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Subject: IUFO: Greatest Intelligence Scam Of The Century? Crypto AG:
The NSA's Trojan Whore
Date sent: Sun, 07 Feb 1999 10:20:06 GMT
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-> IUFO Mailing List
Source: Covert Action Quarterly 63, 30 Jan 1999,
http://caq.com:80/CAQ/caq63/caq63madsen.html
Stig
***
Crypto AG: The NSA's Trojan Whore?
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 intelligence scam of the century: For decades,
the US has routinely intercepted and deciphered top secret encrypted
messages of 120 countries. These nations had bought the world's most
sophisticated and supposedly secure commercial encryption technology
from Crypto AG, a Swiss company that staked its reputation and the
security concerns of its clients on its neutrality.
The purchasing nations, confident that their communications were
protected, sent messages from their capitals to embassies, military
missions, trade offices, and espionage dens around the world, via
telex, radio, teletype, and facsimile. They not only conducted
sensitive albeit legal business and diplomacy, but sometimes strayed
into criminal matters, issuing orders to assassinate 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 (NSA) and Crypto AG, they might as well have been hand
delivering the message to Washington. Their Crypto AG machines had
been rigged so that when customers used them, the random encryption
key could be automatically and clandestinely transmitted with the
enciphered message. NSA analysts could read the message traffic as
easily as they could the morning newspaper.
The cover shielding the NSA-Crypto AG relationship was torn in March
1992, when the Iranian military counterintelligence service arrested
Hans Buehler, Crypto AG's marketing representative in Teheran. The
Iranian government charged the tall, 50ish businessman with spying for
the "intelligence services of the Federal Republic of Germany and the
United States of America." "I was questioned for five hours a day for
nine months," Buehler says. "I was never beaten, but I was strapped to
wooden benches and told I would be beaten. I was told Crypto was a spy
center" that worked with foreign intelligence services.
Despite prolonged interrogation, Buehler - who had worked for Crypto
AG for 13 years and was on his 25th trip to Iran - apparently
maintained his ignorance. "I didn't know that the equipment was
bugged, otherwise the Iranians ould have gotten it out of me by their
many _methods._ "
With millions of dollars in contracts and a major international spy
operation at stake, the company was eager to make the incident and
Buehler go away, even though the salesman had brought in 40 percent of
Crypto's 100 million Swiss franc sales revenue. Crypto bought
Buehler's freedom with a $1 million payment to the Iranians, returned
him to Switzerland, and then, astonishingly, fired him and ordered the
bewildered salesman to repay the bond.
The cover-up backfired, however, when current and former Crypto
employees came to Buehler's defense and shared their first-hand
knowledge of manipulated cipher equipment.
"I hold proofs [sic] of the rigging of code machines," said an
unidentified former Crypto AG engineer. "Fifteen years ago, I saw
American and German engineers doctoring our machines. It took me some
time until I was certain about the manipulations. The proofs:
technical documents. ... I put them in a bank safety deposit box. Then
I informed the federal prosecutors_ office in Berne. There were many
conversations. Suddenly, these contacts were broken off and the affair
petered out."
The engineer told another reporter: the schemes and the cipher keys
were created by them [NSA and BND (Bundesnacrichtendienst-the German
intelligence service)]. I immediately, discreetly, notified the Swiss
prosecutors. There was an investigation. I was never able to find out
the result. Today, the Buehler affair brings everything out in the
open again. And, I'm afraid. What happened to Hans Buehler could
happen to any other salesperson of Crypto AG. It's not a question of
attacking this company; it's a question of saving lives....
When the Swiss media began to reveal the background of Buehler's
story, Crypto AG responded with a lawsuit in an attempt to quash the
story and muzzle Buehler. The suit was settled days before former
Crypto engineers were to testify that they thought the machines had
been altered. The parties agreed not to disclose the settlement and
Crypto sought to reassure its clients. Informed sources in Switzerland
and the Middle East confirmed that Crypto AG settled because it, and
the NSA and BND, didn_t want to reveal anything in court.
