lo. 697 I The Heritage Foundation 21 4 Massachusetts Avenue N.E. Washington, D.C. 20002 (202) 546-4400 March 30,1989 THECRISIS OF SECURFIYAT SIAm INTRODUCTION President George Bush and Secret ary of State James Baker must confront the question of how to improve United States diplomatic security.

The fate of the new U.S. Embassy in Moscow symbolizes the flaws in State Department security policies. Last October 27, Ronald Reagan announced his decision to recommend the demolition of the nearly completed new U.S.

Embassy building in Moscow. Inadequate oversight by the State Department had allowed Soviet contractors to fill the structure with sophisticated eavesdropping devices. Discovery of this l ed to a halt in construction in August 1985.The edifice was found to be so riddled with bugs that it is referred to as a KGB sound stage, a large Soviet tuning fork, the KGB Hilton, and an eight-story microphone plugged into the Politburo.

The High Cost o f Flaws. The new U.S. Embassy in Moscow that Reagan orderedzmay take up to 45 months to construct and cost as much as $300 million. U.S. taxpayers, who have already spent $22 million on the Moscow Embassy, have a right to ask which agencies have been resp o nsible for this security disaster. Much of the blame belongs to the State Department 1 The Washington Post, October 27,1988, p. 1 2 The State Department is now exploring the idea of selling the bugged U.S. embassy building to American businessmen who want offices in Moscow. The Washington Post, January 27,1989, A18 This is the seventh in a series by The Heritage Foundation State Department Assessment Project. It was preceded by Backgmunder No 682, A Country Like Any Other: The State Department and the Sovi e t Union December 7,1988 Backgrounder No. 673, The State Departments Structure Puts It at Odds with the White House (September 22,1988 Backgounder No. 653, Rethinking U.S. Foreign Aidn (June 1,1988 Buckgrounder No. 631, Rethinking the State Departments Rol e in Intelligence (February 11,1988 Buckgnnuzder No. 615, Breaking the Lodam in State Department Reports from Overseas (November 9 1987 and Backpunder No. 605, Understanding the State Department (September 25,1987 An upcoming study will analyze the role of Foreign Sen& Officers Note: Nothing written here k to be construed as necessarily reflecting the views of The Heritage Foundation or as an attempt to aid or hinder the passage of any bill before Congress.

In recent years, the Department has displayed a co nsistent inability to fulfill the security tasks assigned to it.The Soviets have been able to bug typewriters at the present Moscow Embassy and have received information from at least one Marine guard.The State Department also negotiated accords with the Soviets which allowed them to obtain a site for their new embassy in Washington that is ideally suited for electronic surveillance.

Similar failures allowed a non-Soviet bloc country recently to gain access to sensitive arms control information that the St ate Department was supposed to protect should be removed from State Department jurisdiction and given separate status similar to the FBI, CIA, and Secret Service. Foreign construction should be removed from State Department oversight, and the employment o f foreign nationals by U.S. embassies, especially in communist countries should be reduced or eliminated. The Office of Foreign Missions, created by Congress to press for reciprocity in diplomatic dealings with other governments, should be given more suppo r t by the State Department, and the money appropriated for counterintelligence needs to be more effectively spent Fundamental reforms are needed. The Bureau of Diplomatic Security (DS The New Moscow Embassy: Flawed from the Start One of the true scandals o f American foreign policy is what The THE STATE DEPARTMENT SECURITY RECORD 1 Warhingfon Post calls the saga of the two new embassies, ours in Moscow and theirs in Washington.J In 1969 and 1972, two agreements were signed by the U.S. and the Soviet Union wh i ch permitted the acquisition of land for expansion of their respective embassies and the construction of new I buildings. By 1985, the U.S. government stopped construction in Moscow 1 because of the discovery of bugs. So massive was the Soviet effort to w ire the new building for sound that a congressional report termed it fundamentally compromised.

In congressional testimony in 1987, Assistant Secretary of State and then Director of the Bureau of Diplomatic Security (DS) Robert E. Lamb admitted that the U. S. knew from the start that the KGB was going to try to place listening devices in the new embassy building. Said Lamb: We knew the Soviets were going to bug us. We had a strategy for finding it.95 3 The Washington Post, November 1,1988, p. A18 4 Security at the US. Embassy in MOSCOW, Trip Report by Rep. Daniel A. Mica and Rep. Olympia J. Snowe May 12,1987, p. 2 5 U.S. Alerted to Embassy Bugs in 79, The Washington Post, April 23,1987 p. 1 2 The strategy failed. Security problems existed from the very start .

According to a 1986 report by the Senate Foreign Relations Committee lax security standards allowed the American architects to employ a Soviet national, a structural engineer who was residing in the United States, to work on the U.S. Embassy design for a pproximately five months After he completed his work on the design, he returned immediately to the USSR where he disappeared! In addition, a number of State Department contractors and almost half of the employees of the U.S. company responsible for the em b assy's electrical and mechanical systems lacked required security clearances the new building itself. According to the 1972 construction agreement, the Soviet contractor was allowed to fabricate the U.S. Embassy's component parts off site without any U.S. supervision. In addition, the agreements permitted the Soviets to redesign the structure of the building substantially.

Soviet Sophistication. The result was predictable. The prefabricated building components were riddled with listening devices of such sophistication that they eluded detection for years and, even when found could not be understood. As Assistant Secretary L amb was later to comment the U.S. government did not foresee the possibility that the Soviets would use the structure itself as part of the bugging."

U.S. officials blithely had accepted Soviet assertions that Soviet construction practices did not permit on-site pouring of concrete.

Consequently, State Department officials readily agreed to having major components cast away from the construction site By contrast, while the Soviets retained a U.S. company to construct their new embassy in Washington, they i nsisted that the components be fabricated on site and under heavy KGB supervision Mount ARo and the Scandal of Reciprocity In Washington, as well as in Moscow, the Soviets got the better of the U.S government. In exchange for a microphone-riddled building at a swampy site at one of the lowest points in the Moscow area, State Department negotiators, under pressure from the Nixon White House? delivered 12 acres of prime Washington real estate at the second highest point in the capitol area, from which parabo lic dishes currently intercept sensitive microwave transmissions.

Mount Alto is 350 feet above sea level, which places it above nearly every sensitive government site in Washington. Example: the White House is only 7 Perhaps the greatest breach of security had to do with the construction of 8 6 Subsequent attempts to contact "Ivan the Architect" were unavailing as Soviet officials turned away U.S requests with news that he had died of a heart attack. Senate Foreign Relations Committee, Trip Report: Visit t o US. Embassy &Muloscow; September 15-17,1986," p. 4 7 hid p. 6 8 "Congress Hears $70 Mion Plan for Salvaging Moscow Embassy The New Yo& Zhw June 30,1987, p. 1 9 "The Bugged Embassy Case: What Went Wrong The New Yo& Times, November 15,1988, p. A12 3 51 fee t above sea level, the State Department only 32 feet, the Pentagon 21 feet, and the U.S. Capitol only 90.5 feet. From the Soviet eavesdropping antenna on Mt. Alto, the White House is less than 3 miles by direct line of sight, the State Department a little o ver 3 miles, the Pentagon about 4 miles the U.S. Capitol slightly over 4 miles, and the FBI about 3.5 miles. Although the Soviets cannot occupy their new Washington chancery until the situation with the new U.S. Embassy in Moscow is resolved, the agreemen t permits the Soviets to use the residences in their new embassy compound.

