[MediaFilter] [CAQ][CovertAction_Quarterly] ------------------------------------------------------------------------ [Image] by Wayne Madsen FOR AT LEAST HALF A CENTURY, THE US HAS BEEN INTERCEPTING AND DECRYPTING THE TOP SECRET DOCUMENTS OF MOST OF THE WORLD'S GOVERNMENTS It may be the greatest (NSA) and Crypto AG, they might as intelligence scam of the well have been hand delivering the century: For decades, the US has message to Washington. Their Crypto routinely intercepted and AG machines had been rigged so that deciphered top secret encrypted when customers used them, the random messages of 120 countries. These encryption key could be automatically nations had bought the world's and clandestinely transmitted with most sophisticated and the enciphered message. NSA analysts supposedly secure commercial could read the message traffic as encryption technology from easily as they could the morning Crypto AG, a Swiss company that newspaper. The cover shielding the staked its reputation and the NSA-Crypto AG relationship was torn security concerns of its clients in March 1992, when the Iranian on its neutrality. The military counterintelligence service purchasing nations, confident arrested Hans Buehler, Crypto AG's that their communications were marketing representative in Teheran. protected, sent messages from The Iranian government charged the their capitals to embassies, tall, 50ish businessman with spying military missions, trade for the "intelligence services of the offices, and espionage dens Federal Republic of Germany and the around the world, via telex, United States of America." "I was radio, teletype, and facsimile. questioned for five hours a day for They not only conducted nine months," Buehler says. "I was sensitive albeit legal business never beaten, but I was strapped to and diplomacy, but sometimes wooden benches and told I would be strayed into criminal matters, beaten. I was told Crypto was a spy issuing orders to assassinate center" that worked with political leaders, bomb commercial buildings, and engage in drug and arms smuggling. All the while, because of a secret agreement between the National Security Agency ------------------- foreign intelligence services. Buehler's defense and shared their Despite prolonged interrogation, first-hand knowledge of manipulated Buehler-who had worked for cipher equipment. "I hold proofs Crypto AG for 13 years and was [sic] of the rigging of code on his 25th trip to Iran machines," said an unidentified -apparently maintained his former Crypto AG engineer. "Fifteen ignorance. "I didn't know that years ago, I saw American and German the equipment was bugged, engineers doctoring our machines. It otherwise the Iranians ould have took me some time until I was certain gotten it out of me by their about the manipulations. The proofs: many _methods._ " With millions technical documents. ... I put them of dollars in contracts and a in a bank safety deposit box. Then I major international spy informed the federal prosecutors_ operation at stake, the company office in Berne. There were many was eager to make the incident conversations. Suddenly, these and Buehler go away, even though contacts were broken off and the the salesman had brought in 40 affair petered out." The engineer percent of Crypto's 100 million told another reporter: the schemes Swiss franc sales revenue. and the cipher keys were created by Crypto bought Buehler's freedom them [NSA and BND with a $1 million payment to the (Bundesnacrichtendienst-the German Iranians, returned him to intelligence service)]. I Switzerland, and then, immediately, discreetly, notified the astonishingly, fired him and Swiss prosecutors. There was an ordered the bewildered salesman investigation. I was never able to to repay the bond. The cover-up find out backfired, however, when current and former Crypto employees came to ------------------- [Hans_Buehler] [crypto_AG] After Hans Buehler was arrested in Iran on spying chrges, the Crypto AG image of neutrality suffered and various nations reexamined their security arrangements. ------------------- the result. Today, the Buehler affair brings everything out in the open again. And, I'm afraid. What happened to Hans Buehler Nevertheless, the damage to Crypto could happen to any other AG's credibility was already done. salesperson of Crypto AG. It's Customers from Saddam Hussein to the not a question of attacking this Pope grew nervous. Informed of the company; it's a question of details around the Hans Buehler saving lives. ... When the Swiss incident, the Vatican Ñ which uses media began to reveal the Swiss cipher machines to secure background of Buehler's story, diplomatic communications transmitted Crypto AG responded with a from the Holy See to the many papal lawsuit in an attempt to quash nuncios around the world-showed a the story and muzzle Buehler. marked lack of charity. An official The suit was settled days before branded the perpetrators "bandits!" former Crypto engineers were to testify that they thought the SWISS CHEESE NEUTRALITY machines had been altered. The Although the Iranians may have been parties agreed not to disclose technically wrong about Buehler's the settlement and Crypto sought complicity in the massive deception, to reassure its clients. they were right that something was Informed sources in Switzerland rotten at Crypto AG. And even before and the Middle East confirmed the firing of Hans Buehler, some of that Crypto AG settled because Cypto's engineers were it, and the NSA and BND, didn_t want to reveal anything in court. ------------------- ambivalent about secret deals with the