COLLINS RADIO
Agency: CIA
Originator: CIA
Document date: 1/1/77
Document type: PAPER - TEXTUAL DOCUMENT

## Page 1

JFK Assassination System

Identification Form

Date:

6/14/201

Agency Information

AGENCY: CIA

RECORD NUMBER: 104-10107-10191

RECORD SERIES: JFK

AGENCY FILE NUMBER :

80T01357A

Released under the John

F. Kennedy

Assassination Recorde

Collection Act of 1992

144 USC 2107 Notel.

Case#:NW 53216 Date:

06-14-2017

Document Information

ORIGINATOR :

CIA

FROM:

TO :

TITLE:

COLLINS RADIO

DATE:

01/01/1977

PAGES:

21

SUBJECTS :

NBR

DOCUMENT TYPE :

PAPER - TEXTUAL DOCUMENT

CLASSIFICATION: Not Marked

RESTRICTIONS : Open in Full

CURRENT STATUS:

Release

DATE OF LAST REVIEW: 06/14/2017

OPENING CRITERIA :

COMMENTS:

JFK38: F24: 1998.08.04.11:49:29:123081 : NOT BELIEVED RELEVANT (NBR) THERE ARE 4

DOCUMENTS; THEY WERE DECLARED "'NBR" BY THE ARRB, IN ACCORDANCE WITH

THE ARRB MEMO DATED 8 OCTOBER 1997.

y9.1

14 53216

DooId:32358065

Page 1

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Die. MAR 1 0 1876

!!"

KEiN

NAR 100.00

GA 42

ETCERAND

To Role Lovis

Vice Presidoni, Achinistration

LIV Electrosysüens, Inc.

P.C. Box 6113

Dallas, Texas 75222

Dear Mr. Lewis:

This is in reply to your requesi for ruling datod Deccmber 25,

1970, whother the valne of the bachelor quarters supplied to your

employces undor tho circunstances you presoni must be consideico

incomo for tir parposes.

The periinont facts sumitied arc as follows:

LTV Electrosyotees, Inco is a subcontractor wider a prime conüract

with the vos, Corcrent and has approxinataly sorenly-five (75)

employees versing at a joint Unitca States and Australien installation

in susuralia.

2, 000 miles fron the ncaresü ciuy of any sirc.

The largest told

nearer tu the installation is Alice Springs, which has a population of

approxinatoly 9,000. Alico Springs is 15 miles fron the insinlation

and is the only toin rithin commuting distance.

Because ine installation operates on a 2li-hous basis, the U.s.

Goreranent roquires all prino contractions and their subcontractors'

employces do bo availaule for daly aù any time and that employces livo

In quartors assigned to them by the U.S. Goverzont

Rechelors are

assigned ruans in joa's on the installation and nerriod cuployees are

assigned specific houses in Alice Springs. Ine necd for inodiaie

availability of all enplojoes is suci that all quarters, incliding

those for narriod caplojaes, woulu be on the base cxcopt cat securius

regulations do not pounü farily rembero to live on the insiallerior.

It is a condition of caploons that coployees live in the quarters

assigncd to then.

They are given no choice in selection of the quarters,

may noù clocü i cash allorence in lieu of quarters, and are noù alloucá

to lease, purchase or build houses or apartments on their oun.

scotion 6l of the Intorna). Revenue Cods provides thei, unless

othernise cauluded by lau, tress incore veins all incone fion whatever

sourio deriver, including compensation for serices.

NW 53216 DocId: 32358065 Page 2

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nix. RoL. Lewis

Section 119 of the Code provides, in pertinent part, that there

shall be excluded from gross income of an eaplojec the value of any

lodging furnished to hia by his emplojer for the convenience of the

amployer, out only if the emloyce is requiied to accopt such lodging

on tac vusiness prenises of his eployer as a condicion of his capioy-

mente

Scotion 1.119-1íb) of the Income Tax Regulations provides that tho

valuc of lodging furnished to an emplojee by tho caplojer shall so ax-

cluded from ihe employee's gross incouc if these tosüs are net:

2.. The lodging is furnished on the business premises of the

employer,

2. The lodging is surniaica for the convenience of tho

emploger, and

The emplojoe is requirca to accepü such lodging as a

concition of his enplomont.

