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16 January 1998: Add link to USA/NSA response

25 December 1997
Source: William H. Payne

See related documents:

[December 23, 1997]


William H. Payne        	   	    )
Arthur R. Morales                           )
                Plaintiffs,                 )
v                                           )	CIV NO 97 0266 
					    )	SC/DJS
Lieutenant General Kenneth A. Minihan, USAF )
Director, National Security Agency	    )
National Security Agency		    )
                Defendant                   )


1  COMES NOW plaintiffs Payne [Payne] and Morales [Morales] 
[Plaintiffs], pro se litigants to exercise their rights 
guaranteed under the Constitution and Federal Rules of Civil 

As the court may know,

  Rule 26 (b)(1) 
  Parties may obtain discovery regarding any mater, not   
  privileged, which is relevant to the subject matter  
  involved in the pending action, whether it relates  
  to the claim or defense of the party seeking discovery 
  or to the claim or defense of any other party, including  
  the existence, description, nature, custody, condition,  
  and LOCATION of any books documents, or other tangible 
  thing and the identity and location of persons have 
  knowledge of any discoverable matter. 
  Rule 36 states, 
  Request for admission (a) A party may serve upon any other 
  party a written request for the admission, for the  
  purposes of the pending action only, of the truth of any  
  matters within the scope of Rule 26(b) set forth the 
  request that relate to statements or opinions of fact 
  or of the application of law to fact including the 
  genuineness of any documents described in the request.   
  Copies of documents shall  be served with the request 
  unless they have been or otherwise furnished or made 
  available for inspection and copying.  The request 
  may WITHOUT LEAVE OF THE COURT, be served upon the 
  plaintiff after commencement of the action and upon any  
  other party with or after service of the summons and 
  complaint upon that party. ... 
Plaintiffs capitalize WITHOUT LEAVE OF THE COURT. 

2  Rule 36 states,

  {T]he matter IS ADMITTED unless, within 30 days after 
  service of the request, or with such shorter or longer 
  time as the court may allow, the party to whom the 
  request is directed serves upon the party requesting 
  the admission a written answer or objection address 
  to the matter signed by the party or by the party's 
  attorney, ...

Plaintiffs capitalize IS ADMITTED.


 I HEREBY CERTIFY that a copy of the foregoing request 
 for admissions was mailed to Jan Elizabeth Mitchell, 
 Assistant US Attorney, 525 Silver SW, ABQ, NM 87102 
 this  Monday November 3, 1997. 

More than 30 days elapsed  and Plaintiff's have received 
no response from Minihan or Mitchell.

Therefore, Minihan ADMITS

  1  NSA is involved in 'spiking' [modifying the 
     advertised intended functions] electronic 

  2  NSA 'spiked' Iranian and Libyan cryptographic units 
     so that the  cryptographic key was transmitted with 
     the cipher text.

  3  Iranian messages were given to Iraq during the 
     Iran/Iraq war.

  4  NSA was involved in the conviction, by giving 
     contents of secret messages, of Ali Vakili-Rad 
     and Masour Hendi to the Court in Paris in the trial 
     for the stabbing death of Shapour Baktiar. 

  5  Minihan knows where copies of intercepted messages 
     are kept at NSA.

4  Requests for First set of Admission were mailed 
October 13, 1997.   More than 30 days has elapsed.  No 
response from lawyer Mitchell or respondents were received
by Plaintiffs.

Therefore,  NSA employee Brian Snow ADMITS

  1 He designed the cryptographic algorithm for the 
    Missile Secure Cryptographic Unit  (MSCU). 

  2 NSA funded the MSCU  at Sandia labs.

  3 In about 1983 he gave a presentation at NSA FANX 
    building to some Sandians involved with the Missile 
    Secure Cryptographic Unit. 

  4 In the presentation he showed electronic schematics 
    of the units to the Sandians.

  5 He told the Sandians about the electronic and 
    operational problems NSA had with the  
    cryptographic units he bought with him.

  6 He told the Sandians that one of the cryptographic 
    units failed in the Moscow embassy and transmitted 
    clear text.

  7 He concluded his talk telling the Sandians that NSA 
    had no operational failures once NSA went to dual 
    redundant cryptographic units.

  8 He told the Sandians not to ask for a theoretical 
    reason why dual redundant cryptographics never 
    failed, in the sense of releasing classified data, 
    but that this was based on practical  experience.

