The most startling find was buried in one of the concrete walls. Shaped like a bow tie, the device was nicknamed "Batwing." U.S. experts were stunned to find that it was a sophisticated power source that could last 100 years.

They discovered it hidden in the structure of the unfinished new U.S. Embassy building in Moscow -- an eight-story office tower built by the Soviets. The building is so riddled with eavesdropping devices, U.S. officials say, that the State Department wants to tear it down and has asked Congress for $270 million to rebuild it using American materials and labor.

But according to Victor Sheymov, a former Soviet KGB major whose expertise includes communications security, he warned the U.S. government 10 years ago -- just a few months after construction started -- that its new Moscow chancery would be bugged with a new technology that could not be defeated short of tearing the place down. He says he told his CIA debriefers shortly after his defection in May 1980 that "you won't have a single secret in the building" if the Soviets were allowed to put it up.

"I told them the KGB was going to make the building itself a giant system of sensors that could pick up virtually anything inside the building," Sheymov said.

Despite the warnings, U.S. officials decided there was nothing the Soviets could install that could not be detected and removed. It was not until five years later that they began to realize they were badly mistaken.

Discovery of some eavesdropping equipment in the new embassy first became public in the fall of 1986 in a sharply critical Senate Foreign Relations Committee report, but it was offset by State Department assurances that the problems could be remedied "without any additional costs" or much extra effort. After a series of congressional and executive branch investigations, however, President Ronald Reagan decided in October 1988 that the entire building should be torn down. The Bush administration, hoping for a cheaper remedy, ordered new studies, but finally agreed last December that the structure should be razed.

The extent and details of the Soviet effort, which U.S. intelligence officials have equated with the $250 million cost of a shuttle flight, are still highly classified. "Batwing," for instance, is a tightly guarded secret. Sheymov's warnings have never been officially revealed.

U.S. officials, meanwhile, are still trying to figure out just how the eavesdropping system is supposed to work. Unexplained elements include gold wires connecting reinforcing rods buried in the concrete and an unusually thick upper floor where the top secret code room was to be installed.

"Our technical people were astounded at the level of sophistication," said one source. "One man from the CIA said, 'These are the kinds of things that are only on the drawing boards here.' "

In a series of recent interviews, Sheymov declined to discuss any details of the Soviet technology. He refused, for instance, to talk about "Batwing," which was disclosed by other sources, and said he knew nothing about it.

When Sheymov went public in March about some of his activities, a