Based sojoly on the represcitations mado, no conclude that those

three leats are met..

Compare Hyample (7) of scotion 1.11)-1(d) of the

Regulations.

Therofore, the value of the louging furnished to your

employces cither in the installation barracks or in the city houses

1s excludible fron the gross incone of such employces.

Sinceroly yours,

Chief, Corporation Taz Branch

IN 53216 DOCId:32358065 Page 3

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Cancroub Robondo Corrioo

TRAR 1 D 1971

2:2.0:3:1

Collins dadio Company

Dillüs, Toies . 75207

Dean lãio Cociran:

Line is in copiy do your raguest lor ruling dated januasy 22,

2972, Metace do calus of the bacholor quarvers supplion do vour

empireos mader sho cancunaiances you presont must ue consiuured

incong dos te purpeses.

Deo pescincas dacuo cuorittod are au follois:

Vador a coraraco oceroce mis company and uno Vadica Strios

Coveraono, Luro ü.5, Caricon emplogees of this company wori cuil tic

on a joint insuraliar-unaved Staües Gorerrot insualiauion in Mistralia.

mo nearesi caty oi any sile, cicopi 10r mico springo, Nden das &

populazion di abrozamatoly 2,000.

Mico Springo is 1y miles Ion tre

Decnaco cu: incialiation operatos on a 24-a0ud Dicid and Cose

caplogeco mot oc amdicolo for duüg at any tie, it is neoecoory wit

arailabiliv au cli employcea is such that idl quartoro, includine

cosa duo muraioù caplogeos, noulo do on tho baso acopt diat oecuiaiy

cogularios; do not aciniù fimily menboro of te company's englogcer to

Tiro on che insulationo il io a conciuion of emplosmont bire enpleguos

Livo ii une quartaro assimed to ühem. inoy aro divea no choico in

sulcotion di cartero, may noù olect à casa allonaco in lica di cuoricio,

and aro nuo allurea do icace, purenaco or build noudos or apartito on

thei: 0.a.

Suction di 0ù eno Intoraul Revenuo Codo provices Chiu,, 101:06

cancriso mediand oy lan, coss ircone neans all incons lion natoror

3OLFCO Guriica, Licluding compensation for services.

NH: 53216 DooId:32358065

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•• Ciclaus

Sconion 129 ai ine Cods provicos, in pertinent pare, chat chers

ciato do conded zon groso incoro of an chplojeo die vallo di ing

Jodging duraichod do hin by bis anloyer for tro contentoreo et on?

angiogo, due solo dá doo mojeo is regulaca do accopt cuch a0dgi

on tu susices piasto oi his analogor au a condacion oi hi. cudo!

Manto

Socion 119-100) cộ tne Incono Pai Regulations Drovadeo Gioi Mo

value of iodging turnished tu in caploger by tre ungoger shudi de eu

cluded fron to agiogeus buss incono in threo desis aro met:

io. Iso dodging is dumashed on the business provisoo of

йоз зародої,

?.

Ino Loaging is funished ior the convenienco of tho

angioyoi, arc

the ongiloyoe is roquired do accopt such loaging is

a condicio. oi his inpiogrent.

Basca soluly oil tho ropreceniations mado, no conclude dual lucio

ünreo tosts are mes. Conpure manplo (7) of section 1.119-lía) di wi:

Regulations. Mieiciore, tno valuo of the lodging fumishca io jour

employees einior in tre installation barracks or in the city auudos

is excludablo tion we gross icone of such employces.

Sincoraly jouis,

Chiof, Corporation Tax Bruch

WH 53216

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OGC 71-0143

OGC Subj: FEDERAL TAXEU

Dallas, Texas 75207

Area Code 214 235.9511

Cable: COLINRAD DA

January 22, 1971

Commissioner of Internal Revenue

Attention: Mr. Erskine H. Hatfield

washington, D. G. 20224

Dear Mr. Hatfield:

1.

Under a contract between this company and the United States

Government, five U.S. citizen employees of this company work full time

on a joint Australian-United States Government installation in Australia..

The installation is in a remote location approximately 1,000 miles from

the nearest city of any size, except for Alice Springs, which has a popu-

lation of approximately 9,000. Alice Springs is 15 miles from the instal-

lation and is the only town within commuting distance.

