The Rest Is Classified - 97. Selling The World's Secrets: Why The Brits Won The Falklands War (Ep 2)

Episode Date: November 5, 2025

THE REST IS CLASSIFIED LIVE 2026: Buy your tickets HERE on Friday 7th November at 12pm GMT. In the latter half of the twentieth century, the CIA and its German counterpart, the BND, were listening to the encrypted messages of at least 62 countries around the world. This intelligence was then passed to allies and used to win wars, depose leaders and influence the world order. From sharing secrets with British forces fighting in The Falklands War to monitoring Iran’s mullahs during the 1979 hostage crisis, the CIA knew almost everything going on in the corridors of power. In the second part of their series on Crypto AG, David and Gordon unpack the recently declassified role of the CIA in some of the biggest geopolitical moments of the past seventy years. ------------------- Join The Declassified Club: Start your free trial at ⁠⁠therestisclassified.com⁠⁠ - go deeper into the world of espionage with exclusive Q&As, interviews with top intelligence insiders, quarterly livestreams, ad-free listening, early access to episodes and live show tickets, and weekly deep dives into original spy stories. Members also get curated reading lists, special book discounts, prize draws, and access to our private chat community. To sign up to the free newsletter, go to: ⁠⁠https://mailchi.mp/goalhanger.com/tric-free-newsletter-sign-up⁠ ⁠ ------------------- Step inside the real world of espionage as The Rest Is Classified takes to the London stage for the first time. In this live edition of the hit podcast, former CIA analyst, David McCloskey, and national security journalist, Gordon Corera, look at history’s greatest intelligence failures, unpack iconic spy scenes from film and TV, and answer your burning questions. From Cold War tactics to today’s digital surveillance, this is espionage as it really works: stranger, scarier, and sometimes funnier than fiction. Access the members pre-sale by clicking ⁠HERE⁠. The top secret password for members of the Declassified Club will be emailed on the morning of Thursday 6th November to those who have signed-up via ⁠therestisclassified.com⁠. If you have signed up via Apple Podcasts or YouTube, please email ⁠[e-mail]⁠ with proof of your subscription before 10am GMT on Thursday 6th November and we'll send you the code directly. The non-members general sale will open on Friday 7th November at 12pm GMT. Tickets can be bought ⁠HERE⁠. ------------------- Order a signed edition of Gordon's latest book, The Spy in the Archive, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠via this link.⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Order a signed edition of David's latest book, The Seventh Floor, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠via this link.⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ------------------- Email: [e-mail] Twitter: ⁠⁠⁠⁠⁠⁠⁠@triclassified⁠⁠⁠⁠⁠⁠⁠ Social Producer: Emma Jackson Producer: Becki Hills Head of History: Dom Johnson Exec Producer: Tony Pastor Learn more about your ad choices. Visit podcastchoices.com/adchoices

For exclusive interviews, bonus episodes, ad-free listening, early access to series, first look at live show tickets, a weekly newsletter, and discounted books, join the declassified club at the rest is classified.com. Rinse takes your laundry and hand delivers it to your door, expertly cleaned and folded, so you could take the time once spent folding and sorting and waiting to finally pursue a whole new version of you. Like tea time, you. Or this tea time you. Or even this tea time you.

Said you hear about Dave? Or even tea time, tea time, tea time you. Mmm. So update on Dave. It's up to you. We'll take the laundry. Rinse. It's time to be great. At Desjardin, we speak business.

We speak equipment modernization. We're fluent in data digitization and expansion into foreign markets. And we can talk all day about streamlining manufacturing processes. Because at Desjardin business, we speak the same language you do. Business. So join the more than 400,000 Canadian entrepreneurs who already count on us and contact Desjardin today. We'd love to talk, business. David, David, I've got some top secret information to share with you today. Oh, Gordon, uh, what have you done this time? Don't worry, don't worry. It's good news. So I'm excited to share, and I think actually you know this news already, but it's really to share with

everyone listening, that we are going to be putting on our first ever live show on the 31st of January, 26, at the South Bank Center in London. Luckily, the date and location aren't secret. Which is wonderful, because we'll finally have an opportunity in person to discuss why you are so terribly wrong and morally misguided about Edward Snowden and the JFK assassination. Well, I look forward to proving you wrong live on stage, but yet, Yes, we'll be delving into the weird and wonderful world of intelligence failures and maybe some conspiracy theories as well, and we'll be unpacking some iconic moments of spy fiction from those thrillers and dramas that people love, and we'll be answering your most burning questions about the world of spies and secrets. That's right. The wonderful world of intelligence failures. Nothing more wonderful than an intelligence failure. And if listeners want, finally, to get their questions answered about Gordon's home address, I'll be happy to share it with you live on stage. But Gordon, when can our fantastic listeners and our secret squirrels get tickets for this exciting event? Well, members of the Declassified Club, the famed secret squirrels, can get members-only pre-sale tickets

live from tomorrow Thursday, 6th of November, at 10am GMT, while the general sale for everyone else will be from Friday the 7th of November at 12 p.m. GMT. Now, the links for the general sale tickets will be in the description for this episode, and the rest is classified.com, so make sure you're signed up for alerts to be the first person to secure your spot at the most anticipated espionage event of 2026. And with that, back to the nutty story of Crypto AG. Hello, welcome to The Rest of Classify. I'm David McClosky. And I'm Gordon Carrara. And the question, Gordon, is, what do you do if you're the CIA and you're running

a cryptology company in Switzerland and the CEO is about to retire and his son and likely successor has absolutely no idea that the CIA is involved. You hope you can get him on board, but what happens if you don't? I guess that's what we're about to find out in the second part of our series on Cryptoag.

