Growing scandal in Latin America over 'Pegasus' spy-hacking program

First it was Panama, now Mexico. The spyware Pegasus is at the center of allegations of government spying in both countries. Panama's president, Ricardo Martinelli, is in jail in Miami for allegedly using Pegasus to spy on enemies, journalists, union leaders and his own mistress, according to a federal indictment.

The presidents of Panama and Mexico are caught up in alleged abuses of a sophisticated government wiretapping program. Univision

New evidence of possible illegal government hacking of cellphones in Mexico is the latest allegation of sophisticated - and often salacious - hacking of political opponents in Latin America, and it's worthy of a spy novel.

The latest allegations come on top of a long-running spy saga in Panama, which led to the arrest last week in Miami of the country's former president, Ricardo Martinelli, on charges that he wiretapped politicians, legislators, journalists and even a mistress.

On Monday, The New York Times reported that advanced 'Pegasus' spyware bought by the Mexican government was used to target Mexico’s most prominent human rights defenders, journalists and anti-corruption activists.

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Evidence indicates that the spyware created by an Israeli cyberarms maker, NSO Group, was also used to monitor lawyers investigating the 2014 disappearance of 43 students from a rural teachers' college in the town of Ayotzinapa, in Guerrero state.

Among the targets were investigative journalists Carmen Aristegui and Carlos Loret de Mola, the director of the human rights group Centro PRODh, and the director of the think tank IMCO, the report found.

A report released in Mexico City yesterday by the press freedom group Article 19 and open internet researchers R3D and the University of Toronto's Citizen Lab documented the attempts.

The Mexican government has denied it authorized the use of Pegasus for political purposes.

NSO Group says it sells the tool exclusively to governments, under the terms that it may only be used against terrorists, drug cartels and criminal groups.

"The surveillance of journalists threatens press freedom in Mexico, and potentially the safety of their sources for sensitive stories," said Carlos Lauría, senior program coordinator for the Americas at the Committee to Protect Journalists (CPJ). "The Mexican government should credibly investigate this intrusion and make the results of that investigation public."

Martinelli, who was arrested by U.S. Marshals on an extradition request by the government of Panama, is accused of allegedly abusing the Pegasus system while he was president from 2009 until 2014, as well as the disappearance of the spy equipment after he left office. Some of the tapes including politicians engaged in sex, were released on YouTube.

Martinelli "created and oversaw a sophisticated program that involved illegal wiretapping and other forms of surveillance through which he violated the privacy of his 'targets,' learning intimate details of their personal and professional lives without their knowledge or consent," according to a detailed extradition complaint by the U.S. Department of Justice.

In a Tuesday hearing in federal court in Miami, Martinelli's lawyers denied the charges, saying the former president was a victim of political persecution by the new government of President Juan Carlos Varela. A former ally of Martinelli, Varela met with President Donald Trump at the White House on Tuesday.

A lawyer for Martinelli, Marcos Jiménez, told the court that his client had not been formally accused in Panama of any crime related to the acquisition of the Pegasus phone tapping system and said he had nothing to do with the disappearance of the equipment.

The defense is seeking to have Martinelli,a billionaire supermarket mogul, released on $5 million bond.

Martinelli "created a special, covert unit" within the country's National Security Council known as 'Special Services,' according to the federal complaint.

"The unit reported directly to, and all of its activities were govemed by, Martinelli," it stated.

Martinelli provided a list of people to be monitored. Each officer was given specific tasks and had to deliver written reports on the results of the eavesdropping. The reports were delivered personally to Martinelli "in a sealed manila envelope every morning," according to the complaint. When Martinelli was especially pleased by the results of the wiretapping he sent $2,000 cash bonuses to the two officials in charge of the program.

The document states that after the elections in May 2014, when Martinelli was finishing his presidential term, the National Security Council intelligence chief, Ronny Rodríguez, and another official, William Pitti, removed the eavesdropping equipment from the building where it was housed.

"William poured acid over the printer to destroy it out of concern that it could contain backup copies of all the information printed on the device," the complaint states.

They were sloppy apparently, as investigators later forensically retrieved all the information from a laptop that was left behind. A metal rack that housed the computer server was also recovered from the offices of Super 99, the supermarket chain owned by Martinelli, according to the complaint.

Martinelli, 65, moved to South Florida shortly after his presidency ended and requested political asylum after the spying allegations emerged.

Among the Panamanian victims was Yassir Purcait, a former opposition congressman and fervent critic of Martinelli's government, who is now a witness against Martinelli in Panama's extradition request.

In an interview with Univision Investiga, Purcait described his shock when he saw dozens of boxes with transcripts of telephone conversations and emails that sit in a prosecutor's office in Panama. Purcait had been summoned to declare as plaintiff.

Yassir Purcait alleges that he was a victim of abuse of the Pegasus spyware system in Panama. Univision

"The truth was that it was creepy. I can not describe it any other way. Especially when you find yourself there with private conversations between you and your wife, and between your children. It was tough for our pride, as a couple, as a husband,'' he said.

The extradition complaint says that the Pegasus system was used without prior court order to scrutinize the life and movements of political enemies as well as allies of Martinelli, including members of the Supreme Court, the Electoral Tribunal, judges, journalists and businessmen. The list of "targets" included trade union leaders, business rivals and even the president's mistress.

Under the orders of Martinelli, when the clandestine cell phone surveillance resulted in compromising videos, as happened in one case of a political rival engaged in sex, they were uploaded to YouTube, according to the complaint. Rodriguez, the intelligence chief, reported to his subordinates on one occasion: "The boss is happy with our work and he sent you this bond." The communication was accompanied by a payment of $ 2,000.

Martinelli's lawyer in Panama, Sidney Sitton, told Univision that there is no evidence that the government used the Pegasus system. Instead, he said Panamanian prosecutors had confused Pegasus with an entirely separate Israeli company named MLM.

Sidney Sitton, abogado de Ricardo Martinelli en Panamá Univision

The eavesdropping system was allegedly purchased by the Martinelli government for $13.4 million with funds diverted from a Social Investment Fund that was supposed to be used for raising living standards of low income families.

The revelations in Panama have raised alarm bells in Mexico after reports this week that Pegasus may also have been used to intercept the phones of political activists there.

The arrest and possible extradition of Martinelli provided "some hope that this impunity cannot prevail," Luis Fernando García, director of R3D, Network in Defense of the Digital Rights of Mexico, told Univision.

Garcia explained how the hacking was performed using a virus-like malicious software, or malware, inserted in text messages and designed to infiltrate cellphones. Once the phone is infected with malware "the attacker can read the messages, emails, contacts, real-time location, know where it is located, can activate the camera and activate the microphone," he said.

The software is manufactured by an Israeli company, NSO Group, and was designed by former Israeli military personnel. The company has been linked to President Donald Trump's disgraced former National Security Adviser Michael Flynn, who received thousands of dollars as a consultant for the company.

Additional reporting by Peniley Ramírez in Mexico City and David Adams in Miami