Category Archives: Uncategorized

The #Mossad knew in advance what documents, files and disks it wanted to steal from Secret #Iran #Nuclear Archive

@media print { body { margin: 2mm 9mm; } .original-url { display: none; } #article .float.left { float: left !important; } #article .float.right { float: right !important; } #article .float { margin-top: 0 !important; margin-bottom: 0 !important; } } How the Mossad Recovered a Secret Iranian Archive

The Mossad knew in advance what documents, files and disks it wanted to steal and what was not important for the mission. Thus, there was no need to take the entire archive—just part of it. So the decision was made not to “soak” the materials or copy them, but to steal the original materials of the military program and take them out of Iran….
They stayed for approximately a few hours …and left by cars with their treasure—half a ton materials.”

How the Mossad Recovered a Secret Iranian Archive

BY YOSSI MELMAN June 6, 2018 in Jewish World, Latest, Politics

In the early morning hours of January 31, 2018, a sigh of relief broke the tension in the situation room at Mossad headquarters in Glilot, north of Tel Aviv. Present in the room were Yossi Cohen, the head of Mossad, as well various Mossad department heads and communication experts.

Dozens of Mossad operatives had just sent over the code word, which meant: We left Iran and are safe with the treasure. It was one of the most daring operations ever executed by Israeli spies. They had snatched the central archive of Iran’s secret nuclear military program from a warehouse in a Tehran suburb. Exactly three months later, Israeli Prime Minister Benjamin Netanyahu announced the news in a dramatic press conference in Tel Aviv. The brazen coup, which humiliated Iranian leaders, military chiefs and its top nuclear scientists captured the world’s imagination. Because most operational details were not revealed, speculation has grown about how it occurred. In reality, the operation was more imaginative than the best suspense thrillers and crime films.

Since Netanyahu’s announcement, Hollywood producers and Israeli and European screenwriters have approached the Mossad, asking for its cooperation to write and produce a film, which will be “based on a true story.” Obviously, Cohen liked the flattery but turned down the offers. Israel is a country that likes to keep its secrets.

Cohen, who was raised in a religious family from Jerusalem, is an old hand in the Israeli intelligence community. In 1984, at the age of 22, he was recruited by the Mossad and rose through its ranks as a case officer running Arab and Iranian agents.

When Cohen was appointed by Netanyahu in January 2016 to lead the agency, it was a few months after the six world powers signed the nuclear deal (known as JCPOA) with Iran. JCPOA restrained and limited Iran’s efforts and capabilities to produce nuclear weapons. Most of the international community, and even many in the Israeli security establishment, believed that Iran’s nuclear ambitions would be sidelined for the 10-year duration of the agreement.

Cohen thought differently. He ordered his staff to increase their efforts to focus on Iran, believing that it was continuing its secret nuclear military program. Cohen said he had a gut feeling. For most of his colleagues in the intelligence community, Cohen was perceived as obsessive, similarly to his boss Netanyahu, who has defined his career by labeling Iran as the most evil regime on earth.

A few weeks after Cohen entered his office, Mossad learned that Iran was creating a central archive which would store all documents, drawings, computer simulations and analytical research papers related to its nuclear military program. Before that, all the materials had been dispersed and stored in dozens of sites, offices and laboratories, including civilian institutions such as physics and chemistry departments of universities associated with the Iran Revolutionary Guards Corps (IRGC), which is in charge of the nuclear military program.

The decision to create the central archive was part of a large Iranian deception plan to hide the materials from future inspection of the UN International Atomic Energy Agency (IAEA), which was authorized to monitor the JCPOA. Iran feared that if the IAEA inspectors found out that Iran was involved in a military nuclear program, the U.S. and maybe other major powers would change their minds and void the nuclear deal.

According to the JCPOA, Iran has committed to provide all the information, data and documents and disks related to its past military activities defined by IAEA. Additionally, it is obliged by the deal to turn over or at least to show to IAEA all the equipment having to do with the military program. Iran not only didn’t do it (and thus violated the deal) but also claimed time and again that it was never involved in any nuclear military activity and that its nuclear work was for peaceful purposes: to generate electricity and for use in medicine, agriculture, industry and research.

Yossi Cohen, the head of Mossad. (Wikimedia Commons)

A senior Israeli intelligence officer involved in the operation told me that Iran wanted to achieve three goals by gathering all the documents in one place: to conceal it from IAEA and the international community, to hide it from its own public and to turn it into a storage, which would conserve and keep the accumulated know how for a future use. The circle of those privy to the secret of the archive’s existence were very few, probably no more than a few dozen—including the Supreme Leader Ali Khamenei.

