Lebanon: the pagers were the trigger for the war
New developments in the case of exploding pagers, Northvolt crisis, AI.
Digital Conflicts is a bi-weekly briefing on the intersections of digital culture, AI, cybersecurity, digital rights, data privacy, and tech policy with a European focus.
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N.15 - 8 October 2024
Author: Carola Frediani and Andrea Daniele Signorelli
In this issue:
New developments in the case of exploding pagers
The crisis of Northvolt
GenAI as a commodity
More
WAR IN LEBANON
New developments in the case of exploding pagers
Our last newsletter was about the explosion of pagers and walkie-talkies in Lebanon (if you didn't read it or didn't follow the story closely, take a look, because we're going to make some assumptions). Two weeks on, what more do we know or what more can we say?
Unfortunately, it has become clear that the pager explosion was only the first phase of a larger campaign. A military campaign, or rather, let's call it what it is: a war, initiated by an intelligence operation that had been in the making for years. This operation involved the infiltration of Hezbollah (probably also through HUMINT, or human intelligence), the manipulation of the pager supply chain, the creation of intermediary companies and a "cyber" component, of which little has been revealed, involving the ability to remotely activate the explosive-laden devices in a coordinated manner.
“Creating distrust of communication devices within Hezbollah may well be Israel's purposeful tactic of ‘preparing the battle space' ahead of impending Israeli military operations against Lebanon”, Thomas Rid, a professor of strategic studies at Johns Hopkins University and author of Active Measures, who specializes in disinformation and influence operations, told Wired USA. “He compares the operation to cyberattacks or physical attacks on ‘command-and-control’ infrastructure at the beginning of a conflict, such as the United States' efforts, documented in former NSA chief Michael Hayden's book Playing to the Edge, to destroy the Iraqi military's fiber-optics-based communications in 2003 in order to ‘herd’ the enemy's military toward more easily intercepted radio-based communications”, Wired writes.
“This is taking attacks on command-on-control to a whole new level”, Rid says. “They sent the message: ‘No, we’re not just penetrating these devices and bugging them, we're literally blowing them up, taking away the confidence you might have had in your command-and-control and also in any future devices that you might procure’”.
However, this trust has also been taken away from the rest of the Lebanese population, who are now not only facing the nightmare of war, air strikes and displacement, but also living in a state of paranoia, suspicious of every device: starting with phones, but also power banks, solar panels or other everyday items, as reported by several media outlets.
This goes beyond Lebanon: Dubai's Emirates Airlines has banned passengers from carrying pagers and walkie-talkies on its flights.
Batteries containing explosives?
As for the pagers, one of the few details to emerge in recent days was reported by CNN. Lebanese authorities used some of the devices, which had been switched off during the attack and were therefore intact, and blew them up to investigate what had happened.
"The pagers used in the controlled explosions were switched off at the time of the attack on September 17, which meant they did not receive the message that caused the compromised devices to detonate," writes CNN. "The way in which the explosive material had been hidden inside the pagers’ batteries was so sophisticated that it could not be detected", said a Lebanese security source. "The explosive material was ‘laced’ inside the pager’s lithium battery and virtually undetectable". The source added that they had "never seen anything like it".
This account is corroborated by another Washington Post investigation published in the last few hours (based on several intelligence sources from different countries), which states that the modified pagers were a feat of engineering, with the explosives so carefully hidden that they were virtually undetectable even if the device was dismantled. In fact, according to Israeli sources, Hezbollah disassembled some of the pagers and may even have X-rayed them, but still failed to detect the trap.
An electronic signal from Israeli intelligence triggered the explosion of thousands of devices at once. On 17 September, thousands of compromised pagers rang out across Lebanon and Syria. A short phrase in Arabic appeared on the screens: "You have received an encrypted message". Many Hezbollah members followed the instructions to verify the coded messages, which involved pressing two buttons simultaneously with both hands, according to the Washington Post.
Let's not forget that within a week of the pager and walkie-talkie explosions, Nasrallah and other Hezbollah leaders were killed. As Natalia Antelava writes in the Coda newsletter, "assassinations of the entire command structure of the most powerful militia in the Middle East requires state of the art technology, incredible human penetration into target societies and extraordinary strategic patience. French media reported that Nasrallah’s arrival at Hezbollah underground HQ was leaked to the Israelis by an Iranian mole. These reports have not been corroborated, but the former Iranian president Mahmoud Ahmadinejad produced a jaw-dropping sound bite when he told CNN Turk that even the head of the Iranian unit countering Mossad was an Israeli agent”.
It's worth noting, however, that Ahmadinejad's interview with CNN Turk, which has resurfaced in recent days, appears to be much older. Nevertheless, it still points to an incredible level of human, not just technological, infiltration by Israel.
Who is Pauline? The circle of companies and the supply chain
What do we know about the supply chain and the companies involved? Last time, I wrote about two companies, BAC Consulting in Hungary and Norta Global in Bulgaria, with technology licensed from the Taiwanese company Gold Apollo.
Another piece of the puzzle has come into focus: Hong Kong. Specifically, there's a company, Ellenberg Trading, registered in the Hong Kong Companies Registry and founded in 2021 by a certain "Pauline Ellenberg" with an alleged residence in Zurich, who is currently untraceable by journalists.
The company allegedly made payments totaling millions of euros to the Bulgarian company Norta, which in turn transferred the money to the Hungarian company BAC Consulting, which commissioned the production of the pagers, according to Der Standard and others. According to this reconstruction, Ellenberg Trading was the company at the beginning of the payment chain, but the money was transferred from an account opened at Mizrahi Tefahot, Israel's third-largest bank.
