ICE Signs $2 Million Contract With Spyware Maker Paragon Solutions

Paragon was founded in 2019 by veterans from the Israel Defense Forces’ powerful intelligence Unit 8200 with the active involvement of former Israeli prime minister Ehud Barak as an investor who is estimated to own a sizable slice of the company.

The company has received investment from the Boston-headquartered Battery Ventures, “considered to be one of the world’s top venture capital firms,” and two of its founders formerly worked for Blumberg Capital, another large US venture capital firm.

Israeli media reported in June that a US private equity fund with a portfolio of security companies has been in talks to acquire control of Paragon, estimating its valuation at $1 billion.

To secure its unique US-approved, “ethical” positioning, Paragon has made “deliberate efforts” since its establishment to break into the US market, notes the Atlantic Council.

In 2019, as Paragon was developing Graphite, the company enlisted WestExec Advisors, a prominent Washington, DC, consulting firm cofounded by former Obama administration officials, including current US secretary of state Antony Blinken, to advise on its “strategic approach to the US and European markets,” a company executive told the Financial Times. Avril Haines, a former WestExec staffer, is now the US director of national intelligence.

To remain in the US government’s “good graces,” Paragon in February 2023 hired another DC-based lobbying firm, Holland & Knight, “with a good track record in avoiding sanctions,” as some reports point out. Lobbying expenditure disclosure reveals a spend of a minimum $280,000 in 2023 and 2024 for this campaign.

The fact that the spyware vendor has neither been placed on an entity list nor have any of its executives been sanctioned by the Biden administration suggests that Paragon’s lobbying efforts have been successful.

In addition, Biden’s executive order leaves enough margin for the deployment of tools like Graphite. When a senior US administration official was asked specifically about potential abuses of Paragon’s flagship product, they said that the executive order “requires the heads of agencies to review any activity that might be relevant,” without excluding the possibility of lawful use.

Meanwhile, the company continues to grow and is advertising several roles in Israel. In the US, Paragon boosted its presence in the wake of the signing of the executive order and started hiring intelligence veterans, including former CIA and FBI officers at its subsidiary, “hoping it would pick up new business.” Fresh reports from February 2024 confirmed the steady growth.

Paragon’s $2 million contract with ICE is tangible proof that the company’s approach is paying off. It remains to be seen whether Graphite’s deployment will align with the protection of human rights, privacy, and democracy.