Fund Manager Who Owns Israeli Spyware Firm Still Lacks Access to Sensitive Information | Monitoring


The American consultancy firm that now manages the fund which owns a majority stake in NSO Group, the Israeli spyware maker, has not yet been authorized by the Israeli government to receive sensitive information about the company.

Authorization is required before any sensitive information can be shared as NSO is regulated by the Israeli Ministry of Defense, and details of the company’s government clients and internal investigations are filed.

Berkeley Research Group (BRG) was chosen to take over management of the fund by a group of public investors at the end of July after an internal dispute between the founding partners of Novalpina Capital, the London-based private equity firm that previously managed the fund and controlled the NSO Board of Directors.

A spokesperson for the Israeli embassy in London declined to comment. BRG did not respond to multiple requests for comment.

The fund’s change of management follows months of internal conflict at Novalpina. He also intervened after the publication of Project Pegasus, an investigation into NSO carried out by a consortium of 17 news outlets including the Guardian, the Washington Post and the French association Forbidden Stories.

The investigation revealed how human rights activists, journalists and lawyers around the world have been targeted by authoritarian governments using NSO’s hacking software known as Pegasus. Traces of Pegasus were also recently discovered on the cell phones of five current members of the French cabinet, according to a report from the investigation site Mediapart.

NSO said its hacking software was only intended for use by government clients to conduct legitimate serious crime investigations. The company denied that its spyware was ever used to target French officials, and also said it conducted extensive investigations into allegations of abuse when it received “credible information.”

Once installed on a phone, Pegasus can harvest more or less any information or extract any file. SMS messages, address books, call history, calendars, emails, and internet browsing histories can all be exfiltrated. It can also turn a mobile phone into a remote listening device.

The Guardian also learned that Gunter Schmid, a senior advisor to Novalpina who had continued to chair NSO’s Governance, Risk and Compliance Committee (GRCC), recently tendered his resignation.

According to a recent NSO disclosure of its internal governance practices, the GRCC monitors NSO’s compliance with its human rights policies and investigates complaints of abuse.

After Schmid’s departure, the GRCC now appears to have at least three members: Asher Levy, executive chairman of NSO, Shalev Hulio, co-founder and chief executive of NSO, and Shmuel Sunray, general counsel of NSO.

NSO did not respond to questions about Schmid’s resignation or BRG’s status with the Israeli government. Schmid was not immediately available for comment.

According to its website, BRG is a global consulting firm that helps organizations manage litigation and investigations, address corporate finance issues, and improve their performance. The company says on its website that it “is always looking for opportunities to make a positive contribution to our local and global communities.”

BRG’s executive chairman is David Teece, a distinguished economist and professor of global business at the Haas School of Business at the University of California, Berkeley.

A university press secretary did not respond to a Guardian request for an interview with Teece. But the professor has already expressed his opinion on the role of business in supporting democratic values.

In October 2020, in an opinion piece published by the New York Times that focused on corporate social responsibility in the wake of “worrying” developments in China, Teece called out companies “whose prosperity depends on liberal democratic institutions.” to “reassess their strategic decisions to determine whether they undermine in any way these institutions”.

He wrote: “[I]It is about thinking of the future with a stewardship perspective and a deep concern for democracy, open societies, justice and the rule of law. Other problems, with the possible exception of those related to the environment, are of minor importance. “

BRG declined to answer questions about its corporate social responsibility policies.

Two people familiar with the matter said that investors’ decision to transfer management of the fund that owns NSO from Novalpina to BRG was heavily influenced by Tobias Read, the Oregon state treasurer who recently launched a campaign for become governor.

The Oregon State Employee Pension Fund was one of the largest investors in Novalpina Capital, having committed around $ 233 million to the private equity firm in 2017, before its acquisition from NSO.

Rachel Wray, spokeswoman for the Oregon Treasury, told The Associated Press in August that Read – who, as the state’s chief investment officer, oversees its multibillion-dollar pension fund – was “concerned” about the NSO reporting and was “involved” at the time. in discussions around Oregon’s investment.

Responding to questions about whether Read had concerns that BRG does not yet receive clearance from Israel, Wray said in a statement to the Guardian: “The Treasury is one of many partners limited of this fund; as a limited partner, we do not control the investment decisions made by the external managers of private equity funds.

She then directed the inquiries to be forwarded to a spokesperson for BRG. The spokesperson did not respond to requests for comment.

It is understood that BRG recently met with the managers of other portfolio companies belonging to the fund which was previously controlled by Novalpina.

While BRG has yet to go to Israel to visit NSO’s headquarters, or access classified information, it is understood that the consulting firm has met with Omri Lavie, a co-founder of NSO based in the United States.

In an exchange of messages with the Guardian, in response to a question as to whether he expected BRG to be involved in NSO in the same way that Novalpina had been, Lavie wrote: “I guess you will have to wait and see like everyone else. “


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