Because the installation operates on a 24-hour basis and these

employees must be available for duty at any time, it is necessary that

they live in quarters assigned to them by the U. S. Government.

Bachelors

are assigned rooms in BOQ's on the installation and married employees are

assigned specific houses in Alice Springs.

The need for immediate avail-

ability of all employees is such that all quarters, including those for

married employees, would be on the base except that security regulations

do not permit family members uf the company's employees to live on the

installation. It is a condition of employment that employees live in the

quarters assigned to them. They are given no choice in selection of

quarters, may not elect a cash allowance in lieu of quarters, and are not

allowed to lease, purchase or build houses or apartments on

their own.

The installation is a joint Australian-United States facility.

The bachelor quarters were constructed by the United States Government

and the houses by the Australian Government for occupancy by both American

and Australian employees.

Bachelor quarters on the base and the houses in

Alice Springs are rent free to the company's American employees, utilities

and furnishings included. In accordance with Australian Government policy,

the company's Australian employees are charged $A17.50 per week for the

houses including furnishings and utilities, which houses are comparable to

those supplied rent free to American

employees. Similar houses in

rent for about $A35.00 per week not including furnishings and utilities.

We are advised that the Australian Government subsidy to Australians of

about one-half of the rental value, like the U. S. Government's provision

of free housing, is paid in recognition of the housing shortage and the

requirement to live in assigned housing. It is our understanding that the

HH 53216 DocId:32358065 Page 6

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COLLINS BADIO COMPAN

Mr. Hatfield

2

January 22, 1971

Australian Tax Department does not require Australian employees to report

as income the difference between the value of quarters and the rent paid,

although Australian income tax law provides that the value of lodging

supplied by an employer is taxable income.

We request your ruling as to whether the value of the bachelor

quarters on base or houses in town supplied to our American employees

under these circumstances must be considered income for tax purposes.

We understand that the Australian Government has advised that for purposes

of Australian taxation of American employees, it would treat the value of

the quarters in the same manner as the United States Internal Revenue

Service does.

If your tentative ruling is that the value of quarters is tax-

able income, we request a conference prior to the issuance of the final

ruling.

Yours very truly,

W. P. Cochran

Manager, Tax Department

WPC: 1m

CC:

Morrison, ur.

E. C. Christerson

IN 53216 DocId: 32358065 Page :7

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age 10.666-3

BIF-004-07-1482

COPY

TOTAL PAGES 002

5 Jaruúr, 19.71

Commissioner of Internal Revenue

Attn: Mr. Erskine H. Hatfield

Wasnington, o. C. 20224

This Company is a subcontractor under a prime contract with the

United States Government and has about thirty-seven enployees of the

Company working on a Joint Australian/U.S. Government installation in

Australia.

The instaliation is in a remote location approximately

1,000 miles from the nearest city of any size.

The largest town nearer

to the installation is Alice Springs, which has a population of approxi-

mately 9,000. Alice Springs is 15 miles from the installation and is

only town within connuting distance.

2.

Because the installation operates on a 24-hour basis and employees

must be available for duty at any time, the Company's contract requires

that employees live in quarters assigned to them by the U.S. Goverrment.

Bachelors are assigned roans in BOR's on the installation and married

employees are assigned specific houses in Alice Springs.. The need for

imediate availability of all employees is such that all quarters includ-

ing

those for married employees, would be on the base except tiat security

regulations do not permit family members to live on the installation.

It

is a condition of enployment that employees live in the quarters assigned.

to then.

They are given no choice in selection of the quarters, may not

elect a cash allowance in lieu of quarters, and are not allowed to lease,

purchase or build houses or apartments on their own.

3. The installation is a joint U.S.-Australian facility. The bacheior

quarters were constructed by the U.S. Goverrment and the houses by the

Australian Government, for occupancy by both American and Australian

enployees. Bacielor quarters on the base are rent free to both Australian

and Aerican enployees and the houses are rent free to American enployees,

in accorciance with Australiar Government policy Australian employees are

charged rent of $17.50 per week for the houses. Similar nouses in the

town rent for about $35 per week. The Australian Government subsidy to

Australians of about one-half the rental value, like the U.S. Goverrmert's

provision of free nousing, is paid in recognition of the housing shortage

and the requirement to live in assigned nousing. The Australian

tax

department does not require Australian employees to report as income the

difference between the value of quarters and the rent paid, although

Australian income tax law provides that the value of lodging supplied

by an employer is taxable income.

