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Switzerland opens criminal investigation into conspiracy between crypto firm Crypto AG and CIA

The Swiss government’s finance department has filed a criminal complaint “against persons unknown” in connection with media reports that the world’s leading cryptographic equipment manufacturer, Crypto AG, was secretly owned by the US Central Intelligence Agency. This conspiracy theory has been circulating since the 1980s and has now been completely confirmed.

The Swiss firm has made millions of dollars selling equipment to more than 120 countries. But in February 2020, it became known that it was secretly owned by the CIA as part of a secret partnership with the West German intelligence service BND. Operation Rubicon is reportedly among the most daring operations in CIA history. The agreement, which lasted several decades, was revealed thanks to materials obtained by The Washington Post and the German publication ZDF.

“Since 1970, the CIA and its sister National Security Agency have controlled virtually every aspect of Crypto’s operations, directing their German partners on recruiting, technology development, algorithm sabotage and sales management,” The Washington Post writes. As the CIA report put it, “It was the intelligence triumph of the century. Foreign governments paid good money to the United States and West Germany to have their secret communications intercepted by at least two (and possibly as many as five or six) foreign countries.”

In the 1980s, Crypto accounted for up to 40% of diplomatic communications and other messages transmitted by foreign powers decrypted and studied by NSA cryptanalysts.

German intelligence, the BND, decided in the 1990s that the risk of detection was too great and withdrew from the operation. However, the CIA bought out the Germans’ share and continued to operate, squeezing everything possible out of the company for further espionage, until 2018, when the agency sold its assets.

Journalists collected evidence that the CIA and BND secretly bought the Swiss company in the 1950s and paid off most of its top executives to buy their silence. The covert Operation Rubicon allowed the United States and West Germany to spy on secret government communications from several of their adversaries—and even allies, including Austria, Italy, Spain, Greece, Jordan, Saudi Arabia, and the United Arab Emirates. Almost all countries used Crypto AG encryption equipment, except for the USSR, China and several other countries that did not trust the Swiss manufacturer.

Crypto AG reportedly always produced at least two versions of each product – a secure version that was sold to friendly governments, and a tweaked version for everyone else. For years, the NSA’s eavesdropping empire focused on three geographic targets, each with its own alphabetical code: A for USSR, B for Asia, G for everything else. By the early 1980s, more than half of the information collected by the G Group passed through Crypto machines.

The revelation of the secret deal with the CIA and the BND came as a shock to Swiss public opinion and the government of a country that bases its national identity and international reputation on the concept of neutrality, writes intelligence community publication Therefore, the Swiss Federal Department of Finance opened a criminal case on this fact.

The Swiss Prosecutor General’s Office announced the criminal case. She said she had received a criminal complaint from the State Secretariat for Economic Affairs (SECO), which is part of the finance department that authorizes the export of sensitive software or hardware. SECO officials claim they were defrauded out of permission to export Crypto AG products because no one knew they were compromised by a secret agreement with the CIA and BND. Accordingly, this secret agreement violates Swiss federal export regulation laws, SECO officials say.

One of the former employees of Crypto AG says that two or three people in management could have known about the deal with the CIA and 10-15 technical employees “able to add two and two” could have guessed.

The Swiss Prosecutor General’s Office said it would review the application and decide whether to initiate criminal proceedings. Meanwhile, the government is already investigating the alleged conspiracy between Crypto AG and the CIA. The Swiss Federal Assembly (parliament) is also expected to launch its own investigation.

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