FOX NEWS NETWORK

SHOW: FOX SPECIAL REPORT WITH BRIT HUME

December 8, 1999, Wednesday

Espionage

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HUME:

The Cold War is over, the 20th century is about to be, but that doesn't mean old-style espionage is dead. The Russians still keep tabs on the U.S., and Moscow says it has proof we still spy on them. FOX NEWS correspondent Amy Kellogg has details.

(BEGIN VIDEOTAPE)

AMY KELLOGG, FOX NEWS (voice-over): Russian intelligence says U.S. embassy employee Sherry Leberknight (ph) was caught red-handed collecting Russian military secrets. She was nabbed possibly in retaliation for the arrest of an American spying for Russia in the States. You don't hear a lot about spy scandals these days. However, though the wall is down, everyone's guard is still up.

JOHN PIKE, ESPIONAGE EXPERT: I think a lot of people figured they would close up shop and go home. Well, the KGB broke up and changed its name, but these agencies are still very much alive and very much doing what they were doing throughout the Cold War.

KELLOGG: Of course, it's easier to spy on Russia now that it's a fairly open society. You can read about Russian spies on CD-ROM and get political intrigue from the papers. Gone are the days when CIA agents had to study the placement of politicians at photo ops in front of Lenin's mausoleum to figure out who was hot and who was not.

(on camera): During the Cold War, espionage on both sides pretty much focused on military secrets and military strategy. But in recen5t years, American intelligence officers have been much more worried about loose nukes and brain drain -- that is, the migration of unemployed Russian scientists to rogue nations.

As for the Russian side, experts say that intelligence officers based here at Lubyanka are much more worried about economic issues and regional issues closer to home.

(voice-over): Dmitri Babich, a journalist who covers intelligence in Moscow, points out there's a lot of nostalgia for the cloak-and- dagger days when Washington was an easy public enemy number one.

DMITRI BABICH, JOURNALIST: I interviewed lots of our former highly-placed intelligence officials, and I always saw the sad expression on their faces. None of them was happy about what happened in Russia in the last eight or nine years.

KELLOGG: With serious security issues and a civil war going on in Russia, many experts say Moscow's intelligence mechanism is generally tightening up, looking for anyone chipping away at national security.

In Moscow, Amy Kellogg, FOX NEWS. Copyright 1999 Fox News Network, Inc. ALL RIGHTS RESERVED