Oh, you've set it up in a very conspiratorial way, Gordon. As usual, I'd expect nothing less from you. That's right. We're telling the story in this second and final episode of our dive into this insane sort of intelligent story around crypto AG, a Swiss cryptology company that when we left you last in the process of sort of being absorbed by the central intelligence agency. And we looked last time at this really, I think, remarkable friendship between Boris Hagelin, the founder and CEO of crypto AG, and William Friedman, this sort of cryptology and signals

intelligence pioneer in the U.S., who worked for the NSA, and this friendship at the heart of this what becomes a partnership that allowed the U.S. to gain access to encryption machines that are sold around the world to over 130 countries. But now, Gordon, these guys are old. Friedman is retiring. Hegelen, it's the 1960s. He's thinking it's time to step down. He's getting close to 70. And the NSA, where Friedman had worked and been more or less running this operation up to this point, is kind of uncomfortable. Maybe with the human touch that's required. And the Central Intelligence Agency has, you wrote muscled in, but I like to say starting to sweep this company right off its feet. Every stereotype about NSA and CIA people could come into this episode. So we've had this amazing operation where the NSA has been able to work, you know, thanks to this friendship to basically rig the sale of all of these machines around the world.

But the crucial question is Boris Hagelin wants to retire. So it becomes a question of succession. And this has got echoes of the TV series and some of those questions because Boris Hagelin has got a son, Bo Jr., good name, and he's definitely viewed as the successor. He's being groomed as such. He's a capable inventor himself. He invents a kind of pocket-sized cipher machine you can carry round, but actually has a little bit of a battle with his father over who gets credit for that. And you can sense from that. There's some strains between them. Bo doesn't know what his father has been doing, the gentleman's agreement with William

Friedman that's grown into a more kind of formal arrangement. The father has certainly kept it from the sum, which I think is interesting. The more we talk about the story, the more sort of flummoxed I am by Hegeland Senior's motivations, because I guess it's just one thing at a time and that he ends up at this place in the 60s where he's trying

to hand off a company that he's built in secret partnership with American intelligence. He's potentially handing this off to his son. But Hegeland Senior has put so much at risk in this operation, but his entire business is potentially at risk. It's kind of built on a lie. Yeah.

It's built on a lie. He must have been so ideologically committed, I think, to this and probably got some secret thrills out of it that he was willing to continue with. It's immense risk. And Bo Jr. actually goes to the U.S. himself, and he's working as a sales manager for the Americas for the company. But the tensions kind of start to grow with the father. Bo Jr. marries an American woman called Edith, who his parents don't like, familiar story. They think she's keeping him from coming back to Switzerland. to be where their headquarters are. They think he's careless with money because he wants more. He wants to be a playboy, perhaps, but the father doesn't really give him enough money. It's the kind of, it feels like one of those classic generational succession stories. You know, the father has built the business and he's worried that the son doesn't have the kind of the work ethic and what it takes to kind of maintain it and to keep it going in the same way as he's built. It's an age-old story, isn't it? But you can sense that's part of the

tension between father and son. And, you know, the father thinks the son's not really putting his weight. He's enjoying himself too much. So, yeah, it's, it's Logan Roy and the family and the drama succession, isn't it? And Bo is actually a pretty good salesman. And because he doesn't, he doesn't know about his father's secret with the CIA, with the Americans, starts to sell really advanced borderline, unbreakable machines to countries that we would really all prefer. they wouldn't so that we could listen to their communications. I mean, well, you can't blame him because he's thinking like, hey, kind of goes to the Brazilians and he's thinking a new market and he starts selling in 1960, like the top machines.

But the problem is, these are the machines that are not supposed to be sell to anyone other than kind of NATO and allied countries. You know, it's the CX52. And so the US kind of freaks out because they're like, well, we won't be able to read Brazilian messages anymore. So then Boris, you know, has to kind of get involved and convince some Brazilians to instead by a model that can be read. So the issue is he's due to take over, but can he be trusted? Not everyone is sure. U.S. intelligence describe him as a wild card and wonder if the deal's

going to survive the succession. And that grows as the 60s progress and as Boris Hagglett gets older. And what's going to happen to the company? Is it going to be able to adapt to a kind of new machines, electronic machines? So at this point, the first signs of a new plan is hatched, which is that Boris is going to sell the company. And he doesn't tell his son who he's going to sell it to, but he talks about selling it. But the reality is he's thinking about selling it to the CIA, not openly, but through a series of front companies.

And only three people are aware of the plans to sell a company, Boris, the CEO, and Bo Jr., but Bo Jr. doesn't know that it's the CIA. Because we should say by this point, Boris Sr. is not the CEO. Yeah, exactly. he's kind of stepped back, yeah. And so Bo is already kind of probably annoyed because he thought he'd be the CEO,

and he's not happy with a sale. So there's a kind of problem. And then, 1970, the problem, to some extent, goes away because Bo, Bo Jr., dies in a car crash on the Washington Beltway just outside of D.C. Now... Okay, you've said this in very, you know, sort of dark tones here, Gordon. Officially, there is no sign of foul.

