ROSE: In the summer of 2009, Panama elected a new president, a self made multi- millionaire named Ricardo Martinelli.
President Martinelli ran a campaign based on a conservative pro-business platform and talked about “eliminating political corruption.”1
He won in a landslide, with more than 60% of the vote.2
Two years later, he sat next to President Obama in the Oval Office.
MEDIA CLIP: I think all of you know the relationship between the United States and Panama is a historical relationship.”3
ROSE: This is a clip from that press conference – Martinelli responds to Obama, saying that Panama’s geopolitical role was vital to the United States’ national security.
MEDIA CLIP: We also spoke about the security issues. And Panama as you know is the first frontier in Central America to the drug producing countries. And being Panama successful makes the US much safer.4
ROSE: President Martinelli would make this argument continuously – both in press briefings and in official meetings – that because of the issues of security – that he needed certain tools of surveillance.
The New York Times reported that shortly after President Martinelli took office he tried to persuade US diplomats in Panama to give his government surveillance equipment so that he could spy on “security threats as well as political opponents.”
The United States declined.
Martinelli decided to take another route to get spying capability.
He approached Israel.
President Martinelli flew to Tel Aviv for an official visit. He pledged that Panama would always stand with Israel.
And before that trip, Martinelli made a gesture of good faith – ensuring Panama voted with a small minority of UN member countries against measures that were unfavorable to Israel.
The Jerusalem Post reported that Martinelli had a private meeting with then-Prime Minister Benjamin Netanyahu and discussed among other things, “security issues, & military and intelligence equipment.”5
NSO systems were installed in Panama in 2012.
Martinelli got access to Pegasus.
Years later, a Panamanian National Security Council analyst testified that the surveillance equipment was used to actively spy on all kinds of people – without legal due process – on businessmen, judges, civilians, and political opponents.
Lawmakers were taped having sex.
One was recorded as she was being accused by her husband of having an affair.6
Martinelli ordered the team operating Pegasus to also target his mistress.7
In 2014, just days after Martinelli’s term as President ended, a warrant was issued for his arrest. He fled the country.
His successor and former Vice President announced that he was dismantling the espionage unit and ending the use of surveillance equipment.8
Martinelli was in Miami in 2018 when he was arrested and then extradited from the United States on charges of wire-tapping.9
Martinelli stood trial on accusations that he spied on more than 150 people (including journalists, civilians, and opposition leaders) and embezzled over $10M in public funds.101112
He was found not guilty in November of 2021.13
Martinelli plans to run for President of Panama in 2024.1415
AMITAI ZIV: I’m pretty sure that NSO, as a company in this structure, cannot go for a long time.
KAYE WIGGINS: At the point at which the Novalpina guys come in and decides that their fund will, will buy it, you know, that was after the death of Jamal Khashoggi
SRAVYA: The Oregon State Treasury has a contract with the private equity firm for legal reasons, they can’t just pull out the money.
ROSE: This is Shoot the Messenger, a new biweekly investigative reporting podcast from EXILE Content Studio.
Every season, we investigate one international news story. You may have heard the headlines; this is the deep dive. I’m Rose Reid.
NANDO VILA: And I’m Nando Vila. When Rose and I started reporting on this project we had one question: what is the biggest threat to journalists today?
When we put up a bulletin board and stuck a pin for every journalist threatened or assassinated in the past 5 years, we found one repeating link over and over. From Mexico, to DC, to the United Arab Emirates: Pegasus.
Over the course of ten episodes, we’re doing a special partnership with the Committee to Protect Journalists for our first season, “Espionage, Murder, and Pegasus Spyware.”
MEHUL: This was not somebody in their group that was betraying them. This is not one of their friends who was selling their secrets. This was their phone – that was leaking this information to operators. This is an Israeli weapons export. So the people who are doing these sales are weapons dealers.
AMITAI: Pegasus was some kind of diplomatic currency. When Israel needs something from a country, the gift is the allowance to buy NSO.
NANDO: Within a year of meeting Prime Minister Netanyahu, Martinelli got his license of Pegasus. Then, as a great deal of evidence suggests, Martinelli personally misused this powerful tool – to the extent that he had to flee his country, be extradited, and face trial.
