The Felix Bloch Affair: Assessing the Damage to U.S. Security

Introduction

On the basis of currently available
public information, it is not possible to
determine the validity of the allegation
that a senior foreign service officer
named Felix S. Bloch has been spying for
the Soviet Union for many years. For
whatever reason, the Federal Bureau of
Investigation, which is assessing the
factual basis for such an allegation, has
thus far not pressed charges against
Bloch.

What is possible — and of the utmost
urgency — is to assess the damage an
individual with Bloch’s background,
experience and access to information could
have caused if, in fact, he were
in the employ of the KGB. The Center for
Security Policy has undertaken to develop
materials relevant to such a damage
assessment, drawing from unclassified
sources and the considerable experience
of its associates with the policy-making
process and security procedures.

Bloch’s career path has involved him
primarily in East-West economic,
financial and technology affairs. As U.S.
and Western security policy in these
areas is one of the Center’s principal
concerns, this paper provides
chronologies of important events that
occurred in this portfolio of issues and
to correlate these events with Bloch’s
various assignments. This is not to
suggest that in many of his positions —
such as that of Deputy Chief of Mission
in Vienna — Bloch would not also have
had critical access to U.S. intelligence
and policy information concerning other
sensitive issues such as arms control
negotiations, nor is to suggest that
Bloch was necessarily responsible for the
final disposition of economic, financial,
and technology matters within the United
States government.

It is, rather, intended to indicate
the kinds of developments Bloch would
likely have been following closely, and
in which the Soviets would have had a
keen interest. Indeed, as the Center and
its associates have been saying for some
time, the principal vulnerability of the
Soviet empire today resides in the
portfolio for which Bloch had
responsibilities in the course of his
career.

Chronology of Bloch
Assignments: href=”#N_1_”>⁽¹⁾

Chronology
of Recent Events Concerning Bloch: href=”#N_2_”>⁽²⁾

Recent
Public Statements on the Bloch Affair: href=”#N_3_”>⁽³⁾

President
Bush:

“I’ve known about this
matter for some time, and the
minute I heard about it, I was
aggrieved because it is a very
tragic thing should these
allegations be true… The
investigation is going on. And
these are very serious matters
and a thorough investigation
takes a good deal of time.”
(Washington, D.C., 24 July 1989)

Eduard Shevardnadze, Soviet
Foreign Minister:

Bloch “never had any
relations with us, no relations
which could arouse any suspicions
whatsoever.” (Paris, 29 July
1989)

According to the Associated Press, Gennadi
Gerasimov, Soviet Foreign Ministry
spokesman said that the Soviet
Union had no connection with Bloch and
that allegations that Bloch was working
for the Soviets are the result of a new
“wave of spy mania” caused by
the U.S. media.

Alois Mock, Austria’s Foreign
Minister:

There is “a certain
suspicion on the U.S. side
reaching back into the
1970s.” (July 1989) “It
is unexplainable how Bloch was
able to remain so long in such
high positions.” (Viennese
newspaper Kurier, July
1989)

Stanislav Levchenko, former KGB
officer who defected in 1979.

“Many parts of this case are
not clear, and if allegations
that Mr. Bloch was cooperating
with the KGB for a long time,
then probably he was recruited
before he got upset about this
Ambassador or other ambassadors.
He was stationed before in East
Germany, as I understand, as an
economics officer.” (ABC
Nightline, 24 July 1989)

“If we are talking
about…the State Department…it
is not impossible at all that at
some level there could be one,
two, three other assets of the
Soviets who one way or other
could have learned about the
investigation and tipped [Bloch]
off.” “This Week with
David Brinkley,” 30 July
1989)

Reported Conversation between a Soviet
agent (code-named Pierre) to
Bloch, by telephone (the same agent to
whom Bloch allegedly gave briefcase):

“A bad virus is going around
and we believe you are now
infected.” (ABC News, 24
July 1989)

Table showing Bloch’s career

Conclusion:

The Center for Security Policy believes that it is absolutely
imperative that the importance be understood of Western economic,
financial and technology security policies toward Warsaw Pact
countries. Given the acute — and steadily worsening — state of
Soviet bloc economies, it should come as no surprise that the
USSR places a premium on influencing Western policies designed to
safeguard alliance security interests in this field.

Accordingly, the Center believes that, in the wake of
revelations that a very senior foreign service officer and
specialist in this portfolio of issues may have been a long-term
Soviet spy, the following steps are in order:

• A vigorous effort should be made at senior levels of the
  U.S. Government to assess whatever damage may have been
  done by Bloch should the allegations prove true.
• Independent in-depth reviews should be conducted,
  for example by the President’s Foreign
  Intelligence Advisory Board and perhaps a new
  “Team B” in addition to those
  undertaken by duly constituted
  counter-intelligence organizations.
• Joint hearings of the Senate and House
  Intelligence Committees should be held to
  consider the findings of such reviews and the
  extent to which corrective steps deemed to be in
  order.
• Insofar as possible, the results of these reviews
  should be shared with the American people. At a
  minimum, doing so will alert them to the risks
  that attend some of the policy choices affecting
  the economic, financial and technology security
  portfolio.
• If a case can be made that Felix Bloch engaged in
  espionage activities for the Soviet Union, the United
  States government must prosecute him. Under no
  circumstances should the potential damage done to public
  perceptions of the trustworthiness of Soviet
  interlocutors or the possible embarrassment of those who
  worked with Bloch during his years in the State
  Department be permitted to prevent such prosecution.
• Finally, a moratorium must be imposed upon further
  liberalization of economic, financial and technology
  relations with Soviet bloc countries pending completion
  of the aforementioned damage assessment.
• In particular, the creation of new high-level
  U.S.-Soviet working groups on economic issues and
  the decontrol of sophisticated dual-use
  technology should be deferred indefinitely.
• Expanded Soviet access to U.S. banking
  information should be blocked by postponing the
  opening of a New York branch of the Soviet Bank
  for Foreign Economic Affairs pending the results
  of a damage assessment. Such a New York branch
  would also enhance Soviet espionage capabilities.

1. Drawn from press reports and other
publicly available data.

2. Drawn from press reports and other
publicly available data.

3. Drawn from press reports.