  9 William H. Payne was one of the Sandians in the 
    audience of his talk.

  10 He sat across the table from William H. Payne at 
     lunch in the cafeteria in the basement of the 
     FANX building directly after his talk.

  11  He was involved in algorithms associated with 
      the Clipper project.

  12  He where the documents specifying the MSCU 
      algorithm are located at NSA.

  13  He knows where the documents specifying 
      algorithms associated with the Clipper project 
      are located at NSA.

NSA employee Thomas White ADMITS

  15 He served as the liaison between NSA and Sandia 
     for the Deployable Seismic Verification System.

  16 He forwarded documents such as NSA's Orange book 
     and the public key Firefly chip to Sandia.

  17 He told Bill Payne that NSA regarded former 
     president Ronald Reagan as one of the US's  
     greatest traitors. 

  18 He told Bill Payne that the reasons NSA regarded 
     Ronald Reagan as one of the US's greatest traitors 
     is that Reagan, on TV announced to the world 
     that the US was reading Libyan communications. 

  19  He Bill Payne that the following day [after 
      Reagan's TV announcement] NSA could no longer 
      read Libyan communications.

  20  He knows where the documents specifying 
      Benincasa's correction to the original USO  
      seismic data authentication algorithm are 
      located at NSA.

NSA employee Mark Unkenholtz ADMITS

  21  He visited Sandia in about 1986-87 with R 
      division employee Ed Georgio to discuss which 
      data authentication algorithm should be used for 
      the US/USSR deployable seismic verification 
      system (DSVS). 

  22  He and Bill Payne discussed using public key for 
      the DSVS system. 

  23  He concluded that there were too many problems 
      with public key so it was best to continue using 
      the old Benincasa  USO (unmanned seismic 
      observatory) algorithm. 

  24  In 1989 he and others asked Bill Payne to write a 
      memorandum to NSA deputy director James J. Hearn 
      requesting help from NSA to develop new data 
      authentication algorithms. 

  25  He did this is because R division needed a letter 
      of support for more funding. 

  26  The DRAFT letter he asked Payne to write is seen 
      on Internet at, click cryptome, catch the 
      thread at August 29, 1997, SANDIA REPORT, 
      SAND91-2201 UC 706, Data Authentication for the 
      Deployable Seismic Verification System,  
      Appendix T, Benincasa's Algorithm Deficiencies.

  27  He asked Payne to fax the DRAFT letter to his 
      fiancee, Amy Johnston, since NSA did not have fax 
      for unclassified work readily available to use.

  28  The "To Mark and Ed, R" on page 183 of 
      SAND91-2201 UC 706 addressed him and his boss 
      boss at the time, Ed Donohue.

  29  He told Payne that NSA takes about a year to 
      evaluate an encryption/authentication algorithm  
      before it can be distributed for use. 

  30  He told Payne, in a response to a question from 
      Payne, that NSA runs crypto algorithms through 
      statistical tests. 

  31  After Payne wrote the Appendix T memorandum, NSA 
      sent a delegation to Sandia. 

  32  He and NSA employee Scott Judy designed a 
      replacement algorithm for Beninicasa's USO 

  33  The replacement algorithm was code named GRANITE. 

  34  The GRANITE design addressed some of the 
      deficiencies in Benincasa's algorithm enumerated 
      in Payne's Appendix T June 21, 1989 DRAFT letter 
      to Hearn. 

  35  The GRANITE design addressed some of the 
      deficiencies in Benincasa's algorithm enumerated 
      in Payne's Appendix T June 21, 1989 DRAFT letter 
      to Hearn. 

  36  He knows where the documents specifying 
      Benincasa's to the original USO seismic data 
      authentication algorithm are located at NSA.

  37  He knows where the documents specifying his and 
      Judy's GRANITE algorithm are  located at NSA.

NSA employee Scott Judy ADMITS

  38  He met Payne at Sandia sometime after he wrote 
      the DRAFT letter on Internet at, click 
      cryptome, catch the thread at August 29, 1997, 
      SANDIA REPORT, SAND91-2201  UC 706, Data 
      Authentication for the Deployable Seismic 
      Verification System,  Appendix T,  Benincasa's 
      Algorithm Deficiencies.

