FBI admits it acquired NSO's Pegasus spyware in 2019 - report

Despite confirming its purchase, the bureau claims Pegasus was never used in any FBI investigation.

 A man walks past the logo of Israeli cyber firm NSO Group at one of its branches in the Arava Desert, southern Israel July 22, 2021 (photo credit: REUTERS/AMIR COHEN)
A man walks past the logo of Israeli cyber firm NSO Group at one of its branches in the Arava Desert, southern Israel July 22, 2021
(photo credit: REUTERS/AMIR COHEN)

The Federal Bureau of Investigation acquired Israeli tech company NSO Group's Pegasus spyware for $9 million in 2019, the US agency confirmed to UK news outlet The Guardian on Wednesday.

But Pegasus was never used in any FBI investigation, the bureau claimed, adding that it "procured a limited license for product testing and evaluation only."

According to the report, the deal struck between the FBI and NSO was a one-year test project worth around $5 million. Despite "not using it at all... like, not even switching it on," according to a source, the FBI renewed the contract for another year, bringing the deal up to $9 million.

The deal was agreed upon following a "long process" of disagreements on how much control NSO Group would retain over its software, a source told The Guardian. The FBI reportedly took issue with NSO's policy of keeping sensors on its technology in order to be alerted if it was moved by a government client and to keep track of its physical location.

In addition, the bureau was reportedly wary of allowing NSO engineers to install Pegasus on FBI computers, instead agreeing to keep the spyware in a large container.

The FBI stated it bought access to NSO's spyware in order to "stay abreast of emerging technologies and tradecraft."

The Federal Bureau of Investigation (FBI) seal (credit: REUTERS/YURI GRIPAS)The Federal Bureau of Investigation (FBI) seal (credit: REUTERS/YURI GRIPAS)

The New York Times originally reported that the Trump administration purchased the spyware, which played a big role in the Abraham Accords negotiations, and debated for two years whether to use the surveillance tool.

NYT also reported Pegasus was critical in getting Saudi Arabia's support, or at least indifference, to the normalization of ties between Israel and Arab states such as the United Arab Emirates and Bahrain. According to the report, crown prince Mohammed bin Salman (MBS) received approval from Israel to use Pegasus following a $55 million deal signed in 2017 with former prime minister Benjamin Netanyahu.

Netanyahu reportedly approved the sale and subsequent renewal of the Saudis' contract in the hope of gaining MBS's “commitment and gratitude” ahead of the Abraham Accords signing. Netanyahu denied the allegations made in the Times report, stating them to be a "complete fabrication."

Despite the FBI's acquisition of NSO's program, the Israeli company was blacklisted by the US Commerce Department in November 2021 for engaging in “activities that are contrary to the national security or foreign policy interests of the United States.”

NSO Group, whose former chairman Asher Levy announced his departure last month, said that it is in talks with a number of US funds, confirming media reports that it was discussing a sale of its assets.