The Felix Bloch Affair: Assessing The Damage To US Security

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:

1958: Joined the State Department; intelligence research specialist.

1960: Dusseldorf, West Germany; Commercial Officer at the American Consulate.

1963: Caracas, Venezuela; American Consulate

1965: Attended Berkeley for M.A. in advanced economics.

late 1960s: Department of State, Washington, D.C.

early 1970s: West Berlin; Trade Official

mid-1970s: East Germany; Economic Officer

(several years)

1978-1980: Singapore; Foreign Service Inspector, roving official in the inspection corps, responsible for auditing diplomatic outposts.

1980: Vienna; Economic Officer

1983 – June 1985: Vienna; Deputy Chief of Mission under Helene A. von Damm.

June 1985: Vienna; Acting Ambassador

April 1986 – July 1987: Vienna; Deputy Chief of Mission under Ronald S. Lauder. Transferred to D.C. in July 1987 two months ahead of schedule.

July 1987 – July 1988: Washington, D.C.; Senior Executive Seminar

July 1988 – June 1989: Washington, D.C.; Regional Political-Economic Policy Director, Bureau of European and Canadian Affairs.

Chronology of Recent Events Concerning Bloch:

Spring ’89: Bloch filmed by French counterespionage agency passing briefcase to Soviet agent in Paris. Agent identified in French newspapers (Liberation and Journal du Dimanche) as a member of the UNESCO mission and of the KGB’s agency dealing with technological secrets.

May 14: Phone call from Soviet agent (Pierre) to Bloch.

mid-May: Bloch meets with Pierre in Paris.

May-June: Bloch meets with Pierre in Brussels

June 20: Mrs. Bloch stays at home of Austrian Foreign Minister Mock and accompanies him to a farewell dinner for Turkish ambassador.

June 22: "Virus" phone call to Bloch from Pierre.

June 22: Bloch placed on administrative leave with pay; stripped of building pass; Bloch voluntarily surrenders diplomatic passport.

late June: Austrian Foreign Minister Mock informed by his own Interior Ministry and by U.S. Ambassador Grunwald of Bloch investigation.

July 18: Bloch participates in Atlantic Council conference

July 21: ABC airs report

July 21: State Department discloses FBI investigation

July 24: President Bush states that he has "known about this matter for some time."

Recent Public Statements on the Bloch Affair:

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." (July 24, 1989, Washington)

Eduard Shevardnadze, Soviet Foreign Minister:

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

Gennadi Gerasimov, Soviet Foreign Ministry spokesman said that the Soviet Union had no connection with Bloch (AP reports). 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." (July, Vienna newspaper Kurier)

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, July 24)

Reported Conversations 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." (per ABC News report, July 24, 1989; said to have been recounted to Bloch several weeks before he was confronted by counter-intelligence officials at a meeting that was reported to have occurred on May 14.)

  Other reports put the conversation on June 22nd wherein Pierre said he was "feeling ill" and because his illness was "contagious, he was concerned about Bloch’s health."

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 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.