High Spy At State?

Though a string of spy cases in recent years has involved naval men, embassy guards and intelligence analysts, U.S. officials could take comfort in the belief that none had implicated an American diplomat -- until now. The State Department last week confirmed that the FBI is probing whether Felix S. Bloch, a 30-year Foreign Service veteran and the No. 2 man at the U.S. embassy in Austria from 1981 to 1987, has been working for the KGB.

State Department spokesmen say the FBI is investigating unspecified "illegal activities" to determine "the extent of the compromise of security that has occurred." Bloch, who was born in Austria, is believed to have been recruited there by the Soviets at least three years ago, according to an ABC News report. Posted back to Washington, in 1988 he became director in charge of relations with the European Community and other international economic bodies for the State Department's Bureau of European and Canadian Affairs.

There, as in Vienna, Bloch had access to classified reports on the Soviet Union and sensitive cable traffic, as well as data on U.S. policy options and negotiating positions. Once in Washington, he was authorized, for example, to read the National Intelligence Daily, a compilation of intelligence reports. During a trip to Vienna earlier this year, he was allegedly videotaped handing a briefcase to a suspected Soviet agent on a city street. Bloch has been under 24-hour FBI surveillance for a number of weeks. Neighbors say that in early July they began to see men in parked cars staking out the fashionable Washington apartment building where Bloch lives with his wife and daughter.

Though he achieved the rank of minister-counselor, the department's third highest career level, Bloch is said to have been disappointed by his failure to become a full ambassador. He boasted to friends that he virtually ran the Vienna embassy under former Ambassador Helene von Damm, a Reagan appointee he regarded with scorn. Bloch got on the wrong side of Von Damm's successor, Ronald Lauder, who sent him packing. Colleagues praise Bloch's work in Washington, though some describe him as dull ("A boring little man," says one). He has been placed on leave and his security passes have been withdrawn while the investigation goes on.