CIA bugged 120 countries with Swiss firm
For more than 50 years a Swiss company, Crypto AG, was trusted by clients including the Vatican, Iran, India, Pakistan, several Nato powers and Latin American juntas to provide encryption devices that secured the communications of their spies, diplomats and military. None of its customers knew that behind Crypto AG lay a classified partnership between its joint owners: the CIA and the West German (and later German) intelligence agency BND.
The operation has only been exposed now in a project by The Washington Post and ZDF, a German public broadcaster. It reviewed a 96-page CIA chronicle of the operation, completed in 2004 by the agency’s internal history branch, and an oral history compiled by German intelligence in 2008. “It was the intelligence coup of the century,” the CIA report concluded. “Foreign governments were paying good money to the US and West Germany for the privilege of having their most secret communications read by at least two foreign countries.”
The business raised millions of dollars for the agencies. At one point in the 1980s about 40 per cent of the diplomatic cables and other transmissions by governments that analysts at the US National Security Agency mined for information were harvested through Crypto, according to the CIA report. The Soviet Union and China were suspicious of the Swiss company and never became customers.
In 1982 President Reagan exploited the dependence on Crypto of General Galtieri’s regime in Buenos Aires to pass Argentine communications to the UK during the Falklands conflict. The CIA records that Argentina suspected its equipment had been hacked.
Kjell-Ove Widman, a Swedish maths professor recruited by the CIA in 1979 and made “scientific adviser” to Crypto’s chief executive, was sent to reassure the Argentinians. “The bluff worked,” the CIA history recorded.
Crypto was set up as an encryption company by Boris Hagelin, a Russian-born inventor who fled to Sweden during the Russian Revolution. In 1970 the CIA and the BND agreed to buy Mr Hagelin out for about $5.75 million.
According to the documents they had help from the German company Siemens and the US company Motorola, neither of which has commented on its alleged involvement.
The BND left the company in the 1990s and the CIA sold its assets in 2018 to Cyone Security, which sells exclusively to the Swiss government, and Crypto International. A Cyone spokesperson said that the new firm had “no ties to any foreign intelligence services”. Andreas Linde, the chairman of Crypto International, said that his company had “never had any relationship with the CIA or BND”. The Swiss government yesterday announced an investigation into the original Crypto’s ties to the CIA and BND