ICE's $2 Million Contract With a Spyware Vendor Is Under White House Review

A $2 million contract that United States Immigration and Customs Enforcement signed with Israeli commercial spyware vendor Paragon Solutions has been paused and placed under compliance review, WIRED has learned.

The White House’s scrutiny of the contract marks the first test of the Biden administration’s executive order restricting the government’s use of spyware.

The one-year contract between Paragon’s US subsidiary in Chantilly, Virginia, and ICE’s Homeland Security Investigations (HSI) Division 3 was signed on September 27 and first reported by WIRED on October 1. A few days later, on October 8, HSI issued a stop-work order for the award “to review and verify compliance with Executive Order 14093,” a Department of Homeland Security spokesperson tells WIRED.

The executive order signed by President Joe Biden in March 2023 aims to restrict the US government’s use of commercial spyware technology while promoting its “responsible use” that aligns with the protection of human rights.

DHS did not confirm whether the contract, which says it covers a “fully configured proprietary solution including license, hardware, warranty, maintenance, and training,” includes the deployment of Paragon’s flagship product, Graphite, a powerful spyware tool that reportedly extracts data primarily from cloud backups.

“We immediately engaged the leadership at DHS and worked very collaboratively together to understand exactly what was put in place, what the scope of this contract was, and whether or not it adhered to the procedures and requirements of the executive order,” a senior US administration official with first-hand knowledge of the workings of the executive order tells WIRED. The official requested anonymity to speak candidly about the White House’s review of the ICE contract.

Paragon Solutions did not respond to WIRED’s request to comment on the contract’s review.

The process laid out in the executive order requires a robust review of the due diligence regarding both the vendor and the tool, to see whether any concerns, such as counterintelligence, security, and improper use risks, arise. It also stipulates that an agency may not make operational use of the commercial spyware until at least seven days after providing this information to the White House or until the president’s national security adviser consents.

“Ultimately, there will have to be a determination made by the leadership of the department. The outcome may be—based on the information and the facts that we have—that this particular vendor and tool does not spur a violation of the requirements in the executive order,” the senior official says.

While publicly available details of ICE’s contract with Paragon are relatively sparse, its existence alone raised alarms among civil liberties groups, with the nonprofit watchdog Human Rights Watch saying in a statement that “giving ICE access to spyware risks exacerbating” the department’s problematic practices. HRW also questioned what it calls the Biden administration’s “piecemeal approach” to spyware regulation.

The level of seriousness with which the US government approaches the compliance review of the Paragon contract will influence international trust in the executive order, experts say.

“We know the dangers mercenary spyware poses when sold to dictatorships, but there is also plenty of evidence of harms in democracies,” says John Scott-Railton, a senior researcher at the University of Toronto’s Citizen Lab who has been instrumental in exposing spyware-related abuses. “This is why oversight, transparency, and accountability around any US agency attempt to acquire these tools is essential.”

International efforts to rein in commercial spyware are gathering pace. On October 11, during the 57th session of the Human Rights Council, United Nation member states reached a consensus to adopt language acknowledging the threat that the misuse of commercial spyware poses to democratic values, as well as the protection of human rights and fundamental freedoms. “This is an important norm setting, especially for countries who claim to be democracies,” says Natalia Krapiva, senior tech-legal counsel at international nonprofit Access Now.

Although the US is leading global efforts to combat spyware through its executive order, trade and visa restrictions, and sanctions, the European Union has been more lenient. Only 11 of the 27 EU member states have joined the US-led initiative stipulated in the “Joint Statement on Efforts to Counter the Proliferation and Misuse of Commercial Spyware,” which now counts 21 signatories, including Australia, Canada, Costa Rica, Japan, and South Korea.

“An unregulated market is both a threat to the citizens of those countries, but also to those governments, and I think that increasingly our hope is that there is a recognition [in the EU] of that as well,” the senior US administration official tells WIRED.

The European Commission published on October 16 new guidelines on the export of cyber-surveillance items, including spyware; however, it has yet to respond to the EU Parliament’s call to draft a legislative proposal or admonish countries for their misuse of the technology.

While Poland launched an inquiry into the previous government’s spyware use earlier this year, a probe in Spain over the use of spyware against Spanish politicians has so far led to no accusations against those involved, and one in Greece has cleared government agencies of any wrongdoing.

“Europe is in the midst of a mercenary spyware crisis,” says Scott-Railton. “I have looked on with puzzled wonderment as European institutions and governments fail to address this issue at scale, even though there are domestic and export-related international issues.”

With the executive order, the US focuses on its national security and foreign policy interests in the deployment of the technology in accordance with human rights and the rule of law, as well as mitigating counterintelligence risks (e.g. the targeting of US officials). Europe—though it acknowledges the foreign policy dimension—has so far primarily concentrated on human rights considerations rather than counterintelligence and national security threats.

Such a threat became apparent in August, when Google’s Threat Analysis Group (TAG) found that Russian government hackers were using exploits made by spyware companies NSO Group and Intellexa.

Meanwhile, Access Now and Citizen Lab speculated in May that Estonia may have been behind the hacking of exiled Russian journalists, dissidents, and others with NSO Group’s Pegasus spyware.

“In an attempt to protect themselves from Russia, some European countries are using the same tools against the same people that Russia is targeting,” says Access Now’s Krapiva. “By having easier access to this kind of vulnerabilities, because they are then sold on the black market, Russia is able to purchase them in the end.”

“It’s a huge mess,” she adds. “By attempting to protect national security, they actually undermine it in many ways.”

Citizen Lab’s Scott-Railton believes these developments should raise concern among European decisionmakers just as they have for their US counterparts, who emphasized the national security aspect in the executive order.

“What is it going to take for European heads of state to recognize they have a national security threat from this technology?” Scott-Railton says. “Until they recognize the twin human rights and national security threats, the way the US has, they are going to be at a tremendous security disadvantage.”