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' connection?
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."
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