NSA. "At first, I was idealistic," said Juerg Spoerndli, who left Crypto in "Top Secret" document, dated 1994. "But I adapted quickly. ... February 10, 1956, with the The new aim was to help Big reference "prem 11/1224," was Brother USA look over these written by the famous British World countries_ shoulders. We_d say, War II figure, Field Marshal Bernard _It's better to let the USA see L. Montgomery. While "Monty" was a what these dictators are doing._ vice-commander of nato, he discussed " Soon, however, Spoerndli grew a secret alliance with Swiss Defense apprehensive over the Minister Paul Chaudet. In peacetime, manipulation. "It's still an Switzerland would be officially imperialistic approach to the neutral, but in wartime, it would world. I don_t think it's the way side with nato. A US document business should be done." Ruedi released in 1995 shows Switzerland's Hug, another former Crypto AG importance to US national security. engineer, was also critical. "I A Presidential directive on national feel betrayed," he declared. security prepared for President "They always told us, _We are the Truman states that "Switzerland ... best. Our equipment is not delivers precision instruments and breakable, blah, blah, blah. ... other materials necessary for the Switzerland is a neutral armament of the USA and NATO country._ " countries [emphasis added]." Apparently not. A document Germany's BND, too, has apparently released in 1995 by Britain's cooperated with the US encryption Public Records Office indicates rigging scheme through Siemens that Switzerland and nato Defense Electronics Group of Munich. concluded a secret deal in 1956. The ------------------- A previous director of Siemens called Crypto AG a "secret Siemens the company as a silent partner of daughter," while a former Crypto German and American signals AG financial director said, "the intelligence (sigint) agencies owner of the firm [Crypto] is the around the world, Grube announced Federal Republic [of Germany]." that "Crypto is changing its The Siemens connection to Crypto profile." The German government's was remarkably incestuous. Siemens contribution to the encryption provided technical assistance for rigging scheme also included its the machine manipulation process. pressuring another Swiss firm, Suspicion about the German Gretag Data Systems AG, to allow a electronics giant's role in "red thread" program to be Crypto's operations was heightened installed in the encryption when it was reported that Siemens software. "Red threading" is the helped raise the $1 million to software equivalent of sending in a spring Buehler from his Teheran Greek Trojan horse.18 Once owned by prison cell. In fact, after AT&T, this encryption manufacturer revelations of the Crypto-Siemens was acquired in 1995 by Information association hit the Swiss press, Resources Engineering (IRE), Inc. Crypto's managing director Michael of Baltimore, Maryland.19 Grupe informed the employees that Interestingly, IRE is staffed by a the advisory board to Crypto's number of ex-NSA cryptographic board of directors was being engineers. A third Swiss encryption dissolved. The two advisers-Alfred company, Info Guard AG, was fully Nowosad and Helmut Wiesner-were acquired by Crypto AG on June 16, both full-time Siemens employees. 1994. Info Guard, which had been 50 With the world media describing percent ------------------- [cryptographic_machine] Boris Hagelin and one of his early [Bosris_Hagelin] cryptographic machines. ------------------- owned by Crypto AG, primarily contends that all developmental sells encryption units to banks Crypto AG equipment had to be sent in Switzerland and abroad. for approval to the NSA and to the Although German and American German Central Cipher Bureau sigint agencies were involved in (Zentralstelle für Chiffrierung manipulating Crypto's cipher [ZfCH]), now the Federal Information machines, Motorola, one of the Security Agency (Bundesamt für NSA's major US contractors, Sicherheit in der Informationstechnik performed the actual technical [BSI] which is also Department 62 of lteration, according to a former the BND) in Bad Godesberg, near Bonn. Crypto AG chief engineer who was In other cases, Crypto AG was personally involved in the apparently forced to market manipulation process. encryption equipment manufactured in the US, sent to Crypto, and passed CRYPTO HUDDLE off as Swiss equipment. In the 1970s, Once the cipher machines were as Crypto was moving from rigged to include the secret electro-mechanical to computerized decryption key, the BND and NSA crypto units, a former Crypto AG codebreakers could use the engineer in Switzerland inspected one transmitted key to read any of the first prototype computerized message sent by Crypto AG's 120 machines sent from the US. He country customers. One previous remarked that since the code could be Crypto AG employee easily broken, he found the machine useless. But when he told his superiors that he ------------------- [Crypto_AG's_Zug] could improve the encryption process if he was given access to the mathematical functions, two US cryptographic "experts" refused to disclose the Mackabee. information. According to a Crypto engineer Juerg Spoerndli, who confidential Crypto AG was responsible for designing the memorandum, one of the NSA firm's encryption equipment, had "experts" may have been Nora L. heard from older engineers about the Mackabee, an NSA cryptographer visits in earlier years by who is now retired on a horse mysterious Americans. He concluded farm in Maryland along with her that NSA was ordering the design husband Lester, another retired changes