Defense Firm Said U.S. Spies Backed Its Bid for Pegasus Spyware Maker

A team of executives from an American military contractor quietly visited Israel numerous times in recent months to try to carry out a bold but risky plan: purchasing NSO Group, the cyber hacking firm that is as notorious as it is technologically accomplished.

The impediments were substantial for the team from the American company, L3Harris, which also had experience with spyware technology. They started with the uncomfortable fact that the United States government had put NSO on a blacklist just months earlier because the Israeli firm’s spyware, called Pegasus, had been used by other governments to penetrate the phones of political leaders, human rights activists and journalists.

Pegasus is a “zero-click” hacking tool that can remotely extract everything from a target’s mobile phone, including messages, contacts, photos and videos without the user having to click on a phishing link to give it remote access. It can also turn the mobile phone into a tracking and recording device.

NSO had acted “contrary to the national security or foreign policy interests of the United States,” the Biden administration said in announcing the blacklisting in November, barring American companies from doing any business with the Israeli firm.

But five people familiar with the negotiations said that the L3Harris team had brought with them a surprising message that made a deal seem possible. American intelligence officials, they said, quietly supported its plans to purchase NSO, whose technology over the years has been of intense interest to many intelligence and law enforcement agencies around the world, including the F.B.I. and the C.I.A.

The talks continued in secret until last month, when word of NSO’s possible sale leaked and sent all the parties scrambling. White House officials said they were outraged to learn about the negotiations, and that any attempt by American defense firms to purchase a blacklisted company would be met by serious resistance.

Days later, L3Harris, which is heavily reliant on government contracts, notified the Biden administration that it had scuttled its plans to purchase NSO, according to three United States government officials, although several people familiar with the talks said there have been attempts to resuscitate the negotiations.

Left in place are questions in Washington, other allied capitals and Jerusalem about whether parts of the U.S. government — with or without the knowledge of the White House — had seized an opportunity to try to bring control of NSO’s powerful spyware under U.S. authority, despite the administration’s very public stance against the Israeli firm.

It also left unsettled the fate of NSO, whose technology has been a tool of Israeli foreign policy even as the firm has become a target of intense criticism for the ways its spyware is used by governments against their citizens.

The episode was the latest skirmish in an ongoing battle among nations to gain control of some of the world’s most powerful cyberweapons, and it reveals some of the headwinds faced by a coalition of nations — including the United States under the Biden administration — as it tries to rein in a lucrative global…

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