  39  He later met Payne again at NSA in a meeting. 

  40  He told Payne that NSA bases its cryptographer 
      algorithm on principles other than mathematics. 

  41  He and NSA employee Mark Unkenholtz designed a 
      replacement algorithm for Beninicasa's USO 

  42  His replacement algorithm was code named GRANITE. 

  43  GRANITE design addressed some of the deficiencies 
      in Benincasa's algorithm enumerated in Payne's 
      Appendix T June 21, 1989 DRAFT letter to Hearn. 

  44  The number stepping on the internal registers of 
      GRANITE  was decreased in response to  
      deficiency 2 enumerated in the June 21, 1989 
      letter to Hern. 

  45  He knows where the documents specifying 
      Benincasa's correction to the original USO  
      seismic data authentication algorithm are 
      located at NSA.

  46  He knows where the documents specifying his  
      and Unkenholtz's GRANITE algorithm are located 
      at NSA.

NSA employee Edward Donohue ADMITS

  47  He met Payne at Sandia sometime after he wrote 
      the DRAFT letter on Internet at, click 
      cryptome, catch the thread at August 29, 1997, 
      SANDIA REPORT, SAND91-2201 UC 706, Data 
      Authentication for the Deployable Seismic 
      Verification System,  Appendix T,  Benincasa's 
      Algorithm Deficiencies.

  48  He was head of NSA's R division cryptographic 
      algorithms division in 1989.

  49  He knows where 
      1    Benincasa's original NSS/USO algorithm, 
      2    Benincasa's revision of 1, 
      3    The Unkenholtz - Judy GRANITE algorithm, 
      4    Brian Snow's  MSCU algorithm, 
      5    the clipper algorithms, 
      6    the STU III algorithms. 
      written specifications are located at NSA.

NSA employee Paul Bridge ADMITS

  50  He assumed liaison control from NSA employee 
      Tom White for the US/USSR seismic data 

  51 He placed a copy of 
  Sandia National Laboratories (SNL) and the National 
  Security Agency (NSA) have established a working 
  relationship which has gown substantially over 
  the last decade.  Currently, there exist several 
  joint project areas of mutual interest. 
  Different policies and administrative procedure 
  exist at SNL and NSA which govern the handling 
  of sensitive and classified material, and the 
  documentation and dissemination of such 
  work.  It is the purpose of the Agreement to 
  specify the general guidelines under which work 
  will be administered in the area of cryptography 
  research at SNL. 
  First, SNL, in its role as systems integrator, 
  requires and indigenous cryptographic capability 
  to support its Department of Energy mission in the 
  design and development of safe and secure nuclear 
  weapons and in treaty verification.  SNL and NSA 
  agree to a cooperative effort to support SNL's needs 
  in a manner consistent with the role of such work 
  to national security. 
  Second, NSA, in its role as the U.S. Government 
  approval authority for cryptographic systems 
  developed for and used in national security 
  applications, recognizes its responsibility to 
  provide support and guidance to SNL's activities 
  in applying cryptography. 
  Third, SNL will regard cryptographic research 
  work as classified when it is initiated or 
  created, i.e., will protect such work as 
  "created classified", and will consult with 
  NSA prior to handling such work as unclassified. 
  Periodic technical and managerial discussions 
  between SNL and NSA will be held to increase 
  the awareness of the security concerns of 
  both organizations and to develop and maintain 
  an SNL cryptographic classification guide which 
  will protect the national security interests of 
  both organizations. 
  This working agreement shall be effective on 
  the date of the last signature and will be 
  reviewed annually by SNL and NSA.  It will be 
  valid until terminated by mutual agreement. 
  President		Plans and Policy 
  June 10, 1991		22 July 1991 
  which is now seen on Internet at, 
  click cryptome, catch the thread at August 29, 

  52  His purpose of giving Payne a copy of the 
      Narath/MacFarland agreement an attempt to 
      threaten Payne.

  53  He told Payne that Sandia must regard the 
      US/USSR Deployable Seismic Verification 
      System (DSVS) authenticator as classified 
      and get permission from NSA to place the 
      unit in the field.  

  54  He told Payne that Sandia must have the DSVS 
      authenticator TEMPEST tested .

  55  He agrees Payne responded to him that the 
      previous unit had already passed TEMPEST 
      testing and that Payne's Sandia project 
      leader, H. B. [Jim] Durham, did not want to 
      spend the money to repeat the testing. 

