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

Documents leaked by the 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 $10m 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, which is now a subsidiary of the computer storage giant EMC Corp , urged customers to stop using the NSA formula after the Snowden disclosures revealed its weakness. [Continue reading…]