The British Middle East Eye website reported that the Pegasus scandal, which is one of the biggest espionage scandals in the modern era, revealed loopholes in the story promoted by Israel about its success in the field of (electronic) security.
The website stated in
a lengthy report
that what was revealed about the extent of the Pegasus hack in the context of the electronic espionage of the Israeli "NSO Group" has sparked a storm of controversy in Israel and abroad about the way the cybersecurity sector operates, which it boasts of. Tel Aviv very much.
Israeli companies working in the field of cyber security have always been able to maintain a strong brand due to the fame of the Israeli intelligence services - especially the Mossad and the signals intelligence unit (SIGINT 8200) in this field - and the tangible ability of these companies to recruit graduates from these devices among their employees.
Perhaps one of the less-discussed aspects is whether the cybersecurity sector is financially viable.
Espionage is the mainstay of Israeli digital technology
In its report, the British website indicated that former Israeli Prime Minister Benjamin Netanyahu repeatedly talked about the digital space as the mainstay of the high-tech sector in Israel, and its economy in general.
However, Haaretz revealed abundant evidence that Israel's offensive cyber capabilities - especially the technology used by the "NSO" group - played a large role in Netanyahu's foreign policy.
Countries including Hungary, India, Rwanda, the UAE and others concluded deals with the "NSO" group following Netanyahu's visit to it.
And when it comes to the profits of technology companies, the picture is far from clear, according to "Middle East Eye".
Because they are private companies whose shares are not traded in the stock markets, these companies maintain the confidentiality of their customer lists, the size of contracts concluded with them, and the costs of each project according to the implementation period and the materials used in it, so that it is not easy to obtain their financial reports related to total revenues, operating costs and profits.
Maintaining secrecy becomes difficult
Maintaining the secrecy of Israeli cybersecurity companies has become even more difficult in a world where the security sector is increasingly privatized.
PSCs rely on private investments and private clients, and therefore have to seek public outreach and self-promotion.
The Israeli government has traditionally tightened its grip on the arms industry and the intelligence services operating at home and abroad, but privatization has crept in and even the largest Israeli arms company, Elbit Systems, is privately owned.
The "NSO" group is not limited to being privately owned, but most of its shares were bought by the Novalpina Fund - based in Europe - in 2019, which means that the company may be Israeli, but it is owned by foreign investors.
Another example of Israeli security companies is Black Cube, which prides itself on being founded by former Mossad agents.
Fame does not mean success
The "NSO" group became famous and is said to have become the most famous (or rather notorious) Israeli cyber attack company.
However, fame does not necessarily equate to success, according to the Middle East Eye report.
Journalist Hagar Shezaf from Haaretz newspaper interviewed employees of the "NSO" group and discovered that what distinguishes it from companies in other countries is its willingness to take greater risks, such as dealing with the most tyrannical governments and violating human rights.
Shezaf wondered whether taking risks was a sign of self-confidence or desperation.
In 2017, Blackstone, a US-based investment management company, decided not to invest in NSO because it deemed too risky.
And when Facebook sued NSO Group for its alleged hacking of more than 1,400 WhatsApp accounts, a case that Microsoft and Google joined, the Israeli company found itself under increasing pressure.
The company now claims to have developed its own code of ethics to help select its customers more carefully.
This year it also published a transparency report that Amnesty International criticized as a "missed opportunity" for not being transparent enough.
According to the Israeli writer Amitai Ziv of "The Marker" magazine, the financial situation of the "NSO" group is faltering even before its operations are exposed.
It hired more workers and increased its workforce from 600 to 750, possibly in order to deal with Facebook's lawsuit and the "bad" media coverage it received.
Changed managers 3 times
In 2020, NSO's revenue amounted to $343 million, compared to $251 million in 2018. The writer Ziff noted that the company changed its CEOs 3 times in 11 years.
The writer was not able to directly obtain the financial reports of the same company, but he cited a report issued by Moody's credit rating agency (Moody's) in May, in which it warned that the cash flow of the "NSO Group" had turned negative, which prompted it "that is, the agency." To downgrade the Israeli company's credit rating to B3.
It was announced last July 27 that the Novalpina Capital Fund, which owns most of NSO's shares, is facing liquidation due to disagreements within its management.
If the fund ends up selling its assets on the open market, there is no law to prevent China or Iran from buying SNO shares and the consequent possibility of it obtaining major shareholder status.
loss of state control
The risk is that the privatization of the security sector will result in the state losing control over the weapons and knowledge it produces for the benefit of its military.
Because the Israeli government has used mass surveillance to keep Palestinians in constant fear, international outcry has been minimal.
But now that any creature on this planet might have reason to fear being watched just because someone decided to use NSO (or any other company) to spy on it, the world is starting to worry more and more.
The British site concludes by saying that the "NSO" group declined to comment on what was mentioned in this report.