From their vantage point on Mount Alto, the Soviets are currently able to eavesdrop on an estimated 70 percent of the private telephone calls in the entire capital region, intercept sensitive military communications, and target other important government offices.

The Continuing Mess in Moscow: Swallows in the Embassy at a Christmas party at the U.S. Embassy inVienna by a Marine Corps guard who confessed his involvement with the KGB at his previous posting in Moscow to having had a relationship with a Soviet woman who was employed at the Embassy. In espionage parlance, a woman employed by the KGB to compromise U.S. citizens is know as a swallow the worst-case assessments presume that Soviets had access for hours at a time to the most sensitive areas of the embassy. The integrity of the entire system depended on the single Marine guard in control of the technical systems from the command post. Even the purely technical components of th e system were inadequate.Television cameras did not cover the vaulted door of the Post Communications Unit, and there were blind spots on the perimeter that could be exploited.The Soviets also had access to the courtyard of the embassy since two Soviet dri vers stayed there all night.

Finally, most of thew cameras used were not equipped with motion detectors nor was there adequate 24-hour recording equipment.

Foreign Nationals: Convenience or Threat?

Until very recently, there were about 250 Soviet nationa ls working in the U.S. Embassy in Moscow as chauffeurs, telephone operators, translators maids, and cooks.The State Department has claimed in the past that Soviet nationals were not permitted to work in sensitive areas of the embassy.

With the revelations of the 1980s, that confidence has been demonstrated to have been misplaced On December 14,1986, a CIA officer was startled when he was approached The Marine, who had served as a guard at the Moscow Embassy, admitted According to a 1987 report of the Sena t e Select Committee on Intelligence 10 Senate Panel Urges Destruction of Moscow Site: nte New Yo& Ties, April 30,1987 11 See, e House Votes to Ban Soviet Employees at U.S. Embassy, Los Angeles limes, May 9,1985, p. 16 4 In addition to the threat posed by S o viets planting bugging devices and seducing Marines, there are more subtle problems with employing foreign nationals at sensitive overseas posts. As American Foreign Service Officers become familiar with foreign employees, they tend not to look at them as loyal citizens of an often hostile power. Familiarity leads career diplomats to lower their vigilance with respect to foreign nationals. Foreign nationals hired as clerks or for similar jobs can pick up important information about what is happening at the embassy weaknesses of certain U.S. personnel vulnerabilities of the system, and even the identities of intelligence personnel under cover. A senior State Department official told The New York Times Sure there are KGB agen ts But there are also many other l o 1 eo le who have worked for the U.S. for years despite great hardship. The idea that Soviet citizens, screened and hired by the Soviet government to work at the American Embassy, should be considered loyal to the U.S might strike just about everyone as b izarre. Yet it is precisely this attitude that leads to the kind of fraternization between U.S. personnel and Soviet employees which was uncovered in the wake of the Moscow Embassy Marine Guard case. A 1987 congressional report criticized the U.S. Ambassa d or to Moscow, Arthur Hartman, who successfully argued against proposals to reduce the number of foreign nationals employed at U.S. posts. Concluded the report- The Ambassador acted in ways to obstruct security enhancements the problem of foreign nationals is not limited to the Soviet Union and the Eastern bloc. The Senate Foreign Relations Committee discovered in 1986 that almost half of the employees of one U.S. contractor for American embassies had arrived without any of the required security ~1earances. l ~ In another case 19 of 42 State Department contractors lacked required security clearances. Eight of the nine overseas posts investigated for a recent General Accounting Office (GAO) study had failed to comply with security requirements for investi ating foreign nationals and contractors employed by the State Department.

In Algeria, only 52 of 229 foreign national employees and none of the local guard force of 94 had been investigated. Only 7 of 182 foreign nationals and contractors in Argentina had been investigated, while 204 of 328 local guards in Egypt had not been investigated at all.The situation was better at posts in Chile, India, Morocco, the Philippines, Thailand, and Uruguay, but at most of these posts there were backlogs of individuals who nee d ed to be reinvestigated IP p Widespread Security Laxity. The lax approach by the State Department to 18 l2 Are Embassies Chronically Insecure? The New Yo& limes, April 12,1987 13 Mica-SnoweTrip Report, op. cit 14 Senate Foreign Relations CommitteeTrip Rep o rt, op. cit p. 5 15 Ibid p. 6 16 United State General Accounting Office, Embassy Security: Background Investigations of Fornip Employees January 1989 5 I Z C The GAO study attributes these failures to ( 1) the inconsistent application of States regulation s by overseas posts 2) the low priority generally assigned to background investigations relative to other security concerns 3) the lack of monitoring by States headquarters to see that posts perform background investigations or reinvestigations of foreign n ationals, and (4) inadequate tracking systems to determine who needed background investigation Moscow on the East River Our best watch-tower in the West is how one top-ranking Soviet official described the United Nations to Soviet defector, Arkady Shevche n ko, the former U.N. Undersecretary General.18 The U.N. Secretariat in New York houses the largest concentration of Soviet and Soviet bloc officers in the U.S most of them under cover as U.N. international civil servants. In addition to using many of its m ore than 200 Soviet nationals working in Manhattan at the U.N. as a base for domestic espionage, the KGB and related espiona e services recruit Third World and even Western diplomats in New York.

Outside of Manhattan, the USSR and Warsaw Pact nations routinely conduct espionage through trade and commercial establishments in regional centers such as Charlotte, North Carolina, and Columbus, Ohio.

Department by Congress in 1982, to insure that foreign diplomats in the U.S including those at the United Nations , are treated in the same manner as U.S diplomats are treated by particular other countries. OFM also coordinates the efforts of U.S. federal, state, and municipal authorities to prevent spies from abusing their diplomatic privileges pe.1985 Roth-Hyde Ame n dment to the Foreign Mkions Act places employees of the U.N. Secretariat under the restrictions applied to the officers of diplomatic missions. As a result, Soviet officials must coordinate in advance all travel beyond a 25-mile radius of their base citie s with the OFM Travel Service Bureau. These regulations are important, but are applied inconsistently. Relatively looser standards are applied to Soviet allies, while Hungarian and Romanian officials are not restricted at all. Furthermore, the PBI lacks th e manpower for adequate surveillance of the approximately 10,000 communist bloc nationals in the U.S. Making this situation worse is the apparent lack of support for the OFM within the State Department.

The Case of the Careless Employee Though a small agency housed within the State Department building, the Arms Control and Disarmament Agency (ACDA) has access to highly classified information about nuclear programs and strategic weapons.

Although ACDA has its own security officer, its Sensitive Compartmented Information Facility is under State Department jurisdiction 18 The Office of Foreign Missions (OFM) was created within the State 17 Bid.; p. 3 18 Arkady Shevchenko, Bma&ing with Moscow (New Yorlc Alfr ed A. Knopf, 1985 p. 237 19 Thomas E. L. Dewey and Charles M. Lichenstein, New Measures Needed to Fight Anti4J.S. Spying Heritage Foundation Backgvunder No. 590, July 2,1987 6 .

In 1985 it was revealed that an ACDA employee had improperly stored a large nu mber of highly classified codeword documents in her office safe in spite of assurances given to the ACDA security officer that she had no such documents. A subsequent assessment by the National Security Agency determined that she had taken classified mate rial to officials of a foreign albeit friendly, country.

The case of the careless employee at ACDA led to an investigation by the General Accounting Office of how classified information was being handled.

