Bloch Case Debated : Counterspy Effort: Gaps in the Net

At the time, the report of the Senate Select Committee on Intelligence attracted little notice. A seemingly routine survey of the state of U.S. counterintelligence programs, it was appended to an appropriations bill earlier this month and all but lost in the daily deluge of paper that flows from government printing presses.

“Since its 1986 report on ‘Meeting the Espionage Challenge,’ the committee has catalogued numerous cases of espionage and attempted espionage, some of which had devastating consequences for the United States,” the report said.

It added, “We also found that many of the actions set in motion in early years were faltering as a result of diminishing resources and a lack of continuing resolve to deal with them effectively.”

Bloch Case in Spotlight

Within days, the committee’s central conclusions were driven home in one of the most extraordinary developments in the long history of spies and counterspies: the case of suspected Soviet agent Felix S. Bloch.

And beneath the headlines about Bloch’s suspected activities and the bizarre television film of caravans of FBI agents following him trunk-and-tail across Washington and New York, the case has ignited a major debate within government circles about U.S. counterintelligence capabilities and the growing number of failures to uncover spies, some of whom have gone undetected for more than a decade.

Indeed, the nation’s counterintelligence program appears so overburdened that former KGB agent Stanislav Levchencko, who defected to the United States in 1979, said this week that he was only surprised that American spies at the State Department had not been uncovered earlier.

‘Lax for Decades’

“It is no secret that the security system at the State Department has been lax for decades,” Levchencko declared. “Professional logic would indicate that there are at least two or three more spies still operating inside the State Department who have not yet been found.”

If Levchencko is a less than dispassionate judge, even a senior former U.S. intelligence analyst conceded that “historically, counterintelligence has never been an American forte.”

Current and former intelligence officials say their ability to track down Americans spying for other governments either in the United States or abroad is hampered by an inefficient and underfunded system.

Part of the problem is clearly the dispersed nature of responsibility for counterespionage.

Theoretically, responsibility for tracking down spies inside the United States rests with the FBI. The CIA is widely considered to be responsible for counterintelligence operations overseas. The State Department’s Diplomatic Security Office, a relatively new office, is charged with security at diplomatic installations abroad. The Defense Department has parallel responsibility for military installations in other countries.

In practice, there are yawning gaps in the net.

The CIA concentrates on watching for penetration of U.S. security by foreign agents--the bugging of embassies, for example, and terrorist threats; it gives less attention to the activities of Americans spying on the United States overseas. The State Department and Pentagon efforts are similarly defensive: They concentrate most of their resources on protecting American personnel and facilities from outside threats.

Even at the basic gate-keeping level of controlling access to sensitive material, the problems are staggering and the government effort limited, officials say.

An estimated 4 million Americans have official security clearances and therefore have access to classified documents of varying degrees of sensitivity. But the budget for screening those receiving such clearances has been cut back in recent years.

The screening system itself is antiquated and inconsistent, officials add. The procedure is so limited, one counterintelligence specialist charged, “that the average applicant is likely to be more thoroughly checked for a mortgage than for a security clearance.”

The bulk of security checks do not go much beyond verification of background information, checking references and determining that the subject has no police record.

Questioning friends or neighbors, or sending agents door to door to investigate the private life styles or habits of individuals in sensitive positions is unrealistic and beyond the budget resources of most agencies, said one Justice Department official.

“Lots of people used to argue that the polygraph (lie detector) was the answer--then you would have no need of background checks. But then they found that the polygraph was not foolproof, so it was not an answer,” said Americo R. Cinquegrana, deputy counsel for intelligence policy at the Justice Department.

“There is still debate over which techniques are the most effective.”

The last two executive orders establishing general criteria for employment by the federal government were issued by President Dwight D. Eisenhower in the 1950s, when the Cold War raged and most espionage was linked to ideological sympathy with communism. Accordingly, security checks tended to concentrate on a search for links to suspected groups and organizations--often in earlier stages of the subject’s life.

Today’s spies have been linked largely to financial gain or entrapment tied to sexual activity, but counterespionage programs have not been modified to meet the changing nature of the threat.

Not only do more than a dozen different agencies now use different criteria and methods but follow-up investigations also are limited and sporadic.

“Most spies were recruited after they joined government, not before,” said one former intelligence official. “With little follow-up, that means they can go undetected unless they slip up or someone informs on them.”

Indeed, several of the cases uncovered in the 1980s, now referred to as the “decade of the spy,” were due to informants or through accidents. The only known evidence against Bloch, a videotape of him handing what is believed to be a briefcase to a Soviet agent in Paris, was “inadvertent,” according to State Department sources. The Soviet citizen was being watched, not Bloch.

Similarly, the activities of John Walker Jr., a Navy chief warrant officer who spied for the Soviets for 18 years, were uncovered only after his wife went to the authorities.

“Our counterintelligence is better than it was in the 1970s, but the U.S. is showing that it is not up to the task of counterintelligence in the 1990s and apparently not of the 1980s, especially if we’re not able to find a guy after 10 years,” said Kenneth E. deGraffenreid, a former senior director of intelligence at the National Security Council who is now at the National Strategy Information Center.

Bloch’s alleged espionage for the Soviet Union reportedly may date back a decade or more.

Critics lay blame for counterintelligence failures on the executive branch, which they charge has virtually ignored every official assessment outlining weaknesses in the counterspy program since a wave of spies was uncovered in the mid-1980s.

“For four years, the government has been aware that there is a real problem with espionage by Americans,” said Allen Adler, a former counterintelligence specialist at the American Civil Liberties Union. “And there has been sufficient evidence to give advance warning in each of the cases over the past two decades.

“But the government has not heeded any recommendations that have come out of Congress or various commissions within the Department of Defense and other agencies to determine what can be done to prevent these problems,” he said.

In 1985, Congress recommended cutting back on both the volume of data classified and the number of people given clearances. But Adler and other counterintelligence specialists say both the Reagan and Bush administrations have failed to adopt the recommendations.

“There are too many people who have access to classified data, but it is a function of the amount of data classified,” said Cinquegrana of the Justice Department. Both government officials and critics agreed that the United States classifies far too much information that is not politically or militarily sensitive.

Explained DeGraffenreid, who worked in the Reagan Administration: “Counterintelligence has become a backwater of bureaucratic inertia and lethargy. They’re comfortable with the way things have been done in the past, and they don’t want to be told by others how to do it better.”

The price of U.S. counterintelligence weaknesses is likely to rise, experts say, because the Soviet Union is upgrading its already formidable foreign espionage.

Levchencko said that, contrary to popular conception, the Soviet policy of glasnost, or openness, has actually led to a greater need for foreign intelligence than during the Cold War era.

Soviet President Mikhail S. Gorbachev “is more pragmatic. But with the collapse of industry and the economy, he is also forced to cut large parts of the budget, even for the military. To compensate, he has to keep up with what the United States and the West are doing. He relies on intelligence more than ever so the Soviet Union is not left vulnerable.”

Added DeGraffenreid, “The Soviets are showing an ability to penetrate a new range (of government agencies), from the military to the State Department.

“These are major kinds of spies, not chicken-feed triple agents. It shows that it’s not only the low-level spies who hurt you, like Walker, who gave away codes. If this (Bloch case) is all true, as it appears to be, then this is a really big, big deal.”

Even if no arrests are made in the current case, the allegations already have triggered congressional interest in increasing the resources available to U.S. counterintelligence.

“The fact that the Soviets have had a certain amount of success in buying traitorous Americans would indicate that we should put more resources into counterintelligence,” Rep. Charles Wilson (D-Tex.) said.