HH 53216

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BIF-004-07-1482

- 2 -

4. He request your ruling as to whether the value of the bachelor

quarters on base or houses in town supplied to our employees under

these circumstances must be considered income for tax purposes. The

Australian Goverrment has advised that for purposes of Australian taxa-

tion of American employees, it will treat the value of the quarters in

the, same manner as the United States Internal Revenue Service does.

5. If the tentative ruling is that the value of quarters is taxable,

we respectfully request a conference prior to issuance of a final ruling.

Very truly yours

Robert B. Corpening

General Counsel

TRW Systens Group

HN. 53216

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ELECTROSYE

EMS. INC.

GARLAND DIVISION

P. Q. 80x 6118

DALLAS TEXAS IS222 T

AREA CODE 8Id

BRO:OWAY 6.8011

15 December 1970

4-60000W/0L-58

Commissioner of Internal Revenue

Washington, D. C.

20224

Attn:

Mr. Erskine H. Hatfield

Subj: : Request for Ruling

Gentlemen:

LIV Electrosystems, Inc. Is a subcontractor under a prime contract with

the U. S. Government and has approximately se enty-five (75) employees

working at a joint United States and Australian Installation in Australia.

The installation is in a remote location approximately 1,000 miles from

the nearest city of any size. The largest town nearer to the installation

is Alice Springs, which has a population of approximately 9,000.

Alice

Springs is 15 miles from the installation and is the only town within

commuting distance.

Because the Installation operates on a 24-hour basis, the U. S. Government

requires all prime contractors and their subcontractors' employees to be

available. for duty at any time and that employees live in quarters assigned

to them by the U. S. Government.

Bachelors are assigned rooms in BOO's on

the installation and married employees are assigned specific houses in

Alice Springs.

The need for immediate availability of all employees 1s

such that all quarters, including those for married employecs, would be on

the base except that security regulations do not permit family members to

live on the installation. It is a condition of employment that employees

live in the quarters assigned to them.

They are given no choice. in

selection of the quarters, may not elect a cash allowance in lieu of

quarters, and are not allowed to lease, purchase or build houses or apart-

ments on their own.

The Installation is a joint U.S. - Australian facility. The bachelor

quarters were constructed by the U. S. Government and the houses by the

Australian Government, for occupancy by both American and Australian

employees. Bachelor quarters on the base are rent free to both Australian

and American employees and the houses are rent free to American employces.

In accordance with Australian Government policy Australian employees are

charged rent of $17.50 per week for the houses. Similar houses in the town

rent for about $35 per week. The Australian Government subsidy to Australians

of about one-half the rental value, like the U. S. Government's provision of

free housing, is paid in recognition of the housing shortage and the require-

ment to live in assigned housing. The Australian tax department does not

WW 53216 Doctd: 32358065

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4-60000W/0L-58

15 December 1970

require Australian employees to report as income the difference between the

value of quarters and the rent paid, although Australian income tax law

provides that the value of lodging supplied by an employer is taxable income.

We request your ruling as to whether the value of the bachelor quarters on

base or houses in town supplied to our employees under these circumstances

must be considered income for tax purposes.. The Australian Government has

advised that for purposes of Australian taxation of American employces, it

will treat the value of the quarters in the same manner as the United States

Internal Revenue Service does.

If your tentative ruling is that the value of quarters is taxable income,

we request a conference prior to issuance of a final ruling.

Very truly yours,

R. L. Lewis

Vice President, Administration

RLL/ 88

NW 53216 Docid: 32358065

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Department of the Treasury

Internal Revenue Sorvice

Washington, DC 20224

Date:

In reply reler to:

Degcaber 29, 1970

T:I: C

Mr. No lo Leirls

LTV Flecirnayatcas, Inc.

P. 0. Box 6118

Dallas, Texas

*75222

Dear fir. Levio:

This is to let you know that we have recelved your inquiry olDeceaber 15, 1970.

