to provide states with highly enhanced Big Brother capabilities to ban encryption and provide security services with total access to citizens in complete violation of their privacy — or to use us,” the senior NSO official said.

NSO concedes that its capabilities have accelerated Israel’s ties with many countries in the Middle East, greatly contributing to the Abraham Accords. Qatar was also infuriated by the UAE allegedly using Pegasus to uncover a 2018 bribery scandal.

The company insists Pegasus has saved countless lives around the world, helped recapture notorious Mexican drug baron “El Chapo” in 2016 and catch the six Palestinian inmates who recently broke out of an Israeli jail. Leaders the world over use it rather than violate their citizens’ rights more broadly. Attacking us is not the solution, NSO insists.

The company’s claims are obviously self-serving. Criticism of its activities is widespread and unlikely to die down anytime soon. NSO is now demanding protection from the Israeli government, which supervises its activity. But while Israel worked hard to appease the French after it transpired that Pegasus had been used to penetrate the cell phone of President Emmanuel Macron, Bennett and Foreign Minister Yair Lapid seem to have greater problems to deal with right now.