Baker Orders New U.S. Embassy Office Building for Moscow

Secretary of State James A. Baker III notified Congress on Wednesday that a U.S. Embassy office building in Moscow will be torn down and a new one built, at a cost estimated at perhaps $500 million.

The decision, under consideration for months, was based on the U.S. intelligence conclusion that the Soviets had planted eavesdropping devices in the walls during the building’s construction.

The devices were first detected in 1979. The U.S. government and Congress since then had been trying to decide what to do. In the meantime, American diplomats have been using an old office building next door.

The cost of the so-called new chancery, where sensitive business was to be conducted, exceeded $65 million. The embassy project, including apartments and other living quarters, cost $192 million.

Baker, who sent aides to Moscow on an inspection trip last April, passed up the option of saving millions of dollars by demolishing only those floors believed to be infested with “bugs.”

He also rejected the idea of constructing an annex to house top-secret business. That option would have presented at least two problems: finding the space for the extra building, and the fact that people seen entering or leaving it could have been assumed to be involved in sensitive operations.

The embassy was built under an agreement negotiated during the Nixon Administration, in 1972. It permitted the Soviets to prefabricate concrete slabs for the building off the site. U.S. officials did not insist on the right to inspect the construction.

Meanwhile, a trade group headed by Dwayne O. Andreas, chairman of Archer Daniels Midland Co., offered to buy the building for use as business offices.

Andreas is co-chairman of the U.S.-U.S.S.R. Trade and Economic Council, which promotes commerce between the two nations. He made the offer on behalf of a consortium of U.S. companies, which would use the building as Moscow headquarters.