The Panamanian President’s rise, fall, and comeback – is just one example of how Israel has used Pegasus spyware as a currency to make new relationships, forge alliances, and trade favors around the world.
ROSE: Over the past decade, under the leadership of Prime Minister Benjamin Netanyahu, there is a direct correlation between his travels, his meet and greets with world leaders…and the proliferation of Pegasus spyware.
This is Episode 7: Pegasus, Israel’s Foreign Bargaining Chip
NANDO: The Prime Minister is the highest elected office in Israel – overseeing the executive branch.16
Benjamin Netanyahu has held that office for a total of 15 years since 1996. He was ousted from his position in mid-2021 after serving 12 consecutive years in office. He was charged with bribery, fraud and breach of trust in connection with three separate cases in November of 2019.17
MEDIA CLIP: We have breaking news to bring to you, Israel’s Attorney General has indicted the Prime Minister Benjamin Netanyahu on multiple corruption charges.18
ROSE: Yet, in spite of these charges, Netanyahu has just recently found a way back to the top office by making an even more unlikely coalition between himself and the far right.
His corruption trial is ongoing. He is the first Israeli prime minister to stand trial while in office.19
MEDIA CLIP: Demonstrators back on the streets, the latest in a months-long wave of protests against government plans to weaken the Israeli Supreme Court. At the center of the storm, Prime Minister Benjamin Netanyahu.20
MEDIA CLIP: Growing turmoil in Israel – fiery protests erupting in the streets.21
MEDIA CLIP: We have to fight for our rights – because of the plans of Benjamin Netanyahu, that wants to turn this nation a dictatorship.21
ROSE: Together with his coalition, Netanyahu is actively attempting to change the laws of Israel’s judicial system – a move that has destabilized both the political scene and the economy in Israel. In the last week Israel has seen mass protests and mass strikes.22
One thing that has been consistent for Benjamin Netanyahu – or as Israelis call him, Bibi:
AMITAI: And there is a match and you can see that and especially in the times of Bibi Netanyahu as prime minister, that when Bibi traveled to a country, NSO is following.
ROSE: You may remember Amitai Ziv from previous episodes. Based in Tel Aviv, Amitai is a reporter for Keshet – he has been covering cyber security for more than 15 years.23
AMITAI: And sometimes, NSO, Pegasus is starting to operate almost on the same date that Netanyahu is visiting some country. You can see it in India, in some countries in Africa. I can see it in many, many places. And from that we concluded that Pegasus was some kind of diplomatic currency, that when Israel needs something from a country the gift is the allowance to buy NSO.
MEDIA CLIP: The Israeli government has to sign off on any export deals that NSO makes. It can play the role of gatekeeper effectively controlling which countries NSO can or cannot sell its spyware to.24
MEDIA CLIP: Looking at where Netanyahu went is actually a really good barometer of potential Pegasus customers. Places he visited that soon afterwards were identified as having Pegasus infections.25
MEDIA CLIP: The thing is that NSO tools are no different than when Israel sells helicopters, planes, guns. It’s just another tool which is being sold.26
ROSE: Israel’s Ministry of Defense has to approve every sale of the NSO Group.
AMITAI: The allowance is the first part. In the case of NSO, the government was more active, more proactive in selling NSO in some countries. Let’s take, for example, Azerbaijan.
MEDIA CLIP: Once again Mister Prime Minister. I welcome you to Azerbaijan. We’re very glad to host you in our country. You visited Azerbaijan almost 20 years ago. And now it’s the second visit of yours, and though it’s a short visit but very productive.27
NANDO: Netanyhu traveled to Azerbaijan in 2017. You just heard a clip of the President of Azerbaijan, Ilham Aliyev, welcoming Netanyahu.
AMITAI: This is a flat out dictatorship. But we have interests there.
MEDIA CLIP: [Hebrew] “Azerbaijan”28
ROSE: During Netanyahu’s visit, Aliyev announced that a direct flight would be established between their two countries. They discussed the role of trade and commerce… And In his speeches, Aliyev stressed the importance of the Jewish population in his country and its connection to Israel.
Netanyahu even visited a Jewish community.
