The Saudi Arabian government came close to buying a majority stake in Italian surveillance software firm Hacking Team last year.
Wafic Saïd – a UK-based, Syrian-born businessman who is friends with the Saudi royal family – and Ronald Spogli, a former US ambassador to Italy, who indirectly owned a stake in Hacking Team, tried to broker a deal which ultimately fell through in April 2014.
Prince Bandar bin Sultan, head of the Saudi intelligence service and former Saudi ambassador to Washington, strongly backed the proposed deal before he was removed from office. His successor Gen Youssef al-Idrissi failed to share this enthusiasm, causing the proposed deal to collapse.
The putative deal was revealed in leaked emails (available via WikiLeaks) resulting from a wide-ranging breach against Hacking Team back in July.
Negotiations to sell Hacking Team to Said's investment company Safinvest began in late 2013. By February 2014, a price of €37m ($42m) had been agreed and plans to rebrand the acquired firm as “Halo” had been drawn up.
In other emails, Hacking Team chief exec David Vincenzetti expressed support for the idea of setting up a new company outside of Europe and away from the reach of tighter export controls for surveillance technologies due to come with the implementation of the Wassenaar Arrangement.
"The newco should be away from countries adhering to the new, forthcoming export regulations on ‘offensive technologies’ which will [be] dictated by the recent Wassenaar Arrangement," Vincenzetti said in an email to business advisors in January 2014. "We would like the newco to be in a country which will not impair the export of our technology."
A firm owned by the regional government of Lombardy had a 26 per cent stake in Hacking Team, whose clients included Italy’s foreign intelligence service AISE. These links apparently didn’t act as any kind of impediment to the proposed deal.
Marco Lillo, the Italian journalist who first reported on the proposed Saudi buyout for the newspaper Il Fatto Quotidiano, noted: "Hacking Team had a long legal battle to get permission to export its products to problematic countries. It's paradoxical that it couldn’t sell its software to Saudi Arabia but it could sell them the entire company."
Eric Rabe, a spokesman for Hacking Team, told IT World that talks to sell Hacking Team had never been close to completion.
When contacted by The Register, he said: "As you know, every business has many, many conversations with potential business partners, clients and others that never result in anything," adding that the "Hacking Team does not confirm the reports of discussions with Saudi interests, [and we] continue to work on improving the technology so that law enforcement clients can resume investigations."
In the IT World piece, he defended the sale of its spyware-for-cops technology to authoritarian governments, such as the government of Saudi Arabia, who are also allies to the West. ®