Soviet Agents Warned Bloch, U.S. Suspects

By ROBIN WRIGHT and DOYLE McMANUS

July 25, 1989 12 AM PT

Times Staff Writers

WASHINGTON — Felix S. Bloch, the U.S. diplomat suspected of spying for the Soviet Union, appears to have been tipped off by Soviet handlers that he was under suspicion before the FBI first questioned him in June, officials said Monday.

As a result, by the time State Department investigators asked Bloch about his activities as a U.S. diplomat in Vienna and Washington, he may have had time to destroy evidence that could have strengthened a case against him, they said.

The apparent discovery that Soviet agents warned Bloch that he was under U.S. scrutiny appeared to throw another complicating factor into a counterintelligence investigation that was already laboring under an unusual set of handicaps.

Information Lacking

The FBI has been shadowing Bloch, the former deputy chief of the U.S. Embassy in Vienna, since at least June 22, but it still does not have sufficient information either to arrest him or to provide an estimate of what kind of intelligence he may have turned over to the Soviet Union.

The few officials who have been briefed about the investigation acknowledge that the evidence against Bloch remains fragmentary and may never support a criminal prosecution.

“This may become one of the great unsolved mysteries of our time,” one official said. Unless Bloch agrees to talk to federal investigators--or defects to the Soviet Union and writes his memoirs--”we’ll probably never know the full extent of his activities,” he said.

“It’s hard to know what damage he’s done until you get your hooks into him,” a former intelligence official added.

Far from cooperating with investigators, Bloch led a motorcade of FBI agents and television camera crews on a brief chase through New York’s suburban Westchester County into Manhattan on Monday. He had been staying with a daughter in the town of Chappaqua.

After Bloch entered an office building at 10 Columbus Circle, the agents and media kept a several-hour vigil outside, with television reporters filing live reports from the scene speculating on whom he might be seeing.

Deputy Chief in Vienna

Bloch, a 30-year veteran of the Foreign Service, was deputy chief of the U.S. Embassy in Vienna from 1983 until 1987. He is currently director of the State Department’s office of regional political-economic affairs for Europe, a job that oversees regional economic issues--including limits on high-technology exports to the Soviet bloc.

The apparent Soviet early warning to Bloch was first reported by ABC News on Monday evening. A senior U.S. official said the report “appears to be true.”

One of Bloch’s Soviet contacts telephoned him earlier this year, according to ABC, and tipped him off with a cryptic message: “A bad virus is going around, and we believe you are infected.”

The warning apparently occurred after U.S. counterintelligence agents videotaped Bloch handing a briefcase to a Soviet agent in Paris earlier this year. The discovery that Bloch was apparently involved in spying was “inadvertent,” one official said Monday, adding: “It happened while we were seeing what a Soviet was up to.”

After that incident, the FBI placed Bloch under surveillance, but apparently did not catch him in another overtly suspicious act, officials said. U.S. officials still do not know what the briefcase contained.

In June, officials said, State Department security officials confronted Bloch with what they knew and questioned him briefly, but the diplomat did not choose to cooperate with the investigation, an official said.

On ‘Administrative Leave’

On June 22, the State Department placed him on “administrative leave,” meaning he cannot work but still draws a full salary and benefits. The department also canceled Bloch’s building pass and began the process of revoking his top-secret security clearance.

Shortly after those actions, Bloch was allowed--under guard--to remove his personal belongings from the State Department building and to close out his credit union account.

President Bush called the allegations about Bloch “most serious” and said he had known about them “for some time,” but he declined to discuss the details of the case.

Asked by reporters about the case as he began a meeting with a group of senators Monday morning, Bush said: “The minute I heard about it, I was aggrieved, because it is a very tragic thing should these allegations be true.”

Asked how the case might affect U.S.-Soviet relations, Bush said: “It doesn’t help,” but quickly added: “I think everybody around this table knows that there have been--espionage goes on.”

White House spokesman Marlin Fitzwater said Secretary of State James A. Baker III had personally informed Bush about the investigation but refused to say when. “Obviously, because it is an ongoing investigation, we’re very reluctant to comment on any aspects of it,” Fitzwater said.

Among the issues under investigation, officials said, is whether Bloch may have provided information to the Soviet Union about Western attempts to halt high-technology smuggling to the Soviet Bloc. The issue is critical to Moscow, which has often relied on illegally obtained military technology to improve its own weapons systems, U.S. officials say.

For most of a decade, Bloch played a role in setting and negotiating U.S. policy on the high technology issue, beginning in 1980, when he became economic officer at the Vienna embassy.

“Vienna is a center of that trade, and we were constantly working to try to cut off unauthorized exports of sensitive technology,” said another official who served in Vienna.

According to one official, Bloch opposed a U.S. move to crack down on Austria in the early 1980s because of the country’s relatively lax attitude toward high-technology exports. But other officials said they did not recall that Bloch had taken a visible position on the issue.

More recently in Washington, Bloch’s job as director for regional political-economic affairs in Europe gave him “a seat at the table” when high-technology issues were being discussed, one official said. As recently as last month, officials said, Bloch participated in the negotiations that led to a decision to permit the sale of personal computers to the Soviet Union and Soviet Bloc countries.

However, State Department spokeswoman Margaret Tutwiler added, “I would not characterize him as a key player.”

In any case, another official said, the investigation is “a long way from any kind of damage assessment.”

And, it appears, it is still some distance from an arrest as well.

“It’s awfully hard to make an espionage case out of a briefcase,” one official noted, “when you don’t know what’s in it.”

Times staff writers John J. Goldman, in New York, and David Lauter and Jim Mann, both in Washington, contributed to this story.