Very dangerous. People die on the Beltway all the time. But you wrote down, there are a strange lack of details on the crash. What does that imply? What do you suggest? I try to find out, like, tell me more about the crash. Who else was in? You can't find any details about it. What would be an appropriate set of details to have on a random car crash in 1970? I don't know. How deep down to the rabbit hole that you go? Of a young businessman. I'm not trying to revisit my JFK assassination theories about. the CIA having done it. That's good. That's good, but, but it is incredibly convenient that Bo Jr. dies. Now, I mean, look, some in European intelligence are going to wonder if something happened. Boris himself is going to wonder what happened with his son. He's going to hire private detectives to try and find out if there's something more

to it. You know, others I've spoken to say they just can't believe the CIA or someone would have bumped off, someone like that, even if they have the potential to screw up a world changing intelligence operation. Okay. We should say, I mean, you've covered this in sort of a gloss of paranoid conspiracy, Gordon. It's the 70s. We're in the 70s now. Yeah, we're in the 70s. There's absolutely no evidence of foul play here, right? There's not evidence of it. It is true that it sets the stage for the CIA to take over crypto aging. I mean, Bo Jr. was a potential hurdle on that path, and he's now

out of the picture. So it's so interesting this bit, which is how does the CIA, and we flagged also the Germans, come to buy it? Now, as we said before, the NSA had kind of got less interested in this, partly because their top target is the Soviet Union, and they're not using haggling machines, and they're kind of focused on computing power. And the CIA is kind of very interested in this. And I guess it's fair to say, isn't it? The CIA has always had a little bit of a little bit of game in that kind of communications intelligence, signals intelligence world, hasn't it? It's not that it always leaves it to the NSA. Well, yeah, I mean, I asked a couple examples. One that comes immediately to mine is the Berlin Tunnel operation,

run by a friend at the pod, Bill Harvey. Later involved in the JFK assassination, allegedly. Alleged by Gordon Carrera. Yeah, sorry. Conspiracy theorists. Yes. I've added that to your nut file, Gordon. So that bullet point has been added. It's a big file. But yeah, so the Berlin Tunnel was was CIA digging a tunnel into the Soviet sector of Berlin, wasn't it, to literally tap the communications? It also reminds me of an operation, Gordon, we mentioned briefly in our series on Adolf Tolkechev, the so-called billion-dollar spy. The code name for this one, I believe it was GT-Taw, and it was an effort by the CIA to essentially, it would send someone down into a like a manhole outside of Moscow and place a collar on a communications line that

the Soviet, I think the Soviet Ministry of Defense used. And so there you had this example of the agency essentially, I mean, tapping a communications line, collecting signals intelligence from that, but at the core of the operation is a human, right? It's a CIA officer who's responsible for maintaining that caller and all of the tapes associated with it. What is often not well understood about signals intelligence is how much of it is human enabled in some way. You go through the chain of the operation and how this stuff is physically collected. And at some point, there's a human involved in the process, right?

And oftentimes the access that, that human has, has been, you know, sort of curated by the CIA, right? And it's a natural fit. So there's more of a partnership, I think, between the CIA and the NSA on signals intelligence than is often well understood. Yeah, because even if you go back to Stuxnet, the virus that gets into the Iranian system, at one point, they're getting a human engineer to put a USB stick into an Iranian computer. You need a person to do that. And I guess that's the point, you know, about this operation, is that, yes, it's about collecting communications intelligence, but it's actually, as we've established, about managing people, salesmen, engineers,

persuading other countries to buy and trust things. And I guess that's why the CIA feels more kind of comfortable with it, maybe, than the NSA did. Now, but the other question is, how come the Germans? Now, this is really interesting, because it seems like some Western European services knew or had worked out what was going on with Hagelin. And in 1967, the French approached Hagelin to buy the company with the Germans. But Hagelin says no and tells the CIA, because obviously he's got a relationship with them. And then I love this.

The CIA director, Richard Helms, another friend of the pod, says to the Germans, if you ditch the French, we'll buy it with you. It's basically, I think it's fair to say the CIA are like, yeah, yeah, yeah. It's a good idea buying it, but I think we're the ones to do that. Because I think it's fair to say that CIA and the French did not entirely trust each other at this point. That's shocking. The relationship with the Germans, though, between the BND and the CIA is much closer, though, isn't it? When you look back on it, it's interesting, isn't it?

Because the B&D, obviously, after Second World War, Germany needs a new intelligence service, the old Gestapo and the military intelligence is gone. And it's basically founded by the CIA. And it's kind of the CIA, half running it for them. It's their people. They've got deep relationships with the Germans in that kind of early Cold War period. So it kind of makes sense, doesn't it, that, you know, CIA and BND kind of trust each other. And then there was other reasons why I thought it was interesting, why the CIA would be happy working with the Germans. I mean, one of them is that, you know, you've got a company which is based in Switzerland, so obviously neighboring Germany, and you're going to need engineers and people to help.

