Speaking recently to an audience in Tel Aviv via satellite from Moscow soon after the murder of the journalist Jamal Khashoggi in the Saudi consulate in Istanbul, National Security Agency whistleblower Edward Snowden alleged that Saudi Arabia had used Israeli-made spyware to track Khashoggi’s movements before his death. Snowden said that the Israeli cyber-intelligence company NSO Group Technologies had developed software known as Pegasus that was sold to the Saudis and allowed Khashoggi to be monitored by infecting the smartphone of one of his contacts, another Saudi critic, based in Canada.
This dissident, Omar Abdulaziz, filed a lawsuit in Israel in late 2018 alleging that the NSO Group had broken international law by selling its technology to oppressive regimes. “NSO should be held accountable in order to protect the lives of political dissidents, journalists, and human rights activists,” said his Jerusalem-based lawyer, Alaa Mahajna. The NSO Group is reportedly owned by an American company, Francisco Partners, and both Goldman Sachs and Blackstone are invested in it. The Washington Post columnist David Ignatius, a longtime supporter of the Saudis, has confirmed Snowden’s allegations about the Israeli company’s dealings with the Kingdom.
This is just one of the more sinister examples of a lucrative business. According to the Jerusalem Post, Israel recently sold Saudi Arabia $250 million-worth of sophisticated spying equipment, and Ha’aretz also reported that the Kingdom was offered the NSO Group’s phone-hacking software shortly before Crown Prince Mohammed bin Salman began purging opponents in 2017. Israel and Saudi Arabia both view Iran as a unique threat that justifies their cooperation.
Besides spyware and cyber tools, Israel has developed a growing industry based around surveillance including espionage, psychological operations, and disinformation. One of these corporations, Black Cube, a private intelligence agency with links to the Israeli government (two former heads of the Mossad have sat on its international advisory board), has recently gained notoriety—most notably for spying on women who’d accused Hollywood mogul Harvey Weinstein of sexual assault. News reports have also identified the firm’s work on behalf of Hungary’s authoritarian government, as well as an alleged “dirty ops” campaigns against Obama administration officials tied to the Iran nuclear deal, and against an anti-corruption investigator in Romania. Black Cube and other agencies like it have close ties to the Israeli state because they hire many former intelligence personnel.
Over more than half a century of occupation, Israel has mastered the arts of monitoring and surveilling millions of Palestinians in the West Bank, Gaza, and Israel itself. Israel is now packaging and selling this knowledge to governments that admire the country’s ability to suppress and manage resistance. Israel’s occupation has thus gone global. The country’s defense exports reached a record $9.2 billion in 2017, 40 percent higher than in 2016 (in a global arms market that recorded its highest ever sales in 2017 at $398.2 billion). The majority of these sales were in Asia and the Pacific region. Military hardware, such as missiles and aerial defenses, was the largest sector at 31 percent, while intel, cyber, and information systems comprised 5 percent. Israel’s industry is supported by lavish domestic spending: in 2016, defense expenditure represented 5.8 percent of the country’s GDP. By comparison, in 2017, the American defense sector absorbed 3.6 percent of US GDP.
Despite their occasional diplomatic gestures opposing Israel’s occupation of Palestinian territories, many nations have become willing customers of Israeli cyber-weapons and intelligence know-how. The Mexican government has also used NSO Group tools, in at least one case, according to The New York Times, apparently to track an investigative reporter who was subsequently murdered; human rights lawyers and anti-corruption activists have also been targeted. Amnesty International has accused the NSO Group of attempting to spy on one of its employees. A Canadian research group, the Citizen Lab, found that infected phones have shown up in Bahrain, Brazil, Egypt, Palestine, Turkey, the UAE, the UK, the US, and elsewhere.
During the recent Gaza protests, a former chief executive of the company that built the fence surrounding parts of the Gaza Strip, Saar Korush of Magal Security Systems, told Bloomberg that Gaza was a showroom for his “smart fence” because customers liked that it was battle-tested and proven to keep Palestinians out of Israel. Magal is among the companies bidding to build President Trump’s border wall with Mexico (along with another Israeli company) and has built an international business based on its ability to stop “infiltrators,” a word commonly used in Israel for refugees. Another new weapon that was used on the Israel/Gaza fence was the “Sea of Tears,” a drone that dropped tear-gas canisters on protesters. According to the Israeli website Ynet, its maker soon received hundreds of orders for these drones. Germany is already leasing Israeli drones, while the EU agency Frontex is testing similar drones to surveil European borders in an effort to prevent the entry of migrants and refugees.
Israeli Prime Minister Benjamin Netanyahu has helped to transform his country during his nearly ten years in power into a technological powerhouse that proudly promotes its tools of occupation to a global and domestic market. Speaking to fellow lawmakers in Israel in November, Netanyahu said that “power is the most important [component] of foreign policy. ‘Occupation’ is bull. There are countries that have conquered and replaced entire populations and the world keeps silent. Strength is the key, it makes all the difference in our policy toward the Arab world.” He concluded that any peace deal with the Palestinians could only come with “common interests which are based on technological strength.”
