SALEM, Oregon (AP) – In 2017, Oregon State Treasury investment managers unanimously committed $ 233 million to a new private equity fund called Novalpina Capital. That investment caused a hangover and the Treasury Department is now ready to answer questions.
After Oregon made the investment, Novalpina Capital acquired a controlling interest in NSO Group, an Israeli company that makes smartphone spyware. The spyware was used by repressive regimes against dissidents, human rights activists and journalists. The NSO Group has been hit by numerous lawsuits and was blacklisted by the US government last month.
Earlier this year, London-based Novalpina Capital was so dysfunctional due to a bitter dispute between its partners that investors, including Oregon, removed control of the fund and turned it over to a firm called Berkeley Research Group.
Oregon state treasurer Tobias Read is looking for clarity in the dire situation, spokeswoman Amy Bates said in a statement to The Associated Press.
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That month, Read reached out to Oregon Attorney General Ellen Rosenblum “to discuss various legal options,” Bates said. Rosenblum’s office declined to comment, citing legal confidentiality.
Oregon Treasury also worked with Berkeley Research Group “to get a full record of the previous fund manager’s investment activity over the past few years,” said Bates, who declined to comment.
Until two months ago, the Berkeley Research Group had not received approval from the Israeli government to obtain sensitive information about the NSO Group, the Guardian reported. The Berkeley Research Group did not immediately respond when asked if it has had access to the information since then.
On Wednesday, US Senator Ron Wyden, D-Oregon, said the state pension fund should stop investing in the NSO Group because its Pegasus spyware “allowed authoritarian regimes to target journalists and human rights defenders.”
On November 3rd, the US Department of Commerce blacklisted the NSO Group and another Israeli company. Wyden and Rep. Adam Schiff, D-California, on Wednesday called on the Biden government to go a step further by implementing the Global Magnitsky Act, which authorizes Washington, DC, to freeze assets and allow individuals to enter the United States to forbid.
Bates said Thursday that Read “supports sanctioning global technology companies that facilitate human rights abuses and the repression of journalists by selling technology to authoritarian regimes.”
She noted that Oregon is a limited partner in investing in private equity funds and is therefore not involved in how such a fund operates after an investment, but “deeply concerned about reports of developments in the NSO Group.”
For its part, the NSO Group said in a statement on Wednesday that it “has chosen ethics on revenue, and we firmly believe that our contribution to global security, including US national interests, should have the opportunity to be presented” .
“We only sell to governments authorized by the State of Israel to prevent terrorism and crime. Once the software is sold, the company will no longer operate the system, ”added the company.
AP reporter Josef Federman in Jerusalem contributed to this report.
Follow Andrew Selsky on Twitter at https://twitter.com/andrewselsky
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