  56  He told Payne that NSA should be getting the 
      capability to build cryptographic devices. 

NSA employee Rick Proto ADMITS

  57  He and group of other NSA employees met 
      Sandians H. B. Durham,  Ron Moya, and 
      William Payne at NSA at Fort George G. 
      Meade in about 1986 to discuss, in part,  
      implementation of the Deployable Seismic 
      Verification System data authenticator. 

  58  He and other NSA employees directed that 
      the NSA Unmanned Seismic Observatory data  
      authenticator algorithm designed by NSA 
      employee Ronald Benincasa be implemented 
      entirely in hardware.

  59  He and the other NSA employees at the meeting, 
      directed that the data authenticator be 
      enclosed in a TEMPEST enclosure.  Sandians 
      expressed objection to the TEMPEST enclosure 
      in that the authenticator was housed in a steel 
      tube buried about 100 meters beneath ground 

  60  He agrees that he and NSA employee Robert 
      Morris met with Sandia cryptographer G. J. 
      Simmons when Simmons asked them both the two 
      1  NSA is sorry it delegated cryptographic 
         implementation responsibility to Sandia 
         for nuclear weapons; 
      2  NSA is trying to take back this 

  61  He and/or Morris refuse to respond to 
      Simmons' above question.

Retired Sandia Employee Gustavus J Simmons ADMITS

  62  He with Sandia Paul Stokes designed a data 
      authentication algorithm for seismic treaty 
      verifications in the early 1970s.

  63  He and Stokes either patented, tried to patent, 
      or contemplated patenting their 
      authentication algorithm. 

  64  NSA, when we presented their seismic data 
      authentication algorithm to the Agency, 
      rejected its  use.

  65  He know that NSA gave Sandia the data 
      authentication algorithm designed by NSA  
      employee Ronald Benincasa to use in seismic 
      verification rather than use your and 
      Stokes algorithm.

  66  He feels that the algorithm that he and Stokes 
      proposed is as good or better than 
      Benincasa's algorithm.

  67  He feels that NSA demanding Sandia use 
      Benincasa's algorithm could be a case of  
      Not-invented-here as opposed to technical 
      advantages over his and Stokes 

  68  In about 1986 he gave a presentation in 
      Sandia spook-shop building 868 to promote 
      the use of public key cryptography for use 
      in the Deployable Seismic Verification System.

  69  No one, until he received a copy of Payne's 
      technical report in 1992, SANDIA REPORT, 
      SAND91-2201 UC 706, Data Authentication for 
      the Deployable Seismic  Verification System 
      told him what algorithm and authentication 
      technology was used.

  70  He asked NSA employees Rick Proto and Robert 
      Morris to the effect, 
      1  NSA is sorry it delegated cryptographic 
         implementation responsibility to Sandia 
         for nuclear weapons; 
      2  NSA is trying to take back this 
  71  Proto or Morris did not answer his questions.

  72  He retired before he planned from Sandia Labs.

  73  He felt that NSA exerted some pressure on 
      Sandia to have him retire.

  74  He told William Payne on the phone that he 
      was forced into early retirement as a result  
      of NSA pressures.

  75  He felt that some NSA algorithms do not are 
      properly classifiable.

  76  He felt that NSA abuses classification with 
      regard to cryptography.

  77  He feels that cryptography, by its 'slippery 
      math' basis, is difficult, if not impossible, 
      to regulate.

Sandia employee D. Jerry Allen ADMITS

  78  He was a supervisor Sandia's weapons components 

  79  NSA has responsibility for furnished Sandia the 
      cryptographic algorithms and approving the  
      implementation technology which went into the 
      electronic locks in the US nuclear arsenal. 

  80  He told William Payne in about 1991-92 that 
      it cost $300,000 per nuclear bomb to recall 
      bombs to Pantex to remove and repair Sandia's 
      failing semiconductor chips.

Sandia employee Ronald Kulju ADMITS

  81  He worked in Sandia weapons components 
      department in about 1986/7.

  82  He was working on a project which involved 
      use of the Cylink corporation CY 1024 public 
      key cryptography semiconductor chip.  

  82  He made an agreement in about 1986/7 with 
      Payne.  He would design the hardware  
      oscillator for the CY 1024 if Payne would 
      try to get CY 1024 to communicate with an 
      80c51  microcontroller using synchronous 
      Mode 0 communications. 

