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• Mr. HYDE. Mr. Speaker, there have been at least 7 years of indecision on what to do about eavesdropping devices implanted in structural components of our unfinished new embassy in Moscow. Yesterday, I submitted for the record some research on the historical attitudes and lax security policies which led to this financial debacle and counterintelligence humiliation. Today, I would like to examine the potential solutions. These have been debated for many years, but the consensus required for action continues to elude us.

• In particular, I would like to highlight the intelligence considerations underlying the various options, since authority and funding will be the responsibility of committees other than the House Intelligence Committee, where I am the ranking Republican. The ongoing debate sometimes has submerged intelligence issues as compared with other factors such as cost and convenience, even though intelligence problems caused this dilemma in the first place.

• I would also like to make a strong plea to other Members to make strenuous attempts to move quickly on this matter and actively to search for the facts that will allow agreement among ourselves and with the administration on our future course. For it is not true that we can take our time and pay little penalty for it.

• Available Options. Technical penetration of the new U.S. Embassy in Moscow was first revealed in 1980 and confirmed in 1982 and 1983, although construction was not halted until 1985. In December 1989, the White House finally determined to tear down the chancery building and start over. Intelligence experts long had contended that the bugged U.S. Embassy in Moscow could never be made secure and that the best solution was to build a new chancery of similar size, employing U.S. labor, U.S. materials and other extraordinary security precautions.

• To use the currently available site in a secure manner, they said, we would have to tear down the new building and reconstruct on the same foundation. This option was also endorsed by a series of technical studies, by the Senate Intelligence and Appropriations Committees and by Representatives Mica and Snowe of the House Foreign Affairs Committee in April 1987. The departing Reagan administration finally endorsed this view in October 1988, but the Bush administration decided to restudy the issue. Subsequently, Secretary of State Baker also agreed in October 1989 that a tear-down/rebuild plan was the way to go, and in December 1989 the White House concurred in Baker's lead.

• This solution has been resisted by others, variously due to concerns about wastefulness, excessive cost, negotiability, timely completion, security and inconvenience to U.S. diplomats living on the compound. A few critics of the tear-down/rebuild option have cited concerns that retention of the existing foundation presents security hazards if we rebuild on it, despite administration calculations that such risks can be minimized and that a new foundation might also be penetrated. Until recently, the most commonly cited alternatives were destruction and rebuilding of the top three to five floors of the eight-floor chancery, in order to make part of the building secure, or building a secure annex to the compromised building.

• This year, there arose additional opposition to the tear-down/rebuild proposal, based on insistence that the existing building be completed and used for unclassified, probably non-diplomatic, purposes, and that a building of similar size, a smaller annex, or limited spaces in existing facilities by built or upgraded for sensitive diplomatic activities. This conversion option is particularly attractive to some observers because there is already a shortage of decent housing in Moscow, and growing United States-Soviet ties are expected to create the demand for more office space for unclassified uses by United States agencies, businesses, cultural groups, etc. Indeed, we already are negotiating with the Soviets to acquire nearby land for future building construction.

• Cost projections for the cited options have varied widely and are unreliable, partly because detailed studies were not done despite the considerable lapse of time and partly because cost containment depends on Soviet cooperation. The present estimates for replacing the top three or five floors are $202 million and $225 million respectively. The tear-down/rebuild option is estimated at $270 million, but finishing the new building and adding a secure annex might entail $320 to $350 million.

• The administration lists numerous objections to the option of converting the unfinished building to nonchancery uses. It is said that conscientious attempts to find an alternative use for the compromised new building which might be viable from economic and security points of view have failed. Officials say it would cost far more to convert the building from office to residential use than to build from scratch. Prospective tenants who might use it as an office allegedly are uninterested, and in any case the requirement for this much additional office space is questioned. There is concern about the security implications for the U.S. diplomatic compound of a conversion to uses that would involve significant public traffic, especially if a completely new chancery or annex for classified purposes is built right next to it. The Soviets have said that the local Moscow public utility network is insufficient if we wish to finish and use the existing structure--especially for a conversion to residential use--as well as construct another large building; in this case, the U.S.S.R. has indicated, the United States would have to pay for--and possibly await--area utility upgrades.