And it's a lot easier if you've got the Germans on board and you can send some engineers from Siemens, the company, it's a kind of German company which German intelligence can have a relationship with. You can send them over and to kind of deal with it. You can have people going back and forth in a way that looks a lot less suspicious than a bunch of Americans turning up at Cryptoag headquarters to talk to them or to deal with it. You know, you can see why there's a kind of benefit to keeping it covert if you use the Germans as a partner. If you think of the French were already onto it, that the Germans also had some understanding that the agency was involved at this point and that Hagelin had been collaborating with the Americans. So, I mean,

if they're not included, is there potential that they raise a fuss about it to maybe word gets out or something like that? The BND probably already knew. Yeah, I think so too. And it's interesting. I think the Swedes know because of course, Hagelin is Swedish and the company originated in Sweden. So there's a bit of knowledge around. And it's interesting. They do keep it quiet. But the CIA and BND are going to go halves on it, sale for about $5.75 million to buy the company. Organized through lawyers, shell companies in Liechtenstein. So it's not like, you know, the CIA kind of on company's records, it says, you know, bought by CIA B&D. This is part of the reason why even now a lot of the details are so murky is that a lot of our understanding of this

is coming from work by journalists, has been done really just in the past six or seven years. And some CIA write-ups on the history of this operation that are still not declassified. but that journalists have gotten access to. But the other angle for the secrecy is that it's really hard to understand this Lichtenstein component because a lot of this stuff, it's such a maze, and it's still hard to get down into the roots of the documentation in Lichtenstein. Yeah, and the shell companies and whatever else was there. And so all the staff of the company, Cryptoag, don't know who owns it, which is kind of nuts.

I mean, they think it's some business, you know, kind of group, I guess, one of these shell companies. So only Boris Hagelin and the CEO know about it. All the profits go through Liechtenstein and then come to Munich. And, well, I love this fact. The B&D pick it up and they pick up a load of cash and they hand it over in an underground car park in Munich to the CIA who were kind of running an operation out of the consulate in the city. I mean, you just imagine literally bags of cash being handed over in an underground car park. I mean, it's crazy. You would think, you know, two surfaces running a joint operation there is going to be tension and misunderstanding and, you know, differences of perspective.

But I was amused to see that the CIA thought the B&D was primarily using this as a money-making operation for the service. Yeah. Yeah. The tension grows because the CIA think, well, the Germans just seem to be more worried about the money than the spying. But I love the fact the Germans are shocked, shocked. that America is using this to spy on lots of countries that appear to be allies, including NATO members, like Spain, Greece, Turkey, and Italy. And of course, you know, you're the Germans, you're like, there are European partners. A long tradition of Germans being shocked by spying on allies, which I think is total garbage, personally. They're very good at play acting. The shocked partner,

oh my goodness, we're going to spy on the Greeks. Gambling in this casino. So through the 70s, the operation is still going to be very successful. So again, just a few quick examples of the success of it. Egypt is a big customer. 1978, President Sadat of Egypt taking part in the Camp David negotiations with Israel, brokered by the US, and all the Egyptian communications back to advisors in Cairo from Camp David are monitored because they're using crypto AG machines.

They can see what the Egyptian's bottom line is. And this is described as priceless intelligence. So again, you get a sense of the value of this. Following year, 1979, Iran hostage crisis, NSA is reading about 85% of Iranian comms. Although it's interesting because they're still taken by surprise. And Bobby Inman, who was head of the NSA at this time, I mean, has said on the record, I think, to journalists at the Washington Post, that during, I think it was during the Camp David negotiations, that the NSA was able, through providing the training. transcripts of, you know, these diplomatic communications and sort of the back and forth between Sadat, who's negotiating and then, you know, his advisors, presumably some of whom

were in Cairo, that he was able to answer well over 80% of the White House's questions on sort of how the Egyptians were positioning themselves. So Inman basically said it was absolutely critical intelligence to have and so, so valuable. I also found a great story from this period, Gordon. Billy Carter, who is the sort of boorish brother to then president Jimmy Carter and who also Gordon famously promoted something called Billy Beer in the United States. Did you ever have Billy Beer? I never had Billy Bear. I haven't either. I think collectors still try to get the cans. Essentially he was using his access to the White House and the Carter name to make money. There's an intercept of Libyan communications in this period

that show that Billy Carter was on Gaddafi's payroll as a kind of, you know, lobbyist, right, getting access to the White House. And Inman, who is the NSA director at the time, sees this intercept and is like, oh, crap, you know, like, what do I do? And goes to the Justice Department and they approach Billy Carter and he denies it. He just lies. And eventually they work out a deal where he has to register as a foreign agent. But that whole chain of events is because the Libyans are using crypto AG machines. And that's the thing. There's so much we don't know.

I mean, the other bit that's interesting, I think, is it's being used a lot in Latin America. And in the 1970s, you get this wave where countries are overthrown by some pretty brutal military hunters and kind of dictatorships emerge, where they're going to use repression against their political enemies and their own people. And these militaries that take over are using crypto AG to communicate. And I think a lot of researchers have raised the question, well, does that then mean that the US government knew exactly what these militaries were doing in terms of, you know, repressing their own people? So Salvo Alende gets overthrown by the Chilean military led by General Pino with CIA help. It's worth saying. And thousands are killed. Then you get the same in Argentina, you know, where a hunter takes over in 77. People are getting thrown out of airplanes, dissidents disappeared, all these things. And it does raise the question, well, does that mean the U.S. knew all about what these militaries were doing against their own people because they were inside their comms because of crypto AG.

