The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Saturday, October 14, 1995             TAG: 9510140277
SECTION: LOCAL                    PAGE: B3   EDITION: FINAL 
SOURCE: BY DALE EISMAN, STAFF WRITER 
                                             LENGTH: Short :   42 lines

NAVY OFFICER ACCUSED OF SPYING GIVES UP RETIREMENT BENEFITS

A Norfolk-based naval officer who was accused of spying for Saudi Arabia will receive an ``other than honorable'' discharge after acknowledging that he mishandled classified information and then lied to investigators, the Navy said Friday.

Lt. Cmdr. Michael Stephen Schwartz, 43, who had been scheduled to go to court-martial next month, agreed to the plea bargain that will result in a loss of his retirement benefits and other military privileges, his lawyer said.

Schwartz also has agreed to cooperate in additional investigations arising from the case, the Navy said.

``His career is over,'' said Greg D. McCormack, the attorney. ``We wanted to salvage it to the point where he avoided a federal conviction. . . . He was facing life in prison.''

McCormack said the government could not prove that Schwartz actually passed information to the Saudis. He was accused of four counts of espionage allegedly arising from actions taken between November 1992 and September 1994 while he was stationed in Riyadh, Saudi Arabia.

Schwartz, a former enlisted man, was serving as a surface warfare officer when he was charged last spring. The ``secret'' but not ``top secret'' documents he was accused of passing included classified message traffic, a series of military intelligence digests, intelligence advisories and tactical intelligence summaries.

A native of Tucson, Ariz., Schwartz grew up in El Paso, Texas, and graduated from the University of Texas at El Paso. He worked as a radar operator on the carrier Coral Sea from 1970 to 1972 and was commissioned in 1980 through the Navy's Officer Candidate School program at Newport, R.I. MEMO: Staff writer Kerry DeRochi contributed to this story.

by CNB