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In 1973, the US agreed to allow the Soviet Union to construct new embassy facilities on a tract of land on Mt. Alto in the District of Columbia. Mount Alto, at an altitude of 350 feet, is the third highest point in the District, enjoying a direct visual line to the Capitol, the White House, the Pentagon, and the State Department. The Soviets originally wanted to locate a new embassy in Chevy Chase, MD, but the US Government objected. They then chose a site in midtown Washington, and again the US objected. The US subsequently identified the Mt. Alto site and persuaded the Soviets to accept it.
The location of the new Soviet embassy was offered to the Soviets at a time when electronic surveillance techniques and the potential for their further development were not fully understood in the West. The Soviet acquisition of the Mt. Alto embassy site was not the result of a Soviet conspiracy, but rather it was the consequence of a bad judgment on the part of the United States.
Soon after construction started, concerns were expressed that if the Soviets occupied the new Embassy site, their electronic equipment would be capable of intercepting all communications dealing with national security flowing in and out of Washington, unless encrypted, as well as ordinary business and personal conversations. The Soviet embassy could have been used as a platform to conduct highly sophisticated electronic surveillance of the US government, to facilitate Soviet espionage, and the purchase and theft of US high technology.
Subsequently it was decided to prevent the Soviet Union from occupying new embassy buildings on Mount Alto until the US had acquired a new embassy location in Moscow of substantially equal character. The issue of embassy locations is very complicated, and became even more convoluted after the US discovered Soviet bugging devices in the structure of the new American embassy. The National Security Agency (NSA) and the Central Intelligence Agency (CIA) both objected to allowing the Soviet Union [and Russia] to use the embassy at Mt. Alto.
The new embassy was not occupied until 1991, after the collapse of the Soviet Union. Until then, some of the appartments had been occupied starting in 1979. In early March 2001, it was revealed that the FBI and NSA jointly built a tunnel under the embassy during the 1980's with the aim of tapping into electronic communications inside the facility. Press reports suggested that Robert Hanssen, the 25-year FBI veteran arrested for being a Soviet/Russian spy, had compromised the operation by revelaing the existence of the tunnel which had reportedly cost several hundred million dollars.
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