Reagan Decides to Raze Bugged Moscow Offices

President Reagan has decided that the only way to prevent the KGB secret police from eavesdropping on the U.S. Embassy in Moscow is to tear down the new chancery and rebuild it from the ground up, Administration officials said Wednesday.

Reagan reached his decision after several security and engineering studies showed that the partly constructed building is so riddled with sophisticated listening equipment that it could never be safe from Soviet espionage.

‘We Have to Rebuild’

“All of the studies have come back to the same point,” one official said. “To have a secure facility for the future, we have to rebuild.”

The official said there is no way to determine the cost of the rebuilding project. The only estimate, which is many months old and probably far too low, is $300 million.

“When they get down to it, it could cost $500 million, but nobody really knows,” the official said.

The project is certain to be the most expensive diplomatic construction job in U.S. history.

Reagan has accepted Secretary of State George P. Shultz’s recommendation to begin consultations with Congress over the next move. Congress would have to appropriate the money to finance the reconstruction and, therefore, must make the ultimate decision.

Because Congress left town last weekend, Reagan’s choice now basically leaves the final decisions to his successor.

The United States and the Soviet Union agreed almost 20 years ago to build new embassies in each other’s capitals.

In the strict reciprocity that governs diplomatic relations between the superpowers, neither embassy can be put into service until both sides are satisfied. As a result, the Soviets have been unable to occupy their new building on Mount Alto in the District of Columbia, even though construction has been finished for years.

The U.S. Embassy complex was built by Soviet workmen using prestressed concrete materials cast in Soviet factories. As the building was nearing completion, U.S. security officials discovered that the concrete castings were honeycombed with microphones.

The Administration decided to recommend rebuilding the facility from the ground up after a major Washington consulting firm, BDM, completed a study of the embassy options two months ago.

In choosing reconstruction, the Administration rejected other proposed solutions such as building soundproof “safe rooms” inside existing rooms or tearing down only a part of the eight-story building. These options were rejected as less secure than starting over.

One official said some improvements have been made to the existing embassy building but that the old structure is still considered obsolete and inadequate.

He said it would cost more to bring the old building up to standard than to rebuild the new one.

The U.S. government has spent $22 million on the embassy project so far. It originally was scheduled for completion in 1983.

Although Reagan decided that the embassy should be rebuilt on the same site near the Moscow River, an official said, the building will be completely redesigned.

A cafeteria and some recreational facilities located in the basement of the embassy building would be retained, the official said. The reconstruction job would be from the ground up but will skip the underground part of the building. Housing for embassy staff members, constructed in the same compound as the embassy building will also be retained, the official said.

An announcement of the Reagan’s decision is expected today.

Although some lawmakers were critical of the Administration’s earlier consideration last year of a plan to rebuild just the top five floors of the new building, it is far from certain that Congress will approve the more extensive project.