Med-Or, the Leonardo’s foundation behind the Italian hidden diplomacy

#InEnglish

Med-Or, the Leonardo’s foundation behind the Italian hidden diplomacy

December 29, 2021

Lorenzo Bagnoli
Riccardo Coluccini

Defence, surveillance, intelligence, borders. Four keywords connecting the most important Italian company in the defence sector, Leonardo (formerly Finmeccanica), and the kingmaker of Italian politics in the field of intelligence: former Minister of the Interior Marco Minniti. A member of the Democratic Party, Minniti served as Secretary to the Prime Minister’s Office Cabinet with responsibility for intelligence services during governments led by Letta and Renzi. Marco Minniti is equally held in high esteem by the left and the right, for his deep knowledge of the universe of Italian intelligence and the structure of power of the armed forces.

It is no coincidence that the new foundation created by the Leonardo group, Med-Or, picked Minniti, now out of Parliament, as its president. Med-Or‘s mission is to expand the network of relations required to export the “Italian System” abroad and consolidate its positions. The choice of Minniti brings knowledge of the geopolitical contexts, which is vital for the sector, and a common vision shared by the diverse range of participants in the diplomatic and political network of Leonardo’s diverse universe.

Defence and relations

«The results for the first nine months are very positive.» Alessandro Profumo, CEO of Leonardo, is happy with the performance of the most important Italian defence company, which is 30% owned by the Ministry of Finance. The driver of the success is the military/government sector, which accounts for 87% of the group’s revenues.

In the Odyssey, Penelope endlessly wove a shroud to avoid having to remarry, in the hope that her husband Odysseus would return home. Hoping to remain one of the industry’s biggest players despite the pandemic, Leonardo weaves its own networh, made up of relationships with governments around the world and with Italian companies owned (and/or otherwise controlled) by Leonardo. This is the reason why the company’s military orders by foreign governments reached €9.2 billion, «a sharp growth over the first nine months of 2020,» states a November press release.

Since July 2021 a new think-tank has been weaving Leonardo’s web: the Med-Or foundation. Thanks to Med-Or, whose stated aim is to foster education, training, and cultural exchange, Minniti can continue to promote his political beliefs in another capacity. As a minister, he led proponents of increased surveillance in the Mediterranean; Border monitoring is among the main fields of interest of Minniti’s new employer, Leonardo.

Leonardo’s web: getting where institutions can’t

The letter begins with a formal tone: «Dear Sir,» (A more informal “dear Franco” was later added by pen). «The Leonardo Group – continues the letter undersigned by Chairman Marco Minniti – has recently set up a new Foundation called Med-Or, which I have the honour of chairing.» «Franco» is Franco Gabrielli, former head of Police and now undersecretary to the Presidency of the Council of Ministers. A similar letter was mailed to Luciana Lamorgese, Minniti’s successor at the Ministry of the Interior after Matteo Salvini’s short interlude, and Luigi Di Maio, the Minister of Foreign Affairs. They all participated, by invitation, in the Med-Or Day, held on July 20th, the day of the foundation’s launch.

«Since its very creation – Minniti continues -, the Foundation has pursued very ambitious objectives, and its vocation is to serve the national interest, to which, as you know, I have devoted a large part of my life.» The aim of Med-Or, a conjunction between the “Mediterranean” and the “Orient”, is to «encourage dialogue with those international players for whom Italy is a natural interlocutor» especially in the area that Minniti has repeatedly defined as the “Mediterranean quadrant”, i.e. the geopolitical area that extends from the Mediterranean to the Sahel and the Middle East. «You are certainly aware of the fact that almost all industrialised countries use this type of tool to underpin their relations, as I have been able to appreciate in my previous institutional experiences; the results are often very appreciable, and the objectives equally ambitious,» the former minister added.

Med-Or is a sort of “clearing house” for formal and institutional meetings, an incubator of relations available not only to Leonardo but also for the whole shaky Italian industrial apparatus. «Is there an Italian system?», the former minister asked in an interview with Libero in September 2020. The rhetorical question followed a reflection on Italian deeds in Libya, where Italy runs a hospital in Misrata, but the port is controlled by Turkey. The subtext was that Italy is unable to consolidate its leading positions and to assert its presence in multiple sectors by acting as a single entity.

Leonardo’s aim is to reach where institutions can’t. «Leonardo’s top management considers this initiative with particular interest, not only due to its contribution to the Group’s international relations, which will favour its strategic positioning but also because Med-Or aims to represent a heritage available to Italian institutions and to protect its values,» Minniti wrote in his invitation letter to Med-Or Day.

The foundation is supported by Leonardo – as its sole sponsor – with a Core Fund of € 120,000 and an additional donation amounting to approximately € 500,000 «to finance the initiatives currently underway (scholarships, higher education, internships, etc.)», Leonardo explains in a note to IrpiMedia.