The investigation determined that ACDA could not l ocate one-quarter of a random sample of classified material requested by the GAO. The GAO further concluded that the State Department had failed to provide adequate security support to ACDkThough there is no evidence that any of the material found its way into Soviet hands, the case shows that the State Departments security deficiencies are not limited to embassies overseas THE STATE DEPARTMENT AND U.S. SECURITY The persistent exposure of security failures, prompting the creation of task forces and special committees that conduct investigations and inquiries followed ultimately by pledges to fix the problems by responsible State Department officials, cannot be explained by incompetence. The deficiency in States view of security matters is institutional.

Wit hin the State Department, the Bureau of Diplomatic Security (DS) has the duty of protecting U.S. diplomatic personnel and property overseas. Each overseas post has a regional security officer, who is responsible not only for the security of State Departme nt posts in that country but also for those of the U.S. Information Agency (USIA the U.S. Agency for International Development (AID and the Peace Corps.

The attitudes of many State Department officials impair the effectiveness of the Bureau of Diplomatic S ecurity. To many American career foreign service officers, security and diplomacy have come to appear antithetical. The diplomatic function as defined by the State Department is to get along with the host country and foreign nationals, even when this conf l icts with the requirements of security. By contrast, security personnel perform a function that exposes the limits of the diplomatic enterprise, a world not amenable to rational resolution. To many American foreign service officers, military and security personnel represent the failure of diplgmacy.

Disdain for Security. The result is a low regard, even disdain, by the State Department for security officers.This is reflected in the pecking order at the typical U.S. embassy.The Regional Security Officer, th e local representative of the Bureau of Diplomatic Security, reports to the embassys administrative officer, the foreign service official with typically the lowest prestige in the embassy. What is more, the security officer is considered part of the suppo r t staff 7 State Department officials also tend to see embassies as extensions of the US slices of America transplanted abroad. They consider security measures as barriers between themselves and the locals. Ironically, this was one argument used by State D e partment careerists against eliminating foreign nationals in the Moscow Embassy. Arthur Hartman, U.S. ambassador in Moscow during some of the most damaging security lapses, told Representative James Courter, the New Jersey Republican, that Soviet citizens working at the embassy came away with a new and fresh perspective about democracy.

The public diplomacy mission of the United States Information Agency USIA meanwhile, requires its own approach to security. Because of the lack of Americans with adequate l anguage skills and familiarity with local institutions, USIA needs foreign nationals in its Eastern European offices.

USIA buildings, moreover, must be easily accessible to foreigners if the agency is to fulfill its mandate to acquaint foreign publics wit h American institutions and ideas. In the special case of USIA, the balance between seairity and accessibility should be weighted in favor of the 1atter.This need not undermine U.S. security, because USIA personnel deal with far fewer secrets than do emba ssy personnel, and such confidential material can easily be segregated in core sections of USIA facilities abroad.

State Department Resistance to a Security Priority illustrated by the reaction to legislative initiatives to bar foreign nationals from the U .S. Embassy in Moscow. Representative Courter introduced legislation in 1985 to bar Soviet nationals as employees in Moscow Leningrad, and other Soviet cities. He voiced his concern that even the chauffeurs were Soviets who could overhear the confidential conversations of U.S. diplornats?l When Ambassador Hartman visited Capitol Hill to lobby against passage of the legislation, he joked that employing KGB agents sometimes made it easier to communicate with the Soviet leadership. To illustrate the pervasive presence of Soviet agents, Hartman told the congressmen that he believed that his driver was a colonel in the KGB When Courter expressed shock at this news, he was ridiculed. One unnamed Administration official described Courters reaction as silly: The gu y Courter] doesnt know what hes talking about. Its like thegy from Kansas who goes to NewYork and is shocked by the tall buildings 1986 Expulsions. The elimination of Soviet employees from the U.S.

Embassy in Moscow finally occuryd in fall 1986, but not be cause the U.S government expelled them. Ironically, it was the Soviet government that did so, ordering its citizens to resign from their jobs at the embassy in retaliation for the expulsion from the U.S. of 80 suspected Soviet spies m The attitude of the S tate Department and its resistance to change are well i 20 Courter Sees Incompetence in Moscow Embassy Scandal, StmLedger (NJ Apd 3,1987 21 Congressional Record, May 8,1985, p. 7 22 The New Yo& Ties, September 29,1985 23 Courter Faults Hiring of Soviets a t U.S. Embassy, Stur-Le

er (NJ September 29,1985, p. 11 8 Even after the Soviet nationals left that embassy, 380 foreign nationals remained at work at American embassies in Warsaw Pact countries. To make matters worse, the State Department frequently waive s security criteria for posting Americans to U.S. embassies in those countries. The criteria developed by the Diplomatic Security Service, are regularly waived according to one congressional report, merely to prevent inconveniences in the personnel assign ment process.

The response of the State Department to the threats posed in these other countries has been predictable. For example, when Courter introduced legislation in 1987 banning all foreign nationals from employment in U.S diplomatic facilities in Eastern Europe, the Department opposed it, using the arguments that it had used to lobby against Courters 1985 legislation prohibiting Soviet employees in Moscow.

States Pattern of Neglect recommendations of a number of high-level studies on making U.S embassies more sec ure. After the bombing of the U.S. Embassy in Beirut in 1983, an advisory panel chaired by former CIA Deputy Director Robert Inman was asked by the State Department to recommend anti-terrorist measures; the panel did so, but its counterintelligence recomm e ndations have been ignored. The State Department also has implemented only a few of the dozen proposals recommended in the 198 Presidents Foreign 24 In recent years, the State Department largely has ignored the Intelligence Advisory Board (PFIAB) report. 2 5 The State Department has failed to carry out recommendations both of the Senate Foreign Relations CommitteeTrip Report (September 15-17,1986 which exposed many of the flaws of the new Moscow chancery construction and of the Senate Select Committee on In t elligence (SSCI in its April 1987 report which called for the destruction of the compromised embassy building and the removal of foreign employees from other U.S. embassies. Similar recommendations were made in the report authored by Representatives Dan M ica, the Florida Democrat, and Olympia Snowe the Maine Republican which criticized the lack of coordination between the State Department and the Marine Corps guard unit in Moscow.

The State Departments neglect of many of the measures advocated by these rep orts confirms the low priority that the State Department assigns to security matters 24 Ironically, this legislation was anticipated in 1985 and was used by the State Departments allies on Capitol Hill to try to defeat Courters 1985 legislation banning So v iets from the Moscow Embassy. Representative Dan Mica, the Florida Democrat, arguing the State Departments position, observed that if the U.S. banned foreign nationals from the Moscow Embassy, it might have to ban foreign nationals from other embassies as well.

Congressional Record, May 8,1985, p. H3008 25 State Department Accused oEMoscow Security Laxness, The Washhgtm Xma, April 6,1987, p. 3A 26 Security at the US. Embassy in Moscow, May 12,1987 9 I. I Recent Security Reforms There have been, however, a few improvements in recent years in State Department security procedures. These reforms, many of which are being imposed over the objections and procrastination of key State Department career officers, include Introduction of PlainText Processing. The bug g ing of the embassy typewriters in Moscow has led to the creation of a joint facility with the CIA to protect office equipment. Purchasing, shipping, and maintenance are all done by trained U.S. personnel." This prevents the Soviets from inserting devices i n the typewriters that can record secret typed information Establishment of a Security Evaluation Oflice (SEO The State Department and the Central Intelligence Agency are currently working together to establish a Security Evaluation Office (SEO SEO, which would report to the CIA Director, is to assist the Secretary of State in setting security standards for U.S. missions overseas.This would enable the State Department to utilize intelligence community experts in counterintelligence.

