TIME: Almanac 1995

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<text id=89TT2045> <title> Aug. 07, 1989: First The Verdict, Then The Trial </title> <history> TIME--The Weekly Newsmagazine--1989 Aug. 07, 1989 Diane Sawyer:Is She Worth It? </history> <article> <source>Time Magazine</source> <hdr> NATION, Page 16 First the Verdict, Then the Trial </hdr><body> U.S. agents shadow -- but do not arrest -- spy suspect Felix Bloch By Bruce Van Voorst "Hostile surveillance" is a technique used by police to pressure a suspect by letting him know he is being watched. The FBI's investigation of Felix Bloch, the American diplomat suspected of espionage, by last week had mushroomed beyond hostility into full-blown hysteria. When Bloch and his daughter drove from suburban Chappaqua, N.Y., into Manhattan, they were followed by a posse of federal officers, news reporters, camera crews and, said Government sources, a carload of KGB agents. Within days, Bloch became the most intensely hounded public official since Oliver North. Justice Department sources whispered that the Austrian-born Bloch was not only a Communist spy but also an Austrian lackey: as deputy chief of the American mission in Vienna, he had argued against barring Austrian President Kurt Waldheim from the U.S. A Viennese newspaper chimed in that Bloch was also a skirt chaser: police in Vienna interviewed a call girl with whom he had had a "friendship" for several years. In New York City Ronald Lauder, a former U.S. Ambassador to Austria and now a Republican candidate for mayor, claimed he had so distrusted Bloch that he had him fired. Lauder backed down when the State Department pointed out that Bloch was reassigned to Washington in a normal rotation of duties. Even George Bush got into the act, telling reporters that the case against Bloch was a "very serious matter." That was as far as the Government was willing to go on an official level. The State Department confirmed that Bloch is being investigated for a "compromise of security which has occurred," but at week's end no charges had been filed against him, and he remained on paid leave from the department at an estimated $80,000 annual salary. Austrian officials confirmed that they were investigating a "phony Finn" who had traveled to Vienna several times on a forged passport. U.S. officials have fingered him as Bloch's contact. As investigators and reporters jostled for scraps of information about yet another apparent traitor, did anyone care that under the law Bloch was still presumed innocent? His case may indeed prove to be the most serious spy scandal to come out of the State Department since the Alger Hiss affair. But, wrote columnist Lars-Erik Nelson of the New York Daily News, Bloch "is also a U.S. citizen, entitled to due process before execution." Charles Schmitz, vice president of the American Foreign Service Association, said the baying after Bloch was "terrible either way -- for his rights if innocent, for the case if guilty." When news of the scandal broke, much of the case against Bloch still consisted of statements from intelligence sources and evidence gathered by methods that might not even be admissible at a trial. Under U.S. law, direct evidence is required of the transfer to foreigners of damaging secret information. Sources claim that Bloch, 54, a 30-year State Department veteran, was photographed passing a briefcase to a known Soviet agent in Paris. Reportedly, the same agent later tipped Bloch off to the investigation: "A bad virus is going around, and we believe you are now infected." But American investigators would be hard pressed to prove what was in the briefcase. "While the Soviets have the documents, we're stuck with suspicions," said one. Almost every major spy conviction depends heavily on the suspect's cooperation. The New York Times reported that Bloch told the FBI he was working for "many years" for the KGB and had received "a lot of money," but he refused to talk further about specific acts of espionage. Most critical to the assessment of possible damage, it was not clear whether Bloch's alleged work for the Soviets began while he was in Vienna, from 1980 to 1987, or when he served in Berlin, from 1970 to 1975. As the second-ranking diplomat in the Vienna embassy, including a ten-month stint as charge, or acting ambassador, Bloch had access to U.S. diplomatic traffic on East European and Soviet issues as well as worldwide regional reports. He was aware of CIA activities, if not the names of actual agents, in one of the world's most active intelligence arenas, the Austrian capital. As one of eleven office directors in the Bureau of European and Canadian Affairs in Washington, Bloch also had access to the National Intelligence Daily, a highly classified summary. State Department colleagues speculate that if Bloch turned to the Soviets in Vienna, it may have been out of frustration. A competent diplomat, but a dour, moody man, Bloch was deeply offended at having to serve under two inexperienced political appointees. He dismissed former Ambassador Helene von Damm as a "nut" and Lauder as a "total disaster." After returning to the U.S. in 1987, Bloch openly complained about not getting an ambassadorial post. If, however, he was recruited long ago in Berlin, the frustration theory might not hold. Unless Bloch confesses, the U.S. may never learn his motives or how much damage he may have done. And so far he has held his own remarkably well against the mass-media version of the third degree. </body></article> </text>