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
Washington D.C., February 11, 2020 - 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 encoded 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 1995, 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 decode 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 decode 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 sued the company, and 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.”
Through the Freedom of Information Act, the National Security Archive is seeking the full declassification of the CIA’s secret case study on the “Minerva project” as well as the supporting documentation on the CIA/NSA ties to the Hagelin company, Crypto AG. The Archive called on the German government to release its own records of its collaboration with the United States in the Minerva operations.
“This intelligence now has the ability to play an important role in securing our history and the history of our relations with the Latin American region,” noted Peter Kornbluh, a senior analyst at the Archive. “It is time for these documents to become part of the historical record.”
Operation Condor Foundation Act, “Minutes of the Conclusion of the First Interamerican Meeting on National Intelligence,” Secret, November 28, 1975
Source: The Pinochet File, Peter Kornbluh
During a meeting in Santiago Chile, security officers from Chile, Argentina, Uruguay, Bolivia and Paraguay—founders of Operation Condor—“[R]ecommend the use of a Cryptography System that will be available to member countries within the next 30 days…it will be replaced in the future with cryptographic machines to be selected by common agreement.”
CIA report, “Counterterrorism in the Southern Cone,” Secret, May 9, 1977
Source: Argentina Declassification Project
A CIA summary of Operation Condor to the Carter Administration’s NSC states that in 1976, “Brazil agreed to provide gear for ‘Condortel’ – the group’s communication network.” “The Condor communications system uses both voice and teletype.”
CIA cable, “Communications System Employed by the Condor Organization,” Secret, February 1, 1977
Source: Argentina Declassification Project
The CIA reports that “All countries belonging to the Condor organization maintain communications … 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 machine is 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.”
According to William Friedman’s tour report [see Document 6 below], Boris Hagelin sent machines similar to the CX52 to the NSA for testing. The CX52 was one of Swiss company Crypto A.G.’s flagship machines.
DIA Intelligence Appraisal, "Latin America: Counterterrorism and Trends in Terrorism,” August 11, 1978
Source: Argentina Documentation Project
“[I]n 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 are to be provided by Condortel facilities. Operations conducted elsewhere are to rely upon coded messages transmitted by public cable or telephone facilities…” The Condor machines provided by Argentina (H-4605) are similar, if not a variant of, the Crypto H-460 which according to the Washington Post is “an all-electronic machine whose inner workings were designed by the NSA.”
CIA Weekly Situation Report on International Terrorism, “Ecuador Joins Condor,” March 1, 1978
Source: Argentina Declassification Project
“At present an Argentine military officer, chief of the Condor communications system (Condortel), is supervising the installation of telecommunications system in the Ecuadoran Ministry of National Defense. This communications system is on loan to Ecuador until it can purchase its own equipment.”
NSA “[Draft] Report of Visit to Crypto A.G. (Hagelin) by William F. Friedman,” Top Secret, March 15, 1955
Source: William F. Friedman Collection of Official Papers
Under part III of the report titled “The Approach to Hagelin as Authorized by USCIB…” eminent American cryptologist William Friedman narrates a conversation with Boris Hagelin, head of the leading neutral ciphering machines company Crypto A.G. Friedman notes the American Intelligence interest in “maintaining the status quo in regard to the so called ‘gentlemen's understanding’ reached in January 1954.” Hagelin “… said he did not need time to think the matter over,” while Friedman “…thanked Hagelin for his ready acceptance of our proposal…” [USCIB refers to the United States Communications Intelligence Board, a top supervisory body at the time.]
Recounting his 7 day tour to Crypto A.G., Friedman outlines the issues discussed with Hagelin. There are long technical descriptions of the most recent models and of the prospective customer countries based on the machines’ relative strengths. The document is interspersed with many exchanges that suggest an ongoing understanding between the NSA and the Director of Crypto A.G.
At one point, when discussing a more intricate ciphering model, Hagelin notes, “We will hold up making that model if you want us to hold up on it.” In response, Friedman states, “I told him that I thought this might be advisable, and that in any case we would want one of these models just as soon as possible.”
In another section, when discussing the rehabilitation of the old C-446, Friedman writes “[This] offers certain potential advantages to UKUSA; for once these tools have been rehabilitated Hagelin will be able (as he himself mentioned to me) to make more C-446's than are needed by the government for which he is making this old model. In other words, he was hinting to me that this rehabilitation would make it possible for him to supply certain customers with a model almost like the M-209. This model is, of course easier to solve than the new models.”
This report is part of a trove of more than 52,000 pages of Friedman’s personal records and correspondence released by the National Security Agency in 2015.
NSA Cryptologic History, “American Cryptology during the Cold War, 1945-1989,” 1998
Source: National Security Archive mandatory declassification review request
On page 82, this NSA historical report states, “Ideology-based public revelations became fashionable with the publication in 1975 of ex-CIA agent Phillip Agee's Inside the Company - A CIA Diary. Although Agee's aim was CIA's covert operations organization, he knew much about SIGINT, and he revealed what he knew. He claimed, for instance, that NSA had used close-in techniques to intercept plain text from the UAR embassy in Montevideo, Uruguay. He also claimed that Swiss-built Hagelin machines had vulnerabilities which NSA exploited to obtain plain text.”