Memos confirm secret NSA deal with leading cryptography vendor

William FriedmanIn 2007 I wrote in my “National Security Agency: The Historiography of Concealment” that America’s leading signals intelligence agency had made a secret deal with Crypto AG, a Swiss-based manufacturer of cryptographical equipment. The agreement, which lasted for much of the Cold War, allowed the NSA to read the classified messages of dozens of nations that purchased encoding equipment from Crypto AG. As I expected, the claim drew criticism from individuals connected with Crypto AG, including company scientists, who argued that the Swiss manufacturer would never have agreed to a deal that undermined its professional reputation as a trusted and neutral vendor of cryptological devices. Now, however, the BBC has revealed two recently declassified NSA memos that provide concrete proof of the deal.

My 2007 claim was based on a string of well documented allegations that surfaced in the early 1980s. While conducting research for his seminal book The Puzzle Palace, historian James Bamford came across references to Project BORIS, which involved a pact between the NSA and the Swiss company. To be precise, the deal appeared to have been struck between the Swiss inventor and Crypto AG founder Boris Hagelin and William F. Friedman, an American cryptologist who led the Armed Forces Security Agency, a forerunner of the NSA. The two men were united by a deep personal friendship, which was forged during World War II by their mutual hatred of Nazism.

Bamford’s claim was echoed in 1996 by Scott Shane and Tom Bowman, reporters for The Baltimore Sun. In a six-part investigative series about the NSA, the two journalists wrote that Friedman visited Hagelin during a trip to Switzerland in 1955 and asked for his help so that American could dominate its Cold War rivals. According to Shane and Bowman, Hagelin agreed and built a type of cryptological backdoor in Crypto AG’s devices, which allowed the NSA to read millions of messages for many decades. The company, of course, reacted furiously, saying that claims of a secret deal were “pure invention”.

On Thursday, however, BBC security correspondent Gordon Corera confirmed that a BBC investigation of 55,000 pages of documents, which were declassified by the NSA in April, found proof of the secret agreement. The declassified material, said Corera, contains two versions of the same NSA memorandum, as well as an earlier draft, which refer to a “gentleman’s agreement” between Friedman and Hagelin. Under the agreement, Crypto AG would inform the NSA about periodical changes to the technical specifications of its encoding machines. The company would also provide the American spy agency with detailed lists showing the precise models purchased by various national governments around the world. Furthermore, Crypto AG agreed not to sell the more advanced, customizable models of its equipment to countries viewed by Washington as directly adversarial. This, says the BBC, amounted to Crypto AG deceiving some of its customers, by offering them “watered-down versions” of its encoding devices.

Corera notes that there is no evidence in the memos that Crypto AG built any kind of back door in its devices for use by the NSA. Instead, by providing the American agency with detailed operational knowledge of the devices, it enabled American codebreakers to reduce the time and effort needed to break encoded messages intercepted by the NSA.

There are a couple of minor errors in Corera’s article. For instance, the “father of American code-breaking” is not Friedman, as he claims, but Herbert Yardley, who led the so-called Black Chamber (also known as the Cipher Bureau) in 1919, long before Friedman was in the picture. Additionally, he fails to mention Bowman’s contribution to Shane’s Baltimore Sun article, which was published in 1996, not 1995, as he writes. These minor errors aside, however, the BBC discovery is absolutely crucial for our understanding of cryptological history in the Cold War.

Author: Joseph Fitsanakis | Date: 31 July 2015 | Permalink

Swiss reject contract bid by UK-owned internet firm over spy fears

UPC CablecomThe Swiss federal government has rejected a multi-million dollar contract bid by one of the world’s largest broadband Internet service providers, saying it is foreign-owned and could serve as “a gateway for foreign spies”. The company, UPC Cablecom, is headquartered in Zurich, is subject to Swiss law, and is currently the largest broadband cable operator in Switzerland. However, in 2005 it became a subsidiary of the UPC Broadband division of Liberty Global Europe, an international telecommunications and television company based in London, England. It is therefore technically considered a foreign company according to Swiss law. In 2013, UPC Cablecom submitted a bid for a competitive contract to provide broadband Internet services to Swiss government agencies. But in January 2014, the company was informed by Swiss officials that such a contract could not be awarded to a foreign-owned telecommunications service provider such as UPC Cablecom.

Until last week, it had been generally assumed that the decision to exclude UPC Cablecom’s bid on the basis of the company’s foreign ownership had been taken by the officials in charge of evaluating the contract. However, on Friday of last week, the Swiss daily Berner Zeitung reported that the decision to drop UPC Cablecom’s bid had been taken by no other than the Swiss Federal Council. Consisting of seven members representing various cantons and political parties, the Federal Council serves as Switzerland’s collective head of government and effectively operates as the country’s head of state. It was the Federal Council, said Berner Zeitung, that intervened in the contract evaluation proceedings and instructed the Swiss Federal Department of Finance to exclude bids by foreign-owned companies. The argument was that such companies could serve as “potential gateways for foreign intelligence constituencies”, said the paper. It added that the decision had been taken in light of information revealed by American former intelligence operative Edward Snowden, who is currently living in Russia.

