The biggest spy affair in history: How Yugoslavia discovered the fraud

The secret services of the USA and West Germany spied on 130 countries and the United Nations for decades in the secret operation "Rubicon".

Spying is the task of the secret services, but what is special about this operation is that the German BND and the American CIA and NSA were the secret owners of the company Kripto AG based in Switzerland.

They manipulated encryption devices, which intelligence services around the world procured at great cost in the belief that they were buying secure machines from a neutral country.

So, in addition to valuable information, these secret services made millions, maybe even billions, through fraud.

Although the affair was recently exposed by the German and Swiss public services ZDF and SRF and the American Washington Post, many questions remained unanswered: Who among the politicians was privy to these machinations? Who lied to their parliament? What happened to the money earned? And how did the knowledge gained in this way affect the history of the second half of the twentieth century?

For now, none of the informed actors who are still alive want to talk.

Only Bernd Schmitbauer, Minister of the Chancellery under Helmut Kohl, confirmed that Operation Rubicon existed and said that it contributed to "making the world safer and more peaceful."

How did the documents reach the public in the first place?

It all started in September 1999 at a meeting of veterans of Western secret services in Berlin, old friends and acquaintances from the Cold War era.

The participants of the meeting were proud because for decades they managed the largest espionage operation in history.

This is an operation that was first called Theasaurus (Treasury) and then, since the late eighties, "Rubikon".

It would be a shame if the story of such a success was somehow not preserved for posterity, so the secret agents decided to make a final report, a kind of chronicle of that operation.

The American report under the name "Minerva" and the German one under the name "Rubikon" have a total of 280 pages.

Two years ago, those reports were obtained by Peter F. Miller, the author of documentaries on the secret services for another German television program.

Then the journalists included colleagues from Switzerland and America and checked the material for a long time before publishing the story on February 11 of this year.

Yugoslavia discovered the fraud

It turned out that the Western secret services had the whole world in the palm of their hand, although the main rival USSR, as well as China, was not among the buyers of Krypto AG's encryption devices.

However, Yugoslavia has been on the company's customer list almost from the beginning and was one of the best customers. At the same time, it was an important target for espionage.

A CIA report shows that Yugoslavia purchased 1957 CX 121 encryption machines as early as 52.

The BND report states that Yugoslavia only bought old mechanical Crypto devices at the time that the CIA and NSA could most likely intercept.

Somewhere around 1978, Yugoslavia bought for hundreds of thousands of Swiss francs a large amount of then-modern electronic devices of the MCC-314 type for the army, which of course were manipulated. However, Yugoslavia also had its own experts and the fraud was quickly discovered.

The devices for Yugoslavia were manipulated by the BND. Specifically, a transparent algorithm that the CIA and BND could read was developed by an employee signed "S."

"S. used a pre-synchronization scheme to make the machine readable. The German scheme, however, was too transparent, and several buyers, including Yugoslavs and Austrians, discovered the machine's readability," the US report said.

The JNA people asked Kripto AG to send them a specialist to repair the device or they would reveal the secret.

That is why the top of Kripto AG is holding an urgent meeting.

A month later, Bruno von Ach, an engineer who was not familiar with manipulation and did not know who the real owners of the company were, flies to Belgrade and discovers that the device can be made unreadable, i.e. safe.

After that, Yugoslavia was no longer a topic in Kripto AG, until the war of the nineties started.

In an interview for SRF, Bruno von Ah says that then people from the administration came and asked him what devices were sold to Yugoslavia.

Then it became clear to him who he was working for.

They tried to eavesdrop on the JNA, that is, the Serbian side that inherited the equipment, but they did not succeed.

Spying lasted until two years ago?

Swiss television in its "Rubicon" show states that the head of development at the company (in reports signed as "F."), after he was fired, reported to the authorities in Bern that manipulated devices were being made at Kripto AG.

By 1978 at the latest, the Swiss authorities knew what it was all about.

There were also other problems with spying, as in the case of Nigeria, which bought a large number of manipulated devices, but there were no results.

After two years, a representative of Kripto AG was sent to see what was going on. He found the devices in storage, unpacked.

Operation "Rubicon" was most threatened by the well-known case when Krypto AG engineer Hans Biller was arrested and kept in prison in Tehran for nine months.

Shortly thereafter, then-BND chief Konrad Porzner made it clear to CIA Director James Woolsey that the operation no longer had the support of Germany's political elite.

In September 1993, BND sold a stake in Kripto AG to the Americans for $17 million.

German intelligence officers were unhappy about having to end such a successful operation that the CIA continued without them, reportedly until 2018.

For now, heads are not flying anywhere

Information about Operation "Rubicon" was reported by the media around the world, but the small number of reactions is surprising.

"Thanks to US sanctions, Crypto hasn't sold us anything in the last 25 to 30 years. Sanctions have good sides, that's one of them," said Mohammad Zarif, Iran's foreign minister, ironically.

It is believed that only a journalistic investigation revealed to the Iranians that the BND was also involved in espionage operations against them.

Only in Switzerland did a real political earthquake occur.

The Parliament's investigative committee is likely to deal with the question of who among those responsible in politics knew when and what about the activities of Kipto AG.

The Prosecutor's Office has launched an investigation, and supposedly safe Swiss banks are feverishly checking whether Kripto AG manipulated their encrypted fax machines as well.

Because nothing less than the neutral image of Switzerland, from which the Alpine country has been profiting for decades, is being called into question.

In Belgium, military intelligence is investigating the potential scope of wiretapping.

In Austria, representatives of the Ministry of Defense, Interior and Foreign Affairs met with the American diplomat and asked for information on whether the Austrian government was the target of espionage attacks.

There is a strange silence in Germany.

Admittedly, the Parliamentary Control Committee deals with operation "Rubicon" and is particularly concerned about the extent to which the governments from 1970-1993. led by chancellors Willy Brandt, Helmut Schmidt and Helmut Kohl from the Bundestag hid millions of profits from BND's participation in Kripto AG.

According to ZDF research, there is a suspicion that the Federal Government once lied to the control board.

In a written response to ZDF's inquiry, Konstantin von Notz, Green MP and member of that committee, said that at the next meeting, he would request an appropriate report from the federal government and answers to the questions raised by the report on Operation Rubicon.