Many wonder why the IRGC, who was responsible for information security, didn’t hide the archive in an underground bunker in a military base, which would be off limits to IAEA inspection. Intelligence officials who learned the Iranian way of thinking provided me with a few explanations.

First, it has been a typical pattern of the managers of Iran’s nuclear program to conceal components of it in workshops for civilian purposes and locate them in industrial zones. For example, the place where Iran manufactured its first centrifuges in the early 21st century was disguised as a workshop for electrical clocks called Kalaya Electrical Company, in a suburb of Tehran. The other explanation given was that Iran’s security chiefs who suspect that the Mossad has penetrated many layers of their military and nuclear communities feared that if the archive was stored in a military base, too many people who weren’t privy to the secret would notice something suspicious, including Mossad agents.

From the moment the initial information about the new central archive was gathered, Cohen decided to launch an operation. First he went to ask for confirmation from Netanyahu, who is legally in charge of the Mossad. The prime minster approved and allocated a special budget for it. “We didn’t know where that archive was housed and what its exact content was,” I was told by another intelligence officer, “but we believed it was an important and worthy task to try to find it.”

Cohen consulted with experts from the military intelligence and the Israeli Atomic Energy Commission (IAEC) and set the first outlines of the operation. It is a standard procedure in the Mossad to appoint one of its heads of departments as a “project manager” for sensitive operations. But in a rare decision, Cohen decided to be his own “project manager.”

The Mossad and military intelligence began the search for the location of the archive but, from the outset, it seemed like mission impossible. “It was like looking for a needle in a haystack,” explained a former Mossad operative. As a top priority operation, the Mossad began to utilize all the means available to them including bugging phones, infiltrating computers, hacking emails and monitoring social media. (In the last years, the Mossad increased its campaign to recruit Farsi-speaking experts, and now it employs hundreds in a variety of positions, including research analysts, communication specialists and field operatives.) All involved in the operation were asked to be alert to even to the simplest and seemingly insignificant details. In some past Mossad operations, the best tips and information arrived from an unexpected source.

After months of intensive searching, the intelligence spots were focused on several suspected sites. Until that moment, the task was mostly conducted at headquarters level by the Mossad’s intelligence department and a unit known as NABAK (a Hebrew acronym for unconventional weapons). Representatives of Mossad’s best operational departments were asked to join the brainstorming and deliberations. They included Caesarea, Kidon (bayonet) and Keshet (bow). The operatives in these units are called “combatants.”

Caesarea is in charge of running agents under deep cover in enemy countries and terror organizations known in Mossad jargon as “target” countries. Kidon is a small special operations unit whose combatants are trained in the most delicate and dangerous missions, including assassinations, sabotage and the planting of bugging devices in enemy lands. Keshet is in charge of surveillance. All of these units have their own in-house communication experts and locksmiths, which can, within seconds, break in or unlock any door or decipher any coded safe.

The Israeli censor has tightened its grip on the flow of information regarding the most sensitive details of the operation so one can only base his or her reportage and description on the past known modes of operations. After further searching, and nearly a year after the operation was launched, the exact location of the archive was found. The place looked from the outside rickety, deliberately. It looked simple and did not draw attention.

At this point began the process of how to get to the warehouse, how to break into the archive and what to do with the materials there. The hope was to find documents, which would incriminate Iran by proving that, even after signing the JCPOA, the country secretly continued its nuclear military program.

The first decision was to put the warehouse under watch to find out the daily routine of the neighborhood. Is the place guarded? And by who? How often? How frequently is the place visited? Who has access to it? Who are the neighbors within the vicinity? What is the traffic like? To find answers to these questions, Mossad dispatched agents with deep cover with borrowed identities or Farsi-speaking individuals with knowledge of Iranian culture and customs.

Iran is not an unknown land for Mossad combatants. In the last two decades Mossad conducted many risky and dangerous operations there, mainly to gather information on Iran’s nuclear program. They included the implant of viruses (stuxnet and others) inside the computers which were running the centrifuges at the Natanz uranium enrichment facility. Mossad combatants sabotaged equipment which was sent to Iran in various parts of the world. Between 2010 and 2012 Mossad combatants penetrated Iran and killed four top nuclear Iranian scientists and wounded another one by small but powerful bombs attached to their cars by motorcyclists. All of these scientists worked on “weaponization,” the final and most crucial stage of assembling a bomb.

The planning of how to break into the archive took almost a year. The most crucial dilemmas the planners faced were not how to get there but how to get out and whether to copy the materials inside the parameter or to steal the originals.