The ruling by the Federal Council meant that Swisscom became the sole bidder for the government contract, which is worth 230 million Swiss francs (US $378 million). Meanwhile, UPC Cablecom has filed a complaint with Switzerland’s Federal Administrative Court, claiming that the Federal Council abused its power by intervening in the service contract. The Court’s decision is not expected for several months.

Author: Joseph Fitsanakis | Date: 9 June 2015 | Permalink: http://intelnews.org/2015/06/09/01-1711/

Switzerland to probe claims it was spied on by US, German agencies

SwisscomThe office of the Swiss Federal Prosecutor has launched an investigation into claims that the country’s largest telecommunications provider was spied on by a consortium of German and American intelligence agencies. The spy project was reportedly a secret collaboration between Germany’s BND (Bundesnachrichtendienst) and America’s National Security Agency (NSA). According to Austrian politician Peter Pilz, who made the allegations on Wednesday, the BND-NSA collaboration was codenamed EIKONAL and was active from 2005 to 2008. Speaking during a press conference in Bern, Switzerland, Pilz said many European phone carriers and Internet service providers were targeted by the two agencies.

Among EIKONAL’s targets, said Pilz, was Swisscom AG, Switzerland’s largest telecommunications provider and one of the successor companies to the country’s national carrier, the PTT (short for Post, Telegraph, Telephone). The government of Switzerland still retains a majority of Swisscom shares, which makes the Bern-based company the closest thing Switzerland has to a national telecommunications carrier. Under the EIKONAL agreement, the BND accessed Swisscom traffic through an interception center based in Frankfurt, Germany. From there, said Pilz, the intercepted data was transferred to a BND facility in Bad Aibling to be entered into NSA’s systems. Pilz shared numerous documents at the press conference, among them a list of key transmission lines that included nine Swisscom lines originating from Zurich and Geneva.

Switzerland’s Office of the Federal Prosecutor said on Wednesday that a criminal investigation was already underway into Peter Pilz’s claims, and that the Swiss Federal Intelligence Service was in contact with Swisscom and other actors targeted by EIKONAL. Meanwhile, Pilz refused to answer questions about where he got the documents about the alleged spy operation. He said, however, that he did not think Swisscom was aware of the BND-NSA actions against it. The company issued a statement on Wednesday saying it had “no agreements with the NSA, the BND, or any other foreign intelligence agency that permit eavesdropping” on company lines.

Author: Ian Allen | Date: 28 May 2015 | Permalink: http://intelnews.org/2015/05/28/01-1705/

Senior Iranian aide defects during nuclear talks in Lausanne

Amir Hossein MotaghiBy JOSEPH FITSANAKIS | intelNews.org
A media advisor to the Iranian president, who was in Switzerland to cover the ongoing international negotiations on the country’s nuclear program, has defected. Amir Hossein Motaghi is credited with having helped secure the impressive ascent of Hassan Rouhani to Iran’s presidency in 2013. Rouhani, who swept to power with over 50 percent of the vote, over 30 percentage points ahead of his nearest rival, owes much of his victory to his popularity among the youth. Motaghi led the media team that promoted Rouhani’s image among younger voters by cleverly employing online platforms such as Facebook and Twitter.

Following Rouhani’s victory, however, Motaghi repeatedly voiced impatience with the slow pace of social and political reforms in Iran. Recently he spoke in favor of the release of Jason Rezaian, the Iranian-American Tehran bureau chief for The Washington Post, who has been denounced as a spy and imprisoned by the Iranian government. There have been rumors in the Iranian media that Motaghi had been ordered to report once a week to Iran’s Ministry of Intelligence; some say he had been privately warned that he faced arrest upon his return to Iran.

Motaghi had reportedly been sent to the Swiss city of Lausanne by the Iran Student Correspondents Association (ISCA). His task was to cover the ongoing talks that aim to bring an end to the dispute between the Islamic Republic and a group of nations that have come to be known as P5+1, representing the five permanent members of the United Nations Security Council plus Germany. However, according to Iranian opposition sources, the media aide resigned from his ISCA post before filing an application for political asylum in Switzerland.

Soon afterwards, Motaghi gave an interview to Irane Farda, a pro-reform Iranian television station based in London, in which he explained the reasons for his defection. He accused the Iranian government of controlling Iranian media reports about the talks, by staffing its reporter entourage in Lausanne with undercover intelligence officers. He also said he could no longer pursue his profession conscientiously because he was only allowed to report approved news items. Furthermore, he accused the American delegation to the talks as “mainly speak[ing] on Iran’s behalf with […] the 5+1 countries [so as to] convince them to consent to an agreement”.

