On a side note, there was a workaround found for the backdoor: since it was using DH key agreement without digital signatures, both sides could use proxies that each generated a secret w, raised the outgoing DH public key to the power of w, and raised the incoming DH public key to the same power w. Alice's public key is g^x, where x is known to the government but is otherwise locked away deep in tamper-resistant hardware in the Clipper chip. Alice's proxy raises her (g^x)^w mod p = g^(xw) mod p before it hits the wire. Likewise, Bob's proxy raises (g^y)^v mod p = g^(y v) mod p. Alice's proxy raises Bob's seen public key to her secret exponent g^(y * v)^w mod p = g^(y * v * w) mod p before sending it to her clipper chip, and the tamper-resistant hardware calculates g^(y * v * w) ^ x mod p = g^(x * y * w * v) mod p. Bob's clipper chip likewise is given 9^(x * w)^v mod p and calculates g^(x * w)^v^y mod p = g^(x * y * w * v) mod p. Both chips calculate the same shared secret Skipkack key to encrypt the keystream. A government wiretapper knows x and y and sees g^(xw) and g^(yv), but can't calculate g^(xywv) unless they can compute discrete logarithms mod p. As a bonus, they'd get perfect forward secrecy whereas fixed DH public keys don't provide forward secrecy.

Authentication worked by the phone displaying a hash of the session key, and the two users were expected to read the key hash to each other and recognize each other's voices. If they were being MitM'd, they wouldn't have identical session keys. Alice and Bob's authentication procedure would then still work just fine, since they'd still have identical session keys.

If the government were wiretapping Alice, they'd of course detect the tampering because they'd be getting garbage data/failed checksums, but otherwise, the tampering would be undetectable, and Alice and Bob get hardware-accelerated 80-bit Skipjack encryption of their data stream, back when 56-bit DES was generally considered reasonably safe and 80-bit symmetric keys were considered sufficient for data classified SECRET and below.

(Or maybe the tampering could be detected when the wiretappers went to look up Alice's fixed DH public key and couldn't find it in their escrow database... I forget if the escrow worked by having a database or if the chip encrypted the DH secret key with a master key and transmitted it at the start of every session. In any case, the whole thing wasn't that well thought out. It's also possible the DH exchange was signed using a malleable signature scheme using the same prime as DH, allowing Alice to raise the DH public key to a known-only-to-Alice power and calculate the power needed to raise the signature in order to still get a valid signature on the modified DH public key. Clearly, I forget the exact details.)