«Foundations with similar characteristics to Med-Or are common mainly in English-speaking countries and in France. There are many examples,» the company continues, without, however, providing any specific names. «The vocation of a foundation like Med-Or is to have an open dialogue with Mediterranean countries, based on cultural exchanges,» it adds. The Med-Or strategic committee includes envoys from the Ministry of Foreign Affairs, the Ministry of the Interior, Economic Development, Defence and Finance; the Presidency of the Council of Ministers and the Federation of Italian Companies for Aerospace, Defence and Security (AIAD), a sector association of companies led by former MP and founder of Fratelli d’Italia, Guido Crosetto. Med-Or is not a state agency, but it looks like one. It is the flagship of diplomatic relations outside the Ministry of Foreign Affairs’ building: a network made of friendships, industrial relations, and cultural exchange projects.

«The fact that the Foundation has only one sponsor is not very common in think-tanks», Mattia Diletti, professor at La Sapienza University in Rome and author of I think tank (Farsi un idea) (Think-Thanks: a general overview), published by Il Mulino, told IrpiMedia. «In Med-Or, the network dimension is very actively supported. In political science, we talk about gatekeepers or policy entrepreneurs, i.e. people who drive other networks of stakeholders: when Minniti acts, he doesn’t just represent himself», Diletti added.

Politics, Business, and Journalism in the Med-Or Foundation

Marco Minniti: Chairman – Former Minister of the Interior in the Gentiloni Government, former Democratic Party MP. He was the promoter of policies aimed at containing migratory flows from Libya.

Alessandro Ruben: Board member: A lawyer, former MP close to Gianfranco Fini, former advisor to Ignazio La Russa when the latter was Minister of Defence in the Berlusconi government, he enjoys an excellent international reputation. He has friendly relations with Joe Biden and Nancy Pelosi. He was an advisor to Cassa Depositi e Prestiti until 2021. Together with the chairman of Elettronica, Enzo Benigni, he is a member of the Guido Carli Foundation, which represents some of the most influential voices in Confindustria.

Germano Dottori: Board member – Academic, scientific advisor to Limes, between 2018 and 2019 he was an advisor to the then president of Copasir and under-secretary of Defence Raffaele Volpi (Lega). He is the author of La visione di Trump (The Vision of Trump), a book where the election of the former American president is not described as an accident of history, but as the result of the consequences of the Cold War.

Paolo Bigi: Board member – Since 2021, he has been the CEO of Saudi engineering and construction group Arkad, an industry giant that closed some plants in Liguria in 2018, following a group reorganisation. From 2017 to 2020, he was manager of the Saudi Binladin Group (SBG), the engineering company founded by Osama Bin Laden’s father and still controlled by the Saudi terrorist’s family.

The board of directors also includes journalist Pietrangelo Buttafuoco, a contributor to several national newspapers and director of the Leonardo Foundation’s own newspaper. Among the authors of Med-Or’s articles and analyses are the deputy editor of Foglio Alessandro Giuli and Francesco Cossiga’s daughter, Anna Maria. The site that has most closely followed the launch of Med-Or is Formiche.net, founded and edited by Paolo Messa, who, from 2018 to 2020, was the head of the organisational unit “Institutional Relations – Italy”, of the Leonardo Group. The Formiche group also publishes the specialist magazine Aviopress.

Minniti at Med-Or: intelligence, Niger, Libya and the friends from the Gulf

The first think-tank co-founded by Marco Minniti was ICSA, Intelligence Culture and Strategic Analysis, between 2009 and 2013, the year when he left office to become under-secretary of the Prime Minister’s Office (Prime Minister Enrico Letta) in charge of intelligence services. ICSA, which today is led by retired army general Leonardo Tricarico, deals with education and training in the field of intelligence; its first chairman was Francesco Cossiga, a former President of the Republic with a passion for intelligence services. Among all the foundations run as a “one-man company”, ICSA has been different since the very beginning, a collector of relations and skills in the specific field of defence and security.

Shadows on foundations: between caviar diplomacy and interference by foreign powers

It was 2014 when the New York Times headlined Foreign powers buy their own ability to exert influence on think-tanks. An investigative report by the outlet «has found that more than a dozen major Washington research groups have received tens of millions of dollars from foreign governments in recent years while pressuring U.S. government public officials to adopt policies that often reflect the donors’ priorities. Money is increasingly transforming the former industry of think-tanks into a lobbying arm of foreign governments to exert pressure on Washington.»

Between 2014 and 2016 Azerbaijan allegedly paid a series of MEPs to influence their decisions on the sanctions to be imposed (or not imposed) to the regime of the Aliyev’s family. The payments were also channelled through foundations and lobby groups. In Italy this was established by the Court of Milan in the first instance sentence against former MEP Luca Volontè and his Novae Terrae Foundation. Ongoing investigations also concern important politicians from various parties in Germany who are part of consultancy groups, lobby organisations, and, in some cases, foundations.

It is the long wave of the so-called “caviar diplomacy”, the strategy implemented by the dictatorship in Baku to buy the favourable votes of some MEPs in around 2010. The cash-for-votes system, dubbed the Azerbaijani laundromat, was investigated by OCCRP. The findings also led to the introduction of the Register of People with Significant Control in Scotland, the freezing of several bank accounts linked to the laundromat in the UK. The Baltic and Russian branches of Danske Bank were closed down in 2019 after money-laundering investigations uncovered suspicious transactions worth approximately 3 billion dollars.