SEO would monitor compl iance of the State Department with the established standards and independently and objectively evaluate compliance. In addition, SEO would inspect overseas facilities and provide technical assistance and personnel to formulate and recommend counterintelli g ence security standards to the Secretary of State Inman panel recommendations, the Office of Security at the State Department was elevated in 1985 to become the present Bureau of Diplomatic Security (DS) headed by an Assistant Secretary of State.The numbe r of security officers and engineers assigned to DS has been increased dramatically.The training of the Bureau's staff has been upgraded and, after the revelations of the Marine Guard breach of security in Moscow, an FBI agent has been detailed to the DS C o unterintelligence Staff to help ensure that rigorouq security standards are upheld Upgrading of the Diplomatic Security Service. As a result of the STRENGTHENING SECURITY AT STATE The reforms underway are far from adequate. A number of actions remain to b e taken by the U.S. government. Ronald Reagan's October 27,1988 decision to reject the Moscow Embassy and, more recently, Secretary of State James Baker's suggestion that the building could be sold to private investors are needed first steps.The U.S. furth e r needs to Hire Americans for U.S. embassies abroad. The employment of foreign nationals at U.S. embassies in hostile countries is a mistake, not only because it permits espionage, but because it encourages American diplomats to lower their guard around f ellow workers who serve another government 27 Ronald Spiers The 'Budget Crunch' and the Foreign Service Depamnent of State Bulletin, July 1988, p. 30 28 Gnpsional Record, September 14,1988, p. H7565.

The State Department should replace the foreign national staffs at embassies and other diplomatic facilities in Eastern Europe and other communist countries with American citizens. An exception can be made for overseas posts of the U.S. Information Agency (USIA which requires more access to foreign populations in order to fulfill its mission of public diplomacy Strengthen review of contractors. Stricter standards of security review should be imposed on contractors constructing U.S. diplomatic buildings; in the short term, existing standards must be enforced. Su c h investigations must be closely monitored to insure consistent application of security standards at all U.S. embassies abroad, to prevent a recurrence of the disparities in enforcement which both the Senate Foreign Relations Committee and the GAO have re p orted Upgrade the status of the Bureau of Diplomatic Security. The 1985 upgrading to bureau status of the former office of Security at the State Department is not enough.The Bureau of Diplomatic Security needs to be made independent of the State Departmen t , or at least part of an independent entity within the State Department.To develop its own professional standards, discipline, and esprit, the members of the Bureau should be excepted from ordinary civil service regulations, as are the FBI CIA, or Secret Service Create a separate career track for security officers at State. The reformed DS should have its own career track and promotion panels.

Currently, the senior positions of DS tend to be Foreign Service Officers who specialize in administrative careers within the Foreign Service.To win promo,tion, they must work in other areas of administration, eventually advancing out of security work to be a general administration officers.

Security requires a separate career track so that the service is staffed fro m the top with officials expert in security matters Upgrade security staff status. The Regional Officer should not report through the administrative officer in each U.S. embassy overseas, as he now must do. Instead, the Regional Officer in charge of secur i ty should report directly to the ambassador and deputy chief of mission. This would help to bring security matters frequently and directly to the attention of the embassy leadership. The transformation of DS into a full-scale independent career service wi l l give greater status to security personnel within the embassy and greater weight to their findings and suggestions Establish a security training program. The training requirements for DS are different from those for Foreign Service Officers. A training p r ogram needs to be developed to fit DS needs.This will require coordination with the CIA, FBI, and Secret Service.To achieve continuity within DS, the Bureau should have its own permanent instructors to train its officers, in addition to security experts a s signed to DS from other agencies Remove authority for embassy construction from State. The Foreign Building Office (FBO) at State is in charge of billions of dollars appropriated for the current worldwide construction program to improve U.S. embassy 11 de fenses against terrorism. Under FBOs supervision there has been little coordination between contractors who build embassies and the engineers on the DS staff, who only check the premises for bugs after the building is finished.

Responsibility for the const iction of embassies should be removed from the State Department for two reasons. First, the State Department consistently has undervalued security. Second, a number of U.S. government agencies, in addition to the State Department, are now tenants in embas s y buildings. An honest broker outside the State Department could make the decisions about construction, security, logistics, communications, and other institutional issues concerning embassy arrangements, as the General Services Administration does for do m estic buildings of the federal government Consider independent status for the Office of Foreign Missions. The creation of the Office of Foreign Missions in 1982 was supported by the intelligence community, with the understanding that it would be headed by a former intelligence officer with the personal rank of ambassador. The mission of enforcing reciprocity, that is, of making U.S. government restrictions on foreign (especially communist bloc) embassy personnel in the United States depend in large part on how their goyements treat U.S embassy personnel in their own countries, sometimes may conflict with the requirements of security. Restrictions on the travel of Soviet diplomats in the U.S for example, may be justified by security concerns quite distinct f rom the question of punishing or rewarding the Soviet government for its treatment of U.S. diplomats. For reasons of national security, it might be un\\ ?rise to relax such restrictions on Soviet personnel in the U.S. even if the Soviet government eased restr ictions on the travel and activities of U.S diplomats in the Soviet Union the OFM head to have experience in security matters. However, while a former FBI official was given the job, the State Department blocked his ambassadorial rank for four.years.The l a ck of support within the State Department for the OFM raises the question whether the function of enforcing reciprocity might also be better located outside the State Department Manage spending more wisely. Despite an increase of over a billion dollars in the budget for embassy security after the Inman report counterintelligence has been shortchanged by the State Department. There are two basic problems with the program to enhance the physical security of embassies and other facilities: too much money (ove r $4 billion) requested and failure to spend the appropriated amount wisely.

Congressional hearings in 1987 showed that the building program at State is choked with unassigned funds. Unassigned balances for new embassy construction have grown to almost $1 billion, prompting former Senator Lawton Chiles, the Florida Democrat, to state If the [budgetary] crisis exists The necessity of balancing security and reciprocity makes it important for 12 it is in the inability of the State Department to effectively ma n age the long-scale programs authorized by Congress State does not have enough experienced staff to manage effectively all of the money appropriated by Congress. Yet State has rejected help from those who might be able to manage the program, including a pr oposal to have the Army Corps of Engineers help with embassy construction.

Those projects that have been undertaken quite often have not been well thought out. Not every embassy faces the same security hazards. After the U.S. Embassy in Beirut was destroye d by a suicide mission, U.S. embassies around the world were redesigned for protection against trucks loaded with explosives. Just as generals often fail by attempting to fight the last war, so State is prepared to repel the last terrorist attack. In the f uture, State Department security officials should be more sensitive to the variety of security risks that threaten U.S. embassies overseas CONCLUSION The State Department consistently underestimates the complexity and seriousness of the security threat to U.S. embassies abroad. In spite of repeated failure to correct the problem, the Department, from former Secretary of State George Shultz down, has lobbied against the kinds of substantive reforms that would correct the problem. The changes needed to impro ve security dramatically cannot be cosmetic, as they have been in the past. A serious restructuring of the way State provides for the physical security of U.S. embassies and the security of U.S. data and secrets is needed.

Anything less will just be courting future security debacles.