MEDIA CLIP: “Shalom Alechiem…Shalom Alechiem.”29
NANDO: Upon his arrival, a children’s choir sang to greet the Israeli Prime Minister. Netanyahu said he was moved by the performance – just as he was moved by seeing the flags of Israel next to the Azerbaijani flag
MEDIA CLIP: [Hebrew] Israel Azerbaijan…30
ROSE: Netanyahu has other interests in Azerbaijan – considering its geography, and its natural resources.
AMITAI: Because we are buying a lot of oil off them. That’s one thing. But they have also a border with Iran. And Iran is the big nemesis of Israel right now. And this proximity is important for us. I’m just guessing here there’s nothing official. But what other reason you have to sell to this horrible country? And of course, when they got the weapon, when they got Pegasus, they used it against journalists in the country.
ROSE: Sometime between Netanyahu’s 2017 visit and 2019, Azerbaijan obtained Pegasus.31
Reporters from the Pegasus Project confirmed that approximately 1,000 phone numbers from Azerbaijan have been targeted.32
Many of the numbers that have been identified so far belong to reporters, editors, or media company owners and activists – and their family and friends.33
NANDO: People like Khadija Ismayilova, an Azerbaijani investigative reporter, were on the list.
MEDIA CLIP: All night I’ve been thinking about “what did I do with my phone?” and I felt guilty. I felt guilty for the messages I sent.34
NANDO: Khadija has been reporting on corruption in Azerbaijan for more than a decade – she has written about President Aliyev’s business dealings and scandals – she has been surveilled, blackmailed, threatened, and jailed.35 But she was even more distraught learning about the power of Pegasus – that before in the other times it was her choice and the consequences were hers to bear alone. But with Pegasus – that made everything different.36
MEDIA CLIP: I mean, my family members are also victimized. The sources are victimized. Everyone, I mean, people I’ve been working with, people who told me their private secrets are victimized. I mean, It’s not just me, I’ve put so many people in danger.32
MIDROLL 1
ROSE: Israel has a history of using weapons to bargain with countries around the world – Long before the connection between Prime Minister Netanyhu and Pegasus was ever made.
AMITAI: So this is not really new. It is called sometimes the “Uzi diplomacy.”37 Uzi like the gun, the rifle. Israel from the seventies is selling weapons to some of the worst countries in the world when they need it for diplomacy. The Uzi was used in Africa for slaughters or what have you. Wars.38
ROSE: So there’s like this geopolitical relationship.
AMITAI: Deep, deep. Geopolitical and diplomacy involvement in the business of NSO.
NANDO: We could look at the NSO Group’s rise and expansion as a reflection of the growth of the cybersecurity industry – both in Israel and abroad.
And it was Prime Minister Benjamin Netanyahu who was an early and avid supporter of the cyber industry.
MEDIA CLIP: The Israeli tech sector is based quite a lot on the alumni of the elite Israeli technological unit.24
MEDIA CLIP: 80% of founders of Israel’s cybersecurity companies come from the Israeli military establishment.24
MEDIA CLIP: These people were trained by the best and used during their military service to surveil Palestinians.24
MEDIA CLIP: Israel has the highest surveillance companies per capita in the world. The Palestinian territories and the Palestinian people have been effectively a testing ground for Israeli technologies.24
ROSE: During his tenure as Prime Minister over the past decade, there has been a steady stream of growth and acquisition in a Herzliya-Silicon Valley pipeline.39 Apple, Oracle, Microsoft, Facebook and Paypal have all acquired Israeli companies for tens – or hundreds of millions – of dollars.40
NANDO: In 2017, when Israel hosted the Cybertech conference, Netanyahu shared that “Israel receives roughly one-fifth of the world’s global private investment in cybersecurity.”41
He also said, “Given that we are one tenth of one percent of the world’s population, that means we are punching two hundred times above our weight.” The prime minister compared his small country’s high tech abilities with that of China, Russia, the United States and the UK.
MEHUL: During my time in Israel, it was really interesting to see how the Israeli defense industry had become this venue for, kind of behind the scenes diplomacy carried out by then Prime Minister Benjamin Netanyahu.
ROSE: This is Mehul Srivastava – a reporter for the Financial Times. He also appeared in a previous episode.
MEHUL: My name is Mehul Srivastava. I’m the cyber security correspondent for the Financial Times, and I’m based in London right now. But for the last five years before this, I was based in Israel, and that’s where I covered the surveillance industry, including the spyware maker NSO.