Well, that's right, Gordon. I think maybe there, you mentioned Argentina, which is going to be so critical to how this operation almost entirely unravels. So let's take a break. And we come back. We'll see how the CIA, hopefully, Gordon, bandages to hold this entire thing together. With MX Platinum, $400 in annual credit. Redits for travel and dining means you not only satisfy your travel bug, but your taste buds too.

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Welcome back. Gordon, we left on the cliffhanger that Argentina was going to almost screw

this entire thing up but before we get there Gordon think it's fair to say that in the 1970s, mo money, moe problems, as they say, right, for the good folks at Crypto AG. Yeah, it's really interesting.

So in the 70s, it seems to be motoring along, but you can start to see the tensions, which are actually going to lead to the unraveling of this operation. Cryptoag, big company, successful company, 250 people. But of course, some of the engineers inside the company getting a little bit suspicious about things that they don't know. You know, where do some of the algorithms come from? Why are some of the flaws in the machines not being fixed? You know, it's getting harder to keep this all secret. And one of the reasons is the staff are frankly doing their job. Like the engineers are seeing a problem, a vulnerability, and they're fixing it. And interesting things start to happen. They're

reading the Syrian codes. And then in 1977, the NSA complained, suddenly they can't read them anymore. And the reason is that one engineer from the company has seen some complaints from Damascus and he goes and just fixes it. He's doing his job, but he basically gets fired, partly because he's suspicious about what's going on. And, you know, the CIA is actually a bit annoyed about this because they think maybe it'd be better to keep him on the payroll to keep him quiet. And you get other engineers who are kind of aware of something secret. They're going to start drinking. They're going to start telling their family, you know, these crazy what sounds like conspiracy theories that they're spies behind the company and people think they're nuts. The company is

going to start hiring engineers, you know, one who's described as too bright to remain unwitting, and it's a woman who starts to build more secure machines. When countries buy these machines, I mean, they're not just going to buy them and trust a company. They check them. So they get their security experts to kind of look at the machines, take them apart, check the codes. And they start to, you know, have suspicions. And Argentina is one of them. After 77, the military officers who've taken over the country start to suspect something. And they summon the CEO of Crypto AG who does know about the deal to come out to Argentina in 79. And he's frightened out of his wits because he kind of thinks they're onto this.

This is a kind of a group of people who throw people out of airplanes and kill people. And so he kind of manages to convince them. Well done for spotting this vulnerability. We'll fix it. And of course he's going to fix it in a way they can still read it. And it's interesting because the Argentines will keep quiet about it. because now they realize there is this vulnerability, they think, maybe we can use that to spy on the Chileans who are using the machines.

So they actually keep quiet about the fact that there was a problem with it. So you've got this growing tension. And I think it's interesting because the BND and CIA realize they've got to kind of manage the relationship, and particularly with the engineers. And that's going to be the kind of one of the next stages. Do we know, Gordon, how the CIA and the BND were interacting with the CEO? at the time and like with the winning members of the company. I mean, what was the actual dance like? Because it does seem this is a complicated intelligence operation. It's gone well beyond

the kind of one-man show that it was when, you know, Boris Sr. and William Friedman had agreed on their sort of gentleman's understanding. Like, do we know what the architecture is right now for how the CIA and B&D run it? I mean, the CIA are using kind of the consulate in Munich. And, you know, They've literally got someone there who's assigned to deal with this. But the problem is you have got people who are kind of coming out of meetings looking a bit mysterious. And one of the interesting things is that the CIA and BND realized they're actually going to need someone inside the company to kind of manage the engineering side because it's just too difficult. Too many people are finding out about it. So in 1980, they actually get a company to hire a maths professor from Stockholm who's going to be given a CIA code name, Athena, because that's going to be their person in.

inside the company who can kind of be used to explain away problems and who can know about the deal. And that's going to be the vital person who's going to kind of go out to Argentina and other places and kind of persuade them that everything's fine and you don't need to worry. I was pleased to see a codename appear in here, Gordon, because I think so far you have downplayed the code name game inside this operation because in the cable traffic, Cryptoag is referred to as Minerva, right? That's the code name. The overall operation is called Rubicon by the time you get to the, I think, the late 70s, but, but Gordon, it had a terrible codename at birth, which was Thesaurus, which I find to be very boring and bookish, and Rubicon

is much more exciting. I'm going to guess NSA came up with Thes and CIA came up with Rubicon, but I don't know. Again, sorry NSAP. That's a good guess. It's a good guess. Interesting enough, the Falklands War, 1982, when Argentina takes the Falkland Islands part of the UK and invades and takes them is going to be a really interesting incident in this kind of story of the explosion. I think we should do the Falklands War another time because there's a really interesting question. Do you mean the Belvenous Islands? No, I mean the Falkland Islands, David. And I think you'll find it's a very touchy subject for us, Brits. I just consulted Argentine maps to get the name, the name right. Like the Gulf of America. Anyway, the reality is that

That basically, there's a kind of complicated question about whether there was an intelligence or a policy failure and failing to spot the invasion, particularly when you remember that we're supposed to be listening to their comms. And actually, when the war starts, the Dutch come up to the Brits, it's quite interesting and say, do you want some help with Argentine comms? Because we're in crypto AG, because it turns out they're also now part of the kind of a sharing arrangement within Europe. So more states have kind of got access through the Germans to some of this intelligence. kind of interesting how much it spread. And it's quite interesting because some people think, oh, the Dutch gave the Brits lots of information. I'm reliably informed that actually the Brits didn't need it. And they said, thank you very much, but they already knew what they were doing. And there's a very good account of this in John Ferris's book, the authorised history of GCHQ behind

the Enigma about the whole kind of Falklands War, which, as I said, will look at another time. But it's interesting because a former British minister, so someone who'd been a minister in the previous government, says there's been an intelligence failure over the Falklands. And he says, how come we didn't have advance warning of the invasion? Because we were reading their messages. And he actually says that in Parliament. He uses it to attack the government. Oh, that's poor.

