It was a month before Christmas when the telephone rang in the small FBI office in Hyannis, Mass. A gift store clerk from the shore town of West Dennis said she had been drinking but wanted to pass along a tip.
Her ex-husband, she said, was a spy.
That phone call, motivated by a murky blend of mother love, wifely fury and a belated stirring of patriotism, did more than unalterably change the life of accused spy John Anthony Walker Jr.
It turned a nasty family secret into a national concern, a controversy that has been fueled by daily revelations of alleged payoffs, security breaches, private sorrows and a heightened sense of vulnerability. The developments, some say, have sent the political pendulum on the national security issue on its most dramatic swing since the Watergate era.
Military and intelligence officials are saying privately that they hope the Walker spy case will prompt a new toughness in U.S. national security and a rethinking of laws and regulations that limit the maneuvering room of intelligence agencies.
Yesterday, in his first major public statement on espionage since the Walker case began, President Reagan called for overturning "unnecessary restrictions on our security and counterintelligence officials" that were imposed during the 1970s.
For six weeks, the private lives of the Walker family have been played out in the most public of arenas -- in federal courtrooms in Norfolk, Baltimore and San Francisco, across the airwaves through the Christian Broadcasting Network, and on the covers of news magazines and the front pages of newspapers.
At the same time, public preoccupation with the alleged spy ring has spread far beyond sensational personal details.
Military officials have moved to beef up security procedures and assess the extent of possible damage. Congress has responded with a flurry of proposed legislation, including measures to reinstate the death penalty for espionage and to grant the Pentagon sweeping powers to subject millions of people with access to classified information to polygraph tests.
Civil libertarians, staggered by the whirlwhind votes and what one congressman calls a "lynch mob atmosphere," are urging calm and reason in the face of what they see as an America enraged.
The strong passions inspired by the Walker case have been intensified by the hijacking of TWA Flight 847 and other acts of terrorism.
In his weekly radio address yesterday, Reagan directly linked the two. "This terrorism reminds us of the threat posed to open societies, and of the great challenges we face in a world where many disdain our values and seek to harm us and our way of life," Reagan said.
"One of those challenges is our need to counter the rash of spy activities that threaten our security and interests at home and abroad, and to improve our own intelligence-gathering capabilities," he added.
Rep. C.W. Bill Young (R-Fla.) said last week after the House voted to permit the execution of military personnel convicted of espionage during peacetime that the American people are "tired of hijacking, they're tired of terrorist activities. They're tired of Americans turning traitor and selling secrets."
"My sense of the mood," said Rep. Leon E. Panetta (D-Calif.), "was there . . . was a need to defend our position in the world . . . . I kind of describe it as a Rambo type of mentality."
"It's all just a reaction to a particular case without thinking through what is the right solution," said Morton H. Halperin, director of the Washington office of the American Civil Liberties Union.
As government officials search for ways to combat the larger problem of espionage, investigators are still working to piece together the full story of the case that has made John Anthony Walker Jr., Michael Lance Walker, Arthur James Walker and Jerry Alfred Whitworth household names.
"This case is so bizarre," said one official close to the investigation. "It just hasn't followed the traditional type of espionage case. Tip From an Ex-Wife
It started as many spy cases do: with a tip from a spouse, in this case John Walker's ex-wife Barbara, confirmed by a statement from their daughter, Laura.
But it became far more serious in terms of the number of alleged participants and the scope of potential damage to national security than federal agents had first thought. And it turned into a case with a number of remarkable aspects: an alleged ring of spies, operating on both coasts and bound by ties of family and friendship that has allowed it to last as long as 20 years.
Now, it is frustrating investigators who continue to look for signs of profit from the alleged espionage -- caches of money, real estate, securities -- that they believe was the primary motivation for small-town conservative Navy men to sell out their country.
John Walker, a former Navy communications specialist turned private investigator, was arrested early May 20, the day after FBI agents allegedly saw him drop a bag full of classified documents from the USS Nimitz by a rural roadside in Montgomery County.
