In 1967, then CIA Director Richard Helms signed a "Secret Virgle Eyes Only" memo rehiring a man now accused of espionage because officials thought the man had been improperly fired in 1963 and might later sue the agency for damages, according to court testimony today.

Edwin Gibbons Moore II, was rehired also because CIA officials claimed the agency would appear to be "morally wrong" in the public eye if he were not rehired, according to another "Secret Eyes Only" memo read in court today by the CIA's general counsel, Richard H. Lansdale.

The CIA would appear to be "utterly indifferent to the cause of justice and the welfare of individuals" if it did not rehire Moore, despite his "barely adequate" work record, the memo read by Landsdale stated.

Moore was applying in 1967 for reinstatement following his acquittal in North Carolina after the last of three trials on charges that he had burned down a motel he owned.

Moore, who joined the agency as a low-level office worker in 1952, had been placed on a suspended-without-pay status when the arson charges were lodged against him in 1961.

In 1963, when Moore was convicted of arson, he was "terminated" from CIA employment, Lansdale read from the memos.

However, after that verdict was reversed and he was acquitted on May 10, 1967, he made his reinstatement application, which led the CIA to conclude it should not have terminated him in 1963 until all his legal appeals had been exhausted, according to the memos.

Lansdale said he did not know why all the Moore memos had been classified as "Secret Eyes Only."

He then read from another 1967 "Secret Eyes Only" memo concerning Moore which stated that, "We don't intend to stack the cards against him but it must be recognized that he (Moore) had at least a mediocre performance record prior to September, 1961, (when he was suspended because of the arson charges) and that the intervening six years may well have diminished his professional qualifications."

That memo, signed by then acting personnel director Robert S. Wattles, proposed that Moore not be reassigned to the intelligence division, but rather be placed in the real estate and construction division. Moore was to work only under "close supervision and evaluation," Wattles wrote.

Moore was subsequently assigned to the CIA's supply section and was sent to Vietnam in 1970, according to previously introduced testimony.

He returned in 1971, and was diagnosed by CIA psychiatrists as suffering from a "paranoid-like" state. He received a medical disability retirement from the CIA in 1973.

Moore is accused of offering photocopies of two 1973 secret CIA telephone directories and other classified documents to the Soviet Union last Dec. 21 in exchange for $200,000. He has pleaded innocent by reason of insanity.

FBI agents Cornelius G. Sullivan, who led the two dozen FBI agents who arrested Moore outside his home at 4800 Ft. Sumner Dr., Bethesda, last December, said that Moore's name had been one of five names of "disgruntled former employees" the CIA had given him as the case unfolded.

Sullivan added he did not know in advance if Moore in fact would be the person attempting to pick up a package planted by the FBI.

Former CIA Director George Bush was introduced by prosecutor Thomas L. Crow as an expert witness on national security matters. Bush testified that the documents Moore is accused of offering to the Soviet Union would have caused "injuries" to the United States.

If convicted of espionage Moore faces a maximum penalty of life in prison. The trial in U.S. District Court hered was recessed until Monday.