- The Washington Times - Friday, December 10, 1999

Russia’s Foreign Intelligence Service secretly placed an electronic eavesdropping device inside a strip of wall molding and recorded sensitive conversations of senior State Department officials in the oceans and environmental bureau, U.S. officials said Thursday.
The sophisticated device included batteries, a microphone and recording mechanism and a line-of-sight transmitter built into molding that was screwed into the wall a sign that someone had access to the room on more than one occasion, said officials close to the investigation.
The incident was a stark reminder that Russian intelligence-gathering activities have not ended with the Cold War and the demise of the Soviet Union. It followed two other recent spy cases, one involving a CIA officer in Moscow and a U.S. Navy enlisted man.
“I think this incident, by itself, sends a strong message that there is a very aggressive Russian intelligence presence operating inside the United States,” Neil Gallagher, assistant director of the FBI’s National Security Division, told reporters.
The Russian bug was detected after FBI and State Department diplomatic security officials spotted Stanislav Borisovich Gusev, a Russian intelligence officer working in the embassy here, loitering near 23rd Street NW, with headphones, outside the north side of the department’s eight-story headquarters.
Mr. Gusev’s activities aroused the suspicions of FBI counterspies, who then launched a hunt for the listening device and the person who was able to get inside the conference room on more than one occasion without being escorted.
Officials said Mr. Gusev had placed a special antenna used in the eavesdropping operation underneath a box of tissues in his car. The antenna was aimed at a seventh floor conference room. The room is used by the assistant secretary of state for oceans and international environmental scientific affairs and other officials of that bureau.
The bureau, known as OES, deals primarily with environmental and maritime issues.
“This was Save the Whales’ kind of stuff,” said one official.
However, investigators are looking into whether the Russians gathered sensitive information from the bugged conference room on the space and advanced technology office, which is part of the OES bureau. Russian agents have targeted American technology for decades.
A damage assessment of the case is just beginning, officials said.
Once Mr. Gusev was identified, investigators worked to pinpoint the exact location of the transmissions and followed them to the OES conference room, where the disguised molding was found.
It is not known how long the device has been in place, the officials said.
Officials described the device as a near replica of a piece of molding that was painted a slightly different color than other molding in the room. Also, the screws that kept it in place were different.
Officials said the case would have been more damaging if the Russians had succeeded in planting the listening device in one of the conference rooms on the south side of the seventh floor.
Secretary of State Madeleine K. Albright’s office is located on that side of the building and apparently was not penetrated in the Russian electronic spying operation, the officials said.
Counterspies spotted Mr. Gusev, who they identified as an SVR agent, after he parked his car near the Bureau of Diplomatic Security’s offices located in an annex building a block north of the State Department building. The car had diplomatic license tags bearing the letters “YR” identifying him as a Russian diplomat.
Officials said both the FBI and State Department’s Diplomatic Security Service agents are claiming credit for first spotting Mr. Gusev in June.
State Department security officials have interviewed hundreds of employees in an effort to find the person who planted the device.
FBI and diplomatic security officials are searching for whoever planted the bug, which they described to reporters as “professionally” placed so as to avoid detection for several months.
The State Department also has not indicated if the United States had arranged misleading conversations in the bugged room so as to feed disinformation to the Russians.
“This episode should be a stark reminder to all of us at government that despite the thawing of tensions between competing nations, government facilities and personnel remain a desirable target for foreign intelligence services,” said David Carpenter, assistant secretary of state for diplomatic security.
“Back in the summer, several months ago, a Washington field office surveillance team, on a routine surveillance completely unrelated to this matter, made an observation … that Stanislav Gusev was standing in the vicinity of State Department, and it took them as a little bit odd,” Mr. Carpenter told reporters at the State Department Thursday.
“Each week, Mr. Gusev would show up in the vicinity of State Department, literally just walking around the surrounding street,” Mr. Carpenter told reporters Thursday.
Fearing a “technical penetration in the State Department” the FBI joined in “attempting to find a needle in a haystack … without compromising the investigation, without alerting unnecessarily all of the employees in the State Department.”
The counterespionage team began “utilizing very sophisticated, very sensitive technical equipment, and were able to locate what we believed to be a listening and transmittal device,” said Mr. Carpenter.
“We left the device in place. We took steps to protect it. We took steps to minimize any loss that would result of its continued presence in the State Department. And to exploit this.”
Mr. Carpenter said the FBI and State security team waited for Mr. Gusev to show up once more this week and fell upon him near his car while he was operating some equipment that was apparently receiving communications from the bug.
Mr. Gusev was captured at 11:50 a.m. Wednesday and by 2:39 p.m. he was turned over to Russian diplomats.
He has been told to leave the country within 10 days.
Mr. Gallagher told reporters at the State Department Thursday that the timing of the arrest was not related to Moscow’s expulsion of an American diplomat this week on charges of spying.
The Russian had been in Washington since March, said Mr. Gallagher, and during that period he apparently had not entered the State Department building.
The FBI official said that sweeping the building for electronic bugs was a huge job that was beyond the manpower limitations of the agents assigned to secure America’s diplomatic headquarters.
“I would prefer not to get into where we do sweep and where we don’t sweep, for obvious reasons,” said Mr. Gallagher. “We are somewhat limited in our capabilities … by our manpower. We do have limitations. This is a big building.”
Deputy Attorney General Eric H. Holder Jr. Thursday discounted concerns that the arrest of Mr. Gusev was in retaliation for the expulsion last week of a U.S. diplomat in Moscow, who was accused of spying.
“This is not a question of any kind of retaliation,” he said during the Justice Department’s weekly press briefing. “These are separate matters. The matter here in Washington is something that had been under review for some time and is not in any way related to anything that happened any place else.”
Mr. Holder described the accusations as a “serious matter,” but declined to elaborate, referring questions on the sensitivity of the information and its potential for harm to national security to the State Department.
“I’ll let the folks at State talk about that later on. But I think this is, obviously, a very serious breach that we have here,” he said.
“Certainly our relationship has changed with the Russians… . But yet we can’t leave our guard down. I mean, there are nations all around the world that are, for a variety of reasons, trying to gain access to information from us, and we just can’t let our guard down.”

Jerry Seper contributed to this report.

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