"Who is Pauline Ellenberg? The answer could bring the world closer to discovering who launched the intelligence operation that led Hezbollah to purchase explosive-laden pagers," writes the Norwegian outlet VG. According to this reconstruction, the Hong Kong company transferred about 1.5 million euros to the Bulgarian company Norta Global, owned by a Norwegian (Rinson Jose, the Indian-Norwegian I wrote about in the last newsletter, is the subject of an international search warrant issued by Norwegian police as he disappeared after traveling to Boston for a conference).
The money transfers were made from an Israeli bank account. From Bulgaria, the money then went to a third company in Hungary, BAC Consulting, run by the Italian-Hungarian CEO Cristiana Barsony-Arcidiacono, which had a branch in Taiwan and was a distributor for Gold Apollo, according to the Taiwanese company's founder.
Norta Global allegedly transferred over one million euros to Budapest-based BAC in several installments between March 10, 2023 and June 7, 2024, according to the Hungarian outlet Telex. Meanwhile, BAC made dozens of transfers to the Taiwanese company Gold Apollo (for a total of over 717,000 euros). In addition, BAC sent money in four installments to a Hong Kong company, Apollo Systems Ltd, totaling over $122,000, as well as to the CEO of the same company ($43,000). BAC also paid a Hong Kong company for logistics services and another company that manufactured the pager displays.
However, according to the Shilin District Prosecutor's Office in Taiwan, BAC's Taiwan office is registered under the name Apollo Systems Ltd. The entire supply chain is a tangled web.
Where were the pagers built?
We still don't know one crucial piece of information: where the pagers were actually manufactured and how they got to Lebanon?
According to Telex, which gathered direct or indirect information from investigators who allegedly spoke with Cristiana Barsony-Arcidiacono, the shipment went from Taiwan to Hong Kong and then to Lebanon. The two European companies were used only for the commercial side, allowing Israeli intelligence (with or without their knowledge) to secretly pay for the pagers. It's unclear whether we're talking about a paper trail (virtual, but with supporting documents for the buyers) or an actual shipment.
The key question is: where were they assembled? Hezbollah leaders were wary of the risk of sabotage, so the pagers couldn't have come from Israel or its allies (at least on paper). In 2023, a purchase offer was made by an as-yet-unidentified woman who offered Taiwanese Apollo devices, a well-known brand and product line. According to the Washington Post, she was the former Middle East sales representative for the Taiwanese company, who had formed her own company and acquired a license to sell a line of pagers under the Apollo brand. It was this woman (who was unaware of the Israeli plan, as was Gold Apollo, according to Washington Post sources) who contacted Hezbollah officials.
In this version of events, the pagers were physically assembled in Israel under Mossad supervision and contained a battery pack that concealed a small amount of powerful explosives.
The legal debate
While open warfare, bombings and casualties are understandably the focus of media attention today, the issue of exploding pagers and walkie-talkies remains a unique case that has sparked a separate debate. This debate centers on the legality of their use, the impact on civilians, the transformation of everyday civilian items into weapons, and the consequences for the perception of the technology, its manufacturers, its suppliers, and the security of the supply chain.
Here are just a couple of articles I’ll link to on the topic: a piece from Foreign Policy, which raises many questions and objections about the initial operation, an editorial from The Guardian, which argues that the use of booby-trapped objects is illegal and unacceptable. Finally, there is an article on the civilian victims of the pager explosions from Courrier International.
CLIMATE TECH
The Northvolt Crisis
Since its founding in 2016 to build "the world's greenest battery," Swedish startup Northvolt has been the undisputed champion of Europe's climate tech sector, while its rapid rise has attracted billions of dollars in investment and orders from the world's biggest car companies, including Volkswagen, BMW, and Volvo.
But as Europe’s electric car market struggles, “much of this enthusiasm is starting to look like fantasy. In June, BMW cancelled a $2.2bn contract with Northvolt. And last week, amid a spiralling cashflow crisis, the battery manufacturer announced it was making 1,600 redundancies and suspending expansion of its Northvolt Ett factory in Skellefteå.
The Swedish government has ruled out a bailout for Northvolt, but the company’s fate threatens to be a political problem for Sweden and the EU.
The energy and industry minister, Ebba Busch, has said the Swedish government was “working actively” to help Northvolt continue operations and following developments closely, but it would not be appropriate for the state to step in with taxpayer loans or as a partner.
However, the prime minister, Ulf Kristersson, has said the government was helping to find new backers and ownership models, which he said they had discussed with Germany, which has also ruled out a financial lifeline for the firm.
Mats Engström, a senior policy fellow at the European Council on Foreign Relations thinktank (ECFR), said the company’s management had “overpromised and underdelivered”, adding that its future was on a knife-edge”.
Read the full article on The Guardian
AI
GenAI as a commodity
Microsoft CEO Satya Nadella recently stated that large language models, which are driving the generative AI boom, are becoming "increasingly commoditized". As a result, it is becoming increasingly difficult to distinguish OpenAI's latest GPT from Anthropic's Claude or Google's Gemini.
An FT columnist writes: "OpenAI, without a working business model, is on track to burn through more than $5 billion in cash this year, with little prospect of stemming the flow in the short term". – An analysis by FT.
Meanwhile, OpenAI has raised a $6.6 billion funding round, achieving a stellar valuation - TechCrunch.
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