Israel Seeks to Erase Archives of Intel Firm Psy-Group Employed in anti-BDS Campaign

Government increasingly involved in legal battle over the information held by Psy-Group, also probed in FBI investigation into the Trump campaign

A BDS demonstration in southern France, August 8, 2016.
AP

A lawsuit over the downloading and storing of information on scores of computers owned by the defunct intelligence firm Psy-Group has become ensnared by mysterious intervention by a government agency apparently seeking to block access.

Although the Justice Ministry unit responsible for blocking the backup process has a legal basis for its move, the decision of the Central District Magistrate’s Court last November was made in a closed hearing.

No information about what was said at the hearing or why it was held has been made public, even after a party to the original lawsuit of downloading the data sought to get the court to provide an explanation.

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The company, which had attracted a lot of unfavorable media attention over its brief four-year existence, dealt in online perception management, social media influencing/manipulation campaigns and opposition research often employing fake users and websites.

Among those was a campaign to dig up and distribute via social media damaging information on the campus leaders of the boycotts, sanctions and divestment movement in the United States.

As revealed in a New Yorker article earlier this year, the campaign was paid for by American-Jewish donors. But the project, as Psy-Group internal documents show, was overseen by an advisory of “senior ex-officials and experts from the government, security and legal sectors.” That raises the possibility that the state is trying to prevent information on the anti-BDS campaign from leaking out.

Among those former officials was Ram Ben-Barak, for former Mossad official and today a Knesset member (Kahol Lavan). Another was Yaakov Amidror, who became Prime Minister Benjamin Netanyahu’s national security adviser after an army career.

The connections hint of possible government involvement in the anti-BDS campaign. Israel’s Ministry of Strategic Affairs in 2016 retained another private sector company called Kela Shlomo (and since renamed) Concert to conduct a fight against BDS, but half the 256 million-shekel ($71 million at current exchange rates) budget was supposed to come from private donations.

Asked about this by TheMarker, Amidror denied any connection between Concert to Psy-Group or its founder Joel Zamel.

“I met Zamel a few years ago. He told me about his anti-BDS project and I agreed happily to advise him. As someone who is involved with Concert, I can tell you that neither the company nor the State of Israel has any connection to Zamel or Psy-Group.”

Regarding Zamel: “He’s a good man who has worked for the country. Personally I don’t believe he was involved in the any U.S. election campaign. I asked him about that and he denied it and I believed him.”

The lawsuit originated over purely business matters.

Psy-Group – which was founded in 2014 by Zamel, and Australian immigrant and a former army intelligence officer, Royi Burstien – had a controversial history. It included offering in the summer of 2016 to advise the Trump presidential campaign how to manipulate social media to favor the candidate to hurt rival Hillary Clinton, according to a report by The New York Times a year ago.

The U.S. Federal Bureau of Investigation investigated Psy-Group senior executives in November 2017, but the company was not mentioned in special counsel Robert Mueller’s final report (at least in the part made public).

In any case, Psy-Group went into liquidation in early 2018, leaving 30 employees seeking back pay. They retained attorney Hayut Greenberg, who was named administrator for the company after it was put into liquidation.

In turn, Greenberg sought to sell approximately 100 computers and three servers to help the company pay off debts after all the contents had been removed from them. However, the Canadian investment company West Face Capital stepped, filing a lawsuit to access the information on them as part of a suit under way in Canada before they were sold.

West Face was involved in its own $450 million lawsuit in Canada against Catalyst Capital Group, accusing the later of retaining another Israeli private intelligence firm, Black Cube, to covertly obtain confidential information from employees and disparaging comments from an Ontario judge who had adjudicated an earlier suit between the two companies.

Psy-Group was involved, allegedly because its role was to make sure the information got online. As a result, West Face sought information that might be on Psy-Group computers and servers and wanted it downloaded before it was sold.

Greenberg and West Face’s attorneys in Israel, Ophir Sabari, Divon Farkash, and Shira Markovitz, fought it out in court, with Greenberg objecting to the delays that would be created by a so-called “forensic” downloading process – one that would create secure and reliable data that could be used as evidence in court .

Eventually Greenberg agreed, but at a hearing in Central District Magistrates Court last November Judge Irit Weinberg-Nutovitz announced that a decision had been made at a closed hearing that the data would be downloaded and given to the government’s Administrator General and Official Receiver.

Greenberg herself said she now opposed a forensic backup, citing “Additional, confidential developments, of which the court in aware.” Calanit Hermelin-Vager, the attorney representing the Official Receiver, took an even stronger stand.

“We’re taking about hundreds, if not thousands, of documents that include third party information. We will not hand them over under any circumstances – certainly for to a future claimant, if it even in fact becomes one,” she told the court regarding West Face.

In a hearing last month, attorneys for the Justice Ministry’s international unit also to provide a legal opinion as to why the Israeli court didn’t have to provide a forensic download to the Canadian court.

Hermelin-Vager was back to reiterate her strong opposition. “Even if the receiver [Greenberg] agreed to the backup – the state would continue to oppose it,” he said.

Greenberg declined to comment on the story and Ben-Barak declined to respond at all.