“A team of executives from an
American military contractor quietly visited Israel numerous times in recent
months to try to carry out a bold but risky plan: purchasing NSO Group, the
cyber hacking firm that is as notorious as it is technologically accomplished.
The impediments were substantial for
the team from the American company, L3Harris, which also had experience with
spyware technology.
They started with the uncomfortable fact that the United
States government had put NSO on a blacklist just months
earlier because the Israeli firm’s spyware, called Pegasus, had been used by
other governments to penetrate the phones of political leaders, human rights
activists and journalists.
Pegasus is a “zero-click” hacking tool that can remotely
extract everything from a target’s mobile phone, including messages, contacts,
photos and videos without the user having to click on a phishing link to give
it remote access. It can also turn the mobile phone into a tracking and
recording device.
NSO had acted “contrary to the
national security or foreign policy interests of the United States,” the Biden
administration said in announcing the blacklisting in November, barring
American companies from doing any business with the Israeli firm.
But five people familiar with the
negotiations said that the L3Harris team had brought with them a surprising
message that made a deal seem possible. American intelligence officials, they
said, quietly supported its plans to purchase NSO, whose technology over the
years has been of intense interest to many intelligence and law enforcement
agencies around the world, including the F.B.I. and the C.I.A.
The talks continued in secret until last month, when word of NSO’s possible sale
leaked and sent all the parties scrambling. White House officials
said they were outraged to learn about the negotiations, and that any attempt
by American defense firms to purchase a blacklisted company would be met by
serious resistance.
Days later, L3Harris, which is heavily reliant on government
contracts, notified the Biden administration that it had scuttled its plans to
purchase NSO, according to three United States government officials, although
several people familiar with the talks said there have been attempts to
resuscitate the negotiations.
Left in place are questions in Washington, other allied
capitals and Jerusalem about whether parts of the U.S. government — with or
without the knowledge of the White House — had seized an opportunity to try to
bring control of NSO’s powerful spyware under U.S. authority, despite the
administration’s very public stance against the Israeli firm.
It also left unsettled the fate of
NSO, whose technology has been a tool of Israeli foreign policy even as the
firm has become a target of intense criticism for the ways its spyware is used
by governments against their citizens.
The episode was the latest skirmish in an ongoing battle
among nations to gain control of some of the world’s most powerful cyberweapons,
and it reveals some of the headwinds faced by a coalition of nations —
including the United States under the Biden administration — as it tries to
rein in a lucrative global market for sophisticated commercial spyware.
Spokesmen for L3Harris and NSO
declined to comment about the negotiations between the companies. A spokeswoman
for Avril Haines, the director of national intelligence, declined to comment on
whether any American intelligence officials quietly blessed the discussions. A
spokesman for the Commerce Department declined to give specifics about any
discussions with L3 Harris about purchasing NSO.
A spokesman for the Israeli defense
ministry declined to comment, as did a spokeswoman for the Israeli prime
minister.
The Biden administration’s decision to put NSO on a Commerce
Department blacklist came after years of revelations about how governments had
used Pegasus, NSO’s premier hacking tool, as an instrument of domestic
surveillance.
But the United States itself has
also purchased, tested and deployed Pegasus.
In January, The New York Times revealed that the F.B.I. had
purchased Pegasus software in 2019, and that government lawyers at the F.B.I. and
the Justice Department had debated whether to deploy the spyware for use in
domestic law enforcement investigations. The Times also reported that in 2018
the C.I.A. had purchased Pegasus for the government of Djibouti to conduct
counterterrorism operations, despite that country’s record of torturing
political opposition figures and imprisoning journalists.
A decision by L3 to terminate the acquisition talks would
leave NSO’s future in doubt. The company had seen a deal with the American
defense contractor as a potential lifeline after being blacklisted by the
Commerce Department, which has crippled its business. American firms are not
allowed to do business with companies on the blacklist, under penalty of
sanctions.
As a result, NSO cannot buy any American technology to
sustain its operations — whether it be Dell servers or Amazon cloud storage —
and the Israeli firm has been hoping that being sold to a company in the United
States could lead to the sanctions being lifted.
For more than a decade, Israel has
treated NSO as a de facto arm of the state, granting licenses for Pegasus to
numerous countries — including Saudi Arabia, Hungary and India — with which the
Israeli government hoped to nurture stronger security and diplomatic ties.
But Israel has also denied Pegasus
to countries for reasons of diplomacy.
Last year, Israel rejected a request by the government of
Ukraine to purchase Pegasus to use against targets in Russia,
fearing that the sale would damage Israel’s relations with the Kremlin.
The Israeli government also makes extensive use of Pegasus
and other locally made cyber tools for its own intelligence and law enforcement
purposes, giving it further incentive to find a way for NSO to survive the
American sanctions.
