The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1994, Landmark Communications, Inc.

DATE: Tuesday, August 9, 1994                TAG: 9408090420
SECTION: FRONT                    PAGE: A10  EDITION: FINAL 
SOURCE: THE NEW YORK TIMES 
DATELINE: WASHINGTON                         LENGTH: Medium:   53 lines

SPY-AGENCY BUILDING'S COST OUTRAGES SENATORS THE $350 MILLION PRICE TAG WAS CONCEALED, THEY SAY.

Senior members of the Senate Intelligence Committee said on Monday that they were shocked to find that a huge new spy satellite headquarters under construction outside Washington would cost $350 million. They said that the Pentagon and Central Intelligence Agency had concealed the full expense of the project from them.

``You've got to see it to believe it,'' said Sen. John Warner, of Virginia, the ranking Republican on the committee. ``I was absolutely astonished at the magnitude and the proportions of this structure.''

The project in question is a one-million-square-foot complex near Chantilly, Va., being built to house about 3,000 contractors and government workers employed by the National Reconnaissance Office, the nation's most secret intelligence agency. Its cost, by comparison, exceeds the `rebuilding' of New York City's Pennsylvania Station; its size is about one-fifth of the Pentagon's.

The existence of the National Reconnaissance Office was a state secret until late 1992, and almost nothing is known about the office, other than its mission of building the nation's spy satellites. Its annual budget, secretly appropriated, buried within the Pentagon's accounts in the so-called ``black budget'' and never publicly disclosed, has been estimated at $6 billion, or about three times the budget of the entire State Department.

It appears that the new complex was buried so deeply and concealed so successfully inside the NRO's secret appropriations that the ranking members of the Senate Intelligence Committee were, in their words, ``shocked and dismayed to learn'' its real cost.

Warner said that ``someone, or some group of persons, conceived of a means by which to take a project and build it'' by taking ``a very stealthy course.''

Martin C. Faga, director of the National Reconnaissance Office from September 1989 to March 1993, said: ``It was a stealthy course, of course - purposefully so. But that was a reason why it was discussed in detail with the Intelligence Committee.'' Almost all of the briefings given to the Senate and House Intelligence Committees take place in secret.

``I don't think there's any doubt the committee knew the facility was being built,'' Faga said. ``We briefed them in '90, '91, '92. But that doesn't mean the committee understood what it was going to cost. . . . It's perfectly plausible that folks were looking at pieces of the budget, not looking at other pieces, not seeing that there's an aggregate cost there.'' by CNB