Being a vast country with long land borders with seven countries and maritime borders with others, also having air links, all options (air, sea and land) were weighed. Among Iran’s neighbors is Azerbaijan, which is a strategic ally of Israel. Previous reports years ago suggested that the country helped Israel in its intelligence operations against Iran. After Netanyahu’s revelations, Azerbaijani officials rushed to deny it had any hand in the Mossad operation.

All the options evolved around the most important consideration: how to bring the combatants home safe. All of the planners and participants knew that if something went wrong or if the Iranians were lucky and clever and caught the combatants, one fate was awaiting them: torture and eventually hanging from a crane at Tehran central squares, as the customary death penalty in the Islamic Republic is exercised.

What determined the final decision was the fact that, at that late stage, the Mossad already knew that in the archive were not only materials associated with the military program but also a lot belonging to the civilian nuclear program. This is the most amazing part of the operation. The Mossad knew in advance what documents, files and disks it wanted to steal and what was not important for the mission. Thus, there was no need to take the entire archive—just part of it. So the decision was made not to “soak” the materials or copy them, but to steal the original materials of the military program and take them out of Iran.

A team of dozens of combatants was picked for the operation. Before that, a lot of logistics had to be dealt with to prepare cars, safe houses, communication gear and other vital equipment. As is also a standard procedure in the Mossad, all participants practiced many times how to best execute such a complicated mission. A structure similar in size to the warehouse in Iran was built and the combatants practiced on it.

Cohen, who personally observed the rehearsals, had to give the green light. But his confirmation was not sufficient. The prime minister is the ultimate authority on such situations. Netanyahu consulted with defense minister Avigdor Liberman and, despite having a reputation of being hesitant and reluctant to take risks, he approved it.

The combatants arrived in Iran and on the night of January 31 broke into the warehouse after making sure that it wasn’t guarded and the area was safe. They stayed for approximately a few hours and unlocked and emptied the relevant safes where the exact materials they needed were stored and left by cars with their treasure—half a ton materials. Despite the danger and tension surrounding them, everything went according to plan.

Their destination is the most well-kept secret. It is assumed that they escaped to one of Iran’s neighbors where they would feel most safe. After a few hours the security personnel at IRGC discovered what had happened under their nose. The Iranians privy to the secret, including the Supreme Leader, were in shock.

The materials are in Farsi and English. Once the materials arrived, an army of dozens of Israeli Farsi experts read and scanned the documents, disks, drawings and simulations. The material proved to be a gem, but the jewel in the crown was missing. There wasn’t a single document which can indicate or hint that Iran continued its military activities after it signed JCPOA. Also, the Israeli intelligence didn’t know if Iran had a backup with copies of the originals. Olli Heinonen, who was deputy director general of IAEA a few years ago and is now a scholar at a think tank in Washington, told me that, knowing the Iranians, he believed they do have copies. “It’s not their habit to put all their eggs in one basket,” he said.

Nevertheless, the documents had their impact. Cohen personally took a copy of them and in early March flew to Washington and showed it to his counterpart, CIA Director Mike Pompeo (now Secretary of State). The CIA experts reviewed the material and reached the conclusion that it was authentic.

At the same time, Netanyahu met Donald Trump and shared with him the main findings. For the U.S. president, the documents helped to cement his decision to pull out of JCPOA.

After Netanyahu’s press conference in May, experts from the French (DGSE) German (BND) and British (MI6) intelligence communities arrived in Israel and were also shown the materials. They expressed their admiration for the Mossad operation. But aside from the psychological blow Israel inflicted on Iran, and the fact that Iran lied even under the terms of the JCPOA, in diplomatic terms, the effect remained minor. The U.S. left the deal, but all the other five signatory members decided to honor it, though they hope Iran will agree to modify it.

This piece has been adapted into English from a previously published Maariv article.

#Palantir Knows Everything About You

@media print { body { margin: 2mm 9mm; } .original-url { display: none; } #article .float.left { float: left !important; } #article .float.right { float: right !important; } #article .float { margin-top: 0 !important; margin-bottom: 0 !important; } } Palantir Knows Everything About You

Palantir Knows Everything About You

Peter Thiel’s data-mining company is using War on Terror tools to track American citizens. The scary thing? Palantir is desperate for new customers.