Nevertheless, the damage to Crypto AG's credibility was already done.
Customers from Saddam Hussein to the Pope grew nervous. Informed of
the details around the Hans Buehler incident, the Vatican Ñ which uses
Swiss cipher machines to secure diplomatic communications transmitted
from the Holy See to the many papal nuncios around the world-showed a
marked lack of charity. An official branded the perpetrators
"bandits!"
SWISS CHEESE NEUTRALITY
Although the Iranians may have been technically wrong about Buehler's
complicity in the massive deception, they were right that something
was rotten at Crypto AG. And even before the firing of Hans Buehler,
some of Cypto's engineers were ambivalent about secret deals with the
NSA.
"At first, I was idealistic," said Juerg Spoerndli, who left Crypto in
1994. "But I adapted quickly. ... The new aim was to help Big Brother
USA look over these countries_ shoulders. We_d say, _It's better to
let the USA see what these dictators are doing._ " Soon, however,
Spoerndli grew apprehensive over the manipulation. "It's still an
imperialistic approach to the world. I don_t think it's the way
business should be done." Ruedi Hug, another former Crypto AG
engineer, was also critical. "I feel betrayed," he declared. "They
always told us, _We are the best. Our equipment is not breakable,
blah, blah, blah. ... Switzerland is a neutral country._ "
Apparently not. A document released in 1995 by Britain's Public
Records Office indicates that Switzerland and NATO concluded a secret
deal in 1956.
The "Top Secret" document, dated February 10, 1956, with the reference
"prem 11/1224," was written by the famous British World War II figure,
Field Marshal Bernard L. Montgomery. While "Monty" was a
vice-commander of NATO, he discussed a secret alliance with Swiss
Defense Minister Paul Chaudet. In peacetime, Switzerland would be
officially neutral, but in wartime, it would side with NATO.
A US document released in 1995 shows Switzerland's importance to US
national security. A Presidential directive on national security
prepared for President Truman states that "Switzerland ... delivers
precision instruments and other materials necessary for the armament
of the USA and NATO countries [emphasis added]." Germany's BND, too,
has apparently cooperated with the US encryption rigging scheme
through Siemens Defense Electronics Group of Munich.
A previous director of Siemens called Crypto AG a "secret Siemens
daughter," while a former Crypto AG financial director said, "the
owner of the firm [Crypto] is the Federal Republic [of Germany]."
The Siemens connection to Crypto was remarkably incestuous. Siemens
provided technical assistance for the machine manipulation process.
Suspicion about the German electronics giant's role in Crypto's
operations was heightened when it was reported that Siemens helped
raise the $1 million to spring Buehler from his Teheran prison cell.
In fact, after revelations of the Crypto-Siemens association hit the
Swiss press, Crypto's managing director Michael Grupe informed the
employees that the advisory board to Crypto's board of directors was
being dissolved. The two advisers-Alfred Nowosad and Helmut
Wiesner-were both full-time Siemens employees. With the world media
describing the company as a silent partner of German and American
signals intelligence (sigint) agencies around the world, Grube
announced that "Crypto is changing its profile."
The German government's contribution to the encryption rigging scheme
also included its pressuring another Swiss firm, Gretag Data Systems
AG, to allow a "red thread" program to be installed in the encryption
software. "Red threading" is the software equivalent of sending in a
Greek Trojan horse. Once owned by AT&T, this encryption manufacturer
was acquired in 1995 by Information Resources Engineering (IRE), Inc.
of Baltimore, Maryland.19 Interestingly, IRE is staffed by a number of
ex-NSA cryptographic engineers. A third Swiss encryption company, Info
Guard AG, was fully acquired by Crypto AG on June 16, 1994. Info
Guard, which had been 50 percent owned by Crypto AG, primarily sells
encryption units to banks in Switzerland and abroad.
