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[Eurasia] [Fwd: Re: Former Stasi Cryptographers Now Develop Technology for NATO]

Released on 2013-03-11 00:00 GMT

Email-ID 1796097 Date 2010-09-27 20:24:23 From lena.bell@stratfor.com To eurasia@stratfor.com

[Eurasia] [Fwd: Re: Former Stasi Cryptographers Now Develop

Technology for NATO]





-------- Original Message --------



Subject: Re: Former Stasi Cryptographers Now Develop Technology for

NATO

Date: Mon, 27 Sep 2010 13:21:39 -0500

From: Marko Papic <marko.papic@stratfor.com>

To: Lena Bell <lena.bell@stratfor.com>

References: <4CA0DEFD.2020800@stratfor.com>



Feel free to send these to eurasia@stratfor.com



Very interesting articles. I'm a big fan of Spiegel.



Lena Bell wrote:



thpught you'd find this interesting Marko



Former Stasi Cryptographers Now Develop Technology for NATO



http://www.spiegel.de/international/germany/0,1518,719726,00.html







09/27/2010







After the fall of the Berlin Wall, the West Germans were desperate to

prevent the Stasi's top codebreakers from falling into the wrong hands

and set up a company to hire the East German cryptographers. Now the

former Stasi scientists develop technology used by Angela Merkel and

NATO.



Every morning, while going to his office in Berlin's Adlershof district,

Ralph W. passes a reminder of his own past, a small museum that occupies

a room on the ground floor of the building. The museum could easily

double as a command center run by the class enemy in an old James Bond

film. A display of coding devices from various decades includes the

T-310, a green metal machine roughly the size of a huge refrigerator,

which East German officials used to encode their telex messages.



The device was the pride of the Stasi, the feared East German secret

police, which was W.'s former employer. Today he works as a cryptologist

with Rohde & Schwarz SIT GmbH (SIT), a subsidiary of Rohde & Schwarz, a

Munich-based company specializing in testing equipment, broadcasting and

secure communications. W. and his colleagues encode sensitive

information to ensure that it can only be read or heard by authorized

individuals. Their most important customers are NATO and the German

government.



Rohde & Schwarz is something of an unofficial supplier of choice to the

German government. Among other things, the company develops bugproof

mobile phones for official use. Since 2004, its Berlin-based subsidiary

SIT, which specializes in encryption solutions, has been classified as a

"security partner" to the German Interior Ministry, which recently

ordered a few thousand encoding devices for mobile phones, at about

EUR1,250 ($1,675) apiece. Even German Chancellor Angela Merkel has used

phones equipped with SIT's encryption technology. In other words, the

Stasi's former cryptographers are now Merkel's cryptographers.



Secret Operation



The transfer of Ralph W. and other cryptologists from the East German

Ministry for State Security, as the Stasi was officially known, to West

Germany was handled both seamlessly and discreetly. West German

officials were determined to make sure that no one would find out about

the integration of East Germany's top cryptologists into the west. The

operation was so secret, in fact, that it has remained unknown to this

day.



Only a handful of officials were involved in the operation, which was

planned at the West German Interior Ministry in Bonn. In January 1991,

Rohde & Schwarz SIT GmbH was founded. The company was established

primarily to provide employment for particularly talented Stasi

cryptologists that the Bonn government wanted to keep in key positions.



Ralph W. is one of those specialists. W., who holds a doctorate in

mathematics, signed a declaration of commitment to the Stasi on Sept. 1,

1982. By the end of his time with the Stasi, he was making 22,550 East

German marks a year -- an excellent salary by East German standards. And

when he was promoted to the rank of captain in June 1987, his superior

characterized W. as one of the "most capable comrades in the

collective." While with the Stasi, W. worked in Department XI, which

also boasted the name "Central Cryptology Agency" (ZCO).



Looking for the Top Performers



The story begins during the heady days of the East German revolution in

1990. Officially, the East German government, under its last communist

premier, Hans Modrow, had established a government committee to dissolve

the Ministry for State Security which reported to the new East German

interior minister, Peter-Michael Diestel. In reality, the West German

government was already playing a key role in particularly sensitive

matters. Then-West German Interior Minister Wolfgang Scha:uble (who is

the current German finance minister) had instructed two senior Interior

Ministry officials, Hans Neusel and Eckart Werthebach, to take care of

the most politically sensitive remnants of the 40-year intelligence war

between the two Germanys.



The government of then-Chancellor Helmut Kohl was interested in more

than just the politically explosive material contained in some of the

Stasi's files. It also had its eye on the top performers in the former

East German spy agency. The cryptologists were of particular interest to

the Kohl government, which recognized that experts capable of developing

good codes would also be adept at breaking them. The Stasi cryptologists

were proven experts in both fields.



Documents from the Stasi records department indicate that the one of the

Stasi cryptologists' achievements was to break Vericrypt and Cryptophon

standards that had been used until the 1980s. This meant that they were

capable of decoding encrypted radio transmissions by the two main West

German intelligence agencies -- the Office for the Protection of the

Constitution and the Federal Intelligence Service (BND) -- and the West

German border police. The East Germans even managed to decode the BND's

orders to members of the clandestine "Gladio" group, which was intended

to continue anti-communist operations in the event of a Warsaw Pact

invasion of Western Europe.



The West German government was determined to prevent these highly

trained East German experts from entering the free market. The idea that

specialists who had spent decades working with West German encryption

methods and had successfully cracked West German intelligence's codes

could defect to Middle Eastern countries like Syria was a nightmare.

Until then, the BND had had no difficulties listening in on intelligence

communications in the Middle East, an ability the potential defection of

Stasi experts would likely have compromised. Bonn also hoped to use

their skills to break into regions where its own agents were making no

headway. All of this meant that the Stasi experts had to be brought on

board in the West -- even if it involved unconventional methods.