High above the Hudson River in downtown Jersey City, a former U.S. Secret Service agent named Peter Cavicchia III ran special ops for JPMorgan Chase & Co. His insider threat group—most large financial institutions have one—used computer algorithms to monitor the bank’s employees, ostensibly to protect against perfidious traders and other miscreants.
Aided by as many as 120 “forward-deployed engineers” from the data mining company Palantir Technologies Inc., which JPMorgan engaged in 2009, Cavicchia’s group vacuumed up emails and browser histories, GPS locations from company-issued smartphones, printer and download activity, and transcripts of digitally recorded phone conversations. Palantir’s software aggregated, searched, sorted, and analyzed these records, surfacing keywords and patterns of behavior that Cavicchia’s team had flagged for potential abuse of corporate assets. Palantir’s algorithm, for example, alerted the insider threat team when an employee started badging into work later than usual, a sign of potential disgruntlement. That would trigger further scrutiny and possibly physical surveillance after hours by bank security personnel.

Featured in Bloomberg Businessweek, April 23, 2018. Subscribe now.
Over time, however, Cavicchia himself went rogue. Former JPMorgan colleagues describe the environment as Wall Street meets Apocalypse Now, with Cavicchia as Colonel Kurtz, ensconced upriver in his office suite eight floors above the rest of the bank’s security team. People in the department were shocked that no one from the bank or Palantir set any real limits. They darkly joked that Cavicchia was listening to their calls, reading their emails, watching them come and go. Some planted fake information in their communications to see if Cavicchia would mention it at meetings, which he did.
It all ended when the bank’s senior executives learned that they, too, were being watched, and what began as a promising marriage of masters of big data and global finance descended into a spying scandal. The misadventure, which has never been reported, also marked an ominous turn for Palantir, one of the most richly valued startups in Silicon Valley. An intelligence platform designed for the global War on Terror was weaponized against ordinary Americans at home.

Founded in 2004 by Peter Thiel and some fellow PayPal alumni, Palantir cut its teeth working for the Pentagon and the CIA in Afghanistan and Iraq. The company’s engineers and products don’t do any spying themselves; they’re more like a spy’s brain, collecting and analyzing information that’s fed in from the hands, eyes, nose, and ears. The software combs through disparate data sources—financial documents, airline reservations, cellphone records, social media postings—and searches for connections that human analysts might miss. It then presents the linkages in colorful, easy-to-interpret graphics that look like spider webs. U.S. spies and special forces loved it immediately; they deployed Palantir to synthesize and sort the blizzard of battlefield intelligence. It helped planners avoid roadside bombs, track insurgents for assassination, even hunt down Osama bin Laden. The military success led to federal contracts on the civilian side. The U.S. Department of Health and Human Services uses Palantir to detect Medicare fraud. The FBI uses it in criminal probes. The Department of Homeland Security deploys it to screen air travelers and keep tabs on immigrants.
Police and sheriff’s departments in New York, New Orleans, Chicago, and Los Angeles have also used it, frequently ensnaring in the digital dragnet people who aren’t suspected of committing any crime. People and objects pop up on the Palantir screen inside boxes connected to other boxes by radiating lines labeled with the relationship: “Colleague of,” “Lives with,” “Operator of [cell number],” “Owner of [vehicle],” “Sibling of,” even “Lover of.” If the authorities have a picture, the rest is easy. Tapping databases of driver’s license and ID photos, law enforcement agencies can now identify more than half the population of U.S. adults.
JPMorgan was effectively Palantir’s R&D lab and test bed for a foray into the financial sector, via a product called Metropolis. The two companies made an odd couple. Palantir’s software engineers showed up at the bank on skateboards. Neckties and haircuts were too much to ask, but JPMorgan drew the line at T-shirts. The programmers had to agree to wear shirts with collars, tucked in when possible.
As Metropolis was installed and refined, JPMorgan made an equity investment in Palantir and inducted the company into its Hall of Innovation, while its executives raved about Palantir in the press. The software turned “data landfills into gold mines,” Guy Chiarello, who was then JPMorgan’s chief information officer, told Bloomberg Businessweek in 2011.
The founder of Palantir is extremely well connected. Here’s how his life might appear in the company’s model.

