LIMA, Peru (AP) — It was a national scandal. Peru’s then-vice
president accused two domestic intelligence agents of staking her out. Then, a
top congressman blamed the spy agency for a break-in at his office. News
stories showed the agency had collected data on hundreds of influential
Peruvians.


Yet after last year’s outrage, which forced out the prime minister
and froze its intelligence-gathering, the spy service went ahead with a $22
million program capable of snooping on thousands of Peruvians at a time. Peru -
a top cocaine-producing nation – joined the ranks of world governments that
have added commercial spyware to their arsenals.


The purchase from Israeli-American company Verint Systems, chronicled in documents obtained by The
Associated Press, offers a rare, behind-the-scenes look into how easy it is for
a country to purchase and install off-the-shelf surveillance equipment. The
software allows governments to intercept voice calls, text messages and emails.


Except for blacklisted nations like Syria and North Korea, there
is little to stop governments that routinely violate basic rights from
obtaining the same so-called “lawful intercept” tools that have been
sold to Western police and spy agencies. People tracked by the technology have
been beaten, jailed and tortured, according to human rights groups.


Targets identified by the AP include a blogger in the repressive
Central Asian republic of Uzbekistan, opposition activists in the war-ravaged
African nation of South Sudan, and politicians and reporters in oil-rich
Trinidad and Tobago in the Caribbean.


“The status quo is completely unacceptable,” said
Marietje Schaake, a European Union lawmaker pushing for greater oversight.
“The fact that this market is almost completely unregulated is very
disturbing.”


The Verint documents that AP obtained in Peru, including training
manuals, contracts, invoices and emails, offer more detail than previously
available on the inner workings of a highly secretive industry.


“There is just so little reliable data on this,” said
Edin Omanovic, a researcher at Privacy
International,
a London-based advocacy group. “These commercial tools
are being used in a strategic and offensive way in much the same way that
military tools are used.”


The scope and sophistication revealed in the Peru documents
approximates, on a small scale, U.S. and British surveillance programs
catalogued in 2013 by former National Security Agency contractor Edward
Snowden. That trove showed how the U.S. government collected the phone records
of millions of Americans, few suspected of crimes. Even after some reforms,
there is still much to be done in the U.S. and abroad to rein in Big Brother,
privacy advocates say.


Reached at Verint’s corporate headquarters in Melville, New York,
an assistant to CEO Dan Bodner said the company would have no comment. “We
typically don’t comment to reporters,” said Barbara Costa.


Verint and its main competitors hail from nations with well-funded
spy agencies, including the United States, Israel, Britain and Germany, and
have operated with limited oversight.


With more than $1 billion in yearly sales, Verint is a major,
longtime player in an industry whose secrecy makes its size difficult to
quantify. Verint Systems Ltd., the subsidiary that sold
the surveillance package
to Peru, is based in Herzliya, Israel, outside Tel
Aviv.


In regulatory filings, the parent corporation boasts upward of
10,000 customers in more than 180 countries, including most of the world’s
largest companies and U.S. law-enforcement agencies. The company says its
products help businesses run better and “make the world a safer
place.” In 2007, Verint provided Mexico with a U.S.-funded, $3 million
surveillance platform aimed at fighting drug cartels.


Surveillance sales account for about a third of its business.
However, the company discloses little about those products, which it says
collect and parse massive data sets to “detect, investigate and neutralize
threats.”


It also does not identify its law enforcement and intelligence
agency clients, but the AP independently confirmed through interviews and
documents that it has sales in countries including Australia, Brazil, the
United States, Mexico, Colombia and Switzerland.


About half of Verint’s surveillance dealings are in the developing
world, said analyst Jeff Kessler of Imperial Capital in New York.


The Peru installation – known as Pisco, a nod to the local brandy
– illustrates how the private surveillance industry has piggybacked on
multibillion-dollar government research in the West. Many security experts who
honed their skills in Israel’s military have gone to work in the private
sector, effectively putting their tech chops at the service of less
sophisticated nations for a fraction of the cost.


Like spy tools wielded by larger nations, Pisco lets officials
“intercept and monitor” satellite networks that carry voice and data
traffic, potentially putting private communications of millions of Peruvians at
risk.


A software manual offers step-by-step instructions on how to
intercept those communications with Verint equipment: Connect to a satellite,
identify the callers, then “open a voice product” – their jargon for
a phone call.


