Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, January 25, 1993 TAG: 9301230151
SECTION: EXTRA PAGE: 1 EDITION: METRO
SOURCE: DONALD W. PATTERSON LANDMARK NEWS SERVICE
DATELINE: CHAPEL HILL, N.C. LENGTH: Long
SUSPECTED SPY IS NOW BAGGING GROCERIES
When suspected spy Felix S. Bloch fell, he fell hard."This is one of the most unusual things I have ever heard of," says Henry Mattox, a retired foreign service officer who now lives in North Carolina. "Someone in such a high position in life to come tumbling down so far."
The highest-ranking U.S. State Department official ever suspected of espionage, Bloch landed in Chapel Hill - working in a grocery store.
"He surfaced here to everyone's surprise," Mattox says. "The surprise was that he popped up as a bag checker at Harris Teeter."
Bloch got the job at the chain's University Mall store last summer. He lost it this month.
Police charged him with stealing $109 worth of groceries.
That's something U.S. spy catchers couldn't do. In the summer of 1989, ABC News reported that Bloch had been video taped passing a briefcase to a Soviet agent in Paris.
The news set off tremors throughout the diplomatic community, especially in Washington.
Additional news reports said FBI officials were investigating the possibility that Bloch had been involved in espionage for a decade. Faced with that possibility, State Department experts said the Bloch case could be the worst spy scandal in the U.S. since the 1950s.
If Bloch was a spy, he had access to plenty of juicy information.
Bloch at one time served as the No. 2 man in the U.S. embassy in Vienna, long a hotbed of espionage. He worked there from 1981-87 and had access to secret cables, classified reports and some intelligence information, including the identities of CIA agents.
If the dour, balding, Austrian native had become "a Benedict Arnold," as former ambassador to Austria Ronald Lauder called him, why had he taken such a risk?
Some stories speculated that Bloch might have become frustrated working with political appointees like Lauder, a Republican who later ran unsuccessfully for mayor of New York City, and Helene Von Damm, who succeeded Lauder.
Neither spoke highly of Bloch.
Lauder, the son of Estee Lauder and a former executive of her cosmetics firm, told Ted Koppel, the host of ABC's "Nightline," that he had Bloch recalled to Washington.
"I fired him," Lauder said. "I wanted to get rid of him for insubordination. Felix Bloch went outside of channels all the time.
"I know what Felix Bloch was like, and I must tell you I was not surprised. I didn't expect him to be . . . under investigation for being a spy, but there was something the matter with him, that's why I fired him."
But George Vest, the former director general of the foreign service, told The New York Times that Bloch was not fired from his post in Vienna.
"It was time for him to go any way, so we brought him back," Vest said, adding that Bloch was in line for promotions. "He could have hoped to become a [deputy chief of mission] in a bigger post or have his own small embassy."
Others described Bloch as a classic, faceless bureaucrat, a man few people seemed to know.
Born in Vienna on July 19, 1935, Felix Stephen Bloch and his family fled Austria in 1938 after the Nazis took power in Germany. The Blochs settled in New York City.
Felix Bloch attended the University of Pennsylvania and joined the State Department in 1958, serving as an intelligence-research specialist.
He held overseas posts in West Germany and Venezuela before earning a master's degree in advanced economics from the University of California at Berkeley. He later served in East Germany as an economics officer. He also had a brief stint in Singapore. After he left the embassy in Vienna, he returned to Washington.
Former foreign service officers estimate that Bloch would have made about $75,000 a year when the investigation began.
When the investigation became public, the press staked out Bloch's residence, an exclusive condominium on California Street in Washington.
The publicity turned the probe into a media circus. Tabloids trumpeted the news with headlines saying "Bloch-Buster." TV cameras and photographers followed him wherever he went - to the park, to the movies, on visits to relatives.
FBI agents followed along, too. So, reportedly, did personnel from the Soviet embassy.
"It got to be ridiculous," said Fred Warren Bennett, a former federal public defender in Baltimore who defended two convicted Soviet spies, including John Walker Jr., the former Navy warrant officer. "They tried to play on his weaknesses and patriotism, the theory that anybody who has committed a crime wants to bare his soul."
But it didn't work.
Reportedly, Bloch told the FBI that he knew his alleged contact only as a stamp collector. Beyond that he told the government little. He told reporters even less.
The case dragged on.
In December, State Department officials confirmed that the investigation had been scaled back. By then it had become apparent that the government didn't have much of a case against Bloch.
"If all you have is that he turned over a briefcase to a known KGB agent, that's no crime," said Bennett, now a law professor at Catholic University of America in Washington. "He may have been a spy, but there are serious doubts they could have prosecuted him effectively. This was a marginal case."
Unable to prosecute Bloch, the State Department took a different tack.
"They decided to go to monetary sanctions and job sanctions," Bennett said. "They kicked him out."
In November of 1990, the State Department dismissed Bloch on the grounds that he had made "deliberate false statements and misrepresentations" to the FBI and because of his "behavior, activities and associations."
Bloch had tried to resign in February of that year, but the State Department refused his offer.
"If he had resigned, he would have gotten his benefits," Bennett said. "That's why he has to work."
Bloch apparently showed up in North Carolina in 1991. That year, according to tax records, he and his wife, Lucille, built a home at the Governors Club, an exclusive residential and golfing community south of Chapel Hill.
The house and lot - listed in Lucille Bloch's name - are valued at $220,000. That's considered modest for that neighborhood, where the finer properties sell for more than $1 million.
The home, a single-story, frame dwelling with more than 2,200 square feet of space, backs up to the 12th fairway of a golf course designed by Jack Nicklaus.
A neighbor described Bloch as private but friendly.
"I think he is a person that seems to go about his business," said Kirk Bradley, who lives near the Blochs. "You see them and they say hello."
Henry Mattox, the former diplomat who lives in Chapel Hill, says he met Bloch some 25 years ago in a Foreign Service Institute class, but adds that he does not know him well.
"He's a person who keeps his own counsel to a considerable degree," Mattox said. "He is reserved and in my experience unemotional. He can be quite articulate when he chooses to talk."
Mattox said Bloch is one of two or three dozen former foreign service officers who have settled in the Research Triangle and Sandhills areas.
Mattox said he didn't know why the Blochs had settled in Chapel Hill, aside from the area's general appeal and the fact that Lucille Bloch is a native of Saluda.
"It may be happenstance," he said.
Mattox described Bloch as a hard worker, saying that he had heard he put in as many as 70 hours a week.
Bloch works part time as a driver for Chapel Hill Transit, the town's bus system.
Bob Godding, director of transportation, said Bloch was hired last July, but he refused to say whether Bloch had disclosed his troubles.
Bloch also started working at Harris Teeter last summer as a checkout clerk and bagger. When a reporter wanted to talk to Bloch about his new job, the former diplomat replied, "I won't talk with you now or ever."
Efforts to contact Bloch last week were unsuccessful.
At Harris Teeter, manager Bobby Leesnitza also refused to talk about Bloch or his arrest.
"Everyone here has been asked not to comment on it," he said.
It was Leesnitza who told police he saw Bloch steal some groceries and put them in the trunk of his 1980 silver Mercedes-Benz at 7:53 p.m. Sunday night.
Police took Bloch before a magistrate, who placed him under $1,000 secured bond. When Bloch could not make bail, police transferred him to the Orange County Jail in Hillsborough, where he spent the night.
Released the next day, Bloch faces trial on Friday.