That's poor for him. It's a classic problem, politicians saying we could read someone's messages. And you can see Downing Street kind of goes, no, and actually thinks about prosecuting the guy. Because the Argentines, of course now realize their messages are being read in the middle of the war. You can't change your equipment in the middle of the war. but they start changing the keys that are used to use it. But then, of course, they're wondering, isn't it Cryptoag which has done this? So Athena, the agent, the Swedish engineer, goes to Buenos Aires and has to kind of smooth things over after the war and tell them that it's probably something else which has got cracked.

Don't worry, it's not the Cryptoag machines. And weirdly, the Argentines buy it. They keep buying Cryptoag equipment. So it's so interesting because there's all these kind of signs. And yet, I guess countries just don't want to believe. the possibility that their communications are compromised. So they just keep going. The recruitment or the hiring of this Swedish advisor, you know, code name Athena, that's a great move, I think, on the part of the agency of the Germans. And actually, it surprises me that there wasn't someone

on the kind of really technical side who was that in the know up until this point. I mean, is that actually, I would say that. Is that true that up to this point? There wasn't someone with a really deep knowledge of the cryptology and the engineering who actually understood the CIA involvement. Because, I mean, that feels like as soon as you have that, you can send someone to Argentina and smooth this kind of situation over by, I mean, potentially just sort of talking in circles around the customers and lying to them. Yeah, about the equipment that you're selling them. By this point, you can start to see the secrets starting to leak out.

There's another one in 1986, the Libyans bomber Disco in Berlin used by American troops killing three people. And President Reagan in the aftermath, he's going to launch an attack on the Libyans. And he's going to make clear that they're very confident that the Libyans did it. And of course, the reason is because they're using crypto AG compromise to read the Libyan traffic. And he kind of says it in a kind of way which makes people think, well, maybe that's the case. And the Iranians, interestingly enough, are going to listen to that and think, hang on a second.

we're using Crypto AG as well. And then a big moment comes in 92. One of the company Crypto AG salesman is going to be in Iran and he's going to get detained by the regime. And it's possibly they're detaining him as a bargaining chip on other things. And he doesn't know about the deal. But they're going to interrogate him and ask him about Crypto AG being rigged. So they clearly by now are suspicious. After the Libyans, after everything that's happened, going to become a big case. And people in the CIA and B&D are freaking out about the fact this engineer has been detained. It's called the Hydra affair. There's lots of stuff going on. He's not whitting, though. No, he's not witting. It's so interesting because that's going to be part of the

problem because in the end, the Germans are going to pay, I think, a million dollars to get him out, a ransom. They try and get the CIA to pay up and they won't, it looks like. He gets out and then he's kind of angry and suspicious about something. And he starts doing all these interviews in which he's telling people in the interviews that the Iranians kept on asking him and interrogating about whether the company was rigging the equipment and was being used for espionage. And it kind of shows the dark side of this operation or the dangerous side for staff because an engineer or salesman like him is actually part of an espionage operation, traveling around the world to dangerous countries, but unwitting.

They don't know that they're actually working for a company owned by the CIA. And so these people are kind of being put at risk to some extent by not knowing that they're actually secretly, you know, engaged by the CIA. So it's interesting, the morality of that. But now the secret is starting to leak out. Journalists have been sniffing around the story. Back in the 80s, the historian James Bamford is writing a book on the NSA. He comes across references to the Boris Project in William Friedman's papers. And it's interesting because the NSA had tried to kind of scour Friedman's papers, basically to get hold.

of their letters, because they realize in their letters, all these references to understanding. But then in 1995, Scott Shane at the Baltimore Sun writes a story, and it's kind of partly because of the engineer and what's happened in Iran, using testimony, which says this is rigged. You know, he's basically exposing the deal. And the company says, ah, pure invention. It's nonsense. But actually, some countries stop buying it, but lots of other countries are still buying the kits. Still buying it.

Yeah. Still buying it. It's crazy, isn't it? It gets back to the point that quote from Friedman's autobiography, right? Where he says it's kind of like a lot of this comes down to how the user uses the stuff. And if you just stick your head in the sand, we do this all the time with our phones, right? I mean, it's just you understand that you have vulnerabilities. You take it for granted that if someone says it's a good.

Yeah, exactly. Or even you understand you have vulnerabilities and you're just sort of like, I can't do anything about it. You know, I don't want to do the mental lift to actually make myself more secure because I think that's absolutely right. I have to confront the insecurity. Because confronted the insecurity might mean buying a new phone or it might be installing a new app which looks really complicated and getting the settings right and checking what it is and being sure that's the right app.