• From the State Department perspective, an objection probably at least as important as those above has been the negotiating complications and consequent time lags introduced by the need to acquire more acreage for a completely new chancery or annex. The Department has insisted that a tear-down/rebuild option on land for which we already have a long-term lease could be negotiated relatively quickly and that construction would take about 5 1/2 years. But it was estimated that to negotiate for additional land, do engineering studies such as soil tests and rebuild the foundation would add at least another 2 or 3 years to the proposed schedule. More recently, unofficial guesses as to this prospective time lag have risen to 5 or more years. Political decentralization and economic restructuring reportedly have greatly increased the number of parties whose agreement must be secured. Officials from the city of Moscow or even the local borough may now have to approve acquisitions and plans, and the ownership rights to buildings and land now occupied by household renters or other tenants remain unsettled as the country begins to privatize. Already there have been over a dozen negotiating

• sessions with the central government on land acquisitions, and apparently there has been an atmosphere of cooperation but few concrete accomplishments.

• Some on Capitol Hill seem unconcerned about how long the impasse over a solution may last, particularly since this puts off the need to find $270 million, or up to $350 million if the old building is converted and a new one built. One should consider, however, that negotiations, construction and policy reconsideration have absorbed over 20 years, and even under the most optimistic scenario, it will be another 6 years before the building is complete; without any further delays, already we will be more than 20 years behind schedule. And our needs obviously have expanded considerably in the interim. Crowded conditions, fire and other hazards and security problems at the old embassy have been endured for decades and will persist, despite $35 million spent on renovations after security problems at the new site were confirmed. The portion of these renovation funds originally allocated to counterintelligence improvements in the old Embassy, such as installation of secure conference rooms, was reduced because of cost overruns on the overall project--another indication that, in practice, security continues to be valued less than other priorities. A recent report by the State Department's inspector general chronicled many persistent security problems at the old facility. And the effective duration of imperfect technical security precautions cannot be guaranteed or estimated for an extended period, even for the selected locations which were upgraded.

• All options now envision retaining the leased old Moscow chancery for unclassified uses. It is reasoned that we spent too much on renovations to let it go and that the intensified scope and pace of relations with the U.S.S.R. requires more unclassified space than envisioned during negotiations for the present site some 20 years ago. The United States relinquished right to the building during the original talks, although the Soviets retained their old chancery in Washington. So this, too, is an item for negotiation.

• Views on Capitol Hill. Concerned committees and legislators on Capitol Hill remain at odds with each other and with the administration regarding a solution for the embassy debacle. The result has been an impasse, which will have caused at least a 1-year delay, even if funding is approved for fiscal year 1992. The Bush administration was denied a $270 million lump-sum fiscal year 1991 authorization to implement the tear-down/rebuild option over the next 5 1/2 years.

• Ironically, it was the Congress which first backed intelligence analysts in urging that the incomplete Embassy be demolished and rebuilt. The Senate Intelligence Committee was extremely vocal some years ago in pushing a reluctant administration to adopt this position. The Intelligence Committee position has been consistently backed by the Senate Appropriations Committee, which has been spurred by Senator Fritz Hollings' continuing interest in the issue and sought even this month to fund commencement of demolition. The House Intelligence Committee, while it has periodically sought briefing on the subject, has not adopted a stance as to the desired solution and thus has not been a significant player in the policy debate. During the last 2 years, the Senate Intelligence Committee also has said little. The center of debate therefore has shifted partly to the Foreign Affairs and Foreign Relations Committees. They must authorize a solution because they oversee the State Department, which has insisted that the Moscow Embassy budget be included totally within its own budget.

• The House Appropriations Committee has always differed with its Senate counterpart over the proper course of action. Concerned primarily about the $270 million financial burden imposed by the tear-down/rebuild solution, added to the huge cost overruns encountered during the first construction cycle, Chairman Neil Smith has led the fight against this option. The committee at one time demanded an independent study, but balked when it reinforced the administration position. It has never wavered in its opposition, although the rationales for individual member support have varied, and there appears to be less concerned or conviction about a substitute solution. The HAC blocked detailed engineering and cost studies on the tear-down solution until August 1990, most recently in cooperation with the House Foreign Affairs Committee, until the two committees successfully insisted that other options be studied as well. Searching for a consensus, the administration bowed to this opposition although legally it had had the authority to commission the studies without congressional approval.