Prepared for The Heritage Foundation by Bretton G. Sciarom Bretton G. Sciaroni is a Washington attorney and was Counsel to the Presidents Intelligence Oversight Board at the White House, 1984-1987 13 697 March 30,1989 THECRISI S OF SEcURlTyAT STATE INTRODUCTION President George Bush and Secretary of State James Baker must confront the question of how to improve United States diplomatic security.

The fate of the new U.S. Embassy in Moscow symbolizes the flaws in State Department security policies. Last October 27, Ronald Reagan announced his decision to recommend thf demolition of the nearly completed new U.S.

Embassy building in Moscow. Inadequat e oversight by the State Department had allowed Soviet contractors to fill the structure with sophisticated eavesdropping devices. Discovery of this led to a halt in construction in August 1985.The edifice was found to be so riddled with bugs that it is r e ferred to as a KGB sound stage, a large Soviet tuning fork, the KGB Hilton, and an eight-story microphone plugged into the Politburo The High Cost of Flaws. The new U.S. Embassy in Moscow that Reagan ordered may take up to 45 months to construct and cost a s much as $300 million? U.S. taxpayers, who have already spent $22 million on the Moscow Embassy, have a right to ask which agencies have been responsible for this security disaster. Much of the blame belongs to the State Department 1 77ie Wushington Post , October 27,1988, p. 1 2 The State Department is now exploring the idea of selling the bugged U.S. embassy building to American businessmen who want ofices in Moscow. The Wushington Post, January 27,1989, A18.

This is the seventh in a series by The Herita ge Foundation State Department Assessment Project. It was preceded by Buckgrounder No 682, A Country Like Any Other: The State Department and the Soviet Union December 7,1988 Buckgrounder No. 673, The State Departments Structure Puts It at Odds with the W h ite House (September 22,1988 Buc&grounder No. 653, Rethinking U.S. Foreign Aid (June 1,1988 Buckgrounder No. 631, Rethinking the State Departments Role in Intelligence (February 11,1988 Buckgrounder No. 615, Breaking the Logiam in State Department Reports from Overseas (November 9 1987 and Buckgrounder No. 605, Understanding the State Department (September 25,1987 An upcoming study will analyze the role of Foreign Service Officers In recent years, the Department has displayed a consistent inability to fulf i ll the security tasks assigned to it.The Soviets have been able to bug typewriters at the present Moscow Embassy and have received information from at least one Marine guard. The State Department also negotiated accords with the Soviets which allowed them to obtain a site for their new embassy in Washington that is ideally suited for electronic surveillance.

Similar failures allowed a non-Soviet bloc country recently to gain access to sensitive arms control information that the State Department was suppose d to protect. should be removed from State Department jurisdiction and given separate status similar to the FBI, CIA, and Secret Service. Foreign construction should be removed from State Department oversight, and the employment of foreign nationals by US . embassies, especially in communist countries should be reduced or eliminated. The Office of Foreign Missions, created by Congress to press for reciprocity in diplomatic dealings with other governments, should be given more support by the State Department , and the money appropriated for counterintelligence needs to be more effectively spent Fundamental reforms are needed. The Bureau of Diplomatic Security (DS THE STATE DEPARTMENT SECURITY RECORD I The New Moscow Embassy: Flawed from the Start One of the tr u e scandals of American foreign policy is what ne Washington Post calls the saga of the two new embassies, ours in Moscow and theirs in Wa~hington In 1969 and 1972, two agreements were signed by the U.S. and the Soviet Union which permitted the acquisition of land for expansion of their respective embassies and the construction of new buildings. By 1985, the U.S. government stopped construction in Moscow because of the discovery of bugs. So massive was the Soviet effort to wire the new building for sound th a t a congressional report termed it fundamentally compromi~ed In congressional testimony in 1987, Assistant Secretary of State and then Director of the Bureau of Diplomatic Security (DS) Robert E. Lamb admitted that the U.S. knew from the start that the KG B was going to try to place listening devices in the new embassy building. Said Lamb: We knew the Soviets were going to bug us. We had a strategy for finding it.5 3 The Washington Post, November 1,1988, p. A18 4 Security at the U.S. Embassy in MOSCOW, Trip Report by Rep. Daniel A. Mica and Rep. Olympia J. Snowe May 12,1987, p. 2 5 US. Alerted to Embassy Bugs in 79, The Washington Post, April 23,1987 p. 1 2 The strategy failed. Security problems existed from the very start.

According to a 1986 report by the Senate Foreign Relations Committee, lax security standards allowed the American architects to employ a Soviet national, a structural engineer who was residing in the United States, to work on the U.S. Embassy design for approximately five months. After he completed his work on the design, he returned immediately to the USSR where he disappeared! In addition, a number of State Department contractors and almost half of the employees of the U.S. company responsible for the embassys electrical and mechanical s y stems lacked required security clearances the new building itself. According to the 1972 construction agreement, the Soviet contractor was allowed to fabricate the U.S. Embassys component parts off site without any U.S. supervision. In addition, the agree ments permitted the Soviets to redesign the structure of the building substantially.

Soviet Sophistication. The result was predictable. The prefabricated building components were riddled with listening devices of such sophistication that they eluded detect ion for years and, even when found could not be understood. As Assistant Secretary Lamb was later to comment the U.S. government did not foresee the possibility that the Soviets would use the structure itself as part of the bugging.

U.S. officials blithely had accepted Soviet assertions that Soviet construction practices did not permit on-site pouring of concrete.

Consequently, State Department officials readily agreed to having major components cast away from the construction site? (By contrast, while th e Soviets retained a U.S. company to construct their new embassy in Washington, they insisted that the components be fabricated on site and under heavy KGB supervision Mount AIto and the Scandal of Reciprocity In Washington, as well as in Moscow, the Sovi e ts got the better of the U.S government. In exchange for a microphone-riddled building at a swampy site at one of the lowest points in the Moscow area, State Dep rtment negotiators, under pressure from the Nixon White House! delivered 12 acres of prime Wa shington real estate at the second highest point in the capitol area, from which parabolic dishes currently intercept sensitive microwave transmissions.

Mount Alto is 350 feet above sea level, which places it above nearly every sensitive government site in Washington. Example: the White House is only 7 Perhaps the greatest breach of security had to do with the construction of 6 Subsequent attempts to contact Ivan the Architect were unavailing as Soviet officials turned away U.S requests with news that he h a d died of a heart attack. Senate Foreign Relations Committee, Trip Report: Visit to U.S. Embassy in Moscoy September 15-17,1986, p. 4 7 Ibid.,p.6 8 Congress Hears $70 Million Plan for Salvaging Moscow Embassy, The New Yo& Times, June 30,1987, p. 1 9 The B u gged Embassy Case: What Went Wrong, The New Yo& Times, November 15,1988, p. A 3 51 feet above sea level, the State Department only 32 feet, the Pentagon 21 feet, and the U.S. Capitol only 90.5 feet. From the Soviet eavesdropping antenna on Mt. Alto, the W h ite House is less than 3 miles by direct line of sight, the State Department a little over 3 miles, the Pentagon about 4 miles the U.S. Capitol slightly over 4 miles, and the FBI about 3.5 miles. Although the Soviets cannot occupy their new Washington cha ncery until the situation with the new U.S. Embassy in Moscow is resolved, the agreement permits the Soviets to use the residences in their new embassy compound.

From their vantage point on Mount Alto, the Soviets are currently able to eavesdrop on an esti mated 70 percent of the private telephone calls in the entire capital region, intercept sensitive military communications, and target other important government offices.