Joseph Muscat, the former Maltese Prime Minister, was forced to resign in 2020 because some members of his staff were tied to suspects of the murder of Daphne Caruana Galizia. As reported by The Shift, after leaving government Muscat joined a think-tank funded by the Azerbaijani government, the Nizami Ganjavi International Center. The case raised significant criticism, alongside that of former Italian Prime Minister Matteo Renzi and his relations with Saudi Arabia. Matteo Renzi’s foundation, Open, is now under investigation on charges of being used for alleged illicit funding.

The experience at the Ministry of the Interior contributed to corroborate Minniti’s reputation in geopolitical matters, and especially in Libya. Minniti has been a leading proponent of the outsourcing of border policing. The controversial policy was implemented in 2015, through the training of border guards and the handover or sale – depending on individual agreements – of surveillance technology to transit countries on the main migration routes to Europe. As Minister of the Interior, in February 2017 Minniti signed a Memorandum of Understanding with the government in Tripoli to fund the Libyan Coast Guard. Minniti also promoted the largely contested NGO code of conduct, which granted police officers rights to board NGO ships to gather intelligence. Ultimately, Minniti brokered a peace agreement between 72 tribes in Fezzan, Libya’s southern region, hoping to pacify Libya. Minniti said his goal was to create «a Libyan border patrol to guard 5,000 kilometres of Libya’s southern borders.»

On that border, the surveillance system was operated by Selex, which was then part of the Finmeccanica group (now Leonardo). «Our company manufactures the sensors for border monitoring but we know perfectly well that without the desert tribes those borders can’t be monitored. This is because the human factor is indispensable since no technology can completely cancel out the importance of the human factor»: these were Minniti’s words on October 29th, the day on which Leonardo, through Med-Or, donated 50 respirators to Niger to help the country deal with the Covid-19 pandemic. «We know that a decisive challenge for the overall security of the Mediterranean and the entire planet is being played out in the Sahel. The Sahel is crossed by tensions and instability: however, in what we have called “Europe’s Southern border” – a definition that arose scandal when we first used it and has now become commonplace – a crucial game is being played for Europe’s security, for the fight against terrorism and the issue of migratory flows», the chairman of Med-Or commented.

On the occasion of the launch of Med-Or, the Vice-President of Libya, Abdullah al Lafi, sent a warm message of good wishes «to our friend Marco». Interviewed in April 2021 by Repubblica, al Lafi said: «The most important thing for us is to provide support in ensuring the security of the Mediterranean, and in stopping illegal immigration». With this in mind, the country is discussing the purchase of helicopters to patrol the sea area in which rescue operations are under the responsibility of Libya, as well as the creation of a helicopter assembly centre on site.

The launch of Med-Or was also attended by Dimitris Avramopoulos, the former European Commissioner for Migration when Minniti was Minister of the Interior. Another attendee was Mohamed Abdirizak, Somalia’s foreign minister, but also a businessman and former coordinator of Mossad operations on prisoners of war and victims of armed action under Benjamin Netanyahu’s first government David Meidan (who said he was «honoured to be part of the Med-Or Leonardo initiative» and thanked Minniti for the trust).

From left to right: Luciano Carta, Marco Minniti and Alessandro Profumo at Med-Or launch day on July 20, 2021 | Foto: med-or.org

These attendees were joined by three ministers of Gulf countries: Abdullatif bin Rashid Al Zayani, Minister of Foreign Affairs of Bahrain; Sheikh Mohammed bin Abdulrahman Al-Thani, Deputy Prime Minister and Minister of Foreign Affairs of Qatar; and Hamad bin Mohammed Al Sheikh, Minister of Education of Saudi Arabia.

These people all personally thanked Minniti for the invitation to take part in Med-Or. They all represent countries with whom Leonardo has consolidated relations. In Bahrain, which recognized Israel as a nation state in 2020, Leonardo operates contracts for civil and military air traffic management, the supply of ships, and the Navy’s radar tracking system. In 2021, in Qatar, Leonardo received an order for the provision of training courses for operators of the Qatar Computing Research Institute against hacker attacks, it provides ships and helicopters. In Saudi Arabia, Leonardo has historical supplies of aircraft and warships.

Leonardo and his daughters

One of Leonardo’s strengths is its wide range of stakes in the share capital of companies in the defence and security sector. Some of these connections are also established by memoranda of understanding. For example, at the beginning of November Leonardo signed an agreement with Elettronica Spa – the company that controls the protagonist of the previous episodes of #Surveillances, Cy4gate -, «aimed at consolidating and strengthening Leonardo’s core business,» as outlined by CEO Alessandro Profumo. In essence, the agreement provides for joint participation in international projects. «On the opening day, Med-Or representatives showed guests its analysis centre, based on open sources and aimed at improving the understanding of the debate and the social and cultural dynamics of the countries of interest,» Leonardo explained to IrpiMedia.