  83  He told Payne that Sandia's public key 
      cryptography chips did not get the same 
      answers as the CY 1024. 

  84  He told Payne that NSA and Sandia was in 
      the process of removing  the public key 
      cryptography from weapons systems.

4  Admissions reveal that NSA employees KNOW where 
the lawfully requested documents reside.  And that 
NSA has EMBARRASSING problems with its cryptographic

5  Rule 56 states.  Summary Judgment states,

  The judgment sought shall be rendered forthwith 
  if the pleadings, depositions, answers to 
  interrogatories, and admissions on file, 
  together with the affidavits, if any,
  show that there is NO GENUINE ISSUE AS TO ANY
  MATERIAL FACT and that the moving party is 
  entitled to judgment as a matter of law.

Plaintiffs capitalize NO GENUINE ISSUE AS TO ANY

Admissions attest to the contention that there 


6  Replace Judges Svet and Campos because these judges
have demonstrated, IN WRITING, they do not follow the 
Federal Rules of Civil Procedure.

7  Award Plaintiffs motion for summary judgment 
as a matter of law based on admissions.  

8  Have replacement judges ORDER Defendant to 
produce immediately produce documents in 
machine-readable format for publication on 
Internet. In preparation for settlement of
this unfortunate bungled spy sting.  And analysis 
of 'deficient' NSA cryptographic algorithm work 
designed to get the US government out of the 
cryptography business.

9 Grant such other relief as the Court may deem 
just and proper.

Respectfully submitted, 
                    William H. Payne             	   	     
                    13015 Calle de Sandias NE          	     
                    Albuquerque, NM 87111              	     
                    Arthur R. Morales                            
                    1024 Los Arboles NW                         
                    Albuquerque, NM 87107                        
                    Pro se litigants 
I HEREBY CERTIFY that a copy of the foregoing memorandum
was mailed to Lieutenant General Kenneth A. Minihan, USAF, 
Director,  National Security Agency, National Security Agency, 
9800 Savage Road, Fort George G. Meade, MD 20755-6000 
and hand delivered to Jan E Mitchell, Assistant US Attorney, 
525 Silver SW, ABQ, NM 87102 this Monday December 22, 1997. 


Tuesday December 9, 1997 06:26

Certified - return receipt requested 

Gilbert F. Casellas, Chairman
U.S. Equal Employment Opportunity Commission
1801 L Street, N.W.
Washington, D.C. 20507 

Dear Chairman Casellas:

Tuesday November 11, 1997 I filed a Privacy Act/Freedom of 
Information Act appeal with your office.

No acknowledgment of that appeal was received.

I wrote you in that letter,

  An agency is required to make a decision on an appeal
  within 20 days (excluding Saturdays, Sundays, and legal
  holidays). It is possible for an agency to extend the time
  limits by an additional 10 days. Once the time period has
  elapsed, a requester may consider that the appeal has been
  denied and may proceed with a judicial appeal.

Since I did not send my appeal letter certified, I assume
that it took three days, a the courts allow for filing
by mail, to reach your office.

Therefore, I assume that the letter arrived at your office
on Friday November 14.  This assumption means that your
office had 9 days in November to process my appeal.

The remaining 11 working days before administrative remedies 
are exhausted expires on December 15.

If you did not receive my appeal letter at the time I supposed
you did, then I ask you to write me and tell me this.

Otherwise, I and everyone else must conclude administrative 
remedies have been exhausted on December 15.

Chairman Casellas, should anyone in your office not believe
that we are proceeding to judicial appeal and a defamation
lawsuit, let the following article published on Internet
assure you that we are.  

Unless we settle this matter, of course.

     NSA, Crypto AG, and the Iraq-Iran Conflict 

                    by J. Orlin Grabbe 

One of the dirty little secrets of the 1980s is that the U.S. 
regularly provided Iraq's Saddam Hussein with top-secret 
communication intercepts by the U.S. National Security 
Agency (NSA). Consider the evidence. 

When in 1991 the government of Kuwait paid the public 
relations firm of Hill & Knowlton ten million dollars to drum 
up American war fever against the evil dictator Hussein, it 
brought about the end of a long legacy of cooperation 
between the U.S. and Iraq. Hill & Knowlton resurrected the 
World War I propaganda story about German soldiers 
roasting Belgian babies on bayonets, updated in the form 
of a confidential witness (actually the daughter of the
Kuwaiti ambassador to the U.S.) who told Congress a tearful 
story of Iraqi soldiers taking Kuwaiti babies out of incubators 
and leaving them on the cold floor to die. President George 
Bush then repeated this fabricated tale in speeches ten times 
over the next three days. 

