US, German spies plundered global secrets via Swiss encryption firm: report

US and German intelligence services raked in the top secret communications of governments around the world for decades through their hidden control of a top encryption company, Crypto AG, US, German and Swiss media reported Tuesday.

The Swiss company was a top supplier of devices for encoding communications to some 120 countries from after World War II to the beginning of this century, including Iran, South American governments, and India and Pakistan.

Unknown to those governments, Crypto was secretly owned by the US Central Intelligence Agency together with Germany's BND Federal Intelligence Service.

Together they rigged Crypto's equipment to be able to easily break the codes and read the government's messages, according to reports by the Washington Post, German television ZTE and Swiss state media SRF.

Citing a classified internal CIA history of what was originally called operation "Thesaurus" and later "Rubicon," the reports said that in the 1980s the harvest from the Crypto machines supplied roughly 40 percent of all the foreign communications US codebreakers processed for intelligence.

Meanwhile, the company took in millions of dollars in profits that went to the CIA and BND. "It was the intelligence coup of the century," the history says, according to the Washington Post. "Foreign governments were paying good money to the US 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."

The BND had no immediate reaction to the story. CIA spokesperson Timothy Barrett declined to comment on it.

Crypto AG was founded by Russian-born entrepreneur Boris Hagelin who fled Scandinavia to the United States in 1940 when the Nazis occupied Norway.

He had created a portable mechanical encryption machine that could be used in the field, Some 140,000 were produced for US troops during the war by the Smith Corona typewriter company in New York.

After the war Hagelin moved to Switzerland and began producing more advanced encryption machines American spies worried would allow governments everywhere to shield their communications.

But the premier US cryptologist, the National Security Agency's William Friedman, persuaded Hagelin to restrict sales of his most advanced machines to countries approved by Washington, while older machines - with penetrable encryption - were sold to others.