ROSE: Mehul has reported on Israel’s use of Pegasus as a bargaining chip in its increasingly complicated foreign relationships.42
MEHUL: You have all these countries around the world that don’t have official diplomatic relations with Israel, but they often have covert security relationships with Israel because of how the geopolitics of the region has worked out into an Iran and anti-Iran alliance.
NANDO: What does an anti-Iran alliance look like? Well, it looks like Israel making friends with countries it has historically been at odds with – maybe even at war with – in an effort to make a coalition with countries that perceive Iran as a threat. North of Iran lie Azerbaijan and Turkey. Its largest border on the west is shared with Iraq.
On the south side, across the Persian Gulf lie the United Arab Emirates, Bahrain and Saudi Arabia.
MEHUL: And over time, it became clear that the one piece of Israeli weapons tech that a lot of the Gulf countries were really keen to get their hands on was spyware, including the opportunity to surveil their own citizens rather than in any way defending themselves from Iran. And for years, we had seen reporting from Israeli newspapers and some Western newspapers about various different kinds of surveillance technology that had been sold to countries in the Gulf alliance that Netanyahu himself was trying to create. And key amongst them was NSO. And there’s a conversation between me and my editors in 2018, 2019, that we should take a deeper look at this company and explore essentially how a company like this would become this diplomatic calling card that Netanyahu could use to pry open relationships with kind of recalcitrant allies or future allies in the region.
ROSE: You may recognize the names of these clients from previous episodes:
BILL MARCZAK: Saudi Arabia
RON DEIBERT: The United Arab Emirates
DANA PRIEST: Bahrain
AMITAI ZIV: Azerbaijan
NATALIA KRAPVIA: Hungary
NICOLE PERLROTH: India
AMITAI: Mexico
KYLE MCLORG: Rwanda
NANDO: Saudi Arabia, the UAE, Bharian, Azerbaijan, Hungary, India, Rwanda and Mexico … Were all these countries just pieces in a strategic puzzle?
MEHUL: For us, the key interest was whether or not the Israeli government could figure out a way to convert its behind the scenes clandestine relationship with Saudi Arabia into a slightly more open, not covert relationship. Saudi Arabia has been officially in a state of war with the Jewish state since its inception in 1948. But during Netanyahu’s time, they’d gotten closer and closer behind the scenes. And when it became clear that in the Saudi relationship, this this company, NSO, was most likely playing the role of like a crowbar. You know, the Saudis want this technology. The Israeli government licenses this technology. The NSO group, in all likelihood, sold this technology to the Saudis,43 according to many people that we’ve spoken to. And that creates an opening for the Israeli government and the Saudi government to get closer together. Pegasus has been kind of traced by people like Citizen Lab and Amnesty to a large number of people who are considered enemies of the Saudi state, including the family and close associates of Jamal Khashoggi. Even in Khashoggi’s case, after his close associates that his fiancee and his wife’s phones were infected, he’s now murdered at a consulate in Istanbul. This is a hugely important event for us to try and explore as fully as we can.
By the time I’m taking a look at the company, the company has been around for almost a decade. It has had sales around the world. This results in them having little companies set up not just in Israel, but in Luxembourg,44 where they’re now headquartered and in which other countries are selling. And they would often have a little local subsidiary over there. They would often use middlemen who would have copies of the sales pitches. And you ask around, and remember, this is not an Israeli tech export per se. This is an Israeli weapons export. So the people who are doing these sales are weapons dealers. These are people who have dealings with the Interior Ministry and the Ministry of Defense of the various countries that are using this software.
SCOTT: One of the ways that the Israeli government was pushing for maybe some less than savory regimes to agree to peace was by offering Pegasus and offering NSO’s suite of tools.
ROSE: Scott Stedman has been covering cybersecurity and the NSO Group for more than four years. He is a Research Fellow at Citizen Lab.45 As a forensic journalist – his goal is that behind every investigation, every article – there should be evidence you could present in a court of law.
SCOTT: My name is Scott Stedman. I’m an investigative journalist in Orange County, California, and I’m also a research fellow at Citizen Lab and a certified anti-money laundering specialist.
