US intelligence officials backed contractor’s purchase of scandal-ridden NSO

US intelligence officials reportedly backed an American military contractor’s effort to purchase the controversial Israeli spyware firm NSO Group.

Executives from the contractor L3Harris made “numerous” visits to Israel in recent months in order to secretly negotiate the acquisition, during which they conveyed the supportive position of the US intelligence community, The New York Times reported on Sunday, citing five people familiar with the matter.

The stance was apparently passed along without the knowledge of Biden administration officials, who were caught off guard and furious when the negotiations leaked to the press last month.

L3Harris subsequently notified the administration that it was ending its talks to acquire NGO Group, though several people familiar told The Times that there was still an effort to resurrect the negotiations.

NSO’s flagship spyware, Pegasus, is considered one of the most powerful cyber-surveillance tools available on the market, giving operators the ability to effectively take full control of a target’s phone, download all data from the device and activate its camera or microphone without the user knowing.

The US Department of Commerce added NSO Group to its Entity List last November, which blocks it from acquiring US technology. The move came after bombshell investigative reporting revealed that Hungary, India, Mexico, Morocco and Saudi Arabia had been among the firm’s clients, using its software for dubious purposes.

L3Harris, NSO, the Office of the Director of National Intelligence, the Commerce Department and the Defense Ministry all declined requests for comment on the story.

A collapse of the talks could spell trouble for NSO Group, which has been reeling since being placed on the US blacklist, barring American firms from doing business with the Israeli company.

The NYT reported though that L3Harris representatives told Israeli negotiators that the US government had still signed off on the acquisition talks. Sitting in on at least one of those meetings was Amir Eshel, director general of the Defense Ministry, which is required to sign off on such sales.

According to last month’s joint report revealing the negotiations by The Guardian, The Washington Post and Haaretz, the potential deal could have also included the transfer of some personnel from the Israeli firm to the American contractor. However, that report said the sale was only of the Pegasus technology, and not the entire firm.

An individual familiar with the talks told the outlets that if a deal were to be inked, the list of approved clients for the technology would be dramatically curtailed and would probably only include the so-called “five eyes” alliance — the US, the UK, Australia, New Zealand and Canada.

The White House said that it had not been involved in “any way in this reported potential transaction.”

The senior White House official also said the US government “opposes efforts by foreign companies to circumvent US export control measures or sanctions, including placement on the US Department of Commerce’s Entity List for malicious cyber activity.”

The US Department of Commerce added NSO Group to its Entity List last November, blocking it from acquiring US technology. The move came after bombshell investigative reporting revealed that Hungary, India, Mexico, Morocco and Saudi Arabia had been among the firm’s clients, using its software for dubious purposes.

Also last month, it was reported that Israel was pushing the Biden administration to remove the firm from the blacklist. The Axios news site said that while the Israeli government initially rebuffed NSO’s request that it lobby the Biden administration on its behalf, it has since been convinced to assist the firm. The report cited three unnamed US and Israeli officials.

Azerbaijan, Bahrain, Kazakhstan, Mexico, Morocco, Rwanda, Saudi Arabia, Hungary, India and the United Arab Emirates were all said to have purchased the NSO Group’s Pegasus program to target activists, political dissidents and journalists, allegedly including Morocco targeting French President Emmanuel Macron. It was also reportedly used to track journalist Jamal Khashoggi, who was subsequently murdered by Saudi intelligence agents. NSO has denied allegations of wrongdoing.

According to a recent report, the FBI considered using Pegasus to collect phone data for ongoing investigations but eventually decided against it.