KGB Network Grinds to Halt--but Not for Long : Espionage: Spy agency is ready to go back to work as soon as power struggle is resolved, U.S. sources believe.

For at least a decade, apparently little affected by receding Cold War tensions, KGB operatives in the United States combed through technical reports in the Library of Congress, bribed obscure clerks for Silicon Valley firms and broke into American industrial plants in search of information that might help close the Soviets’ technology gap with the West.

Now, with its leadership in disgrace and facing a far-reaching shake-up in Moscow, the KGB’s worldwide network of agents and operatives has ground to a halt. But the agency remains ready to go back to work when the question of who is in power in the Soviet Union is resolved, U.S. intelligence sources believe.

“They are totally perplexed and don’t know what is going on in their own country,” said one U.S. official. “We are watching them closely, but they don’t seem to know what to do.”

But no one expects the KGB, which has built up what may be history’s most massive espionage apparatus, simply to fade away. Even if the Soviet Union itself does not survive in anything like its present form, U.S. intelligence experts believe that the KGB’s overseas operation will be taken over by someone, perhaps the Russian Federation.

Before its operations were disrupted by the abortive coup last week against Soviet President Mikhail S. Gorbachev, the KGB’s extensive American network had shifted its emphasis away from traditional military espionage. Instead, it concentrated on economic targets, especially in high-tech areas such as computer systems.

U.S. experts expect that the post-coup KGB will be leaner, possibly younger and certainly focused even more than before on industrial targets. For the CIA’s and the FBI’s counterintelligence operations, the new KGB will present some formidable challenges.

“Our mandate is to counter foreign intelligence whether it involves classified information and military targets or technology and industrial secrets,” one U.S. official said. “Our job may change some since the Soviet coup, but not much.”

Former CIA Director James R. Schlesinger said that in the aftermath of the coup, the KGB can be expected to be less effective--at least for a while--in attacking its traditional targets, such as military plants, weapons systems and other military secrets.

But he said that programs for collecting economic information “are less likely to be disturbed by matters back home.”

“Consequently, the task of counterintelligence will continue to be formidable,” Schlesinger said.

The KGB’s industrial espionage techniques fall into three categories: passive collection of industrial information from conferences, libraries and computer networks; penetration of industrial plants by burglary, wiretapping and buying information in single cash-and-carry transactions from employees who need money; and recruiting employees of key companies to become full-time agents.

Gordon Feller, president of Integrated Strategies, a San Rafael-based firm that advises U.S. companies, especially Silicon Valley high-tech firms, on doing business with the Soviet Union, said that the KGB was never particularly effective in its efforts to recruit agents because the organization never had enough money to offer attractive bribes to highly paid U.S. businessmen.

Feller predicted that the KGB’s future operations will increase the emphasis on library research and on debriefing Soviet businessmen who are increasingly welcome in American businesses that hope to tap into the giant Soviet market.

George Carver Jr., a former deputy director of the CIA, said that the techniques of industrial espionage are not very different from military spying.

“Most American businesses use satellite communication relays,” said Carver, now a senior fellow at the Center for Strategic and International Studies in Washington. “Anything put in the air can be taken out of the air. They (KGB agents) also try to recruit people who work for American companies. You don’t have to get the CEO (chief executive officer); the CEO’s secretary will do quite nicely, or the guy who runs the Xerox machine. It is not too hard to whistle up somebody’s credit record and determine who could use a few hundred extra bucks.”

David Szady, special agent in charge of Soviet counterintelligence in the FBI’s San Francisco office, which covers the Bay Area’s high-technology industries, said improved U.S.-Soviet relations have not led to a decrease in KGB activity.

“Many more doors are open to them now, so they are much busier on the overt level,” he said.

Many high-technology businesses, eager to find new markets, have actively pursued opportunities in the Soviet Union over the last several years. Joint ventures between U.S. technology firms and Soviet businesses have become commonplace, and Szady said that many of these ventures provide an avenue for KGB intelligence gathering.