• Since 1987, House Foreign Affairs Committee member Representative Olympia Snowe, for a time in concert with her counterpart, Representative Dan Mica, on the Subcommittee on International Operations, has also championed the tear-down solution. This year, however, the full committee overturned the recommendations of its subcommittee on a partisan vote. Ultimately, House Foreign Affairs authorized $300 million, with an eye to completing the existing shell for unclassified uses and building other secure spaces, and specified that the ultimate solution was to be left open.

• The administration's request also energized the Senate Foreign Relations Committee, which voted 16-0 against this solution. Instead, Foreign Relations authorized $50 million, most of it to complete the building for unclassified uses and the remaining $10 to $15 million to provide more space for secure conversations and activities in the old Embassy and in other facilities on the compound. The report stated that `over the long term, the committee would consider a proposal to build a new secure annex on the existing compound or on land that the United States is now negotiating to acquire.' Since the respective bills died, differences between the Foreign Affairs and Foreign Relations Committees were not resolved.

• The Foreign Relations Committee also reacted strongly to Senate Appropriations language this month which allowed reprogramming of $10 million to begin tearing down the unfinished building. Senator Pell and Senator Moynihan observed that such reprogramming could not occur without the authorizing committees' approval, that the administration had guaranteed them that tear-down would not proceed without their approval, and that such approval would never be given, largely because tear-down/rebuild was considered wasteful and excessively expensive. Since the House Appropriations Committee bill in any case had abstained from either commenting on or funding the matter for the past several years, the Senate Appropriations Committee action died in conference. The stalemate thus persists to this day and stretches to the foreseeable future.

• Intelligence issues. Cost and other legitimate issues must be considered in choosing an option. The purpose of this article, however, is to illuminate those factors influencing what by now should be our primary interest--to acquire secure space for our people, papers, communications and codes. As a House member of both the Foreign Affairs and Intelligence Committees, I take exception to several arguments commonly used in this regard and wish to point out some of the considerations overlooked, insofar as this can be done in an open forum.

• Some have questioned the desirability of making the entire building secure, arguing that no U.S. Embassy in the world has that kind of protection. This is true, but it is more a commentary on the state of U.S. Embassy security programs than it is on the requirement for protection. Moreover, this Embassy is not just `anywhere in the world.' It is in the U.S.S.R., which, whatever the ultimate fate of Gorbachev, perestroika, glasnost and Marxism-Leninism, will remain our primary geopolitical rival for decades to come. Soviet intelligence services remain our most effective and threatening rivals, and have intensified their efforts against us since the onset of glasnost, just as, during the height of euphoric early 1970's detente, they manipulated negotiations to facilitate the bugging of our new Embassy.

• The Soviets expended enormous resources, to wire the building--nonsensitive portions included. They have decades of experience in this area, so we must assume they had good reason to expect a handsome and continuing intelligence return on their investment of scarce rubles. In estimating that return, it is well to keep in mind that we have an 85-year lease on the property.

• How much is it worth to us to ensure that information and positions on arms control and other negotiations are protected, so the Soviets have not ascertained, before we even come to the table, our strategy and fallback position--as they may have in the past? Many other considerations of similar importance could be cited to demonstrate the value of protecting classified information.

• For options retaining the structure for diplomatic uses, the primary point of contention is to what extent spaces used mostly for unclassified work should be secured. This decision requires serious and detailed consideration, including substantive input from various parts of the intelligence community.