The same day Walker was arrested, FBI agents, acting on additional information supplied by Barbara Walker, searched the California mobile home of Walker's longtime friend, former Navy radioman Jerry Whitworth, 45. Two days later, agents arrested Walker's son, Michael, a 22-year-old seaman aboard the USS Nimitz. A week later, on May 29, John's older brother Arthur James was arrested, five days after allegedly admitting to FBI agents that he gave his brother classified documents from the Chesapeake, Va., defense contracting firm where he worked.
A second search of Whitworth's home was conducted on May 31. By June 4, Whitworth, unemployed since retiring from the Navy in 1983, was in the same situation as the other three. All were charged with espionage.
Since those arrests, court documents and testimony have helped to draw a sketchy picture of how the alleged ring may have operated. Investigators have said they believe that John Walker, 47, was the linchpin in the alleged conspiracy, the man who lured others in and the one who divided up the proceeds. According to court testimony by an FBI agent, a payment schedule was found in John Walker's home.
Until June 17, almost a month after Walker's arrest, investigators had not disclosed much information about the money that supposedly drove Walker and his alleged accomplices.
Until that day, FBI affidavits had alleged that John Walker once received $35,000 for delivering documents, and Walker's wife Barbara had been quoted as saying he had received $100,000 over 10 years for his activities with the Soviets. Another FBI affidavit indicated that Arthur Walker had once received $12,000 for his help.
Whitworth, according to testimony at his detention hearing June 7, had a file cabinet in his mobile home that contained records of cashier's checks totaling $22,000, Those checks were deposited in nine different bank locations near his Davis, Calif., home, a federal tax investigator said.
Those amounts, investigators conceded, would be meager reward for a high-risk job, sums that pale in comparison to the profits of a modern-day drug smuggler.
But the next week, June 17, a grand jury indictment against Whitworth revealed a much greater lode that might have been lured him to help the Soviets. That indictment charged that Whitworth received at least $328,000 from John Walker to hand over sensitive documents and information. It detailed 15 payents -- the largest for $100,000 in June 1980 -- over an eight-year period. It described meetings between Whitworth and Walker in a variety of locations including San Diego, Hong Kong and the Philippines, often just days before Walker allegedly met with his Soviet contact.
That indictment also charged that the alleged conspiracy between Whitworth and Walker began at least as far back as April 1976, while Whitworth was a petty officer in charge of the Satellite Communciations Division at the Naval Communication School in Diego Garcia in the Indian Ocean. According to naval records, Walker was in Norfolk then serving out his last year in the Navy as a staff communications officer for the commander of the Atlantic Fleet's Naval Surface Force.
The date of the inception of the alleged conspiracy included in the indictment -- 1976 -- at first appeared to contradict investigators' previous statements that the espionage began in 1965.
But prosecutors said they used a narrower time frame because it would be easier to prove. Studying Finances
Initial checks of financial records by law enforcement officials suggested that the members of the alleged spy ring had limited land holdings and possessions. In the past few weeks, and in light of the $328,000 that prosecutors have charged Whitworth with receiving, that picture has changed slightly.
Investigators now are working to determine whether Whitworth, who owns no discernible property, may have channeled his alleged payoffs into a real estate trust. It may take several weeks to determine that possible link, sources say, and to determine whether the alleged payoffs were channeled into a trust by Walker directly or by Whitworth.
While law enforcement investigators searched for a money trail, military and counterintelligence experts launched investigations to determine how much damage to national security the alleged spy ring may have caused.
Again, it became clear there would be no easy answers, with estimates of the potential losses shifting almost daily in the first few weeks.The Navy's first public assessment came on June 11, when Adm. James D. Watkins, chief of naval operations, described the damage as "very serious" but "not catastrophic." Watkins discounted reports that the Soviet Union may have perfected ways to detect U.S. missile submarines. He added, however, that the Navy would have to spend millions of dollars to change secret coding gear believe compromised by the alleged ring.
The next day, Secretary of Defense Caspar W. Weinberger called for the death penalty for convicted spies and ordered an immediate cut of 10 percent in the 4.3 million military and civilian employes with security clearances. Navy Secretary John F. Lehman Jr. said he wanted to cut in half "as soon as possible" the number of Navy personnel with access to classified information.
Defense lawyers have complained that what one called "hysterical" descriptions of the damage to national security have made it impossible for their clients to receive a fair trial. Nonetheless, the dialogue has served to harden public attitudes toward espionage and how to combat it.
