Yesterday, the Federal Council, Switzerland’s executive, announced it was investigating Crypto AG, a company with ties to the CIA and West German intelligence (BND).

The Federal Council obtained information on Crypto in November 2019, according to Swiss broadcaster RTS.

Parliamentarian Balthasar Glättli has called for a more in-depth investigation and the creation of a parliamentary investigation commission. Such commissions have been used only four times in Swiss history, reported RTS.

A key question is: what the neutral nation’s government might have known about about the operation?

For more than five decades, governments around the world trusted the Swiss company Crypto AG to keep communications between their spies, soldiers and diplomats secret.

However, the Zug-based company founded by Swedish national Boris Hagelin, which was secretly owned by the CIA and BND, sold rigged encryption equipment that made snooping possible, according to The Washington Post. The CX-52, pictured above, is one of the machines built with a backdoor that allowed messages to be cracked.

Rumours the company had intelligence links had been circulating for decades. A Swiss documentary on the subject, aired on RTS last year, looks at the affair and investigates what Switzerland’s Federal Government might have known.

The Washington Post and ZDF, a German public broadcaster, combined forces and pieced together a picture of what went on based on a 96-page account of the operation completed in 2004 by the CIA’s Center for the Study of Intelligence and an oral history compiled by German intelligence officials in 2008.

“It was the intelligence coup of the century,” the CIA report concludes. “Foreign governments were paying good money to the U.S. and West Germany for the privilege of having their most secret communications read by at least two (and possibly as many as five or six) foreign countries”, reported The Washington Post.

According to the documents, more than 120 countries used Crypto AG encryption equipment from the 1950s until well into the 2000s. 62 countries are mentioned specifically in the documents, including Iran, Iraq, Egypt, Greece, Ireland, Japan, Argentina, Brazil, Mexico, Italy, Libya, Portugal, Saudi Arabia, Austria, India, Pakistan, Lebanon, Spain and Vatican City. The Soviet Union and China, were never Crypto customers.

At least four countries – Israel, Sweden, Switzerland and the United Kingdom – were aware of the operation or received intelligence from it by the United States or West Germany, according to The Washington Post.

A National Security Agency (NSA) report, declassified in 2014, records a visit to Crypto AG in 1955 by William Friedman, an NSA official. The document describes how an agreement was made during the visit.

Crypto AG was liquidated in 2018 after two companies purchased most of its assets.

One of the companies, CyOne Security, created as part of a management buyout, now sells security systems only to the Swiss government. CyOne’s CEO held the same position at Crypto AG when it was owned by the CIA. The company insists it has no connection to any intelligence service.

The other company, Crypto International, took over the former company’s brand and international business. Its chairman said he had no knowledge of the company’s relationship to the CIA and BND before reading the information published by The Washington Post.

Indications in the classified documents suggest Swiss officials must have known of the company’s ties to the US and German intelligence services for decades, according to The Washington Post.

It appears that most employees of the company were unaware of the secret operation. Only a handful of senior staff appear to have known. Some had suspicions, but many others were unaware of what was going on and feel deceived.

More on this:
The Washington Post article (in English)
RTS article (in French) – Take a 5 minute French test now

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