What is remarkable about this staged turn of events is that, 
until then, Hussein had operated largely with U.S. approval. 
This cooperation had spanned three successive 
administrations, starting with Jimmy Carter. As noted by 
John R. MacArthur, "From 1980 to 1988, Hussein had 
shouldered the burdenof killing about 150,000 Iranians, in 
addition to at least thirteen thousand of his own citizens, 
including several thousand unarmed Kurdish civilians, and in
the process won the admiration and support of elements of 
three successive U.S. Administrations" [1]. 

Hussein's artful slaughter of Iranians was aided by good 
military intelligence. The role of NSA in the conflict is an 
open secret in Europe, the Middle East, and Asia. Only in this 
country has there been a relative news blackout, despite the 
fact that it was the U.S. administration that let the crypto 
cat out of the bag. 

First, U.S. President Ronald Reagan informed the world on 
national television that the United States was reading Libyan 
communications. This admission was part of a speech 
justifying the retaliatory bombing of Libya for its alleged 
involvement in the La Belle discotheque bombing in Berlin's
Schoeneberg district, where two U.S. soldiers and a Turkish 
woman were killed, and 200 others injured. Reagan wasn't 
talking about American monitoring of Libyan news 
broadcasts. Rather, his "direct, precise, and undeniable proof" 
referred to secret (encrypted) diplomatic communication
between Tripoli and the Libyan embassy in East Berlin. 

Next, this leak was compound by the U.S. demonstration that 
it was also reading secret Iranian communications. As reported 
in Switzerland's Neue Zurcher Zeitung, the U.S. provided the 
contents of encrypted Iranian messages to France to assist 
in the conviction of Ali Vakili Rad and Massoud Hendi for 
the stabbing death in the Paris suburb of Suresnes of the 
former Iranian prime minister Shahpour Bakhtiar and his 
personal secretary Katibeh Fallouch. [2] 

What these two countries had in common was they had 
both purchased cryptographic communication equipment from 
the Swiss firm Crypto AG.  Crypto AG was founded in 1952 
by the (Russian-born) Swedish cryptographer Boris Hagelin 
who located his company in Zug. Boris had created the
"Hagelin-machine", a encryption device similar to the German 
"Enigma". The Hagelin machine was used on the side of the 
Allies in World War II. 

Crypto AG was an old and venerable firm, and Switzerland 
was a neutral country. So Crypto AG's enciphering devices for 
voice communication and digital data networks were popular, 
and customers came from 130 countries. These included the 
Vatican, as well the governments of Iraq, Iran, and Libya. Such 
countries were naturally skeptical of cryptographic devices 
sold in many NATO countries, so turned to relatively neutral 
Switzerland for communication security. 

Iran demonstrated its suspicion about the source of the leaks, 
when it arrested Hans Buehler, a top salesman for Crypto AG, 
in Teheran on March 18, 1992. During his nine and a half 
months of solitary confinement in Evin prison in Teheran, 
Buehler was questioned again and again whether he had
leaked Teheran's codes or Libya's keys to Western powers. 
Luckily Buehler didn't know anything.   He in fact believed in 
his own sales pitch that Crypto AG was a neutral company 
and its equipment was the best. They were Swiss, after all. [3] 

Crypto AG eventually paid one million dollars for Buehler's 
release in January 1993, then promptly fired him once they 
had reassured themselves that he hadn't revealed anything 
important under interrogation, and because Buehler had begun 
to ask some embarrassing questions. Then reports appeared on
Swiss television, Swiss Radio International, all the major 
Swiss papers, and in German magazines like Der Spiegel. Had 
Crypto AG's equipment been spiked by Western intelligence 
services? the media wanted to know. The answer was Yes [4]. 