An effort was made in Congress this year to cut the FBI's counterintelligence budget request in order to protest what some members believed was the harassment of Americans who traveled to Nicaragua. That attempt is dead, according to one House member, in part because of the attention the Walker case has focused on the FBI's need for more agents to chase potential spies. Hill Turnabout
Others say preoccupation with the Walker case, plus a heightened awareness of terrorist activity directed toward the United States, prompted the House of Representatives to make some stunning turnabouts and vote in favor of instituting polygraph tests for Pentagon employes and the death penalty for military personnel found to be spies.
The flurry of legislative activity raised the question of whether Congress was acting too hastily and should instead take a more thoughtful look at such serious and complicated issues. Questions of infringements on individual privacy, the accuracy of polygraphs and whether the death penalty is an effective deterrent have not been addressed adequately, some say.
"It's not the way to handle counterintelligence," said Rep. Don Edwards (D-Calif.). "Our problem is we have too many Russians running around . . . . Secondly, we don't kill spies . We turn them into double agents, convict them and try to trade them."
But Sen. John Glenn (D-Ohio), in a comment that parallels what top-level Navy officials are now saying, argued that the scare over the Walker case may benefit the country if it helps to address what he called the "inadequacies of our counterintelligence apparatus."
"At the very least," Glenn said, "I expect we will come out of this serious breach of American security with greatly improved mechanisms for granting security clearances and a substantial reduction in the unreasonably high number of persons who now have access to sensitive material."
If that is the legacy of the charges against John Walker, what is the future for the family members themselves? Awaiting Trial
For now, it appears that all four will stand trial. According to the FBI, Arthur Walker and Michael Walker have made statements admitting some participation in the ring. Whitworth, friends and family say, has maintained his innocence.
John Walker, described by coworkers at his Virginia Beach private detective agency as a flamboyant, manipulative kind of man, is spending his days quietly in a 7-by-10-foot cell in Cell Block Number 2, an isolated section of the Montgomery County Jail in Rockville.
Jailers said Walker no longer wears a toupee, rises at 6 a.m. every day and marks his hours by meals served in the cell block day room. He has cut himself off from the few pleasures offered inmates, refusing morning and evening sessions at the jail gym, church and outdoor yard.
"He doesn't seem depressed but he's certainly concerned with his situation," said John E. Wright, director of the Montgomery County Detention Center.
Laura Walker Snyder, the daughter who urged her mother to turn in Walker and told the FBI her father had tried to recruit her as a spy, took her story to the Christian Broadcasting Network two weeks ago. Snyder, 25, she said her mother never knew that Michael Walker might be involved and was shattered by the charges against him.
Snyder became the focus of a short-lived, well-publicized marital dispute when she snatched her 5-year-old child from her estranged husband and flew to California to appear on the 700 Club, a religious talk show. She has since applied for a job at the Christian Broadcasting Network, according to Guy C. Evans Jr., the network's corporate attorney, who has described himself as Snyder's "spiritual counselor."
Evans said Snyder, who has been treated for stress since her television appearance, is close to signing a book contract. She has declined to grant additional interviews with other media.
Last week, she appeared at CBN with her son Christopher shortly before the noon prayer sessions conducted daily for network employes. In a brief meeting with a Washington Post reporter, she said she had been in touch with her mother on a regular basis but declined to discuss her plans or answer other questions.
And the woman whose call seven months ago made all the difference continues to live -- at least by outside appearances -- much as she did before she became a figure of national attention.
Barbara Walker still works full time at a shop near her Cape Cod apartment, where she lives with another daughter, Cynthia. She is in good health, and she has received strong support from friends and neighbors, said her attorney, J. Albert Johnson.
Emotionally, however, she has had to make adjustments. "I would say there's been a dramatic change . . . for she's never before had the public scrutiny she has had," Johnson said. Reporters camp outside her door daily. She has been unable to see her son, the youngest of her four children.
If she is asked to testify, "I suspect she would fulfill her obligation as called upon," said Johnson, who served as counsel for newspaper heiress Patricia Hearst in her 1976 trial for armed robbery. But, he said, "She's apprehensive about what the future holds for her and her son.