I'll just keep using the current one. I completely think that's right. But then once you get to this point in the 90s, it's starting to unravel because the Germans want out. And it's interesting why they want out because I think they're worrying. about the risk to engineers, because they've got a lot of German engineers there. They're worried about it being exposed because you're having all these stories. Also, every intelligence service in Western Europe seems to know about this, right? I mean, the French know about it, the Dutch

know about it. The Germans are doing this with the CIA. But here's the problem, of course, for the Germans. They also know that the Americans are using it to spy on people like the Spanish and the Italians, you know, on their neighbors, who they're supposed to be friends with in the EU, in the European Union. For the Germans, it's kind of awkward, isn't it? Because you're part of an intelligence operation with the Americans who you occasionally dismisses those people over there. But you know that the Americans are using it to spy on the people you're now allied with in the European Union. And they're kind of worried this could get very messy for us diplomatically if it comes out. So they basically decide we want out.

And it's interesting because the CIA basically buy them out, I think, for $17.1 million. Almost a 4x return. There you go. Yeah, pretty good. Pretty good if you're the German. Yeah, not bad. Not bad. The Germans, I mean, they've been using it as a money-making operation anyway. So there you go. And of course, later, they'll discover that the Americans have been spying on them too. Snowden reveals that they're listening to Angela Merkel's cell phone and everything else. So I think they maybe shouldn't have been surprised. Why are the Germans so surprised? Why are they so surprised when they know what the Americans have been doing through crypto AG that they're being spied on? I agree. It just doesn't kind of make sense, does it? And you did a story on this too, Gordon, didn't you? I did. The illustrious list of journalists who have worked on Cryptoag includes none other than Gordon Carrera. I did 2015.

So many years later, I did a story on it based on a whole load of 52,000 declassified NSA documents that got revealed that year. But it was funny. Just a brief note on this. What you found was like often they would declassify a ton of documents about, it was often Friedman and Hagelin stuff, and they declassified different drafts of the same document, but obviously a different redactor had looked at the different documents, because in one, one sentence would be redacted. Another was a copy of the document in which another sentence

had been redacted, but the first one was there. And so you could piece them together and basically work out the story. And the story I did back in 2015 was about kind of NSA and GCHQ spying on the world. And it basically revealed the deal between Hagelin and Friedman. But, but, What I didn't know was the secret that the company had been bought by the CIA. So there was no clue then that the CIA were in on it. That was still very secret. What's really funny is I remember emailing the company and getting in contact with Cryptoag and asking them for comment at the time, which gave me a kind of anodyne press statement

or something like that. But it's kind of funny because I now know I was emailing a company which was still owned by the CIA at the time, you know, can you tell me about this past? But by the time you get to this point, Crypto AG as a company is in decline, partly because people aren't buying these machines anymore. You know, they're using phones and new devices. And so finally, in 2018, the CIA sells it off. It's interesting because they sell off the kind of the name and the company to some new owners

who have no idea. You know, they have no idea what they bought and the history of what they bought. And it's only going to get, you know, become public in 2020 when, as you said, you know, Greg Miller at the Washington Post and German TV reveals the kind of CIA B&D story. And the new owners of the company are like, what, what? We bought it from the CIA. It does raise some very interesting and I think at this point unanswerable questions, which are fascinating to me around when the sale was happening.

Who was on the other side of the table? You know, I mean, was it just a set of lawyers representing the ownership interest? Yeah, I'm guessing some Liechtenstein lawyer that maybe. maybe also had no idea that the CIA was involved. Yeah. So I guess at that point, you know, 2018, it sold off, 2020 news gets exposed. And at that point, the operation is finally over. But we're still kind of unraveling, I think, just how big it was.

And what the kind of consequences were of some of these operations and some of the knowledge that was gleaned from it. Because it's certainly, you're going for 60 years running comms for a large part of the world. It's wild, isn't it? I mean, it does, I guess, raise the question of whether it would be possible to do something like that again. I mean, is there a modern parallel to this that could be happening right now? There are some parallels in what came out in the Snowden papers where you realize that they were fiddling with the encryption. So I think there's some interesting stuff in Snowden where there were a couple of programs that NSA and GCHQ were doing, where it

looks very similar in which different types of encryption was being sold for export versus for use at home, and where you could imagine the kind of very similar way, but now in the electronic world, that the complexity of the encryption, the how breakable it was, was being manipulated, and again, the kind of instructions might be manipulated. So there are definitely parallels there. Although the relationship between big tech companies and governments is different. This was a small company that the US could own, wasn't it? But if the US government goes to Apple or to Google or someone, it's, those are bigger companies than governments, frankly. And you can see that, you know, the UK government gets into battles with Apple about encryption over some

of the same worries about having unreadable messages. I guess an equivalent would be if a new, you know, let's say a company in Liechtenstein or in Switzerland or in some kind of semi-neutral feeling place, a software company had developed, you know, a secure messaging app like Signal. And if that app were to spread around the world and get downloaded on everybody's phones and everyone, you know, huge numbers of people start using it. And if at the core of that company, the founder and CEO were actually working for the CIA and had provided the CIA with the ability to have some leg up in how you actually would decrypt them to be, that would be sort of a modern, I think equivalent to this,

because it makes the point around the massive quantity of encrypted communications that the agency, the NSA, Western partners were able to decrypt because they had this in with crypto AG. The quantity of this is so staggering. It's not like this was the key to the kingdom on Soviet plans and intentions during the Cold War, which would have been the absolute gold standard for human intelligence or any kind of signals intelligence. But it's providing a huge quantity of really helpful information about a lot of, you know, tier two or tier three targets that, I mean, still, you know, important to U.S. policy makers. So it feels to be like an equivalent today would be an app that everyone's got on their phone. Well, the CIA actually has a way to read those messages if they want to.