The software on the screen appears to be the same as the one produced by Cy4gate: on the screen, you can see a customised version, with the Med-Or logo, of an information dashboard identical to the dashboard of AMICO (an acronym for Advanced Multimedia Information Cockpit). The system allows access to documents and information collected online from so-called “open sources” such as social networks, public databases, or press reviews. Metro first reported on it in 2018, explaining that the product is «developed by Leonardo SpA and Rome-based Cy4gate». AMICO can interact with other software developed by Cy4gate. As outlined in a series of slides released following a meeting last October, the right-hand column of the AMICO dashboard may host documents from another product, QUIPO, described by the company as «the platform developed by Cy4gate to support intelligence analysts». Med-Or, however, «does not use QUIPO software», Leonardo replies.

Photo taken in July 2021 during Med-Or Day, a launch day for the Med-Or Foundation. On the screen, what appears to be an information dashboard similar to the one produced by the company Cy4gate is clearly visible | Photo: formiche.net

Cy4gate presents the AMICO information dashboard during the 2019 edition of the Italian Conference on Cybersecurity (ITASEC2019). The tweet from which the image is taken states that AMICO is a platform developed for data viewing, capable of collecting and analysing huge streams of data in real time | Photo: Twitter

In an interview released in July 2021 to the Telos blog, Minniti mentioned two issues related to health security when speaking of Med-Or’s interests: «The first is Health Intelligence, an area in which Leonardo has the necessary know-how. The other is Health Surveillance, that is, monitoring the progress of the pandemic». «The epidemic – Leonardo added in his answers to IrpiMedia – has highlighted how crucial the issue of managing health emergencies is. The epidemic has highlighted the difficulties of systems that do not have systems for monitoring (health surveillance) the development of the epidemiological situation. Italy can be a reference for these countries, to improve their ability to manage their own complexities». This same topic has also been the focus of Cy4gate itself, which has developed HITS, a contact tracking software.

Leonardo’s web in the history of think-tanks

Think-tanks like Med-Or are an invention of post-World War II American politics in the wake, as sociologist Mattia Diletti writes, of the «hope – almost always shattered – that knowledge, doctrine, knowledge or rationality will influence the actions of rulers and institutions». In the United States, think-tanks have many stakeholders, and scholar Robert Kent Weave has categorised them into three models: «Universities without students», i.e. training centres that make up for the shortcomings of the parties; research and development centres that live off public funding (one name for all: Rand Corporation, the largest think-tank in the world, whose budget ranges between 200 and 250 million a year and million-dollar commissions mainly from the Department of Defence) or political agora, where ideas and projects with ideological connotations are formed (partisan think-tanks). All American-style think-tanks «act in the gap between politics, industry and private stakeholders,» Diletti told IrpiMedia. «They generally rely on a multiplicity of donors, which allows them more independence.»

In Europe, these organisations are smaller. They have emerged mostly in Britain and Germany, where they are often created in the orbit of power centres where either foreign or economic policies are studied. In France, the French Institute of International Relations (IFRI), for example, is an organisation counting dozens of partners and funders, whose board includes former state councillors, academics, managers of Renault, L’Oreal and Burelle (a manufacturer of plastic products), bankers, and public officials. Their goal (on both sides of the Ocean) is to create positive interactions between important national companies, academia, and government. In other words, they «are systemic.» In Europe, «personal think-tanks» are also very successful: they act as manoeuvring spaces for political leaders who rely on their network of relations and their authoritativeness. They are often led by former politicians, such as Tony Blair or Gerhard Schröder.

Renzi: from a personal think-tank to Saudi Arabia

In Italy, people like Matteo Renzi went from a personal think-tank (Fondazione Open) to an institutional think-tank of a foreign country: in fact, although he is a senator, Renzi has decided to take part in Future Investment Initiative Institution (FIII), the think-tank of the Saudi monarchy. Saudi rulers have been accused – among other human rights violations – of having ordered the murder of Jamal Khashoggi, a journalist, and writer who was killed at the Saudi Consul’s Office on October 2nd, 2018.

According to a report issued in February 2021 by the Office of the Director of National Intelligence, the intelligence consultancy body of Washington’s government, «Saudi prince Mohammed Bin Salman approved the operation to capture or kill Saudi journalist Jamal Khashoggi.» One month after the document was issued, Renzi replied to criticism of his trips to Saudi Arabia by stating that «Bin Salman is a friend, I have known him for years. And there is no certainty that he is the instigator of Khashoggi’s murder. Which, by the way, I wish to clearly and fully condemn». Attending events on behalf of a foreign foundation does not, in itself, violate any rules of the Senate, the branch of Parliament in which Matteo Renzi was elected: it is only questionable in terms of political appropriateness.

If the same had happened with a member of the second chamber, the situation would have been different, due to a 2016 code of conduct that requires House elected officials to accept «reimbursement of travel, lodging, and living expenses» only if it occurs «in the performance of their duties».

In Italy, “one-man company” foundations, as former socialist minister Gianni De Michelis once called them, are particularly trendy. These are think-tanks created to promote personal leadership: «The Italian environment is more modest; our economy does not have big system stakeholders. Our big players are state or parastatal bodies», Mattia Diletti added, clearly referring to Eni and Leonardo.

