A new joint investigation published Tuesday, based on documents from the Central Intelligence Agency (CIA) and Germany's BND foreign intelligence agency, has revealed that Swiss company Crypto AG made millions of dollars for the two agencies, while providing them with access to the encrypted communications of more than 120 countries, including Argentina, for decades.
It effectively alleges that the firm was owned and controlled by the US and German intelligence services for decades.
The investigation, carried out by ZDF, a German public broadcaster, and The Washington Post, also reveals that the Ronald Reagan administration had access to secret Argentine communications during the Malvinas (Falkland) War, when Washington sided with the United Kingdom. According to reporting by the Post, the US government “took advantage of Argentina’s reliance on Crypto equipment, funnelling intelligence to Britain during the two countries brief war over the Falkland Islands.”
The Post reported that Kjell-Ove Widman, a mathematics professor in Stockholm, was an expert in cryptology and military reservist who worked closely with Swedish intelligence officials. Critically, Widman developed an affinity for the United States while spending a year in Washington state as an exchange student, the newspaper reported.
The new report claims that in 1982, when Argentina became convinced that its Crypto equipment had betrayed secret messages and helped British forces in the Falklands War, Widman was dispatched to Buenos Aires to persuade them that was not the case. He reportedly told the Argentine government that US intelligence had merely cracked an outdated speech-scrambling device that Argentina was using, but that the main product they used from Crypto, the CAG 500, remained “unbreakable.”
The Post also published documents which showcase a classified, detailed CIA history as saying: “The bluff worked…The Argentines swallowed hard but kept buying CAG equipment.”
Among other things, ZDF and the Post reported that the spy agencies controlled nearly every aspect of the company's operations from 1970 on. That allowed them to monitor Iran's mullahs during the 1979 hostage crisis and to catch Libyan officials congratulating themselves on the 1986 bombing of Berlin's La Belle nightclub, which was frequented by US servicemen.
Swiss Defence Ministry spokeswoman, Carolina Bohren, told the Associated Press on Tuesday that "following research carried out by the media" her office had notified the Cabinet about the Crypto AG case on November 5, 2019. On January 15, the decision was made to appoint a former Supreme Court judge to look into the reports and report back by the end of June.
"The events under discussion date back to 1945 and are difficult to reconstruct and interpret in the present-day context," she said.
Crypto, whose products are still in use in more than a dozen countries, was liquidated in 2018. The two companies that purchased most of its assets say they have no ongoing connection to any intelligence services.
Germany's BND didn't immediately respond to a request for comment.