We will send you a reply as soon as possible.

Very truly yours,

schwackhardt

FICE

JANO 1 RECDS

chief, corporadon Taf Branch (e)

FORM 37MA (REV. 8-67)

Dave

this is my G4-53

at spelling:

RDY.

• 1H. 53216

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## Page 13

Javi SonviEN 538-1817

diqued la

TRu request detep

1/5 + COLLINS 17ZZ

adrised Hatfiele!

4/1c. He will Gleick

then tđ tìn all the

3141 tatfield aduiser

Jame cely sent to alp

fullito

NOTE ATTACHED TO OGC 71-0143.

HH 53216 DocId:32358065 Page 13*1

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## Page 14

SECRET

C 76-0032

3 January 1977

MEMORANDUM FOR THE RECORD

FROM:

SUBJECT:

Andrew J. Percival

Assistant General Counsel

Project SPACE Funding

At 4 p.m., 9 December 1976, the General Counsel informed the

undersigned that he was reviewing the legality of the funding for

project SPACE with the profits from TOMINERVA. Project SPACE

proprietary TOSHIELD is currently negotiating a contract with Collins

Radio involving $222,500.00. This sum is derived from the profits of

TOMINERVA. In view of the reconsideration of the legality of the funding

it was determined that the most prudent course of action would be to

delay implementation of the Collins contract until a final legal deter-

mination has been made. DC/Div D/SPB was immediately informed that

the contract with Collins Radio should not be concluded until a legal

decision has been reached on the funding. He was advised to take the

steps that he deems necessary to implement this decision. The General

Counsel states that his review will be concluded by approximately

15 December 1976.

cc: Mr. Paul Risen

AJP:kas

Distribution:

Original - SPACE

1 - Chrono

255774

122 were, ni

SECRET

HH 53216

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SECRET

13 September 1977

MEMORANDUM FOR: Mr. Anthony E. Goldin

Assistant General Counsel (DDO)

FROM

SUBJECT

REFERENCE

:

Joyce R. Herrmann

Chief of Operations, NE Division

Use of Communication Information Obtained

From U.S. Firms for use Against

Foreign

Targets

: Your Memorandum to C/NE/TOS Concerning

Collins Radio Company Activities in Morocco

dated 16 August 1977

1..

This memorandum which grows out of the conversation

we had in your office on 8 September 1977 in which Mr. Michael

Prompovitch (C/NE/TOS) participated, will serve to update the

information on which your memorandum of 16 August 1977 is

based and to correct any earlier misconceptions.

2. Over

the past year Mr. Prompovitch has collected

technical information on various sensitive communications

systems in numerous Middle East and North African countries

from U.S. commercial company personnel with whom he has been

in contact because of his duties. Because of

the good personal

We plan to use this foreign intelligence to penetrate selected

communications targets abroad.

3.

Appearing below is a list of the companies and the

officers from whom Mr. Prompovitch obtained the information,

and the countries where we hope to mount operations:

E2 IMPDET

CL BY

054979

:063

SECRET

oge tul: CIA Ccti4 Statute - £,0.11965

HH 53216 DocId:32358065 Page 15

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## Page 16

SECR

ET

Company

Motorola Radio Corporation

Chicago, Illinois

Collins Radio Company

Dallas, Texas

Datotek Corporation

Dallas, Texas

Telcom

Corporation

Tysons Corner, Virginia

Officer

Vice President in

Charge of Marketing

for Middle East

Vice President in

Charge of Marketing

for Africa

Manager of Special

Projects Division

President of Dato-

tek Corporation

Executive Vice Pres-

ident in Charge of

Domestic Sales

Marketing Agent for

Domestic Sales

Country

MOrOCCO

Algeria

Egypt

Abu Dhabi

Syria

Egypt

Morocco

Egypt

Saudi Arabia

Jordan

Uganda

Egypt.

Various Arab

States

Stromberg

; Carlson Corporation

Syracuse,

New York

4.. In every case the corporate officer knew that Mr. Prom-

povitch was a CIA officer and

a specialist in communications

and realized that the information he was passing to Mr. Prompo-

vitch would be put to further use by the U.S. Government.