The latter explained to IrpiMedia that it «has a duty to maintain relations with the countries in which it operates, beyond merely trade-related relationships. Med-Or, as it clearly emerges from its Statute, does not deal with Procurement. Its mission is to build a dialogue based on culture and the exchange of knowledge and skills. Throughout Med-Or, Leonardo intends to start a new partnership with an enlarged Mediterranean area». In short, weaving a web.

Among the concrete actions carried out so far, there are analyses and researches signed by journalists and academics published on the website and the opening of a partnership between the Mohammed VI University of Rabat, in Morocco, and Luiss University of Rome, through which the first three scholarships for Moroccan students have been financed.

CREDITS

Authors

Lorenzo Bagnoli
Riccarco Coluccini

In partnership with

Editing

Luca Rinaldi

Photo

Marco Minniti as Minister of Interior at a press conference in January 2016.
Photo: Simona Granati/Corbis

Cy4gate: the Italian surveillance company seeking to challenge NSO and Palantir

#InEnglish

Cy4gate: the Italian surveillance company seeking to challenge NSO and Palantir

December 27, 2021

Lorenzo Bagnoli
Riccardo Coluccini

“Cybertranquillity” is the motto. Cy4gate responds to endless virtual threats by offering its customers defence services to ensure security and protection. The marketing campaign seems effective: the company’s financials are rather solid. Its launch on the AIM (the stock market for small and medium enterprises) listing, which dates back to 24 June 2020, was a success. Its shares rose by 28% on the first day of trading and 110% over the following six months. The initial public offer went better than expected, and Cy4gate won the first prize “for the best strategy in use of the capital market in the fundraising section on the AIM Market of Borsa Italiana for the year 2020”. Today, however, their performance is not as impressive and, according to TeleBorsa’s analysis, its shares, due to their volatility, “are the object of attention especially of ‘risk on’ investors”. The company’s balance sheet, however, is still strong: in 2020, Cy4gate recorded revenues for €12.5 million, an increase of approximately 69% over the previous year.

Founded as a joint venture between Elettronica Group and Expert System in 2014, Cy4gate is the first Italian company that combines cybersecurity, wiretapping services for international police, and broad-spectrum intelligence, defined by Cy4gate as Continuous Intelligence.

Elettronica is a company that sells onboard equipment in the military, from the navy to aviation, technologies for “electronic warfare” such as anti-traffic tools, systems for the detection of threats, and for communications surveillance. Expert System, on the other hand, is active in the field of artificial intelligence and develops a software, COGITO, able to analyze and understand the information contained in text.

The investigation in a nutshell
  • Cy4gate’s revenues amounted to €12.5 million in 2020, an increase of almost 69% over the previous year. The firm’s goal is to challenge its two main competitors, NSO and Palantir. The companies are known for the abusive use of their technologies by authoritarian regimes and the use of social media monitoring tools.
  • Cy4gate has signed contracts globally: in the United Arab Emirates, Saudi Arabia, Pakistan, Qatar, Central Asia (not specifying where), Latin America (at least Argentina and Mexico). It also provides services to NATO and European partners. Many of these countries have already been involved in cases of abuse of surveillance technologies in the past.
  • D-SINT is Cy4gate’s platform aimed at challenging Palantir: a system that monitors social media and other databases to extract information using artificial intelligence algorithms, including facial and object recognition algorithms, and thus make decisions supported by data.
  • Epeius is the wiretapping system Cy4gate has developed to take on the NSO. The system is apparently able to take control of smartphones and extract private information. However, Cy4gate has already experienced some difficulties with Epeius: the Public Prosecutor’s Office of Naples has, in fact, suspended the use of the system due to some disruptions.
  • Cy4gate, NSO and Palantir have spotted an opportunity in the COVID-19 pandemic to expand their market: all three have offered systems either for contact tracing or to help data analysis related to the pandemic. In many cases, these operations have resulted in scandals.

In Italy, Cy4gate has no competitors: no one is able to offer such a wide range of services and products. Abroad, however, its major competitors – whose turnover is still not even comparable with that of the Italian company – are Palantir and NSO Group. Cy4gate itself recognizes them as both competitors and reference points, including them in presentations and talking about them in interviews. The first is an American company whose name is inextricably linked to the American military sector: Peter Thiel, one of the founders, was a major donor to Donald Trump. The second is the Israeli group that created Pegasus, the spyware that infected the phones of politicians, activists, and journalists from around the world. Its use was exposed in the Pegasus Project investigation, which led the United States to blacklist the NSO.

Cy4gate relies on two products to challenge NSO and Palantir, respectively: a software for interceptions, Epeius, and a platform capable of collecting and analysing information already online or collected directly from electronic and digital devices, D-SINT.