The Continuing Mess in Moscow: Swaliows in the Embassy at a Christmas party at the U. S. Embassy in Vienna by a Marine Corps guard who confessed his involvement with the KGB at his previous posting in Moscow to having had a relationship with a Soviet woman who was employed at the Embassy. In espionage parlance, a woman employed by the KGB t o compromise U.S. citizens is know as a swallow the worst-case assessments presume that Soviets had access for hours at a time to the most sensitive areas of the embassy.1 The integrity of the entire system depended on the single Marine guard in control o f the technical systems from the command post. Even the purely technical components of the system were inade4uate.Television cameras did not cover the vaulted door of the Post Communications Unit, and there were blind spots on the perimeter that could be e xploited. The Soviets also had access to the courtyard of the embassy since two Soviet drivers stayed there all night.

Finally, most of thew cameras used were not equipped with motion detectors nor was there adequate 24-hour recording equipment.

Foreign Nationals: Convenience or Threat?

Until very recently, there were about 250 Soviet nationals working in the U.S. Embassy in Moscow as chauffeurs, telephone operators, translators maids, and cooks.The State Department has claimed in the past that Soviet nationals were not permitted to work in sensitive areas of the embassy.

With the revelations of the 1980s, that confidence has been demonstrated to have been misplaced On December 14,1986, a CIA officer was startled when he was approached The Marine, who had served as a guard at the Moscow E mbassy, admitted According to a 1987 report of the Senate Select Committee on Intelligence 11 10 Senate Panel UrgesDestruction of Moscow Site, The New Yo& Ernes, April 30,1987 11 See, e.g., HouseVotes to Ban Soviet Employees at U.S. Embassy, Los Angeles E r nes, May 9,1985, p. 16 4 In addition to the threat posed by Soviets planting bugging devices and seducing Marines, there are more subtle problems with employing foreign nationals at sensitive overseas posts. As American Foreign Service Officers become fam i liar with foreign employees, they tend not to look at them as loyal citizens of an often hostile power. Familiarity leads career diplomats to lower their vigilance with respect to foreign nationals. Foreign nationals hired as clerks or for similar jobs ca n pick up important information about what is happening at the embassy weaknesses of certain U.S. personnel vulnerabilities of the system, and even the identities of intelligence personnel under cover. A senior State Department official told The New York r i mes Sure there are KGB agents But there are also many other lo a1 eo le who have worked for the U.S. for years despite great hardship. The idea that Soviet citizens, screened and hired by the Soviet government to work at the American Embassy, should be co n sidered loyal to the U.S might strike just about everyone as bizarre. Yet it is precisely this attitude that leads to the kind of fraternization between U.S. personnel and Soviet employees which was uncovered in the wake of the Moscow Embassy Marine Guard case. A 1987 congressional report criticized the U.S. Ambassador to Moscow, Arthur Hartman, who successfully argued against proposals to reduce the number of foreign nationals employed at U.S. posts. Concluded the report: The Ambassador acted in ways to o b struct security enhancement the problem of foreign nationals is not limited to the Soviet Union and the Eastern bloc. The Senate Foreign Relations Committee discovered in 1986 that almost half of the employees of one U.S. contractor for American embassies had arrived without any of the required security ~1earances.l~ In another case 19 of 42 State Department contractors lacked required security clearances. Eight of the nine overseas posts investigated for a recent General Accounting Office (GAO) study had failed to comply with security requirements for investi ating foreign nationals and contractors employed by the State Department.

In Algeria, only 52 of 229 foreign national employees and none of the local guard force of 94 had been investigated. Only 7 of 182 foreign nationals and contractors in Argentina had been investigated, while 204 of 328 local guards in Egypt had not been investigated at all.The situation was better at posts in Chile, India, Morocco, the Philippines, Thailand, and Uruguay, but at m o st of theseqosts there were backlogs of individuals who needed to be reinvestigated. hP p Widespread Security Laxity. The lax approach by the State Department to l 12 Are Embassies Chronically Insecure? The New York limes, April 12,1987 13 Mica-Snowe Trip Report, op. cit 14 Senate Foreign Relations CommitteeTrip Report, op. cit p. 5 15 Bid p. 6 16 United State General Accounting Office, Embassy Security: Background Invesrigotions of Foeign Employees January 1989 5 The GAO study attributes these failures to 1) the inconsistent application of States regulations by overseas posts, (2) the low priority generally assigned to background investigations relative to other security concerns 3) the lack of monitoring by States headquarters to see that posts perform ba c kground investigations or reinvestigations of foreign nationals, and (4) inadequate tracking systems to determine who needed background in~estigations Moscow on the East River described the United Nations to Soviet defector, Arkady Shevchenko, the former U .N. Undersecretary General.18 The U.N. Secretariat in New York houses the largest concentration of Soviet and Soviet bloc officers in the U.S most of them under cover as U.N. international civil servants. In addition to using many of its more than 200 Sov iet nationals working in Manhattan at the U.N. as a base for domestic espionage, the KGB and related espiona e services recruit Third World and even Western diplomats in New York.

Outside of Manhattan, the USSR and Warsaw Pact nations routinely conduct espionage through trade and commercial establishments in regional centers such as Charlotte, North Carolina, and Columbus, Ohio.

Department by Congress in 1982, to insure that foreign diplomats in the U.S including those at the United Nations, are treated in the same manner as U.S diplomats are treated by particular other countries. OFM also coordinates the efforts of U.S. federal, state, and municipal authorities to prevent spies from abusing their diplomatic privileges.

The 1985 Roth-Hyde Amendment to the Foreign Missions Act places employees of the U.N. Secretariat under the restrictions applied to the officers of diplomatic missions. As a result, Soviet officials must coordinate in advance all travel beyond a 25-mile radius of their base cities with the O FM Travel Service Bureau. These regulations are important, but are applied inconsistently. Relatively looser standards are applied to Soviet allies, while Hungarian and Romanian officials are not restricted at all. Furthermore, the FBI lacks the manpower for adequate surveillance of the approximately 10,000 communist bloc nationals in the U.S. Making this situation worse is the apparent lack of support for the OFM within the State Department.

The Case of the Careless Employee Arms Control and Disarmament Agency (ACDA) has access to highly classified information about nuclear programs and strategic weapons.

Although ACDA has its own security officer, its Sensitive Compartmented Information Facility is under State Department jurisdiction Our best watch-tower in the West is how one top-ranking Soviet official 18 The Office of Foreign Missions (OFM) was created within the State Though a small agency housed within the State Department building, the 17 Ibid p. 3 18 Arkady Shevchenko, Breaking with Moscow (New Yo r k Alfred A. Knopf, 1985 p. 237 19 Thomas E. L. Dewey and Charles M. Lichenstein, New Measures Needed to Fight Anti4J.S. Spying Heritage Foundation Backgrounder No. 590, July 2,1987 6 In 1985 it was revealed thatan ACDA employee had improperly stored a lar g e number of highly classified codeword documents in her office safe in spite of assurances given to the ACDA security officer that she had no such documents. A subsequent assessment by the National Security Agency determined that she had taken classified material to officials of a foreign albeit friendly, country.

The case of the careless employee at ACDA led to an investigation by the General Accounting Office of how classified information was being handled.