In

every case the information was

given freely to Mr. Prompovitch;

no rewards of any kind were

given for the documents received

from these companies.

5. We are attaching a determination by C/NE that the

information obtained by Mr. Prompovitch constitutes foreign

intelligence pertaining to the communications systems used by

foreign powers and as such can be used by us or by nsA over-

seas.

It is our intention

to obtain similar information by

similar means from other U.S. commercial companies for further

operational use overseas.

6. The Central Cover Staff (Mr. Joel Keys C/CCS/CC) has

been informed of the above.

Joyce R. Herrmani

Attachment

CC :

CCS

L

SE

€ R

HH 53216. DocId: 32358065 Page 16

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SECRET

SUBJECT:

DETERMINATION THAT CERTAIN INFORMATION

CONSTITUTES FOREIGN INTELLIGENCE

I am aware of the contents of the documents

obtained by Mr. Michael Prompovitch from the various

U.S. commercial firms listed in the accompanying

memorandum and have determined that this information

constitutes

foreign intelligence as defined in Section

5(a) (5) of Executive Order 11905.

SIGNED:

Hansafe

C/NE

DATE:

18/9/77

E2 IMPDET

CL BY 056109

SECRET

14 53216 DocId: 32358065

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## Page 18

JECTe

09677-5926

16 August 1977

MEMORANDUM FOR: C/NE/TOS

ATTENTION

FROM

:Mi. Michael R. Prompovitch

Anthony E. Goldin

Assistant

General Counsel (DDO)

SUBJECT

Memorandum of 25 July 1977 Concerning

Collins Radio Company Activities in Morocco

1. This memorandum is in response to your question as

to whether the Subject documents can be disseminated to

the National Security Agency (NSA) .

2.

It is

understood that an acquaintance of yours,

employed by Collins Radio, gave the Subject documents to

you without your asking him for them and without your either

offering to pay or paying him for his voluntary act. It is

also understood that your acquaintance is witting of your

CIA employment.

The Subject documents are: (1) a Collins

proposal, already presented to the Government of Morocco

(GOM), for a high frequency communications system;

and, (2) an internal Collins memorandum proposing

a Collins

response to a GOM request for a foreign broadcast monitoring

system.

Collins did not specifically authorize its employee

to pass Subject documents to this Agency and is not aware

that they have been given to us.

CIA From

3. Section 5(b) (7) of Executive Order 11905 prohibits

CIA from the collection of information, however acquired,

concerning

the domestic activities of United States (U.S.)

persons.

"Collection" is defined at Section

• 5(a) (1) to

mean

any one or more of the gathering, analyzing,.

disseminating

ind storing of non-publicly available information without

the informed express

consent of the

subject of the information.

A U.S. person is defined

at Section

5(b) (9) to be a U.S.

citizen, a permanent resident alien or

a corporation or

organization incorporated or organized in the U.S.

4.

Based upon the above

facts,

I see no issue of

legality or propriety in your having received these documents

HH 53216 Do0Id:32358065 Page 18

E2 IMPDET

CL BY 198950

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## Page 19

SECRET

- 2 -

from the Collins employee. This is an example of what is

referred to as the "silver platter" doctrine - you did nothing

to solicit,

encourage or reward the Collins employee; you did

not intentionally or purposefully "gather" the documents.

5. CIA cannot, however, disseminate the documents, which

apparently constitute non-publicly available intormation,

unless authorized by Executive Order 11905.

Section 5(b) (b)(7)(1)

of the Order is an exception to the Section 5(b)(7) restriction,

and it authorizes us to "collect" information concerning

corporations which constitutes foreign intelligence or counter-

intelligence.

Foreign intelligence is defined at Section 5(a) (5)

to mean information concerning the capabilities, intentions

activities of any foreign power, or of any

non-u.s. person,

whether within or outside the u.s.,

or concerning

areas outside

he U.S. It is as much a substantive decision as it is a

legal determination whether these documents constitute foreign

intelligence.

6.

recommend that

a decision whether the documents

constitute foreign intelligence be made by Chief, Near East

Division (C/NE), or another,

appropriate senior officer in NE

Division.

I think C/NE could properly determine that they

constitute foreign intelligence based upon my understanding

that they describe the communications system a foreign power

is acquiring or seeks to acquire.