Global surveillance

The countries where Cy4gate says it sold products to, signed contracts and developed its own business. In many cases, the company does not provide details on the buyer’s identity

In an interview to the specialized Youtube channel Vivere di dividendi, published in December 2020, the then CEO Eugenio Santagata – currently working for Telsy, a company that deals with security of telecommunications infrastructures belonging to the Telecom group – specified that for some offensive cyber intelligence activities (those requiring the authorizations of the judiciary and governments) – “we stand by the side of those who do ethical hacking, and, therefore, on the side of the good guys”. With this in mind, Santagata seems to combine two different Cy4gate products: on the one hand, the collection of online public information, on the other hand, the interception of spyware on behalf of investigative bodies. The latter is the sector where the most significant abuse was carried out, in the context of the ever-expanding surveillance market. Italian companies have often been in the eye of the storm, such as the former Hacking Team (now known as Memento Labs), Area SpA, and RCS, accused of malfunctions of their technologies, alleged export violations, or abuses.

Cy4gate's sales geography

Cy4gate’s 2019 turnover consists of 30% of sales abroad and 70% of sales in the Italian market. The company’s goal is to achieve perfect balance between the two markets over the next few years. In Italy, institutional clients range from the Ministry of Justice to the Court of Auditors, from the Prime Minister’s Office to the Carabinieri Corps, and, lastly, the Army and Naval Armaments Directorate of the Italian Ministry of Defence.

In 2016, two years after its birth, Cy4gate started exporting its products to the Middle East and Asia; exports further increased between 2018 and 2019. In 2017, exports have resulted in €4 million revenues. The countries of destination are not specified. The presentations often do not mention specific countries, but provide vague geographical indications. Among the few countries mentioned are Pakistan, Qatar, Saudi Arabia, the United Arab Emirates, and the Emirates Cabinet, the Emirates federal government executive; the latter is currently led by Dubai Sheikh Mohammed bin Rashid Al Maktoum, who serves as the Prime Minister and Minister of Defence of the entire federation of the seven emirates. Other big companies in the sector have often been involved in scandals in these countries.

Over the past two years, Cy4gate has secured a $110 million contract with NATO’s Center of Excellence; it has entered into agreements with the North American and Gulf Navy government agencies for both cyber intelligence and cybersecurity technologies, worth a total of 3 million; designed a 600,000 dollar cyber intelligence platform for a Latin American government (and filed the trademark in Mexico); sold a 300,000 euro cyber intelligence solution for a Central Asian government; and signed research and development contracts with a European aerospace and defence company.

Cy4gate also takes part in European projects, such as GalilEO for EU DEfence (GEODE), in its quality as a member of a consortium of companies whose aim is promoting the development of military capabilities in the EU based on Galileo, a civil positioning and satellite navigation system developed in Europe. And contracts and activities with NATO in the field of cyber defence. NATO itself has selected Cy4gate as the official supplier of government or defence agencies belonging to the NATO Codification System, a sort of register of suppliers officially recognised by NATO.

Where no direct contract has been entered into, the company has relied on contracts signed by its majority shareholder and parent company Elettronica, as reported in the listing document provided to AIM. In 2019, for example, activities were carried out based on several contracts awarded by Elettronica: six of them concern Italian or foreign customers, with Cy4gate as a subcontractor; in addition, (again, as reported in the document), a collaboration for the provision of an intelligence platform to two foreign customers and two more in the military relating to cybersecurity has been established.

In other cases, it carries out «incisive business development and sales actions» as stated in the 2018 financial statements. These actions concern: «Latin America (Argentina and Mexico), the Gulf countries (in addition to UAE, Saudi Arabia, Kuwait, Qatar), Asia (Pakistan, China, and Indonesia), Africa (Algeria, Nigeria) very often in coordination with the initiatives and sales force of Elettronica».

Palantir: the competitor

D-SINT (short for Digital Signal Intelligence) is the Cy4Gate software intended to challenge Palantir in the field of intelligence platforms. It collects, processes, and links data with different format and origin: from social media images to dark web information. «The right information, at the right time, to the right people, in the right way», the company states in a presentation brochure. The analysis is facilitated by the use of COGITO software, developed by Expert System (one of the two founding companies of Cy4gate), and by facial and object recognition software developed by iCTLab, a University of Catania spin-off. The integration – according to a 2019 presentation – will allow, for example, to search information about individual subjects in texts, image databases, or on Twitter, and the same applies to objects.

The two companies were also developing a voice recognition option “related to possible wiretapping or audio files collected in databases or from portable devices”. In the same presentation, however, the two companies underline a criticality in the use of this type of algorithms for recognition: «Given the increasing focus on the issue of privacy, this area will be a critical factor for the use of the data collected and analysed».

Screenshot taken from the presentation held during the workshop “AI for Cybersecurity” on 18 March 2019 at Auditorium della Tecnica Congress Center. The presentation revolves around some D-SINT platform features, also allowing to use facial and object recognition algorithms developed by iCTLab

This is a niche market: the market of intelligence platforms such as D-SINT, able to analyse a multiplicity of data from any type of source, be it public, published on the web, or private databases. In recent years, the Palantir Technologies Group has stood out, although not always in positive terms. According to a Bloomberg article of 2018, its software is able to «find out everything about you».