Swiss television traced the ownership of Crypto AG to a 
company in Liechtenstein, and from there back to a trust 
company in Munich. A witness appearing on Swiss television 
explained the real owner was the German government--the 
Federal Estates Administration. [5] 

According to Der Spiegel, all but 6 of the 6000 shares of Crypto 
AG were at one time owned by Eugen Freiberger, who resided 
in Munich and was head of the Crypto AG managing board 
in 1982. Another German, Josef Bauer, an authorized tax 
agent of the Muenchner Treuhandgesellschaft KPMG, and 
who was elected to the managing board in 1970, stated that his 
mandate had come from the German company Siemens. Other 
members of Crypto AG's management had also worked at 
Siemens. Was the German secret service, the 
Bundesnachrichtendienst (BND), hiding behind the Siemens' 

So it would seem. Der Spiegel reported that in October 1970, 
a secret meeting of the BND had discussed how the Swiss 
company Graettner could be guided into closer cooperation 
with Crypto AG, or could even merged with it. The BND 
additionally considered how "the Swedish company Ericsson
could be influenced through Siemens to terminate its own 
cryptographic business." [6] 

A former employee of Crypto AG reported that he had to 
coordinate his developments with "people from Bad 
Godesberg". This was the location of the "central office for 
encryption affairs" of the BND, and the service instructed 
Crypto AG what algorithms to use to create the codes. The 
employee also remembers an American "watcher", who 
strongly demanded the use of certain encryption methods. 

Representatives from NSA visited Crypto AG often. A 
memorandum of a secret workshop at Crypto AG in August 
1975, where a new prototype of an encryption device was 
demonstrated, mentions the participation of Nora L. 
Mackebee, an NSA cryptographer. Motorola engineer 
Bob Newman says that Mackebee was introduced to him 
as a "consultant". Motorola cooperated with Crypto AG 
in the seventies in developing a new generation of
electronic encryption machines. The Americans "knew Zug 
very well and gave travel tips to the Motorola people for the 
visit at Crypto AG," Newman told Der Spiegel. 

Knowledgeable sources indicate that the Crypto AG 
enciphering process, developed in cooperation  with the NSA 
and the German company Siemans, involved secretly 
embedding the decryption key in the cipher text. Those who 
knew where to look could monitor the encrypted 
communication, then extract the decryption key that was also 
part of the transmission, and recover the plain text message. 
Decryption of a message by a knowledgeable third
party was not any more difficult than it was for the intended 
receiver. (More than one method was used. Sometimes the 
algorithm was simply deficient, with built-in exploitable 

Crypto AG denies all this, of course, saying such reports are 
"pure invention". 

What information was provided to Saddam Hussein exactly? 
Answers to this question are currently being sought in a 
lawsuit against NSA in New Mexico, which has asked to see 
"all Iranian messages and translations between January 1, 1980 
and June 10, 1996". [7] 

The passage of top-secret communications intelligence to 
someone like Saddam Hussein brings up other questions. 
Which dictator is the U.S. passing top secret messages to 
currently? Jiang Zemin? Boris Yeltsin? 

Will Saddam Hussein again become a recipient of NSA 
largess if he returns to the mass slaughter of Iranians? What 
exactly is the purpose of NSA anyway? 

One more question: Who is reading the Pope's 


[1] John R. MacArthur, Second Front: Censorship and 
Propaganda in the Gulf War, Hill and Wang, New York, 1992. 

[2] Some of the background of this assassination can be found 
in "The Tehran Connection," Time Magazine, March 21, 1994. 

[3] The Buehler case is detailed in Res Strehle, 
Verschleusselt: der Fall Hans Beuhler, Werd Verlag, Zurich, 1994. 

[4] "For years, NSA secretly rigged Crypto AG machines so 
that U.S. eavesdroppers could easily break their codes, 
according to former company employees whose story is 
supported by company documents," "No Such Agency, Part 4: 
Rigging the Game," The Baltimore Sun, December 4, 1995. 

[5] Reported in programs about the Buehler case that were 
broadcast on Swiss Radio International on May 15, 1994 and 
July 18, 1994. 

[6] "Wer ist der befugte Vierte?": Geheimdienste unterwandern 
den Schutz von Verschlusselungsgeraten," Der Spiegel 36, 

[7] U.S. District Court for the District of New Mexico, 
William H. Payne, Arthur R. Morales, Plaintiffs, v. Lieutenant 
General Kenneth A. Minihan, USAF, Director of National 
Security Agency, National Security Agency, Defendant, 
CIV NO 97 0266 SC/DJS. 

November 2, 1997
Web Page:

William H. Payne  
13015 Calle de Sandias  
Albuquerque, NM 87111