Palantir network

Chart: Dorothy Gambrell
Cavicchia was in charge of forensic investigations at the bank. Through Palantir, he gained administrative access to a full range of corporate security databases that had previously required separate authorizations and a specific business justification to use. He had unprecedented access to everything, all at once, all the time, on one analytic platform. He was a one-man National Security Agency, surrounded by the Palantir engineers, each one costing the bank as much as $3,000 a day.
Senior investigators stumbled onto the full extent of the spying by accident. In May 2013 the bank’s leadership ordered an internal probe into who had leaked a document to the New York Times about a federal investigation of JPMorgan for possibly manipulating U.S. electricity markets. Evidence indicated the leaker could have been Frank Bisignano, who’d recently resigned as JPMorgan’s co-chief operating officer to become CEO of First Data Corp., the big payments processor. Cavicchia had used Metropolis to gain access to emails about the leak investigation—some written by top executives—and the bank believed he shared the contents of those emails and other communications with Bisignano after Bisignano had left the bank. (Inside JPMorgan, Bisignano was considered Cavicchia’s patron—a senior executive who protected and promoted him.)
JPMorgan officials debated whether to file a suspicious activity report with federal regulators about the internal security breach, as required by law whenever banks suspect regulatory violations. They decided not to—a controversial decision internally, according to multiple sources with the bank. Cavicchia negotiated a severance agreement and was forced to resign. He joined Bisignano at First Data, where he’s now a senior vice president. Chiarello also went to First Data, as president. After their departures, JPMorgan drastically curtailed its Palantir use, in part because “it never lived up to its promised potential,” says one JPMorgan executive who insisted on anonymity to discuss the decision.
The bank, First Data, and Bisignano, Chiarello, and Cavicchia didn’t respond to separately emailed questions for this article. Palantir, in a statement responding to questions about how JPMorgan and others have used its software, declined to answer specific questions. “We are aware that powerful technology can be abused and we spend a lot of time and energy making sure our products are used for the forces of good,” the statement said.
Much depends on how the company chooses to define good. In March a former computer engineer for Cambridge Analytica, the political consulting firm that worked for Donald Trump’s 2016 presidential campaign, testified in the British Parliament that a Palantir employee had helped Cambridge Analytica use the personal data of up to 87 million Facebook users to develop psychographic profiles of individual voters. Palantir said it has a strict policy against working on political issues, including campaigns, and showed Bloomberg emails in which it turned down Cambridge’s request to work with Palantir on multiple occasions. The employee, Palantir said, worked with Cambridge Analytica on his own time. Still, there was no mistaking the implications of the incident: All human relations are a matter of record, ready to be revealed by a clever algorithm. Everyone is a spidergram now.

Thiel addresses the 2016 Republican National Convention. Jim Watson/AFP/Getty Images

