Thick as Thieves: The Private (and very profitable) World of Corporate Spying

When Comverse Infosys founder and CEO Jacob “Kobi” Alexander fled to Israel and later Namibia in 2006, the former Israeli intelligence officer and entrepreneur took along a little extra cash for his extended “vacation”–$57 million to be precise.

According to investigative journalist James Bamford’s exposé of the National Security Agency, The Shadow Factory, Alexander was facing a thirty-two-count indictment by the Justice Department “charging him with masterminding a scheme to backdate millions of Comverse stock options … that allowed Alexander to realize $138 million in profits–profits stolen from the pockets of the company’s shareholders.”

When the scandal broke, one former colleague told the New York Times, “The one thing about Kobi is that he did have a sense of entitlement,” said Stephen R. Kowarsky, who was an executive at Comverse from 1985-97. “Most people are a little bit shy or self-effacing about asking for something, but not Kobi. It was easy for him to say, ‘I want that. I deserve that.'”

Sounds like business as usual to me!

But there is a darker side to Verint. As investigative journalist Christopher Ketcham revealed on the muckraking website CounterPunch, U.S. intelligence agencies are wary of Israeli penetration and interception of U.S. military systems and advanced computing applications through a backdoor, called a “trojan,” secretly built into enterprise architecture. Ketcham wrote,

According to former CIA officer [Philip] Giraldi and other US intelligence sources, software manufactured and maintained by Verint, Inc. handles most of American law enforcement’s wiretaps. Says Giraldi: “Phone calls are intercepted, recorded, and transmitted to US investigators by Verint, which claims that it has to be ‘hands on’ with its equipment to maintain the system.” Giraldi also notes Verint is reimbursed for up to 50 percent of its R&D costs by the Israeli Ministry of Industry and Trade. According to Giraldi, the extent of the use of Verint technology “is considered classified,” but sources have spoken out and told Giraldi they are worried about the security of Verint wiretap systems. The key concern, says Giraldi, is the issue of a “trojan” embedded in the software. (Christopher Ketcham, “An Israeli Trojan Horse,” CounterPunch, Weekend Edition, September 27-28, 2008)

Yet despite alarms raised by a score of federal law enforcement agencies, including the Drug Enforcement Agency (DEA), fearful that sensitive wiretap information was finding its way into the hands of international narcotrafficking cartels, virtually nothing has been done to halt the outsourcing of America’s surveillance apparatus to firms with intimate ties to foreign intelligence entities. Indeed, as America’s spy system is turned inward against the American people, corporations such as Verint work hand-in-glove with a spooky network of security agencies and their corporatist pals in the telecommunications industry.

Kobi Alexander would’ve certainly known the drill, exploiting family connections for advantage over competitors with movers and shakers in Washington. As they say, the fruit doesn’t fall far from the tree. Kobi’s father Zvi was a fabulously wealthy oil baron who wound up running Israel’s state oil company. Bamford recounts how Zvi won drilling franchises: he’d bribe African cabinet ministers, “often in partnership with the U.S. tax cheat Marc Rich, who became a fugitive and was given sanctuary in Israel.”

That is, until Rich was handed a pardon during the waning days of the Clinton administration. In the aftermath of Clinton’s “gifting” the tax scofflaw with a “get-out-of-jail-free” card, Rich’s close confidant, attorney and convicted felon, I. Lewis “Scooter” Libby, denied that Rich had conspired to hide illegal profits or violate U.S. laws.

Yet despite a documentary record of shady dealings that spanned continents–and decades–a “neutral, leaning towards favorable” opinion on Rich’s petition for pardon was signed-off by none other than former U.S. Deputy Attorney General Eric Holder, Barack Obama’s apparent pick for U.S. Attorney General.

Like Kobi Alexander and his pals at Comverse, Rich too, had a dirty little secret as CNN reported back in 2001: “Marc Rich did help the Israeli security services in some way.” CNN doesn’t specify how Rich curried favor with Mossad, only that he did. Which just goes to show its a small world–of one hand washing the other.

(Memo to Obama supporters: you can forget about future Justice Department investigations of Bush cronies and war criminals. Why? Shortly before entering private practice at the tony law firm Covington & Burling, Holder was Bush’s Acting Attorney General until John Ashcroft’s nomination was confirmed by the U.S. Senate. Out of government, Holder made a killing defending Chiquita Brands International against charges that the firm paid the far-right Colombian, narcotrafficking AUC death squad millions in “protection money” to murder labor activists. But I digress.)

