Operation Condor Countries Used Crypto AG Devices Without Realizing the CIA Owned the Company, National Security Archive Documents Reveal

Encryption revelations raise questions about U.S. official knowledge of Argentina “dirty war” atrocities, Chile’s Letelier assassination, Southern Cone military dictatorships

Swiss encryption company secretly owned by U.S. and German intelligence agencies, according to records obtained by the German public broadcaster, ZDF and Washington Post

How NSA and GCHQ Spied on the Cold War World

The U.S. intelligence community actively monitored for decades the diplomatic and military communications of numerous Latin American nations through encryption machines supplied by a Swiss company that was secretly owned by the CIA and the German intelligence agency, BND, according to reports today by the German public television channel, ZDF and the Washington Post.

Declassified records posted today by the National Security Archive show that among those secretly surveilled countries were military regimes of the Operation Condor nations—led by Chile, Argentina and Uruguay—as they conducted regional and international acts of repression and terrorism against leading opposition figures.

Today’s posting reveals that Operation Condor—the network of Southern Cone military regimes which targeted opponents around the world for liquidation in the mid and late 1970s—conducted their communications on those encryption devices made by the CIA-owned Swiss company, Crypto AG, without realizing the U.S. might be listening in.

The ZDF reports, and the Washington Post story titled “‘The Intelligence Coup of the Century’: for decades the CIA read the encrypted communications of allies and adversaries,” base their accounts on classified internal histories from the CIA and the BND which detailed their partnership to secretly purchase Crypto AG, the leading manufacturer of encryption devices in 1970.

The company, founded in the 1930s by Swedish inventor, Boris Hagelin, already had a longstanding “gentlemen’s understanding” with the National Security Agency dating back to the early 1950s, according to the Post report. But, through their secret CIA/BND ownership, the U.S. and Germany “rigged the company’s devices so they could easily break the codes that countries used to send encrypted messages,” the Washington Post reported, generating a wealth of intelligence intercepts from countries around the world, among them Iran, Egypt, Pakistan, Saudi Arabia and Italy. In 1993, the CIA secretly bought out the BND’s stake for $17 million, and owned Crypto AG outright until only two years ago when its remaining assets were liquidated.

According to the internal histories cited by the Post and ZDF, the clandestine intelligence gathering operation was initially codenamed “Thesaurus,” and later changed to “Rubicon.” The code-name for Crypto AG was “Minerva.”

In its heyday, Crypto AG sold thousands of sophisticated encryption machines to over 100 unwitting countries. In Latin America, customers included Mexico, Argentina, Brazil, Chile, Uruguay, Peru, Colombia, Venezuela, and Nicaragua. The use of those devices provided the CIA and the National Security Agency with the ability to decrypt thousands of messages, potentially covering a range of dramatic historical episodes, among them: the 1973 military coup in Chile; the 1976 military coup in Argentina; the car bomb assassination of Orlando Letelier and Ronni Moffitt in Washington D.C. in September 1976; the terrorist bombing of a Cubana airliner off the coast of Barbados in October 1976; the Sandinista revolution and the contra war in Nicaragua which the Argentine security forces covertly supported; and 1982 Falklands war between Argentina and Great Britain, among many others.

Since the Condor nations build their entire secret communications network around the Crypto AG machines, the U.S. intelligence community also would have been able to monitor Condor plans and missions, including multiple assassination plots in the region, in Europe and the United States.

The raw communications, and the intelligence reports generated from them, to which the Post and ZDF did not have access, represent a trove of still-secret archives that could significantly illuminate the dark history of the region as well as what and when the U.S. knew about operations there, and what, if anything, U.S. officials did with that knowledge. “The revelations in the documents may provide reason to revisit whether the United States was in position to intervene in, or at least expose, international atrocities,” notes the Washington Post story, which does not include any references to Operation Condor, “and whether it opted against doing so at times to preserve its access to valuable streams of intelligence.”