Thiel, who turned 50 in October, long reveled as the libertarian black sheep in left-leaning Silicon Valley. He contributed $1.25 million to Trump’s presidential victory, spoke at the Republican convention, and has dined with Trump at the White House. But Thiel has told friends he’s had enough of the Bay Area’s “monocultural” liberalism. He’s ditching his longtime base in San Francisco and moving his personal investment firms this year to Los Angeles, where he plans to establish his next project, a conservative media empire.
As Thiel’s wealth has grown, he’s gotten more strident. In a 2009 essay for the Cato Institute, he railed against taxes, ­government, women, poor people, and society’s acquiescence to the inevitability of death. (Thiel doesn’t accept death as inexorable.) He wrote that he’d reached some radical conclusions: “Most importantly, I no longer believe that freedom and democracy are compatible.” The 1920s was the last time one could feel “genuinely optimistic” about American democracy, he said; since then, “the vast increase in welfare beneficiaries and the extension of the franchise to women—two constituencies that are notoriously tough for libertarians—have rendered the notion of ‘capitalist democracy’ into an oxymoron.”
Thiel went into tech after missing a prized Supreme Court clerkship following his graduation from Stanford Law School. He co-founded PayPal and then parlayed his winnings from its 2002 sale to EBay Inc. into a career in venture investing. He made an early bet on Facebook Inc. (where he’s still on the board), which accounts for most of his $3.3 billion fortune, as estimated by Bloomberg, and launched his career as a backer of big ideas—things like private space travel (through an investment in SpaceX), hotel alternatives (Airbnb), and floating island nations (the Seasteading Institute).
He started Palantir—named after the omniscient crystal balls in J.R.R. Tolkien’s Lord of the Rings trilogy—three years after the attacks of Sept. 11, 2001. The CIA’s investment arm, In-Q-Tel, was a seed investor. For the role of chief executive officer, he chose an old law school friend and self-described neo-Marxist, Alex Karp. Thiel told Bloomberg in 2011 that civil libertarians ought to embrace Palantir, because data mining is less repressive than the “crazy abuses and draconian policies” proposed after Sept. 11. The best way to prevent another catastrophic attack without becoming a police state, he argued, was to give the government the best surveillance tools possible, while building in safeguards against their abuse.
Legend has it that Stephen Cohen, one of Thiel’s co-founders, programmed the initial prototype for Palantir’s software in two weeks. It took years, however, to coax customers away from the longtime leader in the intelligence analytics market, a software company called I2 Inc.
In one adventure missing from the glowing accounts of Palantir’s early rise, I2 accused Palantir of misappropriating its intellectual property through a Florida shell company registered to the family of a Palantir executive. A company claiming to be a private eye firm had been licensing I2 software and development tools and spiriting them to Palantir for more than four years. I2 said the cutout was registered to the family of Shyam Sankar, Palantir’s director of business development.
As shown in the privacy breaches at Facebook and Cambridge Analytica, the pressure to monetize data at tech companies is ceaseless
I2 sued Palantir in federal court, alleging fraud, conspiracy, and copyright infringement. In its legal response, Palantir argued it had the right to appropriate I2’s code for the greater good. “What’s at stake here is the ability of critical national security, defense and intelligence agencies to access their own data and use it interoperably in whichever platform they choose in order to most effectively protect the citizenry,” Palantir said in its motion to dismiss I2’s suit.
The motion was denied. Palantir agreed to pay I2 about $10 million to settle the suit. I2 was sold to IBM in 2011.
Sankar, Palantir employee No. 13 and now one of the company’s top executives, also showed up in another Palantir scandal: the company’s 2010 proposal for the U.S. Chamber of Commerce to run a secret sabotage campaign against the group’s liberal opponents. Hacked emails released by the group Anonymous indicated that Palantir and two other defense contractors pitched outside lawyers for the organization on a plan to snoop on the families of progressive activists, create fake identities to infiltrate left-leaning groups, scrape social media with bots, and plant false information with liberal groups to subsequently discredit them.
After the emails emerged in the press, Palantir offered an explanation similar to the one it provided in March for its U.K.-based employee’s assistance to Cambridge Analytica: It was the work of a single rogue employee. The company never explained Sankar’s involvement. Karp issued a public apology and said he and Palantir were deeply committed to progressive causes. Palantir set up an advisory panel on privacy and civil liberties, headed by a former CIA attorney, and beefed up an engineering group it calls the Privacy and Civil Liberties Team. The company now has about 10 PCL engineers on call to help vet clients’ requests for access to data troves and pitch in with pertinent thoughts about law, morality, and machines.
During its 14 years in startup mode, Palantir has cultivated a mystique as a haven for brilliant engineers who want to solve big problems such as terrorism and human trafficking, unfettered by pedestrian concerns such as making money. Palantir executives boast of not employing a single sales­person, relying instead on word-of-mouth referrals.
The company’s early data mining dazzled venture investors, who valued it at $20 billion in 2015. But Palantir has never reported a profit. It operates less like a conventional software company than like a consultancy, deploying roughly half its 2,000 engineers to client sites. That works at well-funded government spy agencies seeking specialized applications but has produced mixed results with corporate clients. Palantir’s high installation and maintenance costs repelled customers such as Hershey Co., which trumpeted a Palantir partnership in 2015 only to walk away two years later. Coca-Cola, Nasdaq, American Express, and Home Depot have also dumped Palantir.
Karp recognized the high-touch model was problematic early in the company’s push into the corporate market, but solutions have been elusive. “We didn’t want to be a services company. We wanted to do something that was cost-efficient,” he confessed at a European conference in 2010, in one of several unguarded comments captured in videos posted online. “Of course, what we didn’t recognize was that this would be much, much harder than we realized.”
Palantir’s newest product, Foundry, aims to finally break through the profitability barrier with more automation and less need for on-site engineers. Airbus SE, the big European plane maker, uses Foundry to crunch airline data about specific onboard components to track usage and maintenance and anticipate repair problems. Merck KGaA, the pharmaceutical giant, has a long-term Palantir contract to use Foundry in drug development and supply chain management.
Deeper adoption of Foundry in the commercial market is crucial to Palantir’s hopes of a big payday. Some investors are weary and have already written down their Palantir stakes. Morgan Stanley now values the company at $6 billion. Fred Alger Management Inc., which has owned stock since at least 2006, revalued Palantir in December at about $10 billion, according to Bloomberg Holdings. One frustrated investor, Marc Abramowitz, recently won a court order for Palantir to show him its books, as part of a lawsuit he filed alleging the company sabotaged his attempt to find a buyer for the Palantir shares he has owned for more than a decade.
As shown in the privacy breaches at Facebook and Cambridge Analytica—with Thiel and Palantir linked to both sides of the equation—the pressure to monetize data at tech companies is ceaseless. Facebook didn’t grow from a website connecting college kids into a purveyor of user profiles and predilections worth $478 billion by walling off personal data. Palantir says its Privacy and Civil Liberties Team watches out for inappropriate data demands, but it consists of just 10 people in a company of 2,000 engineers. No one said no to JPMorgan, or to whomever at Palantir volunteered to help Cambridge Analytica—or to another organization keenly interested in state-of-the-art data science, the Los Angeles Police Department.

