Israeli high-tech companies have prospered in the US. Israelis occupy key positions in high-tech giants from Silicon Valley to Boston’s Route 128. The US is the main market for Israeli technology companies.
Nevertheless, a large cloud darkens the blue skies of Israeli high tech in America: the administration in Washington imposes restrictions of the participation of Israeli companies in federal department tenders, for fear that these companies put backdoor software in their products, for the purpose of espionage.
A backdoors is a deliberate security breach that enables the maker of the software to gain access to confidential information on the target computer, unauthorized, of course, and thus without the need for identification. Backdoor software can be designed to break into source code, or to plant code, for example through an innocent looking e-mail message, that becomes a Trojan Horse when the user of the target computer opens it.
Backdoors were back in the headlines recently when Edward Snowden, who worked at the US National Security Agency, revealed that planting backdoors was one of the agency’s working methods.
For years, claims have been reported in the US that Israeli high-tech companies were incorporating backdoors in their products in order to gather information from US government departments and agencies. These claims, which, as far as is known, have never been verified, are the background to the restrictions of the participation of Israeli companies in US federal tenders.
Now the Americans, with the aid of Israeli organizations, are trying to deal with the problem. A senior official of the US Department of Homeland Security is about to come to Israel to discuss with her Israeli counterparts ways of removing the restrictions.
The official is Dr. Phyllis Schneck, Deputy Under Secretary for Cybersecurity and Communications for the National Protection and Programs Directorate (NPPD) at the Department of Homeland Security, and one of the most senior US government officials responsible for the protection of federal systems, including the computers of the Atomic Energy Agency, the White House, the Pentagon, and the Federal Reserve.
At an Israeli-US cybersecurity conference held recently for the second year in Atlanta, Georgia, Dr. Schneck confirmed that the Obama administration was now working with the Prime Minister’s Office in Jerusalem with the aim of opening US federal tenders to Israeli high-tech companies.
She will come to Israel in mid-November to take part in the Cyber and Homeland Security Conference to be held in Tel Aviv, and she will meet senior people in the Israel National Cyber Directorate, among the directorate’s head, Dr. Eviatar Matania.
Dr. Schneck, and also Soraya Correa, Director of the Office of Procurement Operations at the US Department of Homeland Security, confirmed at the conference in Atlanta that US government departments and agencies had difficulty in accepting Israeli bids in federal tenders because of the fear that Israeli produced cybersecurity programs incorporated backdoors that could be used to expose US government bodies to leaks of materials to foreign agencies.
Correa said that her office was working to simplify tender procedures for small and medium-size companies, including Israeli companies.
The Department of Homeland Security in Washington publishes tenders worth billions of dollars every year for procurement of new technologies. Cancelling the restrictions of the participation of Israeli companies could open new markets for these companies.
The Citizen Lab website, an interdisciplinary laboratory based at the Munk School of Global Affairs, University of Toronto, stated in 2008 that since the 1990s US federal agents had been reporting leaks of information from the Department of Justice, the FBI, the Drug Enforcement Administration, the Department of State, and the White House.
According to the agents, several of the leaks could be traced to two Israeli companies: Verint Systems Inc. (Nasdaq: VRNT) (formerly Comverse Infosys), which provides defense and business intelligence software, and Amdocs Ltd. (Nasdaq: DOX), which provides telephone billing and customer relations management software and equipment. The website said that Verint was the world’s leading “electronic interception” company. According to the website, in 2008, the two companies provided services to the US administration, and had links to the IDF and Israeli intelligence agencies.
The original source of these claims appears to be three reports on Fox News Channel in 2001 by investigative journalist Carl Cameron that pointed to Comverse and Verint as sources of leaks from US government bodies. The reporter claimed that then Attorney General John Ashcroft and Director of the FBI Robert Mueller had received a handwritten document on October 18, 2001 from federal and state agents warning of these information leaks.
The agents who tried to investigate the matter were reportedly told that merely raising the claim that Comverse was involved in information leaks was liable to put an end to their careers.
The three Fox News Channel reports disappeared from the channel’s official database after they were broadcast, with no explanation, but they can be found on the Internet. Like the Jonathan Pollard affair, it seems that these reports left hard feelings on the part of the US security establishment, and they appear to be the cause of the difficulties encountered by Israeli companies trying to take part in US federal contracts up to now.
The Cybercon 2016 conference in Atlanta was sponsored by global law firm Baker Donelson, in collaboration with, among others, Israel’s Ministry of Foreign Affairs and Ministry of Economy, the Georgia Institute of Technology, the America Israel Business Connector (Conexx), StarTAU (Tel Aviv University’s Entrepreneurship Center), accounting firm KPMG-Israel, and the IATI – Israel Advanced Technology Industries Association. The following Israeli cybersecurity companies took part: Sedco, L7Defense, Cykik Labs, Minerva Labs, Source Defense, Cynet, Votiro, Siemplify, SafeT, Topspin, Cytegic, and Cyberbit.
The representatives of the Israeli companies held separate meetings with representatives of several large US and international companies, such as NCR, Turner Broadcasting (which controls CNN), Coca-Cola, Home Depot, Cisco, IBM, Georgia Pacific (a subsidiary of Koch Industries), Global Payments, and First Data.
Ambassador Judith Varnai Shorer, Consul General of Israel to the Southeastern United States, said at the conference that, last year, Israel’s cyber technology exports exceeded its defense exports.