The investigation determined that ACDA could n ot locate one-quarter of a random sample of classified material requested by the GAO. The GAO further concluded that the State Department had failed to provide adequate security support to ACDA Though there is no evidence that any of the material found it s way into Soviet hands, the case shows that the State Departments security deficiencies are not limited to embassies overseas THE STATE DEPARTMENT AND U.S. SECURITY Security and the State Cuffure forces and special committees that conduct investigations a nd inquiries followed ultimately by pledges to fix the problems by responsible State Department officials, cannot be explained by incompetence. The deficiency in States view of security matters is institutional.

Within the State Department, the Bureau of D iplomatic Security (DS) has the duty of protecting U.S. diplomatic personnel and property overseas. Each overseas post has a regional security officer, who is responsible not only for the security of State Department posts in that country but also for tho se of the U.S. Information Agency (USIA the U.S. Agency for International Development (AID and the Peace Corps.

The attitudes of many State Department officials impair the effectiveness of the Bureau of Diplomatic Security. To many American career foreign service officers, security and diplomacy have come to appear antithetical. The diplomatic function as defined by the State Department is to get along with the host country and foreign nationals, even when this conflicts with the requirements of security. B y contrast, security personnel perform a function that exposes the limits of the diplomatic enterprise, a world not amenable to rational resolution. To many American foreign service officers, military and security personnel represent the failure of diplom acy.

Disdain for Security. The result is a low regard, even disdain, by the State Department for security officers.This is reflected in the pecking order at the typical US. embassy. The Regional Security Officer, the local representative of the Bureau of D iplomatic Security, reports to the embassys administrative officer, the foreign service official with typically the lowest prestige in the embassy. What is more, the security officer is considered part of the support staff The persistent exposure of secur i ty failures, prompting the creation of task 7 State Department officials also tend to see embassies as extensions of the U.S slices of America transplanted abroad. They consider security measures as barriers between themselves and the locals. Ironically, t his was one argument used by State Department careerists against eliminating foreign nationals in the Moscow Embassy. Arthur Hartman, U.S. ambassador in Moscow during some of the most damaging security lapses, told Representative James Courter, the New Je rsey Republican, that Soviet citizens working a the embassy came away with a new and fresh perspective about democracy.

The public diplomacy mission of the United States Information Agency USIA meanwhile, requires its own approach to security. Because of the lack of Americans with adequate language skills and familiarity with local institutions, USIA needs foreign national s in its Eastern European offices.

USIA buildings, moreover, must be easily accessible to foreigners if the agency is to fulfill its mandate to acquaint foreign publics with American institutions and ideas. In the special case of USIA, the balance between security and accessibility should be weighted in favor of the 1atter.This need not undermine U.S. security, because USIA personnel deal with far fewer secrets than do embassy personnel, and such confidential material can easily be segregated in core secti ons of USIA facilities abroad.

State Department Resistance to a Security Priority illustrated by the reaction to legislative initiatives to bar foreign nationals from the U.S. Embassy in Moscow. Representative Courter introduced legislation in 1985 to bar Soviet nationals as employees in Moscow Leningrad, and other Soviet cities. He voiced his concern that even the chauffeurs were Soviets who could overhear the confidential conversations of U.S. diplomats?l When Ambassador Hartman visited Capitol Hill to l o bby against passage of the legislation, he joked that employing KGB agents sometimes made it easier to communicate with the Soviet leadership. To illustrate the pervasive presence of Soviet agents, Hartman told the congressmen that he believed that his dr iver was a colonel in the KGB?.

When Courter expressed shock at this news, he was ridiculed. One unnamed Administration official described Courters reaction as silly: The guy Courter] doesnt know what hes talking about. Its like the y from Kansas who goes to New York and is shocked by the tall buildings 1986 Expulsions. The elimination of Soviet employees from the U.S.

Embassy in Moscow finally occurred in fall 1986, but not because the U.S government expelled them. Ironically, it was the Soviet government that did so, ordering its citizens to resign from their jobs at the embassy in retaliation for the expulsion from the U.S. of 80 suspected Soviet spies 40 The attitude of the State Department and its resistance to change are well E 20 Courter Sees Incomp e tence in Moscow Embassy Scandal, Star-Ledger (NJ April 3,1987 21 Congressional Record, May 8,1985, p. 7 22 The New Yo& Ties, September 29,1985 23 Courter Faults Hiring of Soviets at U.S. Embassy, Star-hdgr (NJ September 29,1985, p. 11 8 Even after the Sov i et nationals left that embassy, 380 foreign nationals remained at work at American embassies in Warsaw Pact countries.To make matters worse, the State Department frequently waives security criteria for posting Americans to U.S. embassies in those countrie s.The criteria developed by the Diplomatic Security Service, are regularly waived according to one congressional report, merely to prevent inconveniences in the personnel assignment process.

The response of the State Department to the threats posed in thes e other countries has been predictable. For example, when Courter introduced legislation in 1987 banning all foreign nationals from employment in U.S diplomatic facilities in Eastern Europe, the Department opposed it, using the arguments that it had used t o lobby against Courters 1985 legislation prohibiting Soviet employees in Mo~cow States Pattern of Neglect recommendations of a number of high-level studies on making U.S embassies more secure. After the bombing of the U.S. Embassy in Beirut in 1983, an a d visory panel chaired by former CIA Deputy Director Robert Inman was asked by the State Department to recommend anti-terrorist measures; the panel did so, but its counterintelligence recommendations have been ignored. The State Department also has implemen t ed only a few of the dozen proposals recommended in the 1985 Presidents Foreign Intelligence Advisory Board (PFIAB) report.25 The State Department has failed to carry out recommendations both of the Senate Foreign Relations CommitteeTrip Report (September 15-17,1986 which exposed many of the flaws of the new Moscow chancery construction and of the Senate Select Committee on Intelligence (SSCI in its April 1987 report which called for the destruction of the comproniised embassy building and the removal of f o reign employees from other U.S. embassies. Similar recommendations were made in the report authored by Representatives Dan Mica, the Florida Democrat, and Olympia Snowe the Maine Republican which criticized the lack of coordination between the State Depar tment and the Marine Corps guard unit in Moscow.

The State Departments neglect of many of the measures advocated by these reports confirms the low priority that the State Department assigns to security matters In recent years, the State Department largely has ignored the 24 Ironically, this legislation was anticipated in 1985 and was used by the State Departments allies on Capitol Hill to try to defeat Courters 1985 legislation banning Soviets from the Moscow Embassy. Representative Dan Mica, the Florida D emocrat, arguing the State Departments position, observed that if the U.S. banned foreign nationals from the Moscow Embassy, it might have to ban foreign nationals from other embassies as well.

Congressional Record, May 8,1985, p. H3008 25 State Department Accused of Moscow Security Laxness, The Washington Ernes, April 6,1987, p. 3A 26 Security at the U.S. Embassy in Moscow, May 12,1987 9 Recent Security Reforms There have been, however, a few improvements in recent years in State Department security proce d ures. These reforms, many of which are being imposed over the objections and procrastination of key State Department career officers, include Introduction of Plain Text Processing. The bugging of the embassy typewriters in Moscow has led to the creation o f a joint facility with the CIA to protect office equipment. Purchasing, shipping, and maintenance are all done by trained U.S. personnel. This prevents the Soviets from inserting devices in the typewriters that can record secret typed information Establis h ment of a Security Evaluation Oftice (SEO The State Department and the Central Intelligence Agency are currently working together to establish a Security Evaluation Office (SEO SEO, which would report to the CIA Director, is to assist the Secretary of Sta te in setting security standards for U.S. missions overseas.This would enable the State Department to utilize intelligence community experts in counterintelligence.

