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The underworld of Pegasus

The NSO-developed spyware’s history calls for deliberation over the recent WhatsApp controversy

Snooping on Indian journalists, lawyers and activists' WhatsApp numbers by using a spyware software called Pegasus, developed by the Israeli company NSO Group Technology, is an indication that the current ruling dispensation is either in hand and gloves with such activities or is incapable to handle issues related to privacy of the citizens and the security of the nation. Whatever is the case, the government is bound to face a strongly agitated Opposition on the issue in the winter session of Parliament, beginning after a fortnight. The whole matter has become more serious after two of the victims of WhatsApp spyware have come out in the open to confirm that they were in communication with the Facebook-owned chatting app in connection with alleged snooping.

Not many know that NSO is a firm that is so clandestinely networked at the global level that it is difficult even for experts in secret services to exactly decode its functioning. NSO is focused on cyber intelligence world over. The outfit was founded by Niv Carmi, Omri Lavie and Shalev Hulio and reportedly employs around 500 people who play their games from a base in Herzliya, near Tel Aviv.

NSO has grown with such a fast speed that its annual revenue was said to be around $40 million in 2013 and $150 million in 2015, but within four years, in June 2017, the company was put up for sale for $1 billion by Francisco Partners Management. The American private equity firm Francisco Partners bought the company for $130 million in 2014. The company was officially put up for sale for more than $1 billion in June 2017, roughly ten times what Francisco originally paid in 2014.

Founders Lavie and Hulio, partnering with European private equity fund Novalpina Capital, purchased a majority stake in NSO in February 2019. Francisco Partners sold a 60 per cent majority stake of NSO back to cofounders. Hulio and Lavie invested $100 million, with Novalpina acquiring the remaining portion of the majority stake, thus valuing the company at approximately $1 billion.

Though NSO claims that it provides "authorised governments with technology that helps them combat terror and crime", there are claims that software created by NSO Group was used in targeted attacks against human rights activists and journalists in several countries. NSO's founders are no ordinary businesspersons. It is said that they are ex-members of Unit 8200, the Israeli Intelligence Corps Unit responsible for collecting signals intelligence. The company's start-up funding came from a group of investors headed by Eddy Shalev, a partner in venture capital fund Genesis Partners. The group invested a total of $1.8 million dollars for a 30 per cent stake.

The governments of various countries have taken services from NSO. Mexico signed a contract for $20 million with NSO in 2012. The company sold surveillance technology to the government of Panama and the contract became the subject of a Panamanian anti-corruption investigation following its disclosure in a leak of confidential information from Italian firm Hacking Team. Only six months back, in April 2019, NSO froze its deals with Saudi Arabia over a scandal alleging NSO software's role in tracking slain journalist Jamal Khashoggi in the months before his death.

WhatsApp has claimed that the spyware developed by NSO has targeted 1400 users in 20 countries. It all began around three years ago when on August 25, 2016, Citizen Lab and Lookout revealed that software known as Pegasus, created by NSO, was being used to target human rights activist Ahmed Mansoor in the United Arab Emirates. Mansoor informed Citizen Lab researchers Bill Marczak and John Scott-Railton that his 'iPhone 6 had been targeted on August 10, 2016, by means of a clickable link in an SMS text message'.

The investigation noticed that the software's code referenced an NSO Group product called "Pegasus" in leaked marketing materials. Pegasus had previously come to light in a leak of records from Hacking Team, which indicated the software had been supplied to the government of Panama in 2015. The outcome of the investigation suggested that the software could have been used in Israel, Hungary, Saudi Arabia, Nigeria, Bahrain Turkey, Thailand, Uzbekistan, Mozambique, Qatar, Kenya, Morocco, Yemen, etc.

The fact cannot be ignored that in June 2018, an Israeli court indicted a former employee of NSO Group for allegedly stealing a copy of Pegasus and attempting to sell it online for $50 million worth of cryptocurrency. It is also serious enough that in December 2018, a New York Times investigation concluded that Pegasus software played a role in the murder of Jamal Khashoggi.

Months before, NSO's 'signature spy software' had been placed on the iPhone of Saudi dissident Omar Abdulaziz, one of Khashoggi's confidantes. Abdulaziz claimed the software revealed Khashoggi's 'private criticisms of the Saudi royal family'. It is said that this criticism played a major role in Khashoggi's death.

There are instances that NSO software is playing its role for so many years now. The phone of Joaquín Guzmán, known as El Chapo, was hacked using NSO software in 2011, Mexican President Felipe Calderón reportedly called NSO to thank the company for its role in Guzmán's capture.

And what is Francisco Partners? An American private equity firm founded in August 1999 in Menlo Park, California, and is based in San Francisco and London, Francisco has raised $14 billion in committed capital. The firm currently has five active funds and roughly 50 current portfolio companies. They including BluJay (formerly Kewill), Bomgar, Verifone, Renaissance Learning, Quest, ClickSoftware Technologies, GoodRx, SonicWall and SmartBear Software. Founders Sanford Robertson, Dipanjan Deb, David Stanton, Benjamin Ball, and Neil Garfinkel came from a variety of private equity firms.

By 2012, the Francisco Partners' funds had about $7 billion in capital. The firm invested in Paymetric in 2013, selling the company to Vantiv in Atlanta, Georgia four years later. After acquiring the e-commerce services company Avangate in 2013, the firm invested in the software company Prosper in 2014, with Francisco Partners' executive David Golob becoming a Prosper director. Francisco Partners invested in the information technology company CoverMyMeds the same year and paid $120 million for a majority stake in the spy company NSO Group. The firm completed raising about $2.9 billion and also purchased the California-based analytics company Procera Networks for $240 million and the Israeli workplace management company ClickSoftware Technologies for $438 million. The firm also invested in GoodRx in 2015.

Francisco joined with Elliott Management in June 2016 to buy the SonicWall and Quest Software, subsidiaries from Dell as part of the spinoff of Dell Software. Francisco Partners invested in Dynamo Software, Pet Circle, Discovery Education and MyOn. Francisco Partners is currently led by CEO Dipanjan Deb, one of the firm's founders, along with Ezra Perlman and Deep Shah, co-presidents. One David Golob is also there.

I have no idea if you find this very little brief about the direct and indirect roots NSO has across the globe interesting or not but I am of the opinion that my government, and the Opposition, must take WhatsApp controversy with the seriousness it deserves.

Pankaj Sharma is Editor and CEO of News Views India and a national office bearer of the Congress party. Views expressed are strictly personal

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