The NSA Had A Secret Deal With A Highly Influential Computer Security Firm

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."

STORIED HISTORY
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.