U.S. AND RUSSIA SPAR OVER LATEST SPY CASE.

Washington continued yesterday to assess the damage wreaked on U.S. security by Earl Edwin Pitts, the 13-year FBI veteran arrested and charged this week with selling secrets to the Soviet Union and Russia from 1987-1992. U.S. investigators believe that Pitts, who could face life in prison, was paid more than $224,000 by Moscow. In testimony yesterday before the Senate Judiciary Committee, FBI director Louis Freeh said that the investigation into Pitts’ activities is still ongoing, but that he would "not underestimate the seriousness of the damage" caused by Pitts. More generally, Freeh also charged that Russian intelligence operations directed against the U.S. — particularly in the area of economic espionage — have escalated in the post-Cold War period, and that they have become a "serious problem" for Washington. (Reuter, December 19)

The arrest of Pitts ended a 16-month undercover operation that involved U.S. agents posing as Russian spies and a real Russian spy who had originally served as a go-between for Pitts and his KGB handler. That go-between became an FBI informant himself in 1995, and helped to finger Pitts. The FBI’s operation was also endangered at one point when Pitts’ own wife, a former FBI clerk, conveyed to authorities her suspicions over her husband’s activities. (AP, The Washington Post, December 19)

Intelligence officials in Moscow have had few direct comments to make about the Pitts case, but recent developments have clearly added to the bluster already evident in their public statements over the past year. The chief of Russia’s Foreign Intelligence Service had said on December 16 — two days prior to Pitts’ arrest — that foreign governments are unhappy over Moscow’s more resolute pursuit of its national interests, but that there is little point in over-dramatizing spy cases because all states conduct intelligence operations. In a long interview published on December 18 he described his service as the best foreign intelligence organization in the world. (Itar-Tass, December 16; Nezavisimaya gazeta, December 18) Meanwhile, the director of Russia’s Federal Security Service–the KGB successor organization responsible for counter-intelligence–claimed on December 17 that the CIA’s activities in Russia have been "sharply reduced." He also said that his service had uncovered more than 400 foreign agents over the past two years, along with some 39 Russian citizens who were collaborating with foreign governments. (RTR, December 17)

De Beers Gets Moscow’s Attention.