• Most persons are unaware of the intelligence values of much unclassified information, both for fosusing collection on classified activities and for spotting the stresses and character flaws that facilitate recruitment of agents. Nor do they consider the human impossibility of maintaining a daily working environment in which all discussion of, or repeated lightly veiled reference to, classified information is confined to special restricted spaces, which often are physically uninviting and inconvenient. New living quarters for United States diplomats, also built by the Soviets, presumably have been bugged, as in th epast. Drastic measures to cleanse them are not contemplated, so Embassy employees must continue to refrain from discussions of sensitive work, or even from domestic quarrels, within their homes. It is expecting too much of human nature, however, to anticipate that employees will button their lips nearly 24 hours a day, even when they know the risks.

• We have great difficulty conducting classified activities in Moscow. This tremendous problem is compounded when unclassified areas are bugged, and day-to-day activities easily can be monitored. Unclassified personnel and computer records can be useful to the Soviets for this purpose, as well as for providing information for recruitment targeting. Audio monitoring can yield unclassified data on personalities, professional conflicts, schedules and so on, which helps the KGB assess and recruit U.S. officials to commit espionage, adding to the information acquired from home and street surveillance. Unfortunately, in recent years we have repeatedly seen the truly incalculable security and monetary damages that can be caused by a single spy, another factor that must enter the financial calculus of how much it is worth spending to secure the Embassy.

• In deciding whether to tear down the building, take off only the top three to five floors, or finish it for unclassified activities, we must also consider the potential payoff from the ability to search for additional sensors during destruction. We must assume that similar eavesdropping techniques have been and will be used against us and our allies in the U.S.S.R. and elsewhere.

• Jim Schlesinger's 1987 testimony that we were having difficulty understanding the technlogy and underlying strategy of the Embassy bugging network is quite important in this context. The Soviet defector Victor Sheymov, who in 1980 revealed Soviet strategy for penetrating the Embassy, has stated that many rounds of multiple sensor systems were planned and that `the KGB is known for the redundancy of its operations,' even transcribing the same conversaton twice from different sensors to make sure nothing is missed. In this case, such a strategy was facilitated by their long-term and virtually unimpeded access to the building.

• There are numerous types of sensor systems based on varying physical principles, not all of which require `hard wire' egress. Some of these usually are hidden better than others; in fact, it may be wise to allow discovery of a few, to instill a false sense of security from the assumption that all have been found. Ordinarily, the most sophisticated or best hidden of these would be in the areas designated for sensitive classified activities, where the payoff would be highest and defensive efforts would be most intense--that is, on the top three floors of the new Embassy.

• In this case, however, even those discovered in the lower five floors have been extremely well hidden and often imbedded in structural components; further exploitation has become prohibitively time-consuming and costly, as engineers have become concerned over the structural integrity of the building due to previous removal and exploitation efforts. The $10 million cost of taking down all or part of the building is largely due to the fact that it cannot simply be dynamited and razed, because of the proximity of facilities such as the new living quarters. The necessity for a slower, piecemeal approach also improves the opportunity for further investigation of Soviet sensor technology and methodology, however.

• The evaluation of sensor technology and implantation and disguise techniques allowed by dismantling part or all of the building thus could save us from making some of the same mistakes all over again, and allow us to inspect for use of these techniques elsewhere. It is also important to note that sharing of the acquired information could benefit countries other than the United States, thereby indirectly furthering our own national interest. The fact that the Soviets successfully insisted upon similar construction techniques and terms for other embassies in the U.S.S.R. is important in this context. Increased understanding of the technology could allow key countermeasures in other new embassies in Moscow which already have been occupied or which are being built. In 1940, the British complained about the leak of shared intelligence through the U.S. Embassy in Moscow, and threatened to greatly reduce intelligence cooperation unless we did something about it. The precedent is instructive: intelligence independently collected by individual allies, or U.S.-generated information given to them, is subject to compromise if the same techniques are being used at their Embassies. As the world becomes less bipolar, Soviet collection at other embassies also could allow them to assess and manipulate allied politics, as well as to preempt and influence the moves of their own erstwhile allies and of neutrals.

• Some have argued that it might be preferable to live with the old Soviet sensors from the early 1970's, rather that give the U.S.S.R. the opportunity and incentive to install even more sophisticated equipment in a future new building. This logic is flawed.