I am not, however, "au

courant" in the fine points of such matters. . If C/NE determines

the documents constitute- foreign

intelligence, I believe

it

would be prudent to delete the names of the U.S. persons

mentioned

in document (2) (described above) before sending it

tO NSA.

stallin

53216

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Tor

HANDLE VIA COMINT CHANNELS

MEMORANDUM FOR THE RECORD

SC 03537-77

Copy 1 of 2

8 April 1977

FROM:

Andrew J. Percival

Assistant General Counsel

SUBJECT:

TOTIGER - Collins Arrangement and a New Era in

Cipher Equipment Control

1. The prospective arrangement between the Collins Division of

Rockwell International and TOTIGER, a European manufacturer of cipher

machines, is nearer conclusion. TOTIGER has in the past and is presently

producing cipher machines that NSA finds defiant of analysis. D/DS&T/OSO

has tentatively devised a method of dealing with the problem that is

satisfactory to TOTIGER, NSA, Collins and OSO.

2. OSO has introduced TOTIGER management to representatives of

Collins and its parent Rockwell with a view of fostering a commercial arrange-

ment. It is hoped that TOTIGER will purchase from Collins micro-processor

designs for its new lines of equipment and eventually for all its equipment.

A micro-processor is a solid state mini-computer which is the heart of many

modern cipher devices. Collins would also manufacture and sell the micro-

processors to ICTIGER. The fact that the micro-processors are manufactured

in the United States guarantees that the level of cryptology is acceptable to

NSA. Any such devices exported from the United States must have a license

from the Office of Munitions Control. That license is contingent upon NSA

approval of the cryptology. This fact is known by those in the cipher machine

trade and would seem self-defeating. NSA states, however, that the level of

cryptology that is acceptable to them for export is of such a high level (as

high as 10?0) that expert mathematicians who are not aware of NSA's capabilities

are at loss to understand how useful and timely analysis may be accomplished.

It is true that this applies only to determinate systems. The most secure of

systems, random generated key, is not susceptible to analysis except in cases

of error in usage. Random key is not conducive in practice to volume traffic

and is a logistics problem. Most users have opted for determinate systems of

sophisticated cryptologic algorithm.

3. Collins, one of the worlds largest producers of telecommunications systems,

has no cipher equipment of its own manufacture. Collins is interested in offering

complete equipment packages to its customers including cipher devices. An

arrangement may be reached between Collins and TOTIGER to include the

latter's equipment in Collins systems packages. This will work to the benefit

of United States SIGINT collection efforts.

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4. Should TOTIGER find the price of Collins micro-processors to be

too high based on the small volume of units required, several methods of

fostering the relationship have been proposed. One method would be a

classified contract between NSA and Collins for additional identical micro-

processor units to be delivered to NSA thus effectively raising the volume

and reducing the unit cost to TOTIGER. This contract would be entirely

separate and without reference to TOTIGER. NSA would be purchasing the

units for its own undisclosed classified purposes as it does with other contracters.

Another method would be a direct subsidy to TOTIGER through a CIA funding

mechanism. Other methods may suggest themselves as discussions progress

and the arrangements made between Collins and TOTIGER. come into sharper

focus.

5.. The governments of West Germany and Great Britian are aware on a

classified basis that arrangements are in progress to eliminate TOTIGER as a

SIGINT problem. The government of Switzerland is peripherally aware that

CIA is dealing with TOTIGER and Collins and has interposed no objection.

Indeed, for reasons that are unclear, the Swiss have encouraged the relation-

ship.

6. With the addition of TOTIGER to the stable of the TOARIEL and the

TOMINERVA operations as well as the inherent constraints on U.S. produced

equipment through the Office of Munitions Control, the large majority of cipher

equipment available in the market place to all but a few world powers will be

susceptible to analysis and intelligence collection efforts.

7. A NSA representative has informally stated to the undersigned that these

three projects will account for 90% of the intelligence "take" from diplomatic

third world communications. That "take" is estimated at 90,000,000 words

annually.

8. D/DS&T/OSO/SPB has stated that they will make every effort to keep

this Office informed of developments on a current basis.

Andes TRan

cc: C/DDS&T/OSO/SPB

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