SEO would monitor compliance of the State Department with the established standards and ind ependently and objectively evaluate compliance. In addition, SEO would inspect overseas facilities and provide technical assistance and personnel to formulate and recommend counterintelligence security standards to the Secretary of State.28 Inman panel re c ommendations, the Office of Security at the State Department was elevated in 1985 to become the present Bureau of Diplomatic Security (DS) headed by an Assistant Secretary of State.The number of security officers and engineers assigned to DS has been incr e ased dramatically. The training of the Bureaus staff has been upgraded and, after the revelations of the Marine Guard breach of security in Moscow, an FBI agent has been detailed to the DS Counterintelligence Staff to help ensure that rigorous security st a ndards are upheld Upgrading of the Diplomatic Security Service. As a result of the STRENGTHENING SECURITY AT STATE The reforms underway are far from adequate. A number of actions remain to be taken by the U.S. government. Ronald Reagans October 27,1988 de c ision to reject the Moscow Embassy and, more recently, Secretary of State James Bakers suggestion that the building could be sold to private investors are needed first steps.The U.S. further needs to Hire Americans for U.S. embassies abroad. The employmen t of foreign nationals at U.S. embassies in hostile countries is a mistake, not only because it permits espionage, but because it encourages American diplomats to lower their guard around fellow workers who serve another government 27 Ronald Spiers, The Bu d get Crunch and the Foreign Service, Depmnent of State Bullerin, July 1988, p. 30 28 Congressional Record, September 14,1988, p. H7565 10 The State Department should replace the foreign national staffs at embassies and other diplomatic facilities in Easter n Europe and other communist countries with American citizens. An exception can be made for overseas posts of the U.S. Information Agency (USIA which requires more access to foreign populations in order to fulfill its mission of public diplomacy Strengthen review of contractors. Stricter standards of security review should be imposed on contractors constructing U.S. diplomatic buildings; in the short term, existing standards must be enforced. Such investigations must be closely monitored to insure consisten t application of security standards at all U.S. embassies abroad, to prevent a recurrence of the disparities in enforcement which both the Senate Foreign Relations Committee and the GAO have reported Upgrade the status of the Bureau of Diplomatic Security. The 1985 upgrading to bureau status of the former office of Security at the State Department is not enough.The Bureau of Diplomatic Security needs to be made independent of the State Department, or at least part of an independent entity within the State D e partment.To develop its own professional standards, discipline, and esprit, the members of the Bureau should be excepted from ordinary civil service regulations, as are the FBI CIA, or Secret Service Create a separate career track for security officers at State. The reformed DS should have its own career track and promotion panels.

Currently, the senior positions of DS tend to be Foreign Service Officers who specialize in administrative careers within the Foreign Service.To win promotion, they must work in other areas of administration, eventually advancing out of security work to be a general administration officers.

Security requires a separate career track so that the service is staffed from the top with officials expert in security matters Upgrade secu rity staff status. The Regional Officer should not report through the administrative officer in each U.S. embassy overseas, as he now must do. Instead, the Regional Officer in charge of security should report directly to the ambassador and deputy chief of mission. This would help to bring security matters frequently and directly to the attention of the embassy leadership. The transformation of DS into a full-scale independent career service will give greater status to security personnel within the embassy a nd greater weight to their findings and suggestions Establish a security training program. The training requirements for DS are different from those for Foreign Service Officers. A training program needs to be developed to fit DS needs. This will require c oordination with the CIA, FBI, and Secret Service.To achieve continuity within DS, the Bureau should have its own permanent instructors to train its officers, in addition to security experts assigned to DS from other agencies Remove authority for embassy c onstruction from State. The Foreign Building Office (FBO) at State is in charge of billions of dollars appropriated for the current worldwide construction program to improve U.S. embassy 11 I L I defenses against terrorism. Under FBOs supervision there ha s been little coordination between contractors who build embassies and the engineers on the DS staff, who only check the premises for bugs after the building is finished.

Responsibility for the construction of embassies should be removed from the State Dep artment for two reasons. First, the State Department consistently has undervalued security. Second, a number of U.S. government agencies, in addition to the State Department, are now tenants in embassy buildings. An honest broker outside the State Departm e nt could make the decisions about construction, security, logistics, communications, and other institutional issues concerning embassy arrangements, as the General Services Administration does for domestic buildings of the federal government Consider inde p endent status for the Office of Foreign Missions. The creation of the Office of Foreign Missions in 1982 was supported by the intelligence community, with the understanding that it would be headed by a former intelligence officer with the personal rank of ambassador. The mission of enforcing reciprocity, that is, of making U.S. government restrictions on foreign (especially communist bloc) embassy personnel in the.

United States depend in large part on how their governments treat U.S embassy personnel in t heir own countries; sometimes may conflict with the requirements of security. Restrictions on the travel of Soviet diplomats in the U.S for example, may be justified by security concerns quite distinct from the question of punishing or rewarding the Sovie t government for its treatment of US. diplomats. For reasons of national security, it might be unwise to relax such restrictions on Soviet personnel in the U.S. even if the Soviet government eased restrictions on the travel and activities of U.S diplomats i n the Soviet Union the OFM head to have experience in security matters. However, while a former FBI official was given the job, the State Department blocked his ambassadorial rank for four years.The lack of support within the State Department for the OFM r aises the question whether the function of enforcing reciprocity might also be better located outside the State Department Manage spending more wisely. Despite an increase of over a billion dollars in the budget for embassy security after the Inman report counterintelligence has been shortchanged by the State Department. There are two basic problems with the program to enhance the physical security of embassies and other facilities: too much money (over $4 billion) requested and failure to spend the approp riated amount wisely.

Congressional hearings in 1987 showed that the building program at State is choked with unassigned funds. Unassigned balances for new embassy construction have grown to almost $1 billion, prompting former Senator Lawton Chiles, the Florida Democrat, to st a te If the [budgetary] crisis exists The necessity of balancing security and reciprocity makes it important for 12 it is in the inability of the State Department to effectively manage the long-scale programs authorized by Congress State does not have enoug h experienced staff to manage effectively all of the money appropriated by Congress. Yet State has rejected help from those who might be able to manage the program, including a proposal to have the Army Corps of Engineers help with embassy construction.

Th ose projects that have been undertaken quite often have not been well thought out. Not every embassy faces the same security hazards. After the U.S. Embassy in Beirut was destroyed by a suicide mission, U.S. embassies around the world were redesigned for p rotection against trucks loaded with explosives. Just as generals often fail by attempting to fight the last war, so State is prepared to repel the last terrorist attack. In the future, State Department security officials should be more sensitive to the v a riety of security risks that threaten U.S. embassies overseas CONCLUSION The State Department consistently underestimates the complexity and seriousness of the security threat to U.S. embassies abroad. In spite of repeated failure to correct the problem, t he Department, from former Secretary of State George Shultz down, has lobbied against the kinds of substantive reforms that would correct the problem.The changes needed to improve security dramatically cannot be cosmetic, as they have been in the past. A serious restructuring of the way State provides for the physical security of U.S. embassies and the security of U.S. data and secrets is needed.

Anything less will just be courting future security debacles.

Prepared for The Heritage Foundation by Bretton G. Sciaroni Bretton G. Sciaroni is a Washington attorney and was Counsel to the Presidents Intelligence Oversight Board at the White House, 1984-1987 13