Well, the parallels come with the kind of questions about what tech you trust. Do you trust the kit that you're being sold? And it's why some governments have said they're nervous about Chinese technology. Do you buy Chinese telecoms technology? It was the big rail around Huawei. The company always denied that it was providing back towards the Chinese state. there was never any evidence of that. But, you know, that was the accusation, which was, well, if countries around the world

are buying Chinese kit and what if there is a way where, by their understanding of it, they could get into it. Remember in the UK going to a place where they kind of pulled apart the Chinese kit to look for any kind of backdoors and to check the code for any kind of back doors, looking for the possibility of what the fear was with Cryptoag, that there was some kind of secret way in. So you can still see there is this kind of issue of trust, technology. Now, they never found any there, but that was always the fear is that when you're

buying your telecoms kit, your phone, the software for your phone, any of those things, you know, and this is where it goes back to the Mossad Pager operation. Do you know who is behind a company? Can you trust the kit that you've got? Because most of us are not going to be able to kind of pull it apart and check the code and get into it. And there's a related point to that on the evergreen value of collaboration between a spy service and commercial entities, right? And that could be true for purposes of just cover, cover for a non-official cover officer, or like in this case, there's a fundamental piece to the crypto AG story,

which is if I'm the Libyans, if I'm the Saudis, from the Pakistanis, if I'm the Argentines, I'm not going to buy encryption equipment from the United States. I'm not going to buy from an American company because I'm going to assume that that company is collaborating in some way, shape, or form with American intelligence, right? But from a Swiss company with a bunch of German and Swiss engineers, you know, like... Switzerland. Yeah. Right. That's a different story. And to me, it shows the value in a spy service recruiting inside a commercial entity, like in this story, the CIA recruiting someone. in a third-party country that can sell into a hostile state. Like, that's a really valuable intelligence target,

and that was true in the 1950s with Crypto AG, and it's still true today. Well, thank you for listening. Just a reminder, you can join the Declassified Club, where you'll get plenty of things like bonus episodes, interviews, chance to kind of ask us questions. An entry into the NutFile? Entry into the NutFile. The Secret Squirrel, NutFile.

The growing nut file for scrolling, the growing nut file maintained by your intrepid co-hosts here. We do hope you join. And send us a message over whatever encrypted platform you trust. But otherwise, we'll see you next time. We'll see you next time. Hi there, it's David Olushooga from Journey Through Time. And here's that extract from our gunpowder plot series that I mentioned earlier. The person who's not rejoicing is Guy Fawkes in the tower.

King James himself came to the tower to question Fawkes. That's quite an astonishing fact that Fawkes and the King looked into each other's eyes at that moment. And of course, interrogations at this time. I mean, we say interrogations as if they're just being questioned, but interrogations are brutal, violent events. Yeah, and it's going to get much, much more violent. Forks stands up to the king in a way that actually even impresses the king. He's open that they plan to blow at Parliament.

He said that the aim had been to blow King James and the other Scots back to their Scottish mountains. He says that to the king. It takes guts. But it's also not the most diplomatic thing to say to the person you've just tried to murder who, and your fate is in his hands. Well, I think Forks knows what's going to happen. I mean, the king was impressed by his obstinacy, that he would not reveal the names of his co-conspirators.

that he was willing to insult the king to his face. And you have to say about Guy Fawkes, a man who'd been a soldier for 10 years, my God, he had guts. I mean, he is a bad man. He is a religious fanatic. He's not somebody I admire, but my God, he was brave. You can be brave and wrong. You can be brave and involved in things that are evil at the same time. And he was all of those things. But this willingness to stand up to the king that this is before the torture. If you want to hear more about gumpowder, treason and plot, listen to Journey Through Time, wherever you get your podcasts. Hello, history fans, it's Richard Osmond and Marina Hyde here from the Rest is Entertainment podcast. Now, if your group chats buzzing with celebrity traitors fan theories, Alan Carr Gifts, and Claudia Winkleman outfit inspiration, then our podcast is the place for you.

Every week, we've been reacting to new episodes of the biggest show of the year. after they air. And this Thursday's final will be no different. Join us for a live stream debrief at 10.15pm from the ultimate set of traitors fans, us. Just search the rest is entertainment on YouTube or wherever you get your podcasts. Big dogs only. Hello, I'm David Ullushogger. And I'm Sarah Churchwell. This week on Journey Through Time, we are exploring the story of the gunpowder plot of 1605, the story of how a small group of Catholics engaged in what would have been the most devastating terrorist attack in all of British history. The plan was ruthless, blow up Parliament, King James I, and most of his family, all in a single blow.

The series will tell the story of treason and traitors, of a group of men led by the charismatic Robert Catesby, who believed that the only option left to them to win their rights as Catholics with the violent destruction of the Stuart State. We look at the story of Guy Fawkes, the nation's most famous traitor, from his recruitment to becoming the plot's fall guy and ultimately being tortured and killed. Finally, we found out why this plot is still remembered now 400 years later. Listen to Journey Through Time wherever you get your podcasts.