U.S. Indicts 3 on Spying-Related Charges

A former Pentagon lawyer, her union-representative husband and a former Army paralegal were indicted Tuesday on charges of conspiring to spy for East Germany, the Soviet Union, the Russian Federation and South Africa.

The indictment, returned by a federal grand jury in Alexandria, Va., indicated that the defendants, arrested in an FBI sting operation in October, had rejected the chance to plead guilty to lesser charges, legal sources said.

Instead, attorneys for two of the defendants denied the allegations and said they will attack the legality of the Foreign Intelligence Surveillance Act, which they said played a major role in building a case against their clients.

The defendants, whose ties go back to the University of Wisconsin where they were student leftists and who allegedly were motivated by ideology to carry on a 25-year conspiracy from 1972 through October 1997, are:

* James Michael Clark, 49, a former Army paralegal and an investigator for a private firm in Fairfax, Va.

* Theresa Maria Squillacote, 40, who until January 1997 was a senior staff attorney for the deputy undersecretary of defense for acquisition reform.

* Kurt Alan Stand, 43, a former regional representative of the International Union of Food Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Assns.

Stand, who is married to Squillacote, allegedly recruited her and Clark to become agents of the HVA, the foreign intelligence service of the former German Democratic Republic.

If convicted on all counts, the defendants could be sentenced to life imprisonment. The Justice Department is reviewing the allegations to see if special circumstances apply that could warrant seeking the death penalty.

In addition to the espionage conspiracy, Clark was charged with actual espionage for delivering to East Germany from 1979 to 1984 secret and top secret photographs of national defense documents obtained from unnamed State Department personnel.

Squillacote and Stand also were charged with attempted espionage and obtaining national defense information--four Pentagon and CIA secret documents--to provide to a person they believed to be a South African intelligence officer.

That was part of the FBI sting operation, set up after a South African official notified U.S. authorities that Squillacote had appeared to offer espionage services to a senior South African official who was also a leader of the South African Communist Party, according to a law enforcement source.

*

Helen F. Fahey, U.S. attorney in Alexandria, said in announcing the grand jury action that the Republic of South Africa was not involved in the criminal conduct.

In her letter to the South African, Squillacote described herself as a Marxist and communist and complained of the “horrors” produced by the U.S. system of “bourgeois parliamentary democracy” that she said results in “spiritual death” and “subjective violation of all that is universally right,” according to the indictment.

Squillacote also was charged with making a false statement for claiming that she had retained no classified material when she left her Pentagon job in January 1997.

According to the indictment, in 1990--about the time of the unification of East and West Germany--Lothar Ziemer, their HVA “handler,” and the defendants “established an espionage relationship with the U.S.S.R.”

After the Soviet Union collapsed, they shifted their alleged services to the Russian Federation, the grand jury charged.

Stand’s attorney, Richard Sauber, said: “My client did not turn over classified data to anyone. He wants to go to trial and expects to be vindicated.”

Contending that “the entire case is built on secret surveillance, wiretaps and bugs” under the Foreign Intelligence Surveillance Act, Sauber said the legislative history of that law requires that targets be active agents of an active foreign power and that this was not the situation here.

Squillacote’s attorney, Lee H. Rubin, also attacked the government’s conduct under the act, contending that it had only “outdated, stale information involving a country [East Germany] that had long since ceased to exist.”

In conducting the sting involving South Africa, “the government preyed on the unique psychological vulnerabilities of Ms. Squillacote in an effort to salvage an otherwise unprosecutable case against Ms. Squillacote and Mr. Stand,” Rubin said.

Clark’s attorney could not be reached for comment.