Manager of Fund Owning Israeli 'Pegasus' Spyware Firm Reportedly Awaiting Sensitive Info Clearance
Following a long-running dispute between the founding partners of Novalpina Capital, whose fund took over Israeli spyware company NSO Group in 2019, in the wake of the publication of the Pegasus project, an American consulting firm, Berkeley Research Group (BRG), was selected to take over management of the fund in late July.
Berkeley Research Group (BRG), a US consulting firm that took over management of the fund owning a majority stake in Israeli spyware maker, NSO Group, in late July, is still awaiting clearance from the Israeli government to receive any sensitive information, reported The Guardian.
NSO Group Technologies (NSO standing for Niv, Shalev and Omri, the names of the company's founders), an Israeli technology firm known for its proprietary spyware Pegasus, is regulated by the Israeli Defence Ministry, with details about the company’s government clients and internal investigations classified.
© AP Photo / Daniella CheslowThe logo of the Israeli NSO Group company is displayed on a building where they had offices until few months ago in Herzliya, Israel, Thursday, Aug. 25, 2016.
The logo of the Israeli NSO Group company is displayed on a building where they had offices until few months ago in Herzliya, Israel, Thursday, Aug. 25, 2016.
© AP Photo / Daniella Cheslow
The American consulting firm has reportedly not yet been to Israel to visit NSO’s headquarters. BRG, a global consulting firm that helps organisations manage disputes and investigations, was picked by a group of public investors to take over management of the fund from Novalpina Capital in July.
The London-based private equity company previously managed the fund and controlled NSO’s board after it led the acquisition of NSO Group in 2019. BRG is believed to have recently met with managers of other portfolio companies owned by the fund that was previously controlled by Novalpina.
The group also purportedly met with Omri Lavie, an NSO co-founder who is based in the US. Meanwhile, Gunter Schmid, a senior adviser to Novalpina who was serving as chair of NSO’s governance, risk and compliance committee (GRCC), recently submitted his resignation, writes the outlet. The GRCC oversees NSO’s adherence to human rights policies and probes complaints of abuse.
The decision to transfer management of the fund to BRG had come in the wake of a reported boardroom rift between three financiers - co-founders of the Novalpina Capital private equity fund, who upon acquiring NSO Group in 2019 had vowed to do “whatever is necessary” to ensure the would establish “a new model for public transparency”, described as “wholly without precedent within the cybersecurity industry”.
© REUTERS / HANNIBAL HANSCHKEA man reads at a stand of the NSO Group Technologies, an Israeli technology firm known for its Pegasus spyware enabling the remote surveillance of smartphones, at the annual European Police Congress in Berlin, Germany, February 4, 2020.
A man reads at a stand of the NSO Group Technologies, an Israeli technology firm known for its Pegasus spyware enabling the remote surveillance of smartphones, at the annual European Police Congress in Berlin, Germany, February 4, 2020.
© REUTERS / HANNIBAL HANSCHKE
While the Israeli technology firm NSO Group claims that its product is used by governments worldwide solely to conduct legitimate investigations into terrorism and crime, the investigation claimed that Pegasus software was used by countries to spy on each other as well as their own citizens.
Pegasus software, once installed on a phone, is able to harvest information and extract files from SMS messages, emails, as well as call and internet browsing histories. It can also transform a mobile phone into a remote listening device.
Traces of Pegasus snooping software have recently been discovered on the mobile phones of five incumbent French cabinet members, according to a report by the investigative website Mediapart. The French outlet reported that the phone of at least one member of President Emmanuel Macron's diplomatic team also contained traces of Pegagus. The investigative journal did not reveal which country spied on the officials, but previously French newspaper Le Monde wrote that Moroccan intelligence used the software to spy on President Macron and his cabinet. Rabat has categorically denied the report.
Denying all allegations, NSO says it conducts thorough investigations of allegations of misuse when it receives “credible information”.
NSO creates technology that helps government agencies prevent and investigate terrorism and crime to save thousands of lives around the globe.— NSO Group (@NSOgroup) November 22, 2020
The decision to transfer management of the fund that owns NSO from Novalpina to BRG was reportedly influenced by Tobias Read, the treasurer of the state of Oregon, according to sources cited by the outlet. One of the largest investors in Novalpina Capital, the Oregon state employee pension fund had committed an estimated $233m to the private equity firm in 2017. Rachel Wray, the Oregon treasury spokesperson, was cited by AP as saying in August that Tobias Read was “concerned” about reporting around NSO and had been “involved” in discussions around the pension fund’s investment.
Weighing in on the report that BRG not yet received clearance by Israel to access sensitive information pertaining to NSO, Wray was cited by The Guiardian as saying:
“Treasury is one of many limited partners in this fund; as a limited partner, we do not control the investment decisions made by external managers at private equity funds.”
There has not yet been any official statement on the report from BRG.