through German NSA employee. Between August 19 intermediaries. He confirmed the and 20, 1975, three Crypto AG manipulation and admitted that in engineers huddled with Mackabee the late 1970s, he was "ordered to (identified as representing "IA" change algorithms under mysterious Ñ most likely "intelligence circumstances"25 to weaken his agency") along with three cipher units. Motorola engineers and one other American, Herb Frank. One PRIVACY? HA! Motorola engineer recalled that Although the Buehler incident lent Frank was probably from another credence to the NSA Trojan Horse US intelligence agency based in theory, it was not the first time northern Virginia but described that suspicions were him as a non-technical person who seemed to be making the administrative arrangements for ------------------- [NSA_listening _station] Radomes ar NSA listening station, Menwith Hill, England. raised. Teheran had become concerned in 1987 when US official to a Freedom of Information Act claimed "conclusive evidence that (foia) request by lawyers for the Iran ordered the kidnapping" of bankrupt Pan American Airlines, it ABC News Beirut correspondent states: Mohtashemi is closely Charles Glass.26 Washington's connected with the Al Abas and Abu alleged proof was coded Iranian Nidal terrorist groups. He is diplomatic cables Ñ intercepted by actually a long-time friend of Abu the NSA Ñ between Teheran and the Nidal. He has recently paid 10 Hezbollah (Party of God) terrorist million dollars in cash and gold to group in Lebanon via Iran's these two organizations to carry embassies in Beirut and Damascus. out terrorist activities and was The next year, when a terrorist the one who paid the same amount to bomb brought down PanAm Flight 103 bomb PanAm Flight 103 in over Lockerbie, Scotland, it seems retaliation for the U.S. shoot-down the NSA gained information by of the Iranian Airbus. Mohtashemi intercepting the communications of has also spent time in Lebanon. An Iranian Interior Minister Ali Israeli intercept of Iranian Akbar Mohtashemi. It was diplomatic coded communications apparently these messages that between Mohtashemi's Interior implicated Iran, not Libya. One Ministry in Teheran and the Iranian intelligence summary, prepared by embassy in Beirut (where Mohtashemi the US Air Force Intelligence once served as ambassador) revealed Agency, cites Iran's Mohtashemi as Ñ more than two years before the mastermind. Released in Buehler was arrested by Iran Ñ that redacted form pursuant the Shi_ite ------------------- cleric transferred $1.2 to $2 Then in 1992, Buehler was million used for the bombing of arrested. As the Swiss PanAm 103 to the Popular Front for authorities struggled to put the the Liberation of Palestine-General pieces together, they at first Command headed by Ahmed Jibril. Such believed that the Iranian secret revelations must have made the services were retaliating for the Iranians extremely suspect of the arrest in Switzerland of Zeynold security of their diplomatic Abedine Sarhadi, an employee of traffic. The role of Israel may be the Iranian embassy in Berne and explained by a little-reported a nephew of former Iranian intelligence alliance. NSA maintains President Hashemi Rafsanjani. a link with the Israeli sigint Swiss police had arrested Sarhadi entity, "Department 8200," located in early 1992 and were planning in northern Tel Aviv at Herzliya. to extradite him to France to The sigint link is said to involve face trial for the 1991 the British Government assassination in Paris of former Communications Headquarters (gchq) Iranian Prime Minister Shahpour base on Cyprus. Israel's ability to Bakhtiar. On August 7, 1991, one crack the Iranian Crypto AG codes day before Bakhtiar was found indicates that Israel had access to dead with his throat slit, the the key decoding programs. The ease Teheran headquarters of the with which the West was reading Iranian Intelligence Service, Iranian coded transactions obviously vevak, transmitted a coded meant that someone in Israel's message to Iranian diplomatic sigint services possessed the missions in London, Paris, Bonn, decryption keys. and Geneva, inquiring "Is Bakhtiar dead?" The Iranians concluded from Western press reports ------------------- that Briish and American sigint operators had intercepted and phone calls from a pay phone in the decoded the message (as reported town of Annecy in Savoy and an by L_Express of Paris) and knew Istanbul apartment to the Iranian that Teheran was behind the diplomatic mission in Geneva. On assassination. They realized that December 6, 1994, a special French their code had been broken,30 terrorism court convicted two looked to their Crypto AG cipher Iranians of murdering Bakhtiar, but machines, and picked up Buehler. strangely, it acquitted Sarhadi. According to one European source, "Justice has not been entirely they may also have been tipped off served [for] reasons of state," by Stasi files of the ex-East complained Bakhtiar's widow German regime that found their way bitterly. Those "reasons" may have to Iran and revealed the Crypto AG included a tacit agreement among ruse. In any case, the Iranians France, Switzerland, the German immediately began grilling BND, and the NSA to spare Sarhadi prisoner 01228-1 about the role he in order to avoid producing and his company played in giving captured transmissions and preserve Iranian and Libyan codes to the the questionable secrecy US. Iran knew that Bakhtiar's surrounding the Crypto AG cipher assassination had compromised the manipulation program. It was not intelligence functions of the only the "rogue states" that were