Palantir was founded in 2003 by venture capitalist Peter Thiel, one of the co-founders of PayPal, who in 2016, according to Buzzfeed, tried to transform himself into the philanthropic financier of the American alt-right, the subversive right-wing galaxy – which mixes conspiracies, traits of anti-capitalism, and white supremacy – strongly supporting former POTUS Donald Trump. Since its foundation, Palantir has cooperated with the CIA and the Pentagon in Afghanistan and Iraq, receiving funding from In-Q-Tel, the non-profit investment company linked to the CIA itself, which promotes innovation in the technological sector. Palantir does not directly perform interceptions but allows to analyze the data already collected, providing analysis and showing links: this simplifies decision making.

In addition to military applications, the software produced by Palantir was used by the United States Immigration and Customs Enforcement (ICE), the US federal agency responsible for border control, to identify and deport illegal immigrants. Palantir has also provided predictive police software to Los Angeles City law enforcement agencies to monitor, identify, and track suspects: some analysis of the software operation already seems to indicate that racially motivated biases exert significant influence on decisions. However, other shadows seem to loom over Palantir. According to Intelligencer, a section of the New York Magazine, former army members and intelligence officers have stressed how Palantir’s success is more linked to its clean and simple interface allowing it to view data than to the actual use of advanced technology.

Pandemic-proofing

As the pandemic continues, both Cy4gate and Palantir have tried to enter the European healthcare market. In the first few months of the health crisis, Cy4gate announced the creation of the HITS, Human Interaction Tracking System, a system for tracking coronavirus infections. Hits had also been proposed to the government (which, however, ended up choosing Immuni), unlike other private companies that have adopted the Cy4gate software.

Palantir managed to establish contacts with national healthcare systems. The new contracts related to the pandemic are among the reasons for a +49% in the cash flow reported by the company in Q2 2021. The Greek Government has signed a secret agreement to share population health data with Palantir; following the subsequent scandal, the Greek Privacy Authority opened an inquiry and the Government has apparently terminated any cooperation and had the data deleted. A similar agreement also existed in the UK with the National Health Service (NHS), where two court cases, initiated by civil society organisations, openDemocracy and Foxglove, prompted the UK government to promise to terminate the agreement with Palantir. Similarly, agreement transparency and the use of collected data projected Palantir in the spotlight of political attention also in the US.

Screenshot taken from the slides of the presentation for AIM’s Virtual Conference dated 27 May 2021. In the photo, you can see the competitors selected by Cy4gate in their respective market sectors. In addition to Palantir and NSO, other recurring names of the Italian scene appear, as IPS, RCS, and SIO, all operating in the field of interceptions for Prosecutor’s Offices

NSO Group – the Israeli company protagonist of the Pegasus Project, which collaborates with intelligence agencies around the world – has tried to develop software for contact tracing during the pandemic. The software called Fleming has had a hard life since its launch, though. The company was accused of using the personal data of thirty thousand real people during the launch: these people were unaware that their movement data was used in the presentations of the products. This amounts to a privacy breach. Its poor performance in terms of tracking risks turning into economic loss, since the indicators have already prompted rating company Moody’s to downgrade its creditworthiness to B3 in May 2021.

Interception Software Competition

NSO is a point of reference especially for interceptions and police surveillance activities. Cy4gate offers three systems in the field: Epeius, Hydra and Gens.AI. Epeius is a spyware that can be installed on people’s smartphones and devices to monitor their activities and extract, for example, copies of their chats and photos, location data, and emails. Hydra, on the other hand, allows to monitor online browsing, identify the applications used and the websites visited, and ascertain whether VPN or Tor Browser (two technologies that allow to safely browse hiding one’s identity) have been used. The use of Epeius and Hydra is «reserved for Police Forces and Italian and foreign Intelligence Agencies», reads a Cy4gate document.

Gens.AI, on the other hand, allows to create and manage false profiles to be used on social networks, facilitating investigation activities: in this way, agents can interact with people without arousing suspicion.

The first public traces of Epeius emerged in connection with Italy, according to an article published on Motherboard in February 2021 that revealed the presence of a fake WhatsApp page in Italian allegedly allowing the installation of a module inoculating Epeius. The purpose of the page is not clear: it has not been ascertained whether it was used for Italian intelligence activities or interception during police investigations. What is certain, however, is that the company already has problems with Italian prosecutors: the Public Prosecutor’s Office of Naples has, in fact, suspended the use of spyware managed by SIO and attributable to Cy4gate due to «serious disruptions».

Screenshot of a presentation dated 22nd September 2020 on the data of the first half of the fiscal year. Cy4gate shows the details of the agreement stipulated with Sio and the Italian Prosecutor’s Offices involved

In fact, Cy4gate signed an agreement in March 2020 with company SIO S.p.A., one of the Italian companies renting interception equipment to Public Prosecutor’s Offices. The agreement, whose details are reported in the AIM listing document, grants SIO «the exclusive use of the Epeius computer sensor». Cy4gate will receive the «total amount paid by Prosecutor’s Offices using Epeius for the correct ‘infection’ of a device (remotely or on site)» and a percentage of the annual turnover of SIO generated by Epeius. This percentage will amount to 50% if the turnover is above 4 million euros, or 60% if lower.

According to Cy4gate estimates, the agreement with SIO allows access to about 70 new Prosecutor’s Offices and covers a 70% share of the market of police wiretapping, which is estimated by the company itself to be worth around €36.3M.