Meanwhile in the heimat, enterprising innovators such as Verint are inside–deep inside–America’s telephone and internet infrastructure. Keeping “America safe”–from its citizens–has become a veritable cash cow for dozens of corporate embeds busy as proverbial bees inventing new products for an alphabet-soup mix of intelligence agencies such as the FBI, CIA, DHS, DIA, NGA, NRO and NSA.

Five months after the 9/11 attacks, the security bubble was rapidly expanding and the “homeland security” market was touted by Wall Street gurus as “the next big thing” on the corporate grifting horizon.

Alexander (before fleeing to the dry, but relatively safe harbor in Windhoek) rebranded Comverse Infosys, Verint Systems, Inc., an acronym for “verified intelligence.” The company, which made a fortune on a digital suite of wiretapping tools, AudioDisk, describes itself as a “a leading provider of actionable intelligence solutions for workforce optimization, IP video, communications interception, and public safety.”

Soon thereafter according to Bamford, Verint was selling its “actionable intelligence solutions” to “more than 5,000 organizations in over 100 countries” world-wide, including the worst human rights abusers on the planet. And why wouldn’t they? Verint’s already brisk business took off like a bat out of hell after 9/11.

As USA Today reported in 2006, “Most of the growth this decade will come from building what Homeland Security Research calls ‘a homeland defense infrastructure.’ Growth areas are likely to include technology for surveillance and for detection of nuclear and other weapons of mass destruction.” Or illegal spying by unaccountable state agencies and their private partners.

According to a Business Week company profile,

Verint Systems, Inc. provides analytic software-based solutions for the security and business intelligence markets. Its analytic solutions collect, retain, and analyze voice, fax, video, email, Internet, and data transmissions from voice, video and IP networks for the purpose of generating actionable intelligence for decision makers. The company primarily offers communications interception solutions, such as STAR-GATE, RELIANT, and VANTAGE; networked video solutions that include NEXTIVA; and contact center actionable intelligence solutions, which include ULTRA. Verint Systems serves government entities, global corporations, law enforcement agencies, financial institutions, transportation agencies, retail stores, utilities, and communications service providers. (Verint Systems, Inc. Business Week, Information Technology Sector, accessed November 26, 2008)

With total revenues of $249.8 million and gross profits in 2005 of $137.1 million, Verint, while not the largest firm in the security and intelligence “marketplace” nonetheless is connected to a host of spooky clients, including the National Security Agency and their “partners” at Verizon Communications.

As I wrote back in March, whistleblower and security consultant Babak Pasdar revealed how Verizon handed the FBI and one assumes the NSA, unrestricted access to their customers’ voice communications and electronic data via the Bureau’s “Quantico circuit.”

In a signed affidavit to the whistleblowing protection group, the Government Accountability Project (GAP), Pasdar described how his unnamed client (revealed by The Washington Post as Verizon Communications), listened in and recorded all conversations en-masse; collected and recorded mobile phone data use en-masse; obtained data that the company accessed from mobile phone usage, including internet access, e-mail and web browsing; trended calling patterns and call behavior; identified inbound and outbound callers; tracked all inbound and outbound calls; and traced a user’s physical location.

While Verizon and fellow telecom spy AT&T may have handed the FBI and NSA a treasure trove of their customer’s personal details, niche telecom companies such as Verint, rival Narus (another spooky Israeli security firm), Siemans and Ericsson to name but a few of the multinationals that build the surveillance tools hard-wired into America’s telecommunications infrastructure, have made a killing destroying our privacy.

The Ties that Bind: Verint’s Spooky Board of Directors

The close interconnections amongst firms such as Verint and the U.S. and Israeli National Security States are revealed by a glance at the firm’s Board of Directors.

When Kobi Alexander fled the country in 2006, Dan Bodner became the company’s CEO. According to Business Week, Bodner, a Comverse Infosys insider, “served in the Israeli Defense Forces in an engineering capacity.” A graduate of Technion, Israel’s Institute of Technology, Bodner was previously the President and CEO of Comverse Government Systems Corporation.