Next on the flow chart:


“Voice is heard.”



‘PINPOINT NEW TARGETS OF INTEREST’


Since the early 2000s, Verint and top competitor Nice Systems have
sold mass surveillance products to the secret police in Uzbekistan, according
to extensive research by Mari Bastashevski for Privacy International. She found
the companies also sold such systems to neighboring Kazakhstan, also a tightly
governed nation.


Israeli technicians from both companies have rotated in and out of
Tashkent, the Uzbek capital, for tech support and maintenance, Bastashevski
found. Nice Systems sold its surveillance business to Israeli defense
heavyweight Elbit Systems last year.


That equipment has let Uzbek secret police quickly locate and
arrest people who discuss sensitive information on the phone or via email,
dissidents say.


“The authorities’ main weapon is people’s fear,” said
Tulkin Karayev, a Sweden-based exile. “Freedom of speech, freedom of
expression – all this is banned.”


Asked by the AP whether Nice Systems’ sales had enabled political
repression, Elbit spokeswoman Dalia Rosen would not comment. “We follow
the leading standards of corporate governance and focus on ethical behavior in
our business dealings,” she said.


Over the past two decades, Uzbekistan has “imprisoned
thousands to enforce repressive rule,” Human Rights Watch reported last
year. The price of dissent is arbitrary detention, forced labor and torture,
the group said. A report submitted to the U.N. by three rights groups deemed
torture by the secret police systematic, unpunished and encouraged.


Three years ago, metal worker Kudrat Rasulov reached out to
Karayev from Uzbekistan via Facebook seeking advice on how he could help
promote free expression in his country. The exile said he suggested that
Rasulov, now 46, write critical commentary on local media reports. Rasulov’s
weekly reports were then published online under a pseudonym. Rasulov thought he
was being careful. He created a new email account for every article he sent,
and the two men discussed the articles over Skype. But after six months,
Rasulov was arrested. He is serving an 8-year-prison sentence for subversion.


Karayev believes Rasulov was undone by surveillance, and Human
Rights Watch agreed. The court’s sentence found he was convicted based in part
on his Skype communications and contact with Karayev, the group said in a
report.


“They were reading Skype. They were listening to his phone
calls. That’s the way they build their cases,” said Steve Swerdlow, the
report’s author.


In Colombia, Verint has racked up millions in sales. As recently
as 2015, U.S. customs officials funded maintenance for a wiretapping system,
according to government contracts. Nearly a decade ago, its products were
abused by officials who were later sacked for illegal eavesdropping, senior
police and prosecutors told the AP at the time, speaking on condition of
anonymity because they were not authorized to speak publicly about the matter.


Like the United States, most countries require court orders to use
the technology. But where rule of law is weak, abuse is not uncommon.


The Caribbean nation of Trinidad and Tobago saw a government fall
after a wiretapping scandal involving Verint-supplied equipment. In 2009, a
total of 53 people, including politicians and journalists, were illegally
monitored, according to a former senior security official who asked not to be
named for fear of reprisal. The Verint equipment remains operative, though now
a court order is needed to use it.


One piece of the Verint product mix that Trinidad and Tobago
bought is Vantage Broadway. A promotional brochure published by Israel’s
defense ministry for a 2014 trade show in India describes it as data-analysis
and pattern-seeking software. It pairs with a product called Reliant to
“intercept, filter and analyze huge volumes of Internet, voice and
satellite communication.” The package Peru bought includes both Reliant
and Vantage, documents show.


The little regulation that exists in the commercial mass-surveillance
trade falls under a non-binding international arms export-control regime called
the Wassenaar Arrangement. In December 2013, it was amended to add monitoring
products like Reliant and Vantage and “attack-ware” that breaks into
smartphones and computers and turns them into listening posts.


The United States has not ratified the amendment; the federal
Commerce Department proposed rules that raised objections in Silicon Valley.
Israel says it is complying, and the European Union ratified the update. But Schaake,
the EU lawmaker, said its 28 member states act independently and
“technologies continue to be exported to countries that are known human
rights violators.”


Surveillance technology from Israel, meanwhile, is being used in
South Sudan, where a 2 ½-year-old civil war has claimed tens of thousands of
lives, a panel of U.N. experts reported in January. U.N. and human rights
groups say the government deploys it to track down, jail and torture dissidents
and journalists.