Although German and American sigint agencies were involved in
manipulating Crypto's cipher machines, Motorola, one of the NSA's
major US contractors, performed the actual technical lteration,
according to a former Crypto AG chief engineer who was personally
involved in the manipulation process.
CRYPTO HUDDLE
Once the cipher machines were rigged to include the secret decryption
key, the BND and NSA codebreakers could use the transmitted key to
read any message sent by Crypto AG's 120 country customers. One
previous Crypto AG employee
contends that all developmental Crypto AG equipment had to be sent for
approval to the NSA and to the German Central Cipher Bureau
(Zentralstelle für Chiffrierung [ZfCH]), now the Federal Information
Security Agency (Bundesamt für Sicherheit in der Informationstechnik
[BSI] which is also Department 62 of the BND) in Bad Godesberg, near
Bonn.
In other cases, Crypto AG was apparently forced to market encryption
equipment manufactured in the US, sent to Crypto, and passed off as
Swiss equipment. In the 1970s, as Crypto was moving from
electro-mechanical to computerized crypto units, a former Crypto AG
engineer in Switzerland inspected one of the first prototype
computerized machines sent from the US. He remarked that since the
code could be easily broken, he found the machine useless. But when he
told his superiors that he
could improve the encryption process if he was given access to the
mathematical functions, two US cryptographic "experts" refused to
disclose the information.
According to a confidential Crypto AG memorandum, one of the NSA
"experts" may have been Nora L. Mackabee, an NSA cryptographer who is
now retired on a horse farm in Maryland along with her husband Lester,
another retired NSA employee. Between August 19 and 20, 1975, three
Crypto AG engineers huddled with Mackabee (identified as representing
"IA" Ñ most likely "intelligence agency") along with three Motorola
engineers and one other American, Herb Frank. One Motorola engineer
recalled that Frank was probably from another US intelligence agency
based in northern Virginia but described him as a non-technical person
who seemed to be making the administrative arrangements for Mackabee.
Crypto engineer Juerg Spoerndli, who was responsible for designing the
firm's encryption equipment, had heard from older engineers about the
visits in earlier years by mysterious Americans. He concluded that NSA
was ordering the design changes through German intermediaries. He
confirmed the manipulation and admitted that in the late 1970s, he was
"ordered to change algorithms under mysterious circumstances"25 to
weaken his cipher units.
PRIVACY? HA!
Although the Buehler incident lent credence to the NSA Trojan Horse
theory, it was not the first time that suspicions were raised. Teheran
had become concerned in 1987 when US official claimed "conclusive
evidence that Iran ordered the kidnapping" of ABC News Beirut
correspondent Charles Glass. Washington's alleged proof was coded
Iranian diplomatic cables Ñ intercepted by the NSA Ñ between Teheran
and the Hezbollah (Party of God) terrorist group in Lebanon via Iran's
embassies in Beirut and Damascus.
The next year, when a terrorist bomb brought down PanAm Flight 103
over Lockerbie, Scotland, it seems the NSA gained information by
intercepting the communications of Iranian Interior Minister Ali Akbar
Mohta shemi. It was apparently these messages that implicated Iran,
not Libya.
One intelligence summary, prepared by the US Air Force Intelligence
Agency, cites Iran's Mohtashemi as the mastermind. Released in
redacted form pursuant to a Freedom of Information Act (FOIA) request
by lawyers for the bankrupt Pan American Airlines, it states:
Mohtashemi is closely connected with the Al Abas and Abu Nidal
terrorist groups. He is actually a long-time friend of Abu Nidal. He
has recently paid 10 million dollars in cash and gold to these two
organizations to carry out terrorist activities and was the one who
paid the same amount to bomb PanAm Flight 103 in retaliation for the
U.S. shoot-down of the Iranian Airbus. Mohtashemi has also spent time
in Lebanon.