David T. Ledwell, Verint’s Chief Strategic Officer since 2003, was formerly the President and CEO of Verint subsidiary Loronix Information Systems, according to Business Week. Apparently Loronix has been folded into its parent company Verint, and no longer exists as a separate corporate entity. However, the firm’s products made the transition. According to Verint, the former Loronix division was responsible for its Nextiva IP Video Surveillance System. The “Nextiva portfolio” is loaded with “a broad array of solutions” for video recording and analysis in the banking, critical infrastructure, retail and mass transit “markets.”

Andre Dahan, CEO, President and Executive Director of Verint’s parent company Comverse Technology Inc., was a former CEO and President of AT&T Wireless Services Inc., Business Week reveals. Dahan, a graduate of the Jerusalem Institute of Technology, is described as having “more than 30 years of leadership experience in the information technology industry.”

Victor DeMarines, a Verint board member since 2002 and Advisor to National Security Solutions, Inc., a “private equity firm” that focuses on “services and software” in the security and homeland defense industries, served as President and CEO of the spooky MITRE Corporation, where he worked in the “command and control” field as general manager of MITRE’s Center for Integrated Intelligence Systems and oversaw the non-profit’s Intelligence and Electronic Warfare Systems. Interestingly enough, from 1967-1969 DeMarines “managed MITRE’s Bangkok, Thailand, site, where he helped coordinate MITRE’s support for Air Force systems … on support operations issues,” according to Business Week. In addition to his duties at Verint and MITRE, DeMarines is a member of the advisory group for the National Reconnaissance Office (NRO) that oversees operations of America’s fleet of military spy satellites.

Howard Safir, formerly New York City Police Commissioner under “Mr. 9/11” himself, Mayor Rudy Giuliani, has been a Verint board member since 2002 according to his Business Week profile. After his tenure as Police Commissioner, Safir became the CEO of SafirRosetti, the intelligence and security division of GlobalOptions Group, Inc., described as a firm that provides “crisis management and emergency response plans for disaster mitigation, continuity of operations, and other emergency management issues.”

Larry Myers, another MITRE alumni was MITRE’s Chief Financial Officer and Treasurer. At MITRE, Myers’ brief included work on that firms’ wide-ranging contracts for computer systems for the Department of Defense, the Federal Aviation Administration, the Internal Revenue Service and “several organizations” in the “U.S. intelligence community,” according to Business Week. He joined Verint’s board in 2003.

Paul D. Baker, Vice President of Corporate Marketing and Corporate Communications of Comverse Technology, joined Verint’s board in 2002 according to his Business Week profile. Additionally, Baker is a director with Ulticom, Inc., a firm that provides the telecommunications industry with “Mobility, Location, Payment, Switching and Messaging services within wireless, IP and wireline networks,” according to Ulticom’s website.

Lt. General (retired) Kenneth Minihan, joined Verint’s board in 2002, according to Business Week. Described by the business publication as the “most connected” member on Verint’s board of directors, after leaving his post as the Director of the National Security Agency, NSA’s Central Security Service and Director of the Defense Intelligence Agency, Minihan became managing director of the Paladin Capital Group. A private equity firm based (where else!) in Washington, D.C. Paladin’s management team is loaded with heavy-hitting embeds from the security-intelligence complex, including among others, Dr. Alf Andreassen, described by his Paladin profile as having “promoted technological innovation in the area of national security … for AT&T’s support of classified national programs in the areas of Command, Control, Communications and Intelligence” (C3I). Minihan is well placed on some 17 boards of directors to implement the Pentagon’s vision of creating a panoptic police state. Indeed, while at NSA Minihan oversaw that agency’s transition into the digital age of surveillance.

Shortly after Minihan’s appointment to Verint’s board, Verizon Communications installed STAR-GATE, an intrusive communications interception system. According to a blurb on the firm’s website,

STAR-GATE … [is] designed to manage vast numbers of targets, concurrent sessions, call data records, and communications, STAR-GATE transparently accesses targeted communications without alerting subscribers or disrupting service. Verint partners with leading switch and network equipment vendors across the globe to deliver passive, active, and hybrid solutions for a wide range of communication technologies and communication services. … STAR-GATE can manage network topologies from small, single-switch implementations to country-wide deployments. (Verint, “STAR-GATE Lawful Interception and Data Retention Compliance Solutions for Communication Service Providers,” accessed November 28, 2008)

Another product marketed by Verint for security and intelligence agencies world-wide is RELIANT, described by the firm as a monitoring center for “interception compliance, evidence gathering and historical data analysis by law enforcement agencies.” The Verint brochure touts RELIANT’s ability “to collect, retain, analyze, investigate and distribute intercepted voice data and multimedia communications and historical data to facilitate more productive investigations and the gathering of evidence.”

