The Mexico example revealed both the promise and the perils of working with NSO. In 2017, researchers at Citizen Lab, a watchdog group based at the University of Toronto, reported that authorities in Mexico had used Pegasus to hack the accounts of advocates for a soda tax, as part of a broader campaign aimed at human rights activists, political opposition movements and journalists. More disturbing, it appeared that someone in the government had used Pegasus to spy on lawyers working to untangle the massacre of 43 students in Iguala in 2014. TomÃ¡s ZerÃ³n de Lucio, the chief of the Mexican equivalent to the F.B.I., was a main author of the federal governmentâ€™s version of the event, which concluded that the students were killed by a local gang. But in 2016 he became the subject of an investigation himself, on suspicion that he had covered up federal involvement in the events there. Now it appeared that he might have used Pegasus in that effort â€” one of his official duties was to sign off on the procurement of cyberweapons and other equipment. In March 2019, soon after AndrÃ©s Manuel LÃ³pez Obrador replaced PeÃ±a Nieto after a landslide election, investigators charged that ZerÃ³n had engaged in torture, abduction and tampering with evidence in relation to the Iguala massacre. ZerÃ³n fled to Canada and then to Israel, where he entered the country as a tourist, and where â€” despite an extradition request from Mexico, which is now seeking him on additional charges of embezzlement â€” he remains today.
The American reluctance to share intelligence was creating other opportunities for NSO, and for Israel. In August 2009, Panamaâ€™s new president, Ricardo Martinelli, fresh off a presidential campaign grounded on promises of â€œeliminating political corruption,â€ tried to persuade U.S. diplomats in the country to give him surveillance equipment to spy on â€œsecurity threats as well as political opponents,â€ according to a State Department cable published by WikiLeaks. The United States â€œwill not be party to any effort to expand wiretaps to domestic political targets,â€ the deputy chief of mission replied.
Martinelli tried a different approach. In early 2010, Panama was one of only six countries at the U.N. General Assembly to back Israel against a resolution to keep the Goldstone Commission report on war crimes committed during the 2008-9 Israeli assault on Gaza on the international agenda. A week after the vote, Martinelli landed in Tel Aviv on one of his first trips outside Latin America. Panama will always stand with Israel, he told the Israeli president, Shimon Peres, in appreciation of â€œits guardianship of the capital of the world â€” Jerusalem.â€ He said he and his entourage of ministers, businesspeople and Jewish community leaders had come to Israel to learn. â€œWe came a great distance, but we are very close because of the Jewish heart of Panama,â€ he said.
Behind closed doors, Martinelli used his trip to go on a surveillance shopping spree. In a private meeting with Netanyahu, the two men discussed the military and intelligence equipment that Martinelli wanted to buy from Israeli vendors. According to one person who attended the meeting, Martinelli was particularly interested in the ability to hack into BlackBerryâ€™s BBM text service, which was very popular in Panama at that time.
Within two years, Israel was able to offer him one of the most sophisticated tools yet made. After the installation of NSO systems in Panama City in 2012, Martinelliâ€™s government voted in Israelâ€™s favor on numerous occasions, including to oppose the United Nations decision to upgrade the status of the Palestinian delegation â€” 138 countries voted in favor of the resolution, with just Israel, Panama and seven other countries opposing it.
According to a later legal affidavit from Ismael Pitti, an analyst for Panamaâ€™s National Security Council, the equipment was used in a widespread campaign to â€œviolate the privacy of Panamanians and non-Panamaniansâ€ â€” political opponents, magistrates, union leaders, business competitors â€” all â€œwithout following the legal procedure.â€ Prosecutors later said Martinelli even ordered the team operating Pegasus to hack the phone of his mistress. It all came to an end in 2014, when Martinelli was replaced by his vice president, Juan Carlos Varela, who himself claims to have been a target of Martinelliâ€™s spying. Martinelliâ€™s subordinates dismantled the espionage system, and the former president fled the country. (In November, he was acquitted by Panamanian courts of wiretapping charges.)
NSO was doubling its sales every year â€” $15 million, $30 million, $60 million. That growth attracted the attention of investors. In 2014, Francisco Partners, a U.S.-based global investment firm, paid $130 million for 70 percent of NSOâ€™s shares, then merged another Israeli cyberweapons firm, called Circles, into their new acquisition. Founded by a former senior AMAN officer, Circles offered clients access to a vulnerability that allowed them to detect the location of any mobile phone in the world â€” a vulnerability discovered by Israeli intelligence 10 years earlier. The combined company could offer more services to more clients than ever.