An Israeli intercept of Iranian diplomatic coded communications
between Mohtashemi's Interior Ministry in Teheran and the Iranian
embassy in Beirut (where Mohtashemi once served as ambassador)
revealed more than two years before Buehler was arrested by Iran that
the Shi_ite cleric transferred $1.2 to $2 million used for the bombing
of PanAm 103 to the Popular Front for the Liberation of
Palestine-General Command headed by Ahmed Jibril. Such revelations
must have made the Iranians extremely suspect of the security of their
diplomatic traffic.
The role of Israel may be explained by a little-reported intelligence
alliance. NSA maintains a link with the Israeli sigint entity,
"Department 8200," located in northern Tel Aviv at Herzliya. The
sigint link is said to involve the British Government Communications
Headquarters (GCHQ) base on Cyprus. Israel's ability to crack the
Iranian Crypto AG codes indicates that Israel had access to the key
decoding programs. The ease with which the West was reading Iranian
coded transactions obviously meant that someone in Israel's sigint
services possessed the decryption keys.
Then in 1992, Buehler was arrested. As the Swiss authorities struggled
to put the pieces together, they at first believed that the Iranian
secret services were retaliating for the arrest in Switzerland of
Zeynold Abedine Sarhadi, an employee of the Iranian embassy in Berne
and a nephew of former Iranian President Hashemi Rafsanjani. Swiss
police had arrested Sarhadi in early 1992 and were planning to
extradite him to France to face trial for the 1991 assassination in
Paris of former Iranian Prime Minister Shahpour Bakhtiar.
On August 7, 1991, one day before Bakhtiar was found dead with his
throat slit, the Teheran headquarters of the Iranian Intelligence
Service, vevak, transmitted a coded message to Iranian diplomatic
missions in London, Paris, Bonn, and Geneva, inquiring "Is Bakhtiar
dead?"
The Iranians concluded from Western press reports that Briish and
American sigint operators had intercepted and decoded the message (as
reported by L_Express of Paris) and knew that Teheran was behind the
assassination. They realized that their code had been broken, looked
to their Crypto AG cipher machines, and picked up Buehler.
According to one European source, they may also have been tipped off
by Stasi files of the ex-East German regime that found their way to
Iran and revealed the Crypto AG ruse. In any case, the Iranians
immediately began grilling prisoner 01228-1 about the role he and his
company played in giving Iranian and Libyan codes to the US.
Iran knew that Bakhtiar's assassination had compromised the
intelligence functions of the Iranian UN mission and embassy in
Geneva. The NSA had already identified one of the assassins, Mohammed
Azadi, from intercepts of his phone calls from a pay phone in the town
of Annecy in Savoy and an Istanbul apartment to the Iranian diplomatic
mission in Geneva.
On December 6, 1994, a special French terrorism court convicted two
Iranians of murdering Bakhtiar, but strangely, it acquitted Sarhadi.
"Justice has not been entirely served [for] reasons of state,"
complained Bakhtiar's widow bitterly. Those "reasons" may have
included a tacit agreement among France, Switzerland, the German BND,
and the NSA to spare Sarhadi in order to avoid producing captured
transmissions and preserve the questionable secrecy surrounding the
Crypto AG cipher manipulation program. It was not only the "rogue
states" that were targeted.
During the sensitive Anglo-Irish negotiations of 1985, the NSA's
British counterpart, the GCHQ, was able to decipher the coded
diplomatic traffic being sent between the Irish embassy in London and
the Irish Foreign Ministry in Dublin. It was reported in the Irish
press that Dublin had purchased a cryptographic system from Crypto AG
worth more than a million Irish pounds. It was also reported that the
NSA routinely monitored and deciphered the Irish diplomatic messages.