ROSE: The cyber industry in Israel boasts that it recruits the brightest one percent of its population – kids who show a talent for science, math or computers are picked out and encouraged to follow a path to a special unit in the Israeli Defense Forces, or IDF.4647
The Israeli military has long invested in its digital security and surveillance.
Since its founding in 1948, Israel has been involved in several wars and skirmishes.4849
Building its cyber capabilities has been an enormous priority and investment for Israel – and especially for Prime Minister Benjamin Netanyahu.50
To grow the industry, Netanyhau has underscored the importance to not “overregulate.”51
MEHUL: Despite the amount of international scrutiny and pressure the NSO group has been under, it has still found a measure of support, if not defense, from the Israeli government. The Israeli Ministry of Defense has never come out and outright condemned the company because the sales this company does are approved and regulated by the Israeli Defense Ministry, and because it serves as a unofficial support to various foreign diplomacy ventures of the Israeli government, especially on Benjamin Netanyahu, are involved in it continues to make sales that we’re not aware of. Because the way this company works, my understanding is that the non-disclosure agreements work both ways, both upon NSO and upon the client country.
ROSE: It’s NSO Group’s model of secrecy that allows it to say one thing and do another. For that reason – It’s difficult for journalists to get sources from within and close to NSO.
As a journalist, Mehul has to work to both identify a source, and earn their trust.
MEHUL: You eventually find somebody who has, for whatever reason, decided that they would like to speak to a newspaper about their dealings with this interesting, shadowy company that is now suddenly worth $1,000,000,000 and having multimillion dollar sales for a piece of software.52 So a lot of this has to be surmised, and it’s called, in journalism we call it “working the edges.” You, you talk to the people around the story and you figure out what’s inside it.
ROSE: But how significant is it that Netanyahu is using Pegasus as a bargaining sweetener. Is there any way to know what he could be getting in return for doling out subscriptions to the world’s best known spyware tool.
SCOTT: It seems to be central to the negotiations that the Netanyahu government has had with various countries in the Middle East. So obviously we’ve been working on – we being the world at large – been working on peace deals in the Middle East for a long time now. And I think one of the ways that the Israeli government was pushing for maybe some less than savory regimes to agree to peace was by offering Pegasus and offering NSO’s suite of tools. And, you know, it brings up a very interesting question of, “with Netanyahu back in power, are we going to see a revival of this?” It looks right now the NSO is kind of fluttering and going to be sold potentially eventually. But with Netanyahu back in power, I think there’s the chance of a revival here.
ROSE: As a forensic journalist, Scott started with the NSO Group’s financials. What story does their LLC listings, and their corporate structure tell?
And what he found were multiple companies,53 multiple addresses, multiple LLCs – all over the world.54
SCOTT: I think the public understanding is that they’re just one company that, you know, usually operates in Israel, where, as the reality is that it’s very splintered, for very kind of important reasons. One being they can get export licenses from Cyprus a) lot easier than Israel, where the export laws are pretty tight and b) Doing business with a Cypriot LLC is a lot different for a lot of the Middle Eastern countries than doing business with an Israeli company. For a long time, companies in Israel couldn’t even sell products to Saudi Arabia or the UAE, which are coincidentally NSO’s now biggest customers.55 So having like all of these multiple jurisdictions serves a purpose in a way, in that it attracts new customers. And it’s also easier to export these really powerful tools to all kinds of countries.
ROSE: How many entities are involved in NSO group?
SCOTT: It’s somewhere between 15 and 20. And we know that they’re operating or have operated in at least six countries: Israel, Luxembourg, the U.K., Cyprus, the U.S. and Bulgaria.
NANDO: It’s not simply only about Pegasus and the NSO Group – there’s also the matter of NSO Group’s other companies – they are making other surveillance products under different business names:
MEDIA CLIP: Circles, a location tracking surveillance company that Dillian co-founded and merged with NSO in 2014, was reportedly linked to sales in the UAE and Nigeria.56
MEDIA CLIP: The Kaymera platform has been globally adopted by governments, companies and professionals to protect themselves against all security threats to their communications and mobile devices.57
NANDO: In addition to the NSO Group, they have a company called Circles that specializes in geolocation,58 they have a drone business, and they have a business called Kaymera59 which sells an ‘impenetrable smartphone.’60 Essentially, they made a phone that can’t be targeted, infected, or hacked with the likes of Pegasus.