The ability of South Sudan’s intelligence agency “to identify
and illegally apprehend individuals has been significantly enhanced”
through the acquisition of “additional communications interception
equipment from Israel,” the U.N. experts wrote.


They did not name the suppliers, and a government spokesman
declined to discuss the issue. While there is no direct evidence that Verint is
a supplier, an AP reporter confirmed the names of two company employees on a
flight in May from Ethiopia to the South Sudanese capital of Juba. Typing on a
laptop, one was working on a presentation that named the three telecoms that
operate in the country.


Verint did not respond to questions about whether it supplied
surveillance technology to South Sudan.


An activist jailed for four months in Juba said his interrogators
spoke openly about tapping his phone, played recordings of him in intercepted
phone conversations and showed him emails he had sent. He spoke to the AP on
condition he not be identified, saying he fears for his life.


Joseph Bakosoro, a former South Sudanese state governor who was
also held without charge for four months, said his interrogators played for him
a voicemail that had been left on his cellphone. They claimed it was evidence
he backed rebels.


Bakosoro said the voicemail proved only that he was being bugged.


His interrogators didn’t hide that.


“They told me they are monitoring me,” he said.
“They are monitoring my phone, and they are monitoring everyone, so
whatever we say on the telephone, they are monitoring.”



‘WHO WILL GUARD THE GUARDS?’


Three years after Peru acquired the Verint package, it’s not yet
up and running, Carlos Basombrio, the incoming interior minister said just
before taking office last week. “When it becomes operative, it will be
used against organized crime (in coordination) with judges and
prosecutors.”


Located in a three-story building next to the country’s DINI spy
agency, Pisco sits on a Lima military base off-limits to the public. It can
track 5,000
individual targets
and simultaneously record the communications of 300
people, according to agency documents, with eight listening rooms and parabolic
antennae affixed outside to capture satellite downlinks.


Control of Pisco was shifted to the national police after the
spying scandal that crippled the intelligence agency. Verint sent Israeli
personnel to train Peruvian operators, adding eight months of instruction at
the host government’s request, records show.


One major eavesdropping tool has, however, been active in Peru
since October. It can physically track any phone in real time using
geolocation. Under a July 2015 decree, police can locate phones without a court
order, but would need one to listen in.


Government officials wouldn’t offer details on what software was
being used to track cellphones. But two months before the decree, DINI
officials said payment had been authorized for a Verint geolocation product
called SkyLock. That software enables phone-tracking within the country, and a
premium version can pinpoint any mobile phone in most countries.


All four Peruvian phone companies agreed to cooperate on
geolocation, signing a pact with the government the details of which were not
disclosed.


Civil libertarians consider warrantless geolocation a dangerous
invasion of privacy, especially in a nation with pervasive public corruption.
Peru’s incoming congress is dominated by Fuerza Popular, a party associated
with imprisoned former President Alberto Fujimori. He ran one of the most
corrupt Latin American regimes in recent history.


In July 2015, the Verint surveillance platform got caught in the
chaos of Peruvian politics.


Word of the purchase was leaked, triggering a government audit.
The Miami-based Verint vice president who made the sale, Shefi Paz, complained
about the phone companies’ apparent foot-dragging in emails and letters to DINI
officials. They weren’t making themselves available for meetings.


“Verint should not have to suffer from political
delays,” Paz
wrote
. Reached by phone, Paz declined to comment.


The eavesdropping products Verint and its peers sell play an
important role in fighting terrorism, said Ika Balzam, a former employee of
both Verint and Nice. That is a common industry claim, echoed by politicians.


And yet, Balzam acknowledged, there are no guarantees that
nation-states won’t abuse surveillance tools.


“There is a saying,” Balzam said: “‘Who will guard
the guards?'”


Associated Press writer Frank Bajak reported this story in Lima
and AP writer Jack Gillum reported from Washington. AP writers Maria Danilova
in Washington; Josef Federman in Jerusalem; Jason Patinkin in Juba, South
Sudan; Tony Fraser in Port-of-Spain, Trinidad and Tobago; Jamey Keaten in
Geneva and Kristen Gelineau in Sydney contributed to this report.


Documents about the Peru program: http://bit.ly/2awHVE0


Frank Bajak on Twitter: https://twitter.com/fbajak


Jack Gillum on Twitter: https://twitter.com/jackgillum


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