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Edward Snowdon and the RSA receiving $10 million for a back door with NSA

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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



A National Security Agency (NSA) data gathering facility is seen in Bluffdale, about 25 miles (40 km) south of Salt Lake City, Utah, December 16, 2013. Jim Urquhart/

Credit: Reuters

Edward Snowdon and the RSA receiving $10 million for a back door with NSA

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.


RSA, the security division of EMC on Sunday "categorically" denied a recent Reuters report that claims it has worked with the National Security Agency to include a backdoor in its widely used encryption toolkit.

On Friday, Reuters reported that RSA had inked a "secret $10 million contract" with the NSA, under which the vendor would include intentionally flawed encryption as the default option in its Bsafe developer toolkit, to make it easier for the agency to conduct surveillance.

The NSA isn't saying anything about the report, but RSA says it isn't accurate.


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.

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.

RSA EVOLVES

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 request.

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 1999.

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.

(Reporting by Joseph Menn; Editing by Jonathan Weber and Grant McCool)


The New York Times broke news of the NSA's encryption back door in September, citing documents leaked by former NSA contractor Edward Snowden.
The same month, Reuters reported that RSA was supporting the NSA encryption scheme by default in Bsafe, and RSA issued a bulletin warning customers not to use it.

What's new is the allegation that RSA was paid for helping the NSA spy on its customers. If true, this could do further damage to a company whose reputation was already tarnished by its handling of a March 2011 attack on its SecurID two-factor authentication products.

Andrew Plato, president of Anitian Enterprise Security, a Beaverton, Ore.-based security consultancy, stated he thinks RSA's Bsafe denial sounds "weak and reactionary."

"If you parse the language of their denial, they do not actually deny putting in backdoors," Plato said. "They deny their relationship with the NSA was secret.

OK, so it wasn’t that secret, but what about those backdoors?"

The SecurID hack, which was later found to be a coordinated, targeted type of attack known as an Advanced Persistent Threat, was a disaster for RSA. Not only was it costly for RSA to remediate, it also gave hackers the world over a how-to guide on how to attack networks protected by SecurID authentication.

Indeed, in June of 2011, a series of high-profile attacks on Lockheed Martin (NYSE:LMT ), Northrop Grumman (NYSE:NOC ) and L3 Communications prompted RSA to replace some customers' SecurID tokens. RSA was criticized for taking more than two months after the initial attack to offer this option.

Damage from the SecurID attack is still being felt today. In July, Joe Stewart, director of malware research at Dell (NSDQ:Dell) SecureWorks, announced the SecureID attacks are connected to at least 64 active attacks on companies in the U.S., Europe and Asia.

RSA has clearly learned from the SecurID experience and appears to be doing everything it can to get ahead of the Bsafe issue. But just as the NSA scandal is causing U.S. citizens to question how they're being governed, some RSA developer customers are taking a closer look at the apps they've built using the Bsafe encryption toolkit.

"If the toolkit was used in the past, software developers should go check and make sure they change it," security expert Gary McGraw stated in September. "Businesses need to be aware of this and be asking more questions."

Could this have a long term impact on RSA's business?


Plato said his customers' opinion of RSA has been "gloomy" for a while now, and he thinks the Bsafe issue could make things worse. "This could just alienate RSA farther from the industry," he said.
RSA Denies Report That NSA Paid It $10 Million For Encryption Back Door
Adapted from a piece By Kevin McLaughlin of CRN