In 2017, Israel relaxed its rules for granting export licenses to a range of intelligence, surveillance, and weapons manufacturers, though it claims to consider the human rights implications when doing so. But this stretches credibility when Israel has sold weapons just in the last years to countries that commit grievous abuses such as the Philippines, South Sudan, and Myanmar. Netanyahu has become friends with Chadian dictator Idriss Déby, and next on the list may be the Bahraini regime and Sudanese dictator Omar al-Bashir, who is wanted on charges of crimes against humanity by the International Criminal Court.
The Israeli Defense Ministry releases barely any information about how or why its exports are granted. Ha’aretz recently discovered that espionage equipment had been sold to numerous undemocratic regimes, including Bangladesh, Angola, Bahrain, Nigeria, UAE, Vietnam, and others. In some cases, these governments and others have used the systems to target dissidents and LGBTQ citizens, and even to concoct false charges of blasphemy. In early 2019, Ha’aretz also revealed the existence of another Israeli cybersecurity firm, named Candiru, which markets hacking tools and relies heavily on recruiting military veterans from the elite signals intelligence Unit 8200.
Since the tech bubble burst in 2000, the Israeli government has pushed local companies to invest in the security and intelligence industries. The result, according to a Privacy International report in 2016, was that of the 528 companies worldwide that worked in this field, twenty-seven were based in Israel—making it the country with by far the highest per capita rate of surveillance and intelligence firms in the world. And in 2016, Ha’aretz reported, a full 20 percent of global investments in the sector were in Israeli start-ups.
That same year, human rights lawyer Eitay Mack, one of the few prominent Israelis publicly challenging Israel’s arms export policy, and Tamar Zandberg, chairwoman of the left-wing Meretz party, went to Israel’s High Court of Justice in an effort to win a suspension of NSO Group’s export license. The government demanded that the process was held in camera and the court’s ruling was not released to the public. Supreme Court President Justice Esther Hayut explained that “our economy, as it happens, rests not a little on that export.”
Indeed, in 2017, Israel was second only to the US in raising close to $1 billion in venture capital and private equity for cybersecurity companies. Information released last year by the New York-based data firm CB Insights showed that Israel was the second biggest signer of cybersecurity deals in the world after the US. Although the US led by a large margin, with a 69 percent of global market share, Israel’s 7 percent placed it ahead of the UK.
The occupation has thus fueled Israel’s industrial and defense policy-making through an economic boom that has benefited companies that build, operate, and manage the settlement enterprise. But for Shir Hever, author of The Privatization of Israeli Security (2017) and a world expert on the Israeli arms trade, the occupation is becoming less an asset than a liability. Many Israeli arms sellers, he told me, are “expressing their frustration that customers are not excited about Israeli products because they fail at stopping Palestinian resistance. Russia held an arms fair selling ‘battle-tested’ gear from the Syria war and has managed to increase sales to Turkey and India, both very important markets for Israeli companies. So why should arms importers consider Israeli arms special?”
Hever acknowledges that “authoritarian regimes definitely still want to learn how Israel manages and controls the Palestinians, but the more they learn, the more they realize that Israel does not actually control the Palestinians very effectively. Support for Israel from right-wing groups and politicians around the world is still strong—Brazil’s new president, Jair Bolsonaro, being a particularly depressing example—but I think there is more focus on the racism, racial profiling and nationalism and less and less admiration for the ‘strongest military in the world.’” He even questions the Israeli government narrative about the success of the weapons and intelligence sector and argues that the industry is in decline because it is so dependent on short-term, ad-hoc alliances.
Apartheid South Africa and its decline are a warning from history that Israel would be unwise to ignore. At its height, South Africa was one of the world’s biggest arms dealers, behind Brazil and Israel, and this was achieved through enormous state subsidies. Despite a UN arms embargo, the South African regime spent 28 percent of the state’s budget on its defense industry in the late 1980s, according to a recent book, Apartheid Guns and Money: A Tale of Profit, by Hennie van Vuuren, the director of the South African nonprofit watchdog organization Open Secrets. An economy built on military know-how and expertise in techniques of internal repression might seem a source of indomitable strength, but Apartheid was finished less than five years later.
Today, growing numbers of American Jews are distancing themselves from Israel, rejecting its government’s embrace of ethno-nationalism and supporting instead a one-state solution. For the time being, Israel looks set to remain a major global player in the manufacture and sales of weapons systems and surveillance equipment and expertise—that is now one of the main ways the country defines itself internationally. But international opposition is growing, thanks largely to calls by the boycott, divestment, and sanctions (BDS) movement for a military embargo on Israel and its defense industry. Already, one of the country’s biggest defense companies, Elbit Systems, has faced boycotts over its activities around the world. Just days ago, the banking giant HSBC announced it was divesting from Elbit Systems. High-profile campaigns like this will surely begin to change the calculus about the economic and moral costs of the occupation—all the more so if Israel continues on its present political path toward the de facto annexation of Palestine.
Antony Loewenstein, a Jerusalem-based independent journalist who has written for The New York Times, The Guardian, The Washington Post, and other newspapers, is the author of several books, including My Israel Question (2006) and Disaster Capitalism: Making a Killing Out of Catastrophe (2017), and made a documentary film, Disaster Capitalism. He is working on a book about the global “war on drugs,” forthcoming in 2019. (January 2019)