Early Battles

[norm@netcom.com (Norman Hardy)]

I remember hearing an anecdote from a fairly private but unclassified
source. According to this source NSA was incensed when IBM first developed
Lucifer for banking applications, especially because they published
details in a Scientific American article. NSA accused IBM of stealing
secrets from NSA thru IBM employees having access to NSA technology as
part of their jobs developing hardware and software for NSA. IBM was of
course prepared for this eventuality. They quoted an early paper by Shannon 
suggesting that a mixture of transpositions and permutations would likely 
produce strong ciphers. This is, of course, the heart of both Lucifer and DES.
NSA backed off.