Late on Sunday, ISCA, the press agency believed to have sent Motaghi to Switzerland, released a statement claiming it did not employ the journalist and that his job had been terminated prior to the nuclear talks in Lausanne.

Arafat ‘may have been poisoned’, claims Swiss forensic report

Yasser ArafatBy JOSEPH FITSANAKIS | intelNews.org
A forensic investigation by Swiss researchers into the death of Yasser Arafat states that the data “moderately suggests” that the Palestinian statesman may have been poisoned with a deadly radioactive substance. The founder of Palestinian nationalist group Fatah, who led the Palestine Liberation Organization for over three decades before becoming the first president of the Palestinian Authority, passed away in November 2004 at the Percy military hospital in Paris, France. His official records indicate that he died from a stroke, which he suffered as a result of a blood disorder known as disseminated intravascular coagulation. However, a year-long investigation by a team of forensic pathologists at the Vaudois University Hospital Centre in Lausanne, Switzerland, suggests that the late Palestinian leader is likely to have been poisoned with radioactive polonium. According to the results of the study, published by Qatari news channel Al Jazeera, tests on Arafat’s bones and on soil samples from around his corpse, showed “unexpected high activity” of polonium 210. Traces of the same substance were discovered on the personal artifacts that Arafat used during his final days while in hospital in Paris. According to the study, some of the Fatah leader’s personal belongings, including his underwear and his toothbrush, contained levels of polonium that were as many as ten times higher than those in random samples used as control subjects in the study. The BBC spoke to Dr. Paddy Regan, of the University of Surrey, United Kingdom, who specializes in the detection and measurement of radiation. He said the Swiss study had delivered “a pretty strong statement” in support of the theory that Arafat was poisoned. Read more of this post

Revealed: North Korean leader’s aunt defected to the US in 1998

Kim Jong-un surrounded by generalsBy JOSEPH FITSANAKIS | intelNews.org
The maternal aunt of North Korean leader Kim Jong-un secretly defected to the United States with her husband in 1998, a South Korean newspaper has alleged. Ko Yong-suk is the younger sister of the North Korean supreme leader’s mother, Ko Yong-hui, who died of breast cancer in 2004, aged 51. As a young man, Kim studied at the prestigious International School in Berne, Switzerland, from 1996 to 2001. Along with him, the North Korean government sent to Switzerland his aunt and her husband, ostensibly to look after him. However, Ko and her husband vanished without trace in early May 1998. It was generally assumed that they had been recalled back to Pyongyang by the North Korean regime. But on Tuesday, a report in South Korea’s JoongAng Daily said that the couple secretly visited the United States embassy in Geneva and requested political asylum. The paper cited a former “senior official” in South Korea’s National Intelligence Service (NIS), who was privy to the information about the couple’s defection. It also cited an unnamed South Koran diplomat who was stationed in Berne at the time of the alleged defection. The former NIS official told JoongAng that Washington granted Ko and her husband asylum and spirited them away to an American military base in Frankfurt, Germany. There they were debriefed before being flown to the United States. The official said that the two defectors underwent months of questioning about the inner circle of North Korea’s ruling elite. The NIS source told the South Korean paper that, at the end of that process, the couple underwent “cosmetic surgery to conceal their identities” before being given new names by the US government. Read more of this post

Vatican official, intelligence operative, charged with money smuggling

VaticanBy IAN ALLEN | intelNews.org |
Three men, including a senior Vatican official and a police officer with ties to the Italian Secret Service, have been arrested on charges of plotting to smuggle millions of euros out of Switzerland. Among the men arrested by Italian police on Friday is Monsignor Nunzio Scarano, a senior accountant at the Holy See’s Institute for the Works of Religion, which is the Vatican’s highest financial institution. Along with Father Scarano, Italian authorities arrested Giovanni Maria Zito, an officer in the Arma dei carabinieri, Italy’s national military police force, who was previously detailed to the country’s domestic intelligence service, the Agenzia Informazioni e Sicurezza Interna (AISI). The third accused co-conspirator is Giovanni Carenzio, a successful securities broker based primarily in the Cayman Islands and Switzerland. All three have been charged with corruption, for plotting to smuggle nearly €20 million ($26 million) in cash, from Switzerland into Italy. According to Nello Rossi, chief prosecutor in the corruption investigation, evidence collected from targeted communications interceptions seems to indicate that the smuggled funds belonged to the d’Amico family of shipping magnates, owners of d’Amico International Shipping, which is based in Salerno, Italy. The plan, allegedly hatched last summer by the three men, was to hire a private airplane and use it to carry the €20 million in cash from Locarno, Switzerland, to Italy. The currency was to be carried in suitcases by Zito. Read more of this post

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