At 5:17 PM +0000 11/3/1997, bureau42 Anonymous Remailer wrote:
NSA, Crypto AG, and the Iraq-Iran Conflict
by J. Orlin Grabbe
[snip]
Crypto AG eventually paid one million dollars for Buehler's release in January 1993, then promptly fired him once they had reassured themselves that he hadn't revealed anything important under interrogation, and because Buehler had begun to ask some embarrassing questions. Then reports appeared on Swiss television, Swiss Radio International, all the major Swiss papers, and in German magazines like Der Spiegel. Had Crypto AG's equipment been spiked by Western intelligence services? the media wanted to know. The answer was Yes [4].
[snip]
Representatives from NSA visited Crypto AG often. A memorandum of a secret workshop at Crypto AG in August 1975, where a new prototype of an encryption device was demonstrated, mentions the participation of Nora L. Mackebee, an NSA cryptographer. Motorola engineer Bob Newman says that Mackebee was introduced to him as a "consultant". Motorola cooperated with Crypto AG in the seventies in developing a new generation of electronic encryption machines. The Americans "knew Zug very well and gave travel tips to the Motorola people for the visit at Crypto AG," Newman told Der Spiegel.
Knowledgeable sources indicate that the Crypto AG enciphering process, developed in cooperation with the NSA and the German company Siemans, involved secretly embedding the decryption key in the cipher text. Those who knew where to look could monitor the encrypted communication, then extract the decryption key that was also part of the transmission, and recover the plain text message. Decryption of a message by a knowledgeable third party was not any more difficult that it was for the intended receiver. (More than one method was used. Sometimes the algorithm was simply deficient, with built-in exploitable weaknesses.)
As I recall, this topic came up during a Cylink management meeting I attended in late '92. My recollection was that Cylink was asked by the NSA/CIA to 'alter' some of its crypto units, which supposedly were being sought by a Columbian cartele. The party line was that we refused. I didn't follow up since I wasn't the product manager of that series. --Steve