ESPIONAGE: Stealing the Company Store

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The operation ran smoothly, according to Boyce, until Jan. 6, when Lee failed to find Grishin waiting for him at the Soviet embassy. Lee pitched a piece of paper through the embassy gate. Mexican police, who routinely guard the embassy, immediately seized him, apparently thinking he might have thrown a bomb. In Lee's pocket, the police allegedly found microfilmed documents from a feasibility study of an American spy communications satellite.

Back in Langley, the CIA was tightlipped about exactly what might have been passed on to the Soviet Union. But after Boyce was convicted, an intelligence expert told TIME that the operation "virtually stole the company store at TRW and gave it to the Soviets." As Lee's trial began, his lawyers planned to defend his claim of innocence by arguing that he felt he was working for the CIA and was giving the Soviets "disinformation." The CIA regards this claim as an absurdity.

Two other developments last week were also likely to dampen CIA morale. Director Stansfield Turner, making what he called his "most difficult decision in 31 years of military service," fired two middle-level agency employees for "lack of good judgment." Their mistake, Turner told the Senate Intelligence Committee, was helping a former colleague to purchase 500 explosive timing devices to sell to Libya. When he learned of the situation, said Turner, he "lost a lot of sleep" and "worked hard for some days to decide what was fair to them and best for the welfare of our intelligence operations." CIA sources identified the purchaser of the devices as Edwin Wilson, 48, who now operates his own consulting firm. Wilson has categorically denied the allegations.

In Baltimore's U.S. district court, meanwhile, former CIA Supply Officer Edwin Moore went on trial for allegedly trying to sell classified documents to the Soviet Union (TIME, Jan. 3). Moore was apprehended last December after tossing a fat manila envelope into the parking lot of the Soviet embassy's residence in northwest Washington. Thinking that the packet might be a letter bomb planted by anti-Soviet activists, an embassy watchman called in U.S. officials. Moore was later caught by FBI agents, who lured him into a trap baited with a fake payoff package ostensibly from the Soviets. Moore's attorney said his client may change his plea to innocent by reason of insanity, and produced a psychiatrist who told the court that Moore appeared to be paranoid and insane at the time he tried to peddle a CIA directory to the Soviets.