[cryptography] Exclusive: Secret contract tied NSA and security industry pioneer

Jeffrey Walton noloader at gmail.com
Fri Dec 20 17:56:36 EST 2013

(Thanks to PF on another list)


(Reuters) - As a key part of a campaign to embed encryption software
that it could crack into widely used computer products, the U.S.
National Security Agency arranged a secret $10 million contract with
RSA, one of the most influential firms in the computer security
industry, Reuters has learned.

Documents leaked by former NSA contractor Edward Snowden show that the
NSA created and promulgated a flawed formula for generating random
numbers to create a "back door" in encryption products, the New York
Times reported in September. Reuters later reported that RSA became
the most important distributor of that formula by rolling it into a
software tool called Bsafe that is used to enhance security in
personal computers and many other products.

Undisclosed until now was that RSA received $10 million in a deal that
set the NSA formula as the preferred, or default, method for number
generation in the BSafe software, according to two sources familiar
with the contract. Although that sum might seem paltry, it represented
more than a third of the revenue that the relevant division at RSA had
taken in during the entire previous year, securities filings show.

The earlier disclosures of RSA's entanglement with the NSA already had
shocked some in the close-knit world of computer security experts. The
company had a long history of championing privacy and security, and it
played a leading role in blocking a 1990s effort by the NSA to require
a special chip to enable spying on a wide range of computer and
communications products.

RSA, now a subsidiary of computer storage giant EMC Corp, urged
customers to stop using the NSA formula after the Snowden disclosures
revealed its weakness.

RSA and EMC declined to answer questions for this story, but RSA said
in a statement: "RSA always acts in the best interest of its customers
and under no circumstances does RSA design or enable any back doors in
our products. Decisions about the features and functionality of RSA
products are our own."

The NSA declined to comment.

The RSA deal shows one way the NSA carried out what Snowden's
documents describe as a key strategy for enhancing surveillance: the
systematic erosion of security tools. NSA documents released in recent
months called for using "commercial relationships" to advance that
goal, but did not name any security companies as collaborators.

The NSA came under attack this week in a landmark report from a White
House panel appointed to review U.S. surveillance policy. The panel
noted that "encryption is an essential basis for trust on the
Internet," and called for a halt to any NSA efforts to undermine it.

Most of the dozen current and former RSA employees interviewed said
that the company erred in agreeing to such a contract, and many cited
RSA's corporate evolution away from pure cryptography products as one
of the reasons it occurred.

But several said that RSA also was misled by government officials, who
portrayed the formula as a secure technological advance.

"They did not show their true hand," one person briefed on the deal
said of the NSA, asserting that government officials did not let on
that they knew how to break the encryption.


Started by MIT professors in the 1970s and led for years by ex-Marine
Jim Bidzos, RSA and its core algorithm were both named for the last
initials of the three founders, who revolutionized cryptography.
Little known to the public, RSA's encryption tools have been licensed
by most large technology companies, which in turn use them to protect
computers used by hundreds of millions of people.

At the core of RSA's products was a technology known as public key
cryptography. Instead of using the same key for encoding and then
decoding a message, there are two keys related to each other
mathematically. The first, publicly available key is used to encode a
message for someone, who then uses a second, private key to reveal it.

>From RSA's earliest days, the U.S. intelligence establishment worried
it would not be able to crack well-engineered public key cryptography.
Martin Hellman, a former Stanford researcher who led the team that
first invented the technique, said NSA experts tried to talk him and
others into believing that the keys did not have to be as large as
they planned.

The stakes rose when more technology companies adopted RSA's methods
and Internet use began to soar. The Clinton administration embraced
the Clipper Chip, envisioned as a mandatory component in phones and
computers to enable officials to overcome encryption with a warrant.

RSA led a fierce public campaign against the effort, distributing
posters with a foundering sailing ship and the words "Sink Clipper!"

A key argument against the chip was that overseas buyers would shun
U.S. technology products if they were ready-made for spying. Some
companies say that is just what has happened in the wake of the
Snowden disclosures.

The White House abandoned the Clipper Chip and instead relied on
export controls to prevent the best cryptography from crossing U.S.
borders. RSA once again rallied the industry, and it set up an
Australian division that could ship what it wanted.

"We became the tip of the spear, so to speak, in this fight against
government efforts," Bidzos recalled in an oral history.


RSA and others claimed victory when export restrictions relaxed.

But the NSA was determined to read what it wanted, and the quest
gained urgency after the September 11, 2001 attacks.

RSA, meanwhile, was changing. Bidzos stepped down as CEO in 1999 to
concentrate on VeriSign, a security certificate company that had been
spun out of RSA. The elite lab Bidzos had founded in Silicon Valley
moved east to Massachusetts, and many top engineers left the company,
several former employees said.

And the BSafe toolkit was becoming a much smaller part of the company.
By 2005, BSafe and other tools for developers brought in just $27.5
million of RSA's revenue, less than 9% of the $310 million total.

"When I joined there were 10 people in the labs, and we were fighting
the NSA," said Victor Chan, who rose to lead engineering and the
Australian operation before he left in 2005. "It became a very
different company later on."

By the first half of 2006, RSA was among the many technology companies
seeing the U.S. government as a partner against overseas hackers.

New RSA Chief Executive Art Coviello and his team still wanted to be
seen as part of the technological vanguard, former employees say, and
the NSA had just the right pitch. Coviello declined an interview

An algorithm called Dual Elliptic Curve, developed inside the agency,
was on the road to approval by the National Institutes of Standards
and Technology as one of four acceptable methods for generating random
numbers. NIST's blessing is required for many products sold to the
government and often sets a broader de facto standard.

RSA adopted the algorithm even before NIST approved it. The NSA then
cited the early use of Dual Elliptic Curve inside the government to
argue successfully for NIST approval, according to an official
familiar with the proceedings.

RSA's contract made Dual Elliptic Curve the default option for
producing random numbers in the RSA toolkit. No alarms were raised,
former employees said, because the deal was handled by business
leaders rather than pure technologists.

"The labs group had played a very intricate role at BSafe, and they
were basically gone," said labs veteran Michael Wenocur, who left in

Within a year, major questions were raised about Dual Elliptic Curve.
Cryptography authority Bruce Schneier wrote that the weaknesses in the
formula "can only be described as a back door."

After reports of the back door in September, RSA urged its customers
to stop using the Dual Elliptic Curve number generator.

But unlike the Clipper Chip fight two decades ago, the company is
saying little in public, and it declined to discuss how the NSA
entanglements have affected its relationships with customers.

The White House, meanwhile, says it will consider this week's panel
recommendation that any efforts to subvert cryptography be abandoned.

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