Mexico News Daily | Saturday, July 29, 2017
$32-million deal made with firm that had no experience in security
The federal government purchased the Pegasus spyware system from a front company — with no previous experience in security matters — linked to the nephew of a high-ranking official, an anti-corruption activist group claims.
The Attorney General’s office (PGR) paid US $32 million to a firm called Grupo Tech Bull, S.A de C.V. on October 29, 2014 for the espionage software that had the capacity to target up to 500 individuals.
But Carlos Cayetano Miguel, the legal owner of the company owner at the time of the sale, assured Mexicans Against Corruption and Impunity (MCCI) that he knew nothing of the transaction nor did he receive any money from it.
In an informal recorded interview in a street near Cayetano’s home in an impoverished neighborhood of Mexico City, Cayetano said the company hadn’t sold anything to his knowledge and didn’t even have anyone working in sales at the time.
He also said that he sold his share in the company “three or four years ago.”
Grupo Tech Bull was legally incorporated on October 10, 2013, just over a year before it supposedly sold the spyware to the PGR.
Neither Cayetano nor his partner, Jorge de Jesús Sánchez, had prior experience as business owners.
The company’s primary function was apparently the buying and selling of a range of sophisticated security equipment. Asked how he decided to establish such a company without experience in the area, Cayetano responded, “It was just [a matter of] ‘let’s make a company.’”
The MCCI questions how a new, inexperienced business that had never made any sales was able to make such a lucrative deal with the federal government.
The details didn’t seem to add up.
However, the MCCI says there is email evidence that Rodrigo Ruiz de Teresa Treviño — a director of Balam Seguridad Privada and the nephew of a senior official in the Secretariat of Communications and Transportation (SCT) — was the negotiator with the PGR for the sale of the software on behalf of his company.
After Ruiz had allegedly made the agreement with the PGR, the Israeli company that makes the software, NSO, tried to raise the price by 50%.
That led an Israeli intermediary, Eric Banoun, to write an email on behalf of Ruiz in November 2014 to the Italian company Hacking Team to seek a better price for a similar service.
“A friend of mine, Rodrigo from Balam Seguridad, one of the biggest players today in the field of intelligence solutions in Mexico, will be in contact with you at the start of next week with an urgent proposal. His company received a contract for a cell phone infection system with 500 reusable agents.
“Originally the offer was with another company, called NSO Pegasus. The main issue is that Rodrigo is looking for a viable alternative to the exorbitant price set by NSO.”
That email, the MCCI claims, shows that it was Balam Seguridad that would benefit from the government deal and was seeking to increase its profit by purchasing a similar product for less before reselling it to the PGR.
Tech Bull legal representative Luis Armando Pérez Herrero, a systems engineer from Hidalgo who had allegedly just joined the company, reportedly signed the contract with the PGR.
But the MCCI was unable to locate Pérez or find anyone who could identify him at the address where he supposedly lived at the time.
In addition, it was Balam Seguridad, rather than Tech Bull, that had a price agreement with NSO.
When MCCI interviewed Cayetano, he denied knowing anyone from Balam Security or Rodrigo Ruiz.
Ruiz assured the MCCI that Tech Bull had never belonged to Balam Seguridad, contradicting emails released by WikiLeaks that showed Tech Bull was a subsidiary of Balam, although he did say he knew people from the company and had even done business with them.
On the government side, the negotiations were handled by the former head of the PGR’s Criminal Investigation Agency, Tomás Zerón. He has been accused of tampering with the evidence during the investigation into the disappearance of 43 teacher college students who disappeared in Guerrero in 2014.
The use of the spyware came to light after a New York Times investigation that found it had been used against critics of the government.
Source: El Universal (sp)