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Jeb Bush’s private equity firm held talks with the owners of Israeli spyware company NSO Group over a deal that would have seen the former Florida governor sell its products in the US, according to people familiar with the matter.
The discussions between Bush’s firm Finback Investment Partners and NSO’s owners Novalpina Capital took place in 2020 as NSO was being linked to the silencing of dissent around the world.
Under the proposed deal, Finback would have bought a stake in a US vehicle called Gideon Cyber Systems LLC that several people familiar with the matter said was created to sell NSO products into the US, including Pegasus spyware, which infiltrates phones surreptitiously.
Jeb Bush, the son of George HW Bush and brother to George W Bush, the former US presidents, would have made media appearances as part of a marketing campaign for Gideon’s products, according to a draft term sheet dated August 2020 and seen by the Financial Times.
At the time, Pegasus had already been tracked by human rights groups to the phones of journalists, government critics and dissidents in dozens of countries, including Saudi Arabia, Rwanda and Morocco.
During the several months of talks, NSO was being sued in Israel by an associate of murdered Saudi journalist Jamal Khashoggi, claiming that the associate’s phone was hacked using Pegasus — a claim denied by NSO. Amnesty International was also seeking the cancellation of NSO’s export licence after one of its researchers was hacked.
NSO’s executives and private equity owners were keen to win a place for its products at the highest echelons of American military and intelligence contracting, which might have helped blunt criticism while winning them vital allies in the US.
Gideon was set up in 2020 so that NSO’s sophisticated encryption-piercing technology could be accessed from a US company rather than an Israeli one, smoothing sales to American government agencies, according to a person familiar with the issue. Some of Gideon’s profits would have been payable to NSO’s Luxembourg parent company.
Finback discussed taking a 5 per cent stake in Gideon, valuing the company at $3mn, according to the unsigned draft term sheet, and would have had the opportunity to accrue an additional 5 per cent if Bush and a partner, Jack Oliver, drummed up $50mn in new sales.
The document designated Bush and Oliver as “key” men. According to a biography on Finback’s website, Oliver is also a senior adviser to Palantir, the data and surveillance company co-founded by tech investor Peter Thiel.
Bush would have been responsible for “engagements with strategic . . . customers” such as the CIA and the FBI, and for “targeted press engagements”, according to the proposed terms.
Finback and NSO declined to comment. Bush and Oliver, through a representative for Finback, declined to comment. Israel’s defence ministry did not reply to an email seeking comment.
The deal for Finback to buy a stake in Gideon fell apart in late 2020 when commercial terms could not be agreed, according to three people with knowledge of the discussions. One said Bush did not personally participate in the talks, which were led by his investment team.
A second person familiar with the talks with Finback said they were early stage and did not specifically address selling Pegasus. At the time of the talks, Gideon had not received permission from the Israeli government, which regulates the sale of spyware as a weapon, to sell Pegasus in the US, said a third person familiar with the situation.
Gideon’s other products included geolocation and contact-tracing software.
In November 2021, the US commerce department blacklisted NSO after Pegasus was traced to the phones of US government employees in east Africa. The blacklisting meant it could not do business with American companies.
“NSO [sought to recruit] former US officials to say that they were the good guys. But at the same time, behind America’s back, their tech was being used to hack the US government,” said John Scott-Railton, a researcher at the University of Toronto’s Citizen Lab, which has tracked Pegasus for more than a decade.
The talks were one of several attempts by NSO’s then-chief executive Shalev Hulio to entice a US partner in order to elevate the private equity-backed company, once valued at $1bn, to the ranks of global intelligence giants such as Palantir or Verint.
But since the company’s US blacklisting, NSO has found it difficult to win new customers. It has hundreds of millions of dollars of debt to service.
Israel has previously considered NSO crucial to its foreign policy, especially with outreach to Middle Eastern and Gulf countries, and the country closely regulates the sales of the coveted technology.
Bush has previously spoken in favour of the National Security Agency’s collection of metadata from phone calls by millions of Americans, saying the surveillance was important for keeping people safe.
Finback said in 2021, it would “pursue investments that align with a positive societal impact”, adding that “while it is not the only investment criteria, contributing private capital to address complex social problems will be a key tenet to Finback’s decision-making”.
Additional reporting by Demetri Sevastopulo
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