Lawmakers point to investigations into US government use of foreign spyware

WASHINGTON — Senior lawmakers have said they will investigate the government’s purchase and use of powerful spyware made by two Israeli hacking firms, as Congress passed a measure in recent days to try to curb the proliferation of hacking tools.

Rep. Adam Schiff, the California Democrat who is chairman of the House Intelligence Committee, sent a letter last week to the head of the Drug Enforcement Administration requesting detailed information about the agency’s use of Graphite, a spyware product produced by the Israeli company Paragon. .

“Such use could have potential implications for U.S. national security, and run counter to efforts to deter the broad proliferation of powerful surveillance capabilities for autocratic regimes and others who might abuse them.” , Mr. Schiff wrote in the letter.

Graphite, like the best-known Israeli hacking tool Pegasus, can penetrate the cellphones of its targets and extract messages, videos, photos and other content. The New York Times revealed earlier this month that the DEA uses Graphite in its overseas operations. The agency said it uses the tool legally and only outside the United States, but did not respond to questions about whether US citizens can be targeted with the hacking tool.

Mr. Schiff asked Anne Milgram, the DEA administrator, to respond by Jan. 15 to questions submitted in a classified addendum to the drug agency.

By then, Republicans will have seized power in the House and Mr. Schiff will no longer be chairman of the committee. But the committee’s efforts to limit the spread of foreign spyware have been bipartisan, meaning the change is unlikely to affect the body’s agenda on the issue.

Countries around the world have embraced commercial spyware for the new surveillance powers it gives them. Israeli company NSO held a virtual monopoly in the industry for nearly a decade – selling Pegasus to Mexico, Saudi Arabia, India and other countries – but new companies peddling other hacking tools have found success as demand has skyrocketed.

As part of its omnibus spending bill passed last week, Congress included provisions that give the Director of National Intelligence the power to ban the intelligence community from purchasing foreign spyware, and compel the Director of National Intelligence to submit a “watch list” to Congress each year. identify foreign spyware companies that pose a risk to US intelligence agencies.

Separately, Senator Ron Wyden, the Oregon Democrat who serves on the Senate Intelligence Committee, is lobbying the Federal Bureau of Investigation for information about the bureau’s purchase and testing of the Pegasus spyware. from NSO. Israeli society’s hacking tools have been used by autocratic and democratic governments to target journalists, dissidents and human rights defenders.

The Times reported last month that internal FBI documents showed the bureau’s criminal division had developed guidelines in 2021 for the use of Pegasus in criminal investigations – before FBI senior management decided not to use it. spyware in operations.

In a letter last week to FBI Director Christopher Wray, Wyden asked the bureau for information about why it chose not to deploy Pegasus and whether the bureau’s lawyers had made a decision that would prevent the FBI to use Pegasus or similar hacking tools. .

“The American people have a right to know the extent of the FBI’s hacking activities and the rules that govern the use of this controversial surveillance technique,” Wyden wrote.

A government legal brief related to a Times Freedom of Information Act lawsuit against the FBI said “just because the FBI ultimately decided not to deploy the tool in support of investigations criminals that it would not potentially test, assess, and deploy other similar tools. to gain access to encrypted communications used by criminals.

The Biden administration late last year placed NSO and another Israeli hacking firm on a Commerce Department blacklist, barring any US company from doing business with the two firms.

The move, along with a move by Israel’s Defense Ministry to reduce the number of countries to which companies can potentially sell their hacking tools, has rattled Israel’s hacking industry, drying up investment in the companies amid fears that they too could land on the American blacklist. A senior Israeli military official estimates that soon only six offensive tech companies will remain standing, compared to 18 companies that operated in Israel before the NSO was blacklisted.

But now the Israeli Defense Ministry appears to be considering easing restrictions on businesses to try to prevent the industry from collapsing, according to two Israeli military officials who spoke on condition of anonymity to discuss the sensitive decision making.

Asked if Israel has made a final decision on easing restrictions, a Defense Ministry spokesperson said “the goal is to improve monitoring of controlled cyber exports and create clearer instructions for vetted cyber-exporters, while reducing risk.” misuse of these systems and to provide effective tools to ensure compliance with the terms of the buyer’s license. »

The Israeli government requires all hacking companies in the country to obtain an export license to sell spyware to foreign governments. Some Israelis have tried to avoid these restrictions by relocating their businesses outside of Israel.

One of them, retired Israeli general Tal Dilian, has set up businesses in Greece and Cyprus and his hacking tool – Predator – is at the center of a growing scandal involving allegations of espionage by officials of the Greek government.

Israeli officials have publicly expressed their frustration at being powerless to regulate the activities of Israelis operating outside the country. But after recent reports of Mr Dilian’s growing hacking empire, Israel’s Defense Ministry called a meeting to explore whether steps could be taken to better regulate the operations of Mr Dilian and others working outside of Israel. Among the options explored was whether an investigation could be opened into Mr Dilian or whether other action could be taken against Israeli hackers who use the expertise they have acquired in the Israeli army to set up companies outside the reach of the government.