VANTAGE, according to Verint’s product description, is specifically designed for “mass and target communications interception, investigation and analysis, including COMINT for intelligence and national security agencies.” Indeed the VANTAGE monitoring center promises to deliver a “mass and target interception system” that “intercepts, filters, and analyzes voice, data and multimedia for intelligence purposes, with sophisticated probing technology for passively collecting maximum communications, with Verint’s real-time filtering mechanisms to extract the most important information, and stored data analysis for generating intelligence from data collected over time.”

Amongst the “features” touted by Verint are: mass communications related to specific “areas of interest;” target interception of “known entities;” a “unified interception” and “investigation workflow” specifically designed for “intelligence generation;” the “historical data analysis of call records” conveniently “imported from service providers;” and “tools” that facilitate the “passive monitoring of virtually any type of network.”

The Failure of the National Security-Surveillance State

While America turns its intelligence and security apparatus inward and targets its own citizens, especially leftist dissenters, labor organizers, environmentalists and antiglobalization activists, threats from well-trained far-right jihadis–many of whom were witting or unwitting Western intelligence assets deployed on countless battlefields from Afghanistan to Kosovo and beyond–or neo-Nazi hooligans training for the next Oklahoma City atrocity, go unaddressed.

“Reading the tea leaves” from petaflops (a quadrillion bits) of data vacuumed-up from the internet, cell phones, land lines, spy satellites, personal business transactions or CCTV cameras is not “intelligence” but the height of folly as the recently-concluded attacks in Mumbai starkly demonstrate. The Indian intelligence apparatus, particularly its Research and Analysis Wing (RAW) are hardly slouches when its comes to tradecraft or high-tech security “solutions.”

The close relationship built-up over decades amongst RAW and Mossad for example, did not prevent commandos with alleged links to Lashkar-e-Toiba (LET), a militant group aligned with al-Qaeda and Pakistan’s “state within a state,” the Inter-Sevices Intelligence agency (ISI) from striking at the heart of India’s financial center with devastating effect. While it appears unlikely that the Pakistani government was involved in the Mumbai massacre, pro-Taliban elements within ISI or the military may be seeking to enflame tensions between the two South Asian nuclear nations.

RAW, like their counterparts in the CIA, MI6 or Mossad, rely on an inexhaustible stream of signals intelligence (SIGINT), communications intelligence (COMINT), human intelligence (HUMINT) and increasingly, imagery intelligence (IMINT) from India’s fleet of spy satellites to prevent attacks. Indeed, Verint and other high-tech firms have sold RAW the same equipment with the same promise of “security” that they sold their American and European counterparts. RAW’s headquarters in New Delhi may sport the latest in surveillance technologies, including high-speed supercomputers and yet, 195 people’s lives were snuffed-out by a determined gang of miscreants.

While high-tech “solutions” may give the cops the geolocation of young anarchists slated for preemptive arrest or which journalists may pose “problems,” all the data-mining on the planet will not prevent terrorism; indeed terrorism is the reactionary handmaid of a system at the end of its rope. As the global capitalist economic crisis deepens as industry after industry succumb to the hammer blows of an historic crisis of confidence, new social and political struggles inevitably, appear on the horizon.

Although the close–and well compensated–interconnections amongst securocrats and corporate grifters capitalizing on the homeland security investment bubble will continue well into the next administration, real security in any meaningful sense of the word will only come by creating a just society. Anything less is a fraudulent exercise in self-delusion fueled by the Gordon Gekko’s and Kobi Alexander’s of America’s (very profitable) “war on terror.”

Tom Burghardt is a researcher and activist based in the San Francisco Bay Area. His articles are published in many venues. He is the editor of Police State America: U.S. Military "Civil Disturbance" Planning, distributed by AK Press. Read other articles by Tom, or visit Tom's website.