Pegasus, the secretive surveillance system at the service of Israel’s interests

The controversial spyware has been used in the past to improve the country’s international image and it is part of a thriving cybersecurity industry

Shalev Hulio
The CEO and founder of NSO, Shalev Hulio (center) in 2019 in Herzliya (Israel).Contact Photo (Ziv Koren / Polaris / ContactoPhoto)

When the Mossad or the Shin Bet, Israel’s foreign and national intelligence agencies, do not want to leave clues, they turn to NSO, a company known for marketing a spyware known as Pegasus. The company is in the eye of the storm over claims that clients who bought Pegasus (in theory, only governments can purchase the program) spied on political opponents, diplomats and journalists in several parts of the world.

Agents from both Israeli agencies have even more powerful and secretive communications-tapping tools at their disposal, but even those are not as sophisticated as the state-of-the-art espionage tools handled by Unit 8200, an elite cyber-unit of the Israel Defense Forces and the inner sanctum of its military intelligence.

In 2010, three engineers who had previously worked for Unit 8200 (Niv Carmi, Shalev Hulio and Omri Lavie, whose first-name initials form the company’s acronym) designed a Trojan virus nicknamed Pegasus. The company went on to build an emporium at the service of Israeli interests, but NSO’s power now seems to be in decline due to a string of alleged abuses surrounding the use of Pegasus.

Little oversight

NSO has emerged successfully from judicial investigations in Israel, after it was detected that Pegasus had been used to spy on humanitarian activists, journalists and opposition politicians in other countries. In 2020 a Tel Aviv court dismissed a lawsuit brought by Amnesty International to review the export permit of the spyware system. Earlier, court deliberations involving a similar request filed by the pacifist leftist party Meretz in 2016 were held behind closed doors and a gag order was issued on the judgment.

Israel attracts 40% of the world’s private investments in cybersecurity, yet this sector operates with very little parliamentary or judicial scrutiny. The 700 cybersecurity firms operating in Israel received $8.8 billion (€8.35 billion) in foreign funds last year, according to the National Directorate of Cyber Technologies. That is three times more than in 2020. And 80% of the founders of these companies are young engineers from the famous Unit 8200.

Government control

The Foreign Affairs and Defense Committee of the Knesset (Israel’s legislative assembly) lacks detailed information on exports by the defense sector, according to an investigation published in 2018 by the daily Haaretz. The Defense Ministry, which oversees Pegasus exports, refuses to send lawmakers the list of countries to which military exports are prohibited. “Israeli industry have not hesitated to sell offensive capabilities to many countries that lack a strong democratic tradition, even when they have no way to ascertain whether the items sold were being used to violate the rights of civilians,” said the newspaper. These countries include Bahrain, Saudi Arabia, the United Arab Emirates, Nicaragua, Honduras and Kazakhstan.

NSO is based in Herzliya Pituah, a suburb north of Tel Aviv that is Israel’s answer to Silicon Valley. The company often responds to queries with the mantra that they are simply “providing technology to security agencies and services of other countries to save lives” in the fight against terrorism or organized crime. It maintains that its employees do not operate the program and always have authorization from the Israeli government. Its organization chart includes an ethics committee that can veto contracts, and since 2019 it has adhered to the United Nations guidelines on responsible trade and business. In practice, the Israeli Ministry of Defense has the last word on Pegasus sales.

US sanctions

The US Treasury Department last year blacklisted NSO for acting “contrary to the national security or foreign policy interests of the United States.” The company’s assets have been depreciating ever since. Other Israeli cybersecurity firms, such as Cellebrite and Candiru, are also in the crosshairs of Washington for having provided authoritarian regimes with programs to spy on dissidents.

The murder of Saudi journalist Jamal Khashoggi, a Washington Post columnist who was reported missing in 2018 after going to the Saudi Arabia Consulate in Istanbul, seems to be behind the sanction. In a video conference from Moscow, Edward Snowden, a former US intelligence contract worker who became a household name after leaking American intelligence files in 2013 to the media. told journalists in Tel Aviv that Pegasus had been used to track Khashoggi.

Global image enhancement

The export of programs such as Pegasus was also part of the strategy of the governments of former Prime Minister Benjamin Netanyahu between 1999 and 2021 to improve Israel’s international image, seriously damaged by the Palestinian conflict. With the transfer of cyberespionage programs, it sought to gain allies in the United Nations, where the occupation of the West Bank and East Jerusalem and the blockade of the Gaza Strip by Israel are periodically questioned. Mossad officials used to visit NSO’s headquarters in Herzliya along with delegations from Arab and African countries interested in acquiring the Pegasus program, former company employees revealed to Haaretz.

Police spying on Israelis

NSO CEO Shalev Hulio had always claimed that the program was designed not to operate on Israeli phones. But suspicions that Israeli police used Pegasus domestically against public officials, government advisers and social activists without a court order led to investigations by the Attorney General’s Office and parliament early this year. The officers allegedly tapped the phones of alleged suspects to capture data from their mobile devices. If they obtained any evidence against these individuals, the officers would then request judicial authorization retroactively in order to legalize the proceedings and carry on with the investigation.

The Pegasus program was first used by the Israeli police in 2013, after commanders from Shin Bet and military intelligence units joined the force. “These new revelations are just a natural process of Israel’s crippled and eroded democracy, which is controlled by a powerful military-security apparatus,” warned Yossi Mellman, an expert analyst, in the pages of Haaretz. The investigations undertaken by the Attorney General’s Office, which counted precisely on the technical assistance of the Shin Bet and the Mossad, ended up exonerating the Israeli police from the accusations of unlawfully wiretapping communications.

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