During the discussions about the
possible sale of NSO to L3 Harris — which included at least one meeting with
Amir Eshel, the director general of the Israeli defense ministry, who would
have to approve any deal — the L3Harris representatives said they had received
permission from the United States government to negotiate with NSO, despite the
company’s presence on the American blacklist.
L3 Harris’s representatives told the
Israelis that U.S. intelligence agencies supported the acquisition as long as
certain conditions were met, according to five people familiar with the
discussions.
One of the conditions, those people said, was that NSO’s
arsenal of “zero days” — the vulnerabilities in computer source code that allow
Pegasus to hack into mobile phones — could be sold to all of the United States’
partners in the so-called Five Eyes intelligence sharing relationship. The
other partners are Britain, Canada, Australia and New Zealand. A senior British
diplomat declined to comment on questions about the degree of knowledge British
intelligence had about a possible deal between L3 and NSO.
Such a plan would have been highly unusual had it been
finalized, since the Five Eyes countries usually only purchase intelligence
products that have been developed and manufactured within those countries.
Israeli defense ministry officials were open to this
arrangement. But following heavy pressure from the Israeli intelligence
community, it balked at another request: that the Israeli government allow NSO
to share the computer source code for Pegasus — which allows it to exploit the
vulnerabilities in the phones it targets — with the Five Eyes countries. They
also did not agree, at least not in the first phase, to allow L3’s cyber
experts to come to Israel and join NSO’s development teams at the company’s
headquarters north of Tel Aviv.
Representatives of the defense ministry also insisted that
Israel retain its authority to grant export licenses for NSO’s products, but
said they were willing to negotiate over which countries received the spyware.
Over the course of the discussions,
there were numerous issues that would have required the approval of the United
States government. L3Harris representatives said that they had discussed the
issues with American officials, who had agreed in principle, according to the
people familiar with the discussions.
To help negotiate the sale of NSO,
L3Harris hired an influential lawyer in Israel with deep ties to Israel’s defense
establishment. The lawyer, Daniel Reisner, is the former head of the
International Law Department at the Israeli Military Prosecutor’s Office and
acted as a special adviser on the Middle East peace process to former Prime
Minister Benjamin Netanyahu.
In the months since the Biden
administration announced the blacklist in November, and as the Israeli
government pressed for a way to keep NSO from going under, the Commerce
Department in Washington sent a list of questions to NSO and another Israeli
hacking firm that had been blacklisted at the same time, about how the spyware
works, who it targets and whether the company has any control over how its
nation-state clients deploy the hacking tools.
The list, reviewed by The Times, asked whether NSO
maintained “positive control over its products” and whether Americans overseas
were protected from having NSO’s products deployed against them.
Another asked if NSO would “shut
down access to its products if the U.S. government informs them that there is
an unacceptable risk of the tool being used for human rights abuses by a
particular customer?”
Separately from the proposed NSO and
L3 Harris deal, Israeli officials negotiated unsuccessfully with the Commerce
Department about getting NSO removed from the American blacklist in advance of
President Biden’s trip to Israel in the coming week.
News last month of L3Harris’s talks
to purchase NSO seemed to blindside White House officials. After the website Intelligence Online
reported on the possible sale, a top White House official said such a
transaction would pose “serious counterintelligence and security concerns for
the U.S. government” and that the administration would work to ensure that the
deal did not happen.
The official said that an American
company, particularly a defense contractor, should have been aware that any
transaction “would spur intensive review to examine whether the transaction
process poses a counterintelligence threat to the U.S., government and its
systems and information.”
Last week, in response to questions
from The Times, another U.S. official said that no part of the American government
blessed L3’s purchase of NSO, and that “after learning about the potential
sale, the IC did an analysis that raised concerns about the sale’s implications
and informed the administration’s position.”
While not a household defense
industry name like Lockheed Martin or Raytheon, L3Harris earns billions each
year from American government contracts at both the federal and state level.
According to the company’s most recent annual
report, more than 70 percent of the company’s revenue in fiscal year 2021 came
from various U.S. government contracts.
USAspending.gov, a
website that tracks government contracts, indicates that the Defense Department
is L3Harris’ biggest government client.
The company once produced a
surveillance system called Stingray that was used by the
F.B.I. and local American police forces until the company discontinued
production. In 2018, the company purchased Azimuth Security
and Linchpin Labs, two Australian cyber firms that Vice reported had sold
zero day exploits to the Five Eyes countries.
In 2016, the F.B.I. enlisted Azimuth
to help break into the Apple phone of a terrorist who had carried out a deadly
shooting in San Bernardino, Calif., killing more than a dozen people, according
to a report in the Washington
Post.
Azimuth’s work for the F.B.I. ended
a standoff between the bureau and Apple, which had pointedly refused to help
the F.B.I. unlock the phone in the San Bernardino case. The tech giant argued
it had no backdoor to allow the F.B.I. access to the phone, and were loath to
create one because it would weaken the iPhone’s security features it promotes
to its customers.”
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