Later, during the Falklands War, British GCHQ operators were able to
decrypt classified Argentine message traffic because the Argentineans
were using rigged Crypto AG cipher machines. Former British Foreign
Office minister Ted Rowlands publicly stated that GCHQ had penetrated
Argentine diplomatic codes.
US: CRYPTO BULLY
If it turns out that the extent of communications interception is as
broad as suspected, the international implications are profound. Every
country in the world that used secure communications is potentially
affected. Some have sought to abandon Crypto AG, but found their
options limited.
The US had at times required purchase of specific machines as a
condition for favors. Pakistan was allegedly granted American military
credits with only one provision, that it buy its encryption equipment
from Crypto AG. Additionally, "It is not unheard of for NSA to offer
preferential export treatment to a company if it builds a back door
into its equipment," says one person with long experience in the
field. "I_ve seen it. I_ve been in the room."
Several countries abandoned Crypto AG but failed to ensure secrecy.
The Libyans switched to Gretag units after the NSA cited secret
communications to allege Libyan involvement in the 1986 La Belle disco
bombing in West Berlin. One senior US official said the fact that the
Libyans were making their codes more difficult to crack would "make
our job tougher." But the NSA seemed to have the Gretag base covered
as well. According to one knowledgeable cryptographic industry expert,
NSA's program to co-opt the services of encryption manufacturrs
probably extends to all those within reach of NSA operatives. US
cryptographic companies would be definite candidates for such
participation.
The NSA program also likely extends to companies in NATO and pro-US
countries which have close relationships with GCHQ, NSA, and the BND.
Even neutral countries_ firms are not off-limits to NSA manipulations.
A former Crypto AG employee confirmed that high-level US officials
approached neutral European countries and argued that their
cooperation was essential to the Cold War struggle against the
Soviets. The NSA allegedly received support from cryptographic
companies Crypto AG and Gretag AG in Switzerland, Transvertex in
Sweden, Nokia in Finland, and even newly-privatized firms in
post-Communist Hungary.
In 1970, according to a secret German BND intelligence paper, supplied
to the author, the Germans planned to "fuse" the operations of three
cryptographic firms-Crypto AG, Grattner AG (another Swiss cipher
firm), and Ericsson of Sweden. Securocrats often turn to the boogeyman
of "rogue" nations in order to justify the expense and ethical
necessity of eavesdropping on all forms of international
communication, but in reality many intercepts involve messages by
neutral or allied nations.
NSA's 1993 release of the World War II era "magic" intercepts under
FOIA pressure revealed that US military intelligence read not only
messages by Axis nations, but also intercepted and decrypted the top
secret communications of Allied and neutral nations. Switzerland was
among the more than 30 countries whose messages were being read. Since
Swiss-made cipher machines were used by many governments at the time,
it is likely that the US has been reading such messages for over half
a century. An early example is the use of top secret intercepts by the
US delegation to the 1945 founding convention of the United Nations in
San Francisco.
Fifty years of intercepted communication have given the US and its
co-conspirators trade, diplomatic, economic and strategic advantages.
By intercepting the "bottom line" negotiating positions of foreign
governments, they have been able to shape international treaties and
negotiations in their own favor: They will know, for example, the
exact health status of the king of Saudi Arabia, the secret financial
transactions of the president of Peru, the negotiating position of
South Africa's trade delegation to the World Trade Organization, or
the anti-abortion strategy of the Pope in the United Nations. Such
information, presented daily to the president and the secretary of
state in their intelligence briefings, is extremely useful and allows
the US to play high-stakes diplomatic poker with a mirror behind
everyone else's back.
-> Send "subscribe iufo " to [EMAIL PROTECTED]
-> Posted by: [EMAIL PROTECTED] (Stig Agermose)
------------------------------------------------------------------------
Steve Wingate
California Director
SKYWATCH INTERNATIONAL
Today's Midi
http://www.anomalous-images.com/backyard_babies-ufo_romeo.MID
Anomalous Images and UFO Files
http://www.anomalous-images.com
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