: Cherrypicking the Stasi's Top Brains



The government officials in Bonn turned to an expert for advice: Otto

Leiberich, a cryptologist and mathematician who had headed the Central

Office for Cryptology, the equivalent of the Stasi's ZCO at the West

German BND, until the mid-1970s. Leiberich's task, after he was brought

in as a member of the secret operation, was to evaluate the professional

abilities of the Stasi experts.



Leiberich still has vivid memories of his first official trip to the

town of Hoppegarten, next to Berlin. One of the East German

cryptologists at the meeting greeted the members of the West German

delegation as "comrades," Leiberich recalls. He was impressed by the

East Germans' expertise, says Leiberich. "They were excellent

mathematicians who were not personally guilty of any misconduct."



Leiberich says he would have liked to hire them, particularly the

Stasi's then "chief decoder," the ZCO department head, Horst M. A gaunt

chain-smoker who wore horn-rimmed glasses, M. was born in 1937 and had

earned a degree in mathematics at East Berlin's Humboldt University. But

the West was also interested in younger people, in the expectation that

they would be of greater value in the nascent computer age.



A Free-Market Solution



Leiberich could have used the extra manpower, especially after 1990,

when the West German Central Office for Cryptology was spun off from the

BND and a law was enacted to form the new Federal Office for Information

Security (BSI). Leiberich, who was named the BSI's first president,

headed a team consisting mainly of former intelligence colleagues.



But Neusel, the senior official from the West German Interior Ministry,

dismissed the idea as too precarious. Firstly, the government had

decided not to integrate former Stasi officials, because of their past

activities, into the bureaucracy of a unified Germany. Additionally, as

one person involved in the operation recalls, concerns about potential

traitors gave rise to a "sacred principle," namely that "no one from the

Stasi was to be transferred to the West German intelligence agencies."



It also didn't help that the Stasi's Central Cryptology Agency had been

hastily spun off into the East German Interior Ministry, because the

West German cabinet had decided not to allow any members of the East

German Interior Ministry to work in federal agencies.



But the free market was not restricted by any government resolutions. A

creative solution was needed, and no one was better suited for coming up

with the necessary fix than Hermann Schwarz, one of the two founders of

Rohde & Schwarz.



A Soft Spot for the East



Founded in 1933, the company, a provider of radio, measuring and

security technology, was dependent on government contracts and was a

reliable supplier to the West German intelligence agencies. Besides,

Schwarz had a soft spot for the East. He had earned his doctorate in

1931 in the eastern city of Jena, where he had also met his eventual

business partner, Lothar Rohde.



But to Schwarz, who was already elderly at the time and has since died,

allowing his company's name to be used as a cover for a Stasi connection

seemed too risky. According to someone familiar with the operation, the

West Germans must have applied a bit of soft pressure on Schwarz, who

was "extremely worried that it would be made public one day."



But the officials eventually did manage to convince Schwarz to play

along. His change of heart was probably due in part to the prospect of

additional research and federal contracts, which were in fact showered

on his company.



In the end, BSI head Leiberich and a senior Interior Ministry official

decided which former Stasi experts were to be transferred to the front

company. Former Stasi department head Horst M. was seamlessly integrated

into the market economy at SIT, where his wife also began working as a

secretary. Ralph W., who was in his 30s at the time and had been with

the Stasi for eight years, also fitted the desired profile, as did his

colleagues Wolfgang K. and Volker S. In total, about a dozen former

Stasi employees, most of them mathematicians, were given the chance to

embark on a second cryptology career in post-reunification Germany.



The federal government provided whatever assistance it could, but only

with the utmost discretion. SIT was initially headquartered in the town

of Gru:nheide in the eastern state of Brandenburg, in a former Stasi

children's home.



'Cosmic Top Secret'



An episode from the 1990s shows how conspiratorially the operation was

handled, even within the West German intelligence community. When the

BND needed a "D-channel filter" -- a precursor to today's firewalls --

to protect communications networks, it contacted the Federal Office for

Information Security (BSI). But BND officials pricked up their ears when

they discovered that the work was being done by SIT. A private company

protecting the computers of Germany's foreign intelligence agency?

Nevertheless, the BND officials were told that it was "totally OK," and

that the BSI would take responsibility for SIT.



For the parent company Rohde & Schwarz, the former problem child in

Brandenburg soon became a success story. SIT took over the cryptology

division of German engineering giant Siemens, and the company now

employs about 150 mathematicians, engineers and computer scientists at

its three locations. SIT, which proudly refers to itself as the

"preferred supplier of high-security cryptography" for NATO, even

includes in its product line devices classified as "Cosmic Top Secret,"

NATO's highest secrecy level. SIT's Elcrodat solution, standard

equipment on NATO submarines, frigates and military helicopters, has

provided the company with orders worth millions for years.



When approached by SPIEGEL, Rohde & Schwarz declined to comment on this

previously unknown part of its company history.



To show its gratitude for the company's efforts, the federal government

did more than just provide it with lucrative contracts. Eckart

Werthebach, the Interior Ministry official, awarded the former managing

director of SIT, a senior Rohde & Schwarz executive originally from West

Germany, the Order of Merit of the Federal Republic of Germany for his

services. The executive received the decoration in a formal ceremony at

Villa Hammerschmidt in Bonn, the former official residence of the German

president.























--



- - - - - - - - - - - - - - - - -



Marko Papic



Geopol Analyst - Eurasia



STRATFOR



700 Lavaca Street - 900



Austin, Texas



78701 USA



P: + 1-512-744-4094



marko.papic@stratfor.com