ROSE: When it comes to the various entities of the NSO Group, and their various products, what can we expect of how these tools, how these companies, may be used as a diplomatic bargaining chip?
Would it be harder to get confirmation of that kind of diplomatic bartering, if digital organizations like Citizen Lab don’t have insight like they do for tracking Pegasus?
And how does international law regulate the surveillance of one country spying on someone in another country?
MEHUL: The idea that you can do these things transnationally. And I remember when the U.S. Commerce Department’s blacklisting came out, the expression they used was transnational repression to reach out from tens of thousands of miles away. And to be able to listen in to conversations that are happening in person or look at somebody’s travel plans or look at his past travel history. Wow. It really shocked almost everybody that was informed that this may have happened to them.
ROSE: This is a part of the regulation that is confusing to me because phone numbers don’t necessarily have boundaries. So if a certain government is trying to legitimately target a actual terrorist, there’s no way in controlling that that’s within their physical boundaries over which they have sovereignty.
MEHUL: Well, that’s that’s exactly it. For the way this technology works. If you are using a cell phone within my country as I’m the head of the security infrastructure in X country, And your cell phone is physically present in my country, and I have access to the telecom providers. It is not that difficult to hack your phone. It’s not easy, but it’s not that difficult. But let’s say you are overseas. Then as the head of security or the spy chief of that country, my choices are much limited and I have to see if I can get cooperation from a member state, a neighboring state, you know, a friendly state there, or you have software like NSO or or what its competitors make. And the NSO Group has repeatedly said that you can’t hack Israeli numbers and you can’t hack American numbers. But other than that, there’s no real restriction. So people would buy geographical licenses that would allow them to hack 20 countries, 30 countries, whatever. And that’s what they can do. You, you being far away from the country that wants to surveil you if you are a journalist or a dissident or you know, somebody who’s critical of the government. That’s not protection.
MEHUL: This is simply the tip of the iceberg by virtue of its being offered being one of the best known purveyors of this spyware. But we know nothing about this industry other than a few players and a little bit of abuse. We should be very, very worried.
NANDO: What does it feel like to have to be on the other end of Pegasus? What does it feel like to know you have been infected?
CARLOS: They have all my photos, they have all my videos, they have the photos of my dear ones. They have been listening to my conversations in my apartment with my girlfriend, with my friends, with my not so friendly friends. They have been living with me.
NANDO: On the next episode of Shoot the Messenger, we interview Carlos Dada, the founder and editor-in-chief of El Salvador’s newspaper, El Faro.
CARLOS: No one enters or pursues journalism as a career to end up killed. No one wants to be a hero in this.
NANDO: That’s on the next episode of Shoot the Messenger.
Special thanks to the reporting by Mehul Srivastava from the Financial Times – you can find him @MehulatLarge. And Amitai Ziv of Keshet and his reporting – You can find him on twitter at @amitaiz. And to Scott Stedman (@ScottMStedman)
We would also like to thank Laurent Richard and Sandrine Rigaud from Forbidden Stories for their reporting featured in this episode.
Follow Shoot the Messenger on Apple Podcasts. And, if you can, leave a written review – it actually really helps other people find us. And, if you haven’t already, share it with a friend!!
ROSE: Shoot the Messenger is a production of Exile Content Studio.
We are distributed by PRX.
Hosted by me, Rose Reid and Nando Vila. Produced by Rose Reid, with Sabine Jansen, Nora Kipnis, and Ana Isabel Octavio.
Written by me, Rose Reid. With story editing by Gail Reid.
Production assistance by Stella Emmett, Andrea Zevallos and Alvaro Cespedes.
Daniel Batista oversees audio at Exile Content Studio.
Sound design and mixing by Pachi Quinones.
Executive producers are myself, Rose Reid, with Nando Vila, Carmen Graterol, and Isaac Lee.
Special thanks to Jose Zamora and Sonic Union.
For more information on the status of journalists and freedom of the press – visit the Committee to Protect Journalists at cpj.org.
To learn more about EXILE, and our other podcasts and films, visit www.exilecontent.com.
We want to hear from you – so find us on Twitter and Instagram @exilecontent.
Or, send us a voice memo with your questions about Pegasus to stm@exilecontent.com.
