Encryption

Hagelin and Friedman: The Gentlemen’s Understanding Behind “The Intelligence Coup of the Century”

Reporting last week in The Washington Post and Germany’s ZDF public television channel mentioned a 1951 meeting between Crypto AG’s Boris Hagelin and American cryptographer William Friedman, the noted cryptanalyst who was acting as a representative of U.S. intelligence, at Washington D.C.’s Cosmos Club. This meeting reportedly built the foundation of a “gentlemen’s understanding” between Hagelin and the United States to control the company’s cryptographic devices. This agreement would ultimately lead to the joint CIA/BND purchase of Crypto AG upon Hagelin’s retirement in 1970.

Documents from William Friedman’s collection shed light on the years before Hagelin’s retirement and the level of cooperation between the two men. Discussions begin on the issue of surplus M-209 cryptographic devices, designed by Hagelin, in the aftermath of World War II (Documents 1, 5, 6). Both sides sought to control this surplus stock, U.S. intelligence agencies to restrict cryptographic capability to friendly nations, and Hagelin to avoid flooding his own market.