The Shakeout: Blunt Sword, Dented Shield

By Richard Lacayo

| The KGB'S headquarters on Moscow's Dzherzhinsky Square is one of the most forbidding places in the Soviet imagination. Inside and underneath the area are the interrogation rooms and cells where in past decades thousands of citizens came face to face with state power -- and often terror. So it was with some trepidation that a massive crowd advanced into the square in the aftermath of the failed coup -- but its nerve soon strengthened. Within hours, thousands cheered as the statue of "Iron Felix" Dzherzhinsky, who founded the secret police immediately after the 1917 Bolshevik Revolution, was toppled from its central pedestal. It was a symbolic act of purgation -- and revenge.

Equally striking was the response from what used to be the most dreaded organization in the Soviet Union. Nothing. In the coup's aftermath, the KGB -- it calls itself the Sword and Shield of the Communist Party -- showed itself to be as divided and traumatized by the actions of its disgraced chief, Vladimir Kryuchkov, as was another pillar of power, the army. Once the plot had unraveled, the agency released a statement declaring that "KGB servicemen have nothing in common with illegal actions by the group of adventurists." After a bewildering two-day shuffle of leaders, Vadim Bakatin, a liberal who was Gorbachev's Interior Minister until his dismissal last December, was appointed the KGB's new chief. He is expected to move decisively in cleaning up the agency.

As early as the first day of the coup, TIME Moscow correspondent James Carney got an unmistakable indication of the KGB's ambivalence about the putsch. As he stood interviewing soldiers outside the Moscow Hotel, he was approached by a casually dressed man in his 30s who introduced himself as KGB agent Alexander Maisenko and produced the proper red identification card to prove it. "Not all of my colleagues in the KGB think that what is happening is a good thing," he said. "Putting the army in the streets against the people is wrong."

The KGB's split identity derives from the origins of the Gorbachev era. The President was the handpicked successor of Yuri Andropov, the former Soviet leader who was once the KGB chief. From the outset, the KGB acceded to Gorbachev's programs of glasnost and perestroika, which were intended to help the Soviet Union catch up to the achievements of the West. During the first three years of perestroika, the agency was largely untouched by the changes that were pressing upon other institutions, and strove to promote Gorbachev's goals of improving work discipline, attacking corruption and fostering greater industrial efficiency.

Glasnost came to the KGB under Kryuchkov, who took over as a Gorbachev appointee in late 1988 with the promise of greater openness regarding agency affairs and cooperation with Western intelligence agencies in such areas as drug trafficking and terrorism. But as the winds of glasnost blew more strongly, the top echelons of the organization grew nervous. The Old Guard complained that secret files were being opened and covert methods exposed. Kryuchkov reacted harshly when dissident KGB officers sounded off in the press about agency meddling in ethnic conflicts or floated proposals to deprive the KGB of its special troops.

The biggest threat of all to the organization was contained in the impending union treaty: it would loosen Moscow Center's control of KGB units in the republics and affect sensitive issues like security budgets. By last winter some of the KGB's top officers were in the forefront of a conservative backlash, spearheading a campaign against "economic sabotage" that singled out the developing free-market sector as a special target. Speaking before a secret session of the parliament in June, Kryuchkov lambasted Gorbachev's entire program as a product of the CIA's designs for "pacification and even occupation" of the Soviet Union.

In the view of Western experts, the KGB is now likely to be drastically reorganized and stripped of much of its domestic responsibility. U.S. and British analysts suggest that the agency's overseas spy service, the First Main Directorate (there are nine Main Directorates), will remain. A new organization, along the lines of the U.S.'s FBI, may be formed from the Second Main Directorate (internal security). Such restructuring could mean, among other things, a dramatically smaller agency. American experts estimate the KGB's current size at 600,000 members, 265,000 of them border guards, 230,000 in military units, and 40,000 assigned to domestic surveillance. Foreign intelligence, the elite division, accounts for perhaps 20,000 operatives. The KGB of the future could be a rump organization, its feared sword blunted forever.

With reporting by John Kohan/Moscow and Bruce van Voorst/Washington