In a press release dated 10 February 2021, Cy4gate confirmed that the disruptions of the Public Prosecutor’s Office of Naples are due to malfunctions and that, in the specific case, the situation «has been promptly identified and subjected to rigorous analysis». According to sources interviewed by Motherboard, in some cases the software for interceptions caused a notification to appear on the screen of the suspect, arousing suspicions.

NSO, a point of reference despite all the trouble

On 3 November, the U.S. Department of Commerce included NSO in a blacklist that includes companies whose software was used to «deliberately target government officials, journalists, businessmen, activists, academics, and embassy employees», as declared in the same statement. Organisations included in the list can no longer buy technology from US companies, which, in turn, are obviously prohibited from selling to the companies on the list. The initiative was taken by the Department of Commerce following the revelations contained in the Pegasus Project.

Though increasingly debated over and controversial, NSO Group remains a reference point in the industry. Cy4gate is no exception: «Our main competitors in the government sector are Israeli and they are also a point of reference, because we have learned a lot from them over time», Eugenio Santagata – then CEO of Cy4gate – said in the December 2020 interview with Vivere di dividendi.

As the contracts entered into by Cy4gate show, the company is active in controversial markets, competing with companies involved in scandals due to contracts with law enforcement authorities of authoritarian regimes. A similar story as NSO’s, which is, in fact, involved in two important cases connected, specifically, to the United Arab Emirates, a country where Cy4gate is also very active. In early October 2021, a British court confirmed that the Emirates Prime Minister, Sheikh Mohammed bin Rashid al-Maktoum, had his former wife and lawyers’ smartphone spied on using Pegasus software. NSO had terminated the contract for the use of its software after becoming aware of the incident.

The other case, however, concerns the engineer, blogger, and activist Ahmed Mansoor, who over the years has been the target of attacks carried out with three different softwares: in 2011 by FinFisher, in 2012 by Hacking Team, and in 2016 by NSO, exploiting a vulnerability whose price is estimated at around one million dollars. In all three cases, the technologies are linked with the actions of the Emirates government. Mansoor was arrested in 2017 and handed a 10-year sentence following an unfair trial based on fictitious charges, according to Human Rights Watch.

Due to the shadows that surround the two competitors (NSO and Palantir) Cy4gate told IrpiMedia that they condemn «any form of misuse or illegitimate use of products that were created with a clear, specific and exclusive purpose: to support the authorities in charge of the prevention and repression of heinous crimes». In addition, «Cy4Gate operates exclusively within the framework of current national and international standards, and makes its technology available to law enforcement agencies. Its aim is contributing to the prevention and repression of crimes, in the exclusive interest of communities. Our products’ users are the main guardians of these very communities», said a company spokeswoman.

In the case of another NSO, would Europe be able to stop it?

The scandals on the export of surveillance technologies have always involved Italy. From the case of Area SpA in Syria to the abuses of Hacking Team‘s technologies, the export sector seems to constantly circumvent every rule and control, in the almost total silence of the monitoring Authorities. Recently, a case involving the Pegasus Project has emerged due to the work of Forbidden Stories, a consortium of journalists. The case has highlighted how this spyware can end up being used even in Europe.

With the update of European regulations on the export of dual-use technologies, adopted by the European Parliament in March 2021, the EU has tried to remedy the situation by introducing stronger obligations in terms of transparency for individual Member States concerning the granting of export licenses. In addition, broader categories have been included such as technologies for cyber surveillance and biometric technologies. Human rights associations, such as Access Now, Amnesty International, Committee to Protect Journalists, FIDH (International Federation for Human Rights), Human Rights Watch, Privacy International, Reporters Without Borders (RSF) have immediately stressed, however, that this regulation risks to prove still inadequate.

They reiterated, for example, that the term cyber-surveillance should also include every previously regulated system, such as probes to intercept communications on the Internet and software for intrusions into devices. In addition, the associations have requested that the national authorities responsible for export licences publish monthly reports on the applications received. Above all, they hope that the authorities will take into account the provisions of the Charter of Fundamental Rights of the European Union, the guidance developed by the Court of Justice of the European Union and the European Court of Human Rights in the assessment phases.

It is unclear, however, whether the Member States intend to apply these suggestions and keep an eye on the surveillance technologies market, which appears to be increasingly taking up a role as a strategic asset in the geopolitical field.

Despite recent faux pas with the Italian Prosecutor’s Offices, the rise of Cy4gate appears to be unstoppable. In June 2021, the company attended the ISS World Middle East and Africa conference, an event that is part of a series of annual conferences taking place around the world where surveillance companies, governments, and security and intelligence experts meet. The archived copy of the event agenda states that Cy4gate would hold two sessions: one on Gens.AI and the other on the cyber intelligence platform and «how to control and combine in real-time all the information retrieved from the target under surveillance, leveraging on multiple classes of active and passive sensors». The next appointment is with ISS World Europe, which will take place in Prague in December.

CREDITS

Authors

Lorenzo Bagnoli
Riccarco Coluccini

In partnership with

Infographics

Lorenzo Bodrero

Editing

Luca Rinaldi