Iranian UN mission and embassy in targeted. During the sensitive Geneva. The NSA had already Anglo-Irish negotiations of 1985, identified one of the assassins, the NSA's British counterpart, the Mohammed Azadi, from intercepts of gchq, was able to decipher the his ------------------- [intercepting_messages] In this official NSA PR photo, the agency intercepts a message from above. coded diplomatic traffic being sent between the Irish embassy in London and the Irish Foreign US: CRYPTO BULLY Ministry in Dublin. It was If it turns out that the extent of reported in the Irish press that communications interception is as Dublin had purchased a broad as suspected, the cryptographic system from Crypto international implications are AG worth more than a million profound. Every country in the world Irish pounds. It was also that used secure communications is reported that the NSA routinely potentially affected. Some have monitored and deciphered the sought to abandon Crypto AG, but Irish diplomatic messages. Later, found their options limited. The US during the Falklands War, British had at times required purchase of gchq operators were able to specific machines as a condition for decrypt classified Argentine favors. Pakistan was allegedly message traffic because the granted American military credits Argentineans were using rigged with only one provision, that it buy Crypto AG cipher machines. Former its encryption equipment from Crypto British Foreign Office minister AG. Additionally, "It is not unheard Ted Rowlands publicly stated that of for NSA to offer preferential gchq had penetrated Argentine export treatment to a diplomatic codes. ------------------- company if it builds a back door into its equipment," says one The NSA program also likely extends person with long experience in to companies in nato and pro-US the field. "I_ve seen it. I_ve countries which have close been in the room." Several relationships with GCHQ, NSA, and countries abandoned Crypto AG but the BND. Even neutral countries_ failed to ensure secrecy. The firms are not off-limits to NSA Libyans switched to Gretag units manipulations. A former Crypto AG after the NSA cited secret employee confirmed that high-level communications to allege Libyan US officials approached neutral involvement in the 1986 La Belle European countries and argued that disco bombing in West Berlin. One their cooperation was essential to senior US official said the fact the Cold War struggle against the that the Libyans were making Soviets. The NSA allegedly received their codes more difficult to support from cryptographic companies crack would "make our job Crypto AG and Gretag AG in tougher." But the NSA seemed to Switzerland, Transvertex in Sweden, have the Gretag base covered as Nokia in Finland, and even well. According to one newly-privatized firms in knowledgeable cryptographic post-Communist Hungary.39 In 1970, industry expert, NSA's program to according to a secret German BND co-opt the services of encryption intelligence paper, supplied to the manufacturrs probably extends to author, the Germans planned to all those within reach of NSA "fuse" the operations of three operatives. US cryptographic cryptographic firms-Crypto AG, companies would be definite Grattner AG (another Swiss cipher candidates for such firm), and participation. ------------------- Ericsson of Sweden. Securocrats often turn to the boogeyman of "rogue" nations in order to justify the expense and ethical Fifty years of intercepted necessity of eavesdropping on all communication have given the US and forms of international its co-conspirators trade, communication, but in reality diplomatic, economic and strategic many intercepts involve messages advantages. By intercepting the by neutral or allied nations. "bottom line" negotiating positions NSA's 1993 release of the World of foreign governments, they have War II era "magic" intercepts been able to shape international under foia pressure revealed that treaties and negotiations in their US military intelligence read not own favor: They will know, for only messages by Axis nations, example, the exact health status of but also intercepted and the king of Saudi Arabia, the secret decrypted the top secret financial transactions of the communications of Allied and president of Peru, the negotiating neutral nations. Switzerland was position of South Africa's trade among the more than 30 countries delegation to the World Trade whose messages were being read. Organization, or the anti-abortion Since Swiss-made cipher machines strategy of the Pope in the United were used by many governments at Nations. Such information, presented the time, it is likely that the daily to the president and the US has been reading such messages secretary of state in their for over half a century. An early intelligence briefings, is extremely example is the use of top secret useful and allows the US to play intercepts by the US delegation high-stakes diplomatic poker with a to the 1945 founding convention mirror behind everyone else's back. of the United Nations in San Francisco. -------------------------------------------------------------------- See also: Exposing the Global Surveillance System about Project ECHELON Networking with Spooks about control over the internet domain name system Big Brother Goes Hi Tech about loss of privacy in the information age The Secret FISA Court: Rubberstamping on Rights about the loss of legal protections from covert surveillance. ------------------------------------------------------------------------ CAQ63 Contents | CAQ Contents | Subscribe to CAQ | MediaFilter | Back Issues