It's still spy vs. spy

The hunt was maddening. All summer and into the fall, a bunch of FBI irregulars called the special surveillance group--the "G's" in bureau lingo--shadowed Stanislav Gusev when he angled for his favorite parking spot near the State Department, then settled onto a well-worn bench. Whenever Gusev, 54, a technical specialist for the Russian intelligence service, fiddled with something in his pocket, the G's state-of-the-art radio-signal detector would come to life, indicating that a faint low-frequency transmission was emanating from a bug somewhere in the gray State offices.

But where? While the G's, dressed down like tourists, students and street people, kept their eyes on the Russian agent, a second team of FBI agents and personnel from the State Department's office of diplomatic security was covertly scouring the department with a Geiger-counter-size debugging device. An inch-by-inch search of the first through sixth floors yielded nothing. Then a few weeks ago, investigators found a tiny microphone-transmitter on the seventh floor, a short walk from "Mahogany Row," the ornate suite occupied by Secretary of State Madeleine Albright and her top advisers.

The device was hidden inside a length of chair-rail molding ingeniously milled and painted to blend into the aging woodwork of a conference room used by the oceans and environment bureau. "This is really a sort of James Bond scenario," marvels a top official. "This is not something you go in and slap under the table and walk out the door. It's extremely professional in nature and sufficiently concealed so that you or I wouldn't find it in a hundred years."

The bugging operation was disrupted by sharp-eyed Gs who were driving near State on an unrelated surveillance last June. They noticed Gusev, a known intelligence officer whose mug shot they had memorized, standing on the sidewalk, and acting "oddly." After alerting their superiors, the FBI operatives set up an intense surveillance of Gusev.

At first he showed up two or three times a month, lounging on a park bench, his hands moving busily inside two leather bags at his side. They concluded he was making a "technical survey" of the building, using concealed devices to seek the optimal angle for an electronic penetration.

In late summer the G's observed that Gusev's habits had changed. He parked and reparked a Russian-embassy car with diplomatic plates, apparently looking for an optimum position for an antenna concealed, as it turned out, in a Kleenex box on his dashboard. Once satisfied, he got out and appeared to be working a remote-control device hidden in his suit. All this led the FBI to conclude--correctly, as events proved--that he had planted some sort of short-range low-frequency device and was settling down to monitor it.

Officials left the chair-rail bug in place for a few weeks to make sure they could prove it was under Russian intelligence control. Once the evidence was in hand, two FBI agents confronted Gusev on the sidewalk at 11:34 a.m. last Wednesday. He claimed diplomatic immunity and was declared persona non grata and given 10 days to leave the country.

The investigation isn't over yet. FBI agents and State investigators are trying to determine the damage by interviewing people who attended 50 to 100 conferences held in the bugged room. They are also exploring whether State Department insiders were co-conspirators, or whether Russian agents simply exploited State's easy-going security policies, which, until August, did not require escorts for diplomats and other visitors. To fabricate the chair-rail molding, match the paint and install it, officials say, Russian intelligence operatives must have gained access to the seventh-floor conference room on several occasions, with sufficient time to take measurements and photographs and eventually replace the molding. And although State Department officials now believe their building is bug-free, they also thought that six months ago.

It's still spy vs. spy

A Russian diplomat is ordered to leave after a bug is discovered at the State Department

By ELAINE SHANNON/WASHINGTON

--With reporting by Massimo Calabresi/Washington

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Cover Date: December 20, 1999