Operation Condor represented a formal agreement among the Southern Cone military dictatorships to coordinate repressive operations, including assassination, against militant and civilian opponents of their regimes. At the inaugural meeting, hosted by the Pinochet regime in Santiago, Chile, in November 1975, military officials from five military dictatorships signed an accord which stated that member nations would employ a “Cryptology System that will be available to member countries within the next 30 days, with the understanding that it may be vulnerable; it will be replaced in the future with cryptographic machines to be selected by common agreement.” After the second Condor meeting in June 1976, the CIA reported, “Brazil agreed to provide gear for ‘Condortel’—the group’s communications network.”

That “gear,” the documents reveal, came from Crypto AG.

In a heavily redacted intelligence cable dated in early 1977 on the “Communications System employed by the Condor Organization,” CIA agents reported that the Brazilian military had supplied the Condor network with Hagelin encryption machines. “The cipher system employed by Condor is a manual machine system of Swiss origin given to all Condor countries by the Brazilians and bearing the designation CX52.” The CIA described the encryption machine as “similar in appearance to an old cash register which has numbers, slide handles, and a manually operated dial on the side which is turned after each entry.”

By the end of 1977, however, the Condortel network was upgraded with newer encryption devices. According to a recently declassified secret Defense Intelligence Agency (DIA) report, “In late 1977, Argentina provided Hagelin Crypto H-4605 equipment to Condortel to enhance the security of its teletype nets.” Communications for operations in Latin America, the DIA report added “are to be provided by Condortel facilities.” When Ecuador joined the Condor network in 1978, the CIA reported that “an Argentine military officer, chief of the CONDOR communications system, (CONDORTEL), is supervising the installation of a telecommunications system in the Ecuadorean Ministry of National Defense.”

The espionage operations through Crypto AG conceivably provided the U.S. intelligence community with a far more detailed knowledge of Condor operations than previously acknowledged. Indeed, the U.S. intelligence records generated by these espionage operations could be “a historical game changer,” according to Carlos Osorio, who directs the Southern Cone Documentation Project at the National Security Archive. “If declassified,” he noted, “this vast trove of communications intercepts could significantly advance the history of Operation Condor as well as contemporary history of the entire region.”

Before the major revelations in the Washington Post and ZDF today, some of the clandestine history of U.S. intelligence ties to Crypto AG had leaked out in pieces over the past 40 years.

In 1975, former CIA operative Philip Agee published Inside the Company—A CIA Diary which, according to a declassified history of the National Security Agency’s Cryptology program during the Cold War, “claimed that Swiss-built Hagelin machines had vulnerabilities which NSA exploited to obtain plain text.”
In 1982, James Bamford’s book on the NSA, Puzzle Palace, identified references to “the Boris project” in letters from Hagelin’s NSA liaison, William Friedman, which Friedman—whom the Post describes as the father of American cryptology—had donated to the George Marshall Foundation at the Virginia Military Institute in 1969. The NSA moved to re-classify the papers in 1983; they were heavily censored and ultimately released with thousands of other NSA historical records in 2015. Among those papers were Friedman’s reports on his secret trips to Switzerland to meet with Hagelin on behalf of the NSA, and the “gentlemen’s understanding” they reached in the early 1950s for Hagelin to support the NSA’s efforts to decrypt messages sent by Crypto AG devices.
In the early 1990s, the “Minerva secret” was almost exposed after Iran arrested a salesman for Crypto AG named Hans Buehler, claiming he was a spy. Buehler, who knew nothing of the secret CIA/BND ownership, was detained and interrogated for nine months and only released after the company paid a ransom of $1 million. After his return to Switzerland, Buehler began speaking to the press, along with another former Crypto AG engineer who suspected the company was controlled by Western intelligence agencies. The media coverage and court records generated significant attention to the unverified ties between the German and US intelligence services and Crypto AG.
In a December 10, 1995, Baltimore Sun article, “Rigging the Game,” Scott Shane and Tom Bowman reported that the NSA had managed to hide “what may be the intelligence sting of the century” by rigging “Crypto AG machines so that U.S. eavesdroppers could easily break their codes.”




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