Overview
Operation RUBIKON was a joint CIA and West German BND intelligence operation, running from 1970 to 1993, in which the two agencies secretly owned and operated Crypto AG — a Swiss company that was the world’s premier manufacturer of encryption devices and cryptographic equipment. By controlling Crypto AG’s product line, the CIA and BND were able to read the supposedly secure diplomatic and military communications of more than 100 governments and intelligence services that purchased the company’s machines.
The operation was revealed in February 2020 when The Washington Post and German broadcasters ZDF and SRF simultaneously published reporting based on a classified CIA history of the programme, codenamed “The Intelligence Coup of the Century” internally, and a parallel BND internal assessment. Both documents had been obtained through sources with access to the classified files.
How It Worked
Crypto AG was founded in Switzerland in 1952 by Boris Hagelin, a Swedish cryptographer, and became the dominant global supplier of cipher machines — used by governments, militaries, and intelligence services that lacked the capacity to develop their own cryptographic systems. The CIA began influencing Crypto AG’s product designs informally as early as the 1950s.
In 1970, the CIA and BND formalised the arrangement by secretly purchasing Crypto AG through a series of shell companies. The acquisition cost approximately $5.75 million. The agencies then systematically engineered backdoors and cryptographic weaknesses into the machines sold to foreign customers — while selling more robust, uncompromised equipment to NATO allies and friendly governments. Countries that received the weakened machines included Iran, Iraq, Libya, Saudi Arabia, Argentina, India, Pakistan, Indonesia, and numerous others.
The CIA’s internal history stated: “Foreign governments were paying good money to the U.S. and West Germany for the privilege of having their most secret communications read by at least two (and possibly as many as five or six) foreign countries.”
Intelligence Harvest
The operation produced a stream of intelligence that shaped major Cold War events. During the 1979 Iranian hostage crisis, US officials read Iranian internal communications. During the Falklands War, the US read Argentine military communications and shared some intelligence with Britain. When Libyan agents bombed a Berlin discotheque in 1986 killing US servicemen, the US intercepted Libyan communications confirming responsibility — intelligence used to justify airstrikes on Tripoli and Benghazi. The Vatican’s communications were also intercepted.
End of the Operation
The BND withdrew from the operation in 1993, partly due to concerns about legal exposure and partly because of changing priorities after German reunification. The CIA continued its involvement through a successor arrangement. Crypto AG was eventually split into two companies in 2018 — one of which was subsequently revealed to have CIA ownership. Swiss authorities opened a criminal investigation into the company in 2020. The Swiss government’s own subsequent investigation confirmed the historical facts but found that Switzerland itself had been “instrumentalised” rather than complicit.