Analysts said that there can be no doubt that the KGB faces a thorough restructuring in the wake of the failed coup. Already, its top leadership has been sacked. But most U.S. Soviet-watchers, both in and out of government, expect the overseas stations to escape the full weight of retaliation for former KGB leader Vladimir A. Kryuchkov’s participation in the junta that briefly ousted Gorbachev.

“The people in Moscow have more urgent things on their minds than rejiggering the field stations abroad,” Carver said. “They (overseas operatives) probably will throttle back on major new initiatives, but they may decide that no matter how it works out in Moscow, the leadership will want to know these things.”

Although Kryuchkov rose through the KGB’s first directorate, which handles overseas intelligence operations, the espionage service seems not to have been implicated in the coup. The purge announced by Gorbachev this week seems to be aimed primarily at the KGB organs that were involved in the suppression of internal dissent.

And the KGB’s overseas propaganda program, run out of the same residencies that handle espionage, has grown in recent years and can be expected to expand further. The effort, which once leaned to heavy-handed anti-American disinformation, has shifted to a much more subtle program of public relations and influence, designed to persuade the United States and the West of Moscow’s good intentions.

“We are not seeing the crude anti-American disinformation that we saw before 1988,” one U.S. official said. “But the KGB is engaged in extensive efforts to influence opinion in the West, both public opinion and elite decision-makers.

“It remains to be seen what direction this will take (following the failed coup), but this information apparatus is very useful,” the official said. “It can be used by anybody who has control of the KGB.”

Even if the Soviet Union breaks up into its 15 component republics, U.S. analysts agree that the Russian Federation, perhaps joined by some others, will remain a major nuclear power. Such a nation will require an intelligence service. And spies, often far less ideological than is generally assumed, will often work for whoever can pay and protect them.

John J. Dziak, a Pentagon intelligence expert, wrote recently that the czarist secret police continued to operate until the czar fell in 1917 and the Eastern European intelligence services “were still largely viable when those party-states collapsed in late 1989.” He recalled that the files, and some of the operatives, of the czarist agents were absorbed by Felix Dzerzhinsky’s Cheka, a forerunner of the KGB.

However, U.S. analysts also expect, as one fallout of the coup, an upsurge in offers by Soviet spies to defect to the West. Most experts say, however, that the U.S. government should view such defections with extreme skepticism because in most cases the motive will be self-preservation rather than ideological commitment to Western values.

“A lot of these guys are really rough and dirty and have blood on their hands, so they are vulnerable,” one official said. “There aren’t many places they can go, not many places that would take them.”

“In a situation like this, there are an awful lot of feather merchants out there--people who will say, ‘I can’t work for the KGB any more, so maybe I can get a few dollars from the American taxpayer.’ ” Carver said. “There are probably going to be a lot of people offering their services but there will have to be a lot of professional judgments made about whether to take them on or not.”

Former Interior Minister Vadim V. Bakatin was named KGB director in the wake of the coup and was given orders to shake up the organization. But U.S. analysts expect him to concentrate at first on the KGB’s internal operations.

“Bakatin is an outsider, which is a plus in several respects. But being an outsider, he doesn’t know which questions to ask,” Carver said.

Carver said it would be impossible for Bakatin to replace all of the KGB’s overseas operatives because there are not enough intelligence professionals available for that. Besides, he added, the new director will find it difficult to get a firm handle on foreign operations because the spies will go to great lengths to protect themselves and their sources.

Perhaps the most devastating action that Bakatin could take would be to open the KGB’s computer files to show who has been working with the agency, both in the Soviet Union and abroad. But that is something that Bakatin, confirmed in his new job Thursday by the Supreme Soviet legislature, indicated that he would not do. He said he had reached agreement with the presidents of the Soviet republics that it would be too disruptive of society to release the KGB’s personnel files and lists of millions of informers.

Times staff writer Jonathan Weber in San Francisco contributed to this report.

RELATED STORIES: A7