Gotham program
Screenshots of Palantir’s Gotham program, from a promotional video. Source: Youtube

Palantir began work with the LAPD in 2009. The impetus was federal funding. After several Sept. 11 postmortems called for more intelligence sharing at all levels of law enforcement, money started flowing to Palantir to help build data integration systems for so-called fusion centers, starting in L.A. There are now more than 1,300 trained Palantir users at more than a half-dozen law enforcement agencies in Southern California, including local police and sheriff’s departments and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The LAPD uses Palantir’s Gotham product for Operation Laser, a program to identify and deter people likely to commit crimes. Information from rap sheets, parole reports, police interviews, and other sources is fed into the system to generate a list of people the department defines as chronic offenders, says Craig Uchida, whose consulting firm, Justice & Security Strategies Inc., designed the Laser system. The list is distributed to patrolmen, with orders to monitor and stop the pre-crime suspects as often as possible, using excuses such as jaywalking or fix-it tickets. At each contact, officers fill out a field interview card with names, addresses, vehicles, physical descriptions, any neighborhood intelligence the person offers, and the officer’s own observations on the subject.
The cards are digitized in the Palantir system, adding to a constantly expanding surveillance database that’s fully accessible without a warrant. Tomorrow’s data points are automatically linked to today’s, with the goal of generating investigative leads. Say a chronic offender is tagged as a passenger in a car that’s pulled over for a broken taillight. Two years later, that same car is spotted by an automatic license plate reader near a crime scene 200 miles across the state. As soon as the plate hits the system, Palantir alerts the officer who made the original stop that a car once linked to the chronic offender was spotted near a crime scene.
The platform is supplemented with what sociologist Sarah Brayne calls the secondary surveillance network: the web of who is related to, friends with, or sleeping with whom. One woman in the system, for example, who wasn’t suspected of committing any crime, was identified as having multiple boyfriends within the same network of associates, says Brayne, who spent two and a half years embedded with the LAPD while researching her dissertation on big-data policing at Princeton University and who’s now an associate professor at the University of Texas at Austin. “Anybody who logs into the system can see all these intimate ties,” she says. To widen the scope of possible connections, she adds, the LAPD has also explored purchasing private data, including social media, foreclosure, and toll road information, camera feeds from hospitals, parking lots, and universities, and delivery information from Papa John’s International Inc. and Pizza Hut LLC.
The Constitutionality Question
Why the courts haven’t ruled on whether Palantir’s analytical tools are legal
Civil rights advocates say the compilation of a digital dossier of someone’s life, absent a court warrant, is an unlawful intrusion under the U.S. Constitution. Law enforcement officials say that’s not the case. For now, the question is unsettled, and that may be no accident. Civil liberties lawyers are seeking a case to challenge the constitutionality of Palantir’s use, but prosecutors and immigration agents have been careful not to cite the software in evidentiary documents, says Paromita Shah, associate director of the National Lawyers Guild’s National Immigration Project. “Palantir lives on that secrecy,” she says.
Since the 1970s, the Supreme Court has differentiated between searching someone’s home or car, which requires a warrant, and searching material out in the open or shared with others, which doesn’t. The justices’ thinking seems to be evolving as new technologies rise.
In a 2012 decision, U.S. v. Jones, the justices said that planting a GPS tracker on a car for 28 days without a warrant created such a comprehensive picture of the target’s life that it violated the public’s reasonable expectation of privacy.
Similarly, the court’s 2014 decision in Riley v. California found that cellphones contain so much personal information that they provide a virtual window into the owner’s mind, and thus necessitate a warrant for the government to search. Chief Justice John Roberts, in his majority opinion, wrote of cellphones that “with all they contain and all they may reveal, they hold for many Americans ‘the privacies of life.'” Justice Louis Brandeis, 86 years earlier, wrote a searing dissent in a wiretap case that seems to perectly foresee the advent of Palantir.
“Ways may someday be developed,” Brandeis warned, “by which the government, without removing papers from secret drawers, can reproduce them in court, and by which it will be enabled to expose to a jury the most intimate occurrences.”
—Peter Waldman
The LAPD declined to comment for this story. Palantir sent Bloomberg a statement about its work with law enforcement: “Our [forward-deployed engineers] and [privacy and civil liberties] engineers work with the law enforcement customers (including LAPD) to ensure that the implementation of our software and integration of their source systems with the software is consistent with the Department’s legal and policy obligations, as well as privacy and civil liberties considerations that may not currently be legislated but are on the horizon. We as a company determine the types of engagements and general applications of our software with respect to those overarching considerations. Police Agencies have internal responsibility for ensuring that their information systems are used in a manner consistent with their policies and procedures.”