• First, we would not start all over without taking extreme measures to prevent similar penetrations--one reason for the high cost of either rebuilding or construction from scratch. Second, it doesn't matter whether a sensor is old, as long as it works. We recently pulled out of our consulate in Leningrad implanted microphones which apparently had been there for decades and which continued to function well. They don't have to be technological miracles if they get the job done. Third, some of the greatest Soviet advances have been not in the sophistication of the hardware, but rather in the ingenuity of their hiding techniques; again, this was facilitated by treaty provisions allowing them to manufacture components and provide the labor, privileges which would be withdrawn the next time around. Fourth, it is true that even with the most elaborate precautions, we would be unable to swear that not a single bug was somehow slipped in, or that the building would remain secure indefinitely, even if it was so at ribbon cutting. However, we can ensure that it is not bristling with devices and in effect the equivalent of a huge transmitting antenna. We can also install protective measures and adopt policies that will make it much more likely that we discover penetration attempts, thus rendering it far more risky and costly for the Soviets to mount an attack. Their task in finding a means of postconstruction implantation already is much more difficult than previously. Changed personnel and operational security policies in the wake of the typewriter and Marine guard scandals, as well as the withdrawal of Russian and other foreign nationals upon whom we formerly relied for support services inside the Embassy, all decrease Soviet access and increase their risk.

• Finally, there has been debate over whether security or early project completion date should be our top priority in deciding the fate of the new Embassy. Some House Appropriations Committee members have been quoted as saying that provision of safe, efficient and attractive working conditions for State Department employees in Moscow is now the highest priority, particularly since the project has dragged on for so many years; in their view, this priority alone apparently disqualifies options such as tear down or building on another site. Such a value system long was shared by many State Department employees. For two decades, it contributed to the ignoring or downplaying of predictable security problems at the new Embassy--thus helping to get us into our current predicament--and to denigration of the significance of those problems once they were discovered.

• It is about time we finally got our priorities straight. There should be no doubt that security is indeed more important than convenience. I agree that we need new space, and this is one reason why further delay is unwise. However, I do not believe that speed of completion should eclipse security considerations in determining the proper solution.

• Although the old Embassy remains in adequate, after a $35 million improvement program working conditions should be significantly improved. Moreover, if the place is so crowded, the State Department should not have insisted once more upon a sizable increase in reciprocal Soviet and United States

• diplomatic contingents, allegedly to deal with emigre processing backlogs, while also seeking to close down the Rome processing center for emigres and shift part of the work to Moscow. These policies were particularly irritating since, once again, the obvious counterintelligence risks from equivalent increases in the Soviet diplomatic presence in the United States were given short shrift, and other concerns also were ignored. In addition, while Moscow in its more Stalinist past was dreary and claustrophobic, today a good portion of the staff resides in the new, attractive housing for which we paid so dearly. Given the ongoing ferment and excitement in the U.S.S.R. and the continued career advantages derived from serving there, I suspect we can for the foreseeable future find enough volunteers willing to endure the remaining hardships in Moscow.

• Frankly, I also find it hard to be sympathetic to arguments for expeditious solutions when the very people making them were instrumental in creating the problem and/or dragging out decisions on a response. In this respect, it is ironic that House Appropriation Committee members subscribe to this argument. And State Department bureaucrats were prominent among those who dismissed intelligence concerns; negotiated unacceptable treaty terms; for years failed to provide reasonable security precautions even within the confines legally available; and for a long time opposed the solution recommended by various outside groups and by the intelligence community. If their brethren now are suffering the ill effects, it is largely the Department's fault, not that of those who advise on the desirable solutions, painful though they may be.

• It is most troubling, however, that House and Senate members and committees who will determine the outcome of the Moscow Embassy soap opera often have exhibited little interest in the intelligence problems related to various options under consideration. It is to be hoped that the information presented for the record yesterday and today will encourage appreciation of the importance of these intelligence issues and requests for more detailed information.

• After years of delay, the administration finally has reached a consensus and a decision which it actually is trying to implement. But Congress--frantically looking for places to slash the budget--will write the final chapter of this torturous saga. Let us hope we have learned an admittedly bitter and humiliating lesson, so we finally put security at the top of our list of priorities.

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