U.S. and Israel Deny Reports of Paragon Sale to AE Industrial Partners

By Raphael Satter and AJ Vicens
WASHINGTON (Reuters) – Officials from the United States and Israel have denied allegations regarding the approval of the sale of Israeli spyware firm Paragon to Florida-based AE Industrial Partners.

Background of the Deal

In recent days, Israeli news outlets claimed that Paragon, founded by former Israeli intelligence officers and supported by ex-Israeli Prime Minister Ehud Barak, had been acquired by AE, an investment group specializing in national security businesses. A source familiar with the arrangement confirmed its basic details to Reuters on Monday.

Denials from Officials

Reports from Israeli media, which did not cite sources, suggested that the sale had received the backing of U.S. and Israeli authorities. However, a senior White House official stated that this information was incorrect, clarifying that "the U.S. government never 'approved' this sale. This is a private transaction" and no official clearance was granted.

Furthermore, the Israeli military also rejected these reports. Local media quoted the Defense Ministry saying that, although Paragon had approached them regarding the sale, "the Ministry of Defense did not approve the sale" and that discussions were still ongoing.

Paragon's Market Attempts

Paragon had previously aimed to penetrate the U.S. surveillance industry but faced challenges. In September, the U.S. Immigration and Customs Enforcement (ICE) signed a one-year contract worth $2 million with Paragon’s U.S. subsidiary, according to Wired. Nonetheless, the White House official confirmed this contract had been paused and placed under review subsequently.

ICE has not responded to requests for comment regarding the situation: emails sent to AE and Paragon also went unanswered.