Operation Laser has made L.A. cops more surgical—and, according to community activists, unrelenting. Once targets are enmeshed in a spidergram, they’re stuck.
Manuel Rios, 22, lives in the back of his grandmother’s house at the top of a hill in East L.A., in the heart of the city’s gang area. Tall with a fair complexion and light hair, he struggled in high school with depression and a learning disability and dropped out to work at a supermarket.
He grew up surrounded by friends who joined Eastside 18, the local affiliate of the 18th Street gang, one of the largest criminal syndicates in Southern California. Rios says he was never “jumped in”—initiated into 18. He spent years addicted to crystal meth and was once arrested for possession of a handgun and sentenced to probation. But except for a stint in county jail for a burglary arrest inside a city rec center, he’s avoided further trouble and says he kicked his meth habit last year.
In 2016, Rios was sitting in a parked car with an Eastside 18 friend when a police car pulled up. His buddy ran, pursued by the cops, but Rios stayed put. “Why should I run? I’m not a gang member,” he says over steak and eggs at the IHOP near his home. The police returned and handcuffed him. One of them took his picture with a cellphone. “Welcome to the gang database!” the officer said.
Since then he’s been stopped more than a dozen times, he says, and told that if he doesn’t like it he should move. He has nowhere to go. His girlfriend just had a baby girl, and he wants to be around for them. “They say you’re in the system, you can’t lie to us,” he says. “I tell them, ‘How can I be in the hood if I haven’t got jumped in? Can’t you guys tell people who bang and who don’t?’ They go by their facts, not the real facts.”
The police, on autopilot with Palantir, are driving Rios toward his gang friends, not away from them, worries Mariella Saba, a neighbor and community organizer who helped him get off meth. When whole communities like East L.A. are algorithmically scraped for pre-crime suspects, data is destiny, says Saba. “These are systemic processes. When people are constantly harassed in a gang context, it pushes them to join. They internalize being told they’re bad.”
In Chicago, at least two immigrants have been detained for deportation by Immigration and Customs Enforcement officers based on erroneous information in gang databases, according to a pair of federal lawsuits. Chicago is a sanctuary city, so it isn’t clear how ICE found out about the purported gang affiliations. But Palantir is a likely link. The company provided an “intelligence management solution” for the Cook County Sheriff’s Office to integrate information from at least 14 different databases, including gang lists compiled by state and local police departments, according to county records. Palantir also has a $41 million data mining contract with ICE to build the agency’s “investigative case management” system.
One of the detained men, Wilmer Catalan-Ramirez, a 31-year-old body shop mechanic, was seriously injured when six ICE agents burst into his family’s home last March without a warrant. He’d been listed in the local gang database twice—in rival gangs. Catalan-Ramirez spent the next nine months in federal detention, until the city of Chicago admitted both listings were wrong and agreed to petition the feds to let him stay in the U.S. ICE released him in January, pending a new visa application. “These cases are perfect examples of how databases filled with unverified information that is often false can destroy people’s lives,” says his attorney, Vanessa del Valle of Northwestern University’s MacArthur Justice Center.
When whole communities are algorithmically scraped for pre-crime suspects, data is destiny
Palantir is twice the age most startups are when they cash out in a sale or initial public offering. The company needs to figure out how to be rewarded on Wall Street without creeping out Main Street. It might not be possible. For all of Palantir’s professed concern for individuals’ privacy, the single most important safeguard against abuse is the one it’s trying desperately to reduce through automation: human judgment.
As Palantir tries to court corporate customers as a more conventional software company, fewer forward-deployed engineers will mean fewer human decisions. Sensitive questions, such as how deeply to pry into people’s lives, will be answered increasingly by artificial intelligence and machine-learning algorithms. The small team of Privacy and Civil Liberties engineers could find themselves even less influential, as the urge for omnipotence among clients overwhelms any self-imposed restraints.
Computers don’t ask moral questions; people do, says John Grant, one of Palantir’s top PCL engineers and a forceful advocate for mandatory ethics education for engineers. “At a company like ours with millions of lines of code, every tiny decision could have huge implications,” Grant told a privacy conference in Berkeley last year.
JPMorgan’s experience remains instructive. “The world changed when it became clear everyone could be targeted using Palantir,” says a former JPMorgan cyber expert who worked with Cavicchia at one point on the insider threat team. “Nefarious ideas became trivial to implement; everyone’s a suspect, so we monitored everything. It was a pretty terrible feeling.” —With Michael Riley

#CRYPTO INSIDER: Mrs. Watanabe’ is back: the archetypal Japanese housewife is fueling the #bitcoin craze @businessinsider.

Here’s the full rundown of cryptocurrencies as of Wednesday morning: 

What’s happening: