From: Subject: NSA, Crypto AG, and the Iraq-Iran Conflict Date: Mon, 1 Aug 2011 19:17:45 -0600 MIME-Version: 1.0 Content-Type: text/html; charset="Windows-1252" Content-Transfer-Encoding: quoted-printable Content-Location: file://E:\cw\cw2\thecanadian\speccoll.htm X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2900.6109 NSA, Crypto AG, and the Iraq-Iran Conflict [Email Reply]

NSA, Crypto AG, and the Iraq-Iran Conflict

by J. Orlin Grabbe

One of the dirty little secrets of the 1980s is that the U.S. = regularly=20 provided Iraq's Saddam Hussein with top-secret communication intercepts = by the=20 U.S. National Security Agency (NSA). Consider the evidence.=20

When in 1991 the government of Kuwait paid the public relations firm = of Hill=20 & Knowlton ten million dollars to drum up American war fever against = the=20 evil dictator Hussein, it brought about the end of a long legacy of = cooperation=20 between the U.S. and Iraq. Hill & Knowlton resurrected the World War = I=20 propaganda story about German soldiers roasting Belgian babies on = bayonets,=20 updated in the form of a confidential witness (actually the daughter of = the=20 Kuwaiti ambassador to the U.S.) who told Congress a tearful story of = Iraqi=20 soldiers taking Kuwaiti babies out of incubators and leaving them on the = cold=20 floor to die. President George Bush then repeated this fabricated tale = in=20 speeches ten times over the next three days.=20

What is remarkable about this staged turn of events is that, until = then,=20 Hussein had operated largely with U.S. approval. This cooperation had = spanned=20 three successive administrations, starting with Jimmy Carter. As noted = by John=20 R. MacArthur, "From 1980 to 1988, Hussein had shouldered the burden of = killing=20 about 150,000 Iranians, in addition to at least thirteen thousand of his = own=20 citizens, including several thousand unarmed Kurdish civilians, and in = the=20 process won the admiration and support of elements of three successive = U.S.=20 Administrations" [1].=20

Hussein's artful slaughter of Iranians was aided by good military=20 intelligence. The role of NSA in the conflict is an open secret in = Europe, the=20 Middle East, and Asia. Only in this country has there been a relative = news=20 blackout, despite the fact that it was the U.S. administration that let = the=20 crypto cat out of the bag.=20

First, U.S. President Ronald Reagan informed the world on national = television=20 that the United States was reading Libyan communications. This admission = was=20 part of a speech justifying the retaliatory bombing of Libya for its = alleged=20 involvement in the La Belle discotheque bombing in Berlin's Schoeneberg=20 district, where two U.S. soldiers and a Turkish woman were killed, and = 200=20 others injured. Reagan wasn't talking about American monitoring of = Libyan news=20 broadcasts. Rather, his "direct, precise, and undeniable proof" referred = to=20 secret (encrypted) diplomatic communication between Tripoli and the = Libyan=20 embassy in East Berlin.=20

Next, this leak was compounded by the U.S. demonstration that it was = also=20 reading secret Iranian communications. As reported in Switzerland's = Neue=20 Zurcher Zeitung, the U.S. provided the contents of encrypted Iranian = messages to France to assist in the conviction of Ali Vakili Rad and = Massoud=20 Hendi for the stabbing death in the Paris suburb of Suresnes of the = former=20 Iranian prime minister Shahpour Bakhtiar and his personal secretary = Katibeh=20 Fallouch. [2]=20

What these two countries had in common was they had both purchased=20 cryptographic communication equipment from the Swiss firm Crypto AG. = Crypto AG=20 was founded in 1952 by the (Russian-born) Swedish cryptographer Boris = Hagelin=20 who located his company in Zug. Boris had created the "Hagelin-machine", = a=20 encryption device similar to the German "Enigma". The Hagelin machine = was used=20 on the side of the Allies in World War II.=20

Crypto AG was an old and venerable firm, and Switzerland was a = neutral=20 country. So Crypto AG's enciphering devices for voice communication and = digital=20 data networks were popular, and customers came from 130 countries. These = included the Vatican, as well the governments of Iraq, Iran, and Libya. = Such=20 countries were naturally skeptical of cryptographic devices sold in many = NATO=20 countries, so turned to relatively neutral Switzerland for communication = security.=20

Iran demonstrated its suspicion about the source of the leaks, when = it=20 arrested Hans Buehler, a top salesman for Crypto AG, in Teheran on March = 18,=20 1992. During his nine and a half months of solitary confinement in Evin = prison=20 in Teheran, Buehler was questioned again and again whether he had leaked = Teheran's codes or Libya's keys to Western powers. Luckily Buehler = didn't know=20 anything. He in fact believed in his own sales pitch that Crypto AG was = a=20 neutral company and its equipment was the best. They were Swiss, after = all. [3]=20

Crypto AG eventually paid one million dollars for Buehler's release = in=20 January 1993, then promptly fired him once they had reassured themselves = that he=20 hadn't revealed anything important under interrogation, and because = Buehler had=20 begun to ask some embarrassing questions. Then reports appeared on Swiss = television, Swiss Radio International, all the major Swiss papers, and = in German=20 magazines like Der Spiegel. Had Crypto AG's equipment been spiked = by=20 Western intelligence services? the media wanted to know. The answer was = Yes [4].=20

Swiss television traced the ownership of Crypto AG to a company in=20 Liechtenstein, and from there back to a trust company in Munich. A = witness=20 appearing on Swiss television explained the real owner was the German=20 government--the Federal Estates Administration. [5]=20

According to Der Spiegel, all but 6 of the 6000 shares of = Crypto AG=20 were at one time owned by Eugen Freiberger, who resided in Munich and = was head=20 of the Crypto AG managing board in 1982. Another German, Josef Bauer, an = authorized tax agent of the Muenchner Treuhandgesellschaft KPMG, and who = was=20 elected to the managing board in 1970, stated that his mandate had come = from the=20 German company Siemens. Other members of Crypto AG's management had also = worked=20 at Siemens. Was the German secret service, the Bundesnachrichtendienst = (BND),=20 hiding behind the Siemens' connection?=20

So it would seem. Der Spiegel reported that in October 1970, a = secret=20 meeting of the BND had discussed how the Swiss company Graettner could = be guided=20 into closer cooperation with Crypto AG, or could even merged with it. = The BND=20 additionally considered how "the Swedish company Ericsson could be = influenced=20 through Siemens to terminate its own cryptographic business." [6]=20

A former employee of Crypto AG reported that he had to coordinate his = developments with "people from Bad Godesberg". This was the location of = the=20 "central office for encryption affairs" of the BND, and the service = instructed=20 Crypto AG what algorithms to use to create the codes. The employee also=20 remembers an American "watcher", who strongly demanded the use of = certain=20 encryption methods.=20

Representatives from NSA visited Crypto AG often. A memorandum of a = secret=20 workshop at Crypto AG in August 1975, where a new prototype of an = encryption=20 device was demonstrated, mentions the participation of Nora L. Mackebee, = an NSA=20 cryptographer. Motorola engineer Bob Newman says that Mackebee was = introduced to=20 him as a "consultant". Motorola cooperated with Crypto AG in the = seventies in=20 developing a new generation of electronic encryption machines. The = Americans=20 "knew Zug very well and gave travel tips to the Motorola people for the = visit at=20 Crypto AG," Newman told Der Spiegel.=20

Knowledgeable sources indicate that the Crypto AG enciphering = process,=20 developed in cooperation with the NSA and the German company Siemans, = involved=20 secretly embedding the decryption key in the cipher text. Those who knew = where=20 to look could monitor the encrypted communication, then extract the = decryption=20 key that was also part of the transmission, and recover the plain text = message.=20 Decryption of a message by a knowledgeable third party was not any more=20 difficult than it was for the intended receiver. (More than one method = was used.=20 Sometimes the algorithm was simply deficient, with built-in exploitable=20 weaknesses.)=20

Crypto AG denies all this, of course, saying such reports are ""pure=20 invention".=20

What information was provided to Saddam Hussein exactly? Answers to = this=20 question are currently being sought in a lawsuit against NSA in New = Mexico,=20 which has asked to see "all Iranian messages and translations between = January 1,=20 1980 and June 10, 1996". [7]=20

The passage of top-secret communications intelligence to someone like = Saddam=20 Hussein brings up other questions. Which dictator is the U.S. passing = top secret=20 messages to currently? Jiang Zemin? Boris Yeltsin?=20

Will Saddam Hussein again become a recipient of NSA largess if he = returns to=20 the mass slaughter of Iranians? What exactly is the purpose of NSA = anyway?=20

One more question: Who is reading the Pope's communications?=20


[1] John R. MacArthur, Second = Front:=20 Censorship and Propaganda in the Gulf War, Hill and Wang, New York, = 1992.=20

[2] Some of the background of this assassination can be found in "The = Tehran=20 Connection," Time Magazine, March 21, 1994.=20

[3] The Buehler case is detailed in Res Strehle, Verschluesselt: = der Fall=20 Hans Buehler, Werd Verlag, Zurich, 1994.=20

[4] "For years, NSA secretly rigged Crypto AG machines so that U.S.=20 eavesdroppers could easily break their codes, according to former = company=20 employees whose story is supported by company documents," "No Such = Agency, Part=20 4: Rigging the Game," The Baltimore Sun, December 4, 1995.=20

[5] Reported in programs about the Buehler case that were broadcast = on Swiss=20 Radio International on May 15, 1994 and July 18, 1994.=20

[6] "Wer ist der befugte Vierte?": Geheimdienste unterwandern den = Schutz von=20 Verschlusselungsgeraten," Der Spiegel 36, 1996.=20

[7] U.S. District Court for the District of New Mexico, William H. = Payne,=20 Arthur R. Morales, Plaintiffs, v. Lieutenant General Kenneth A. Minihan, = USAF,=20 Director of National Security Agency, National Security Agency, = Defendant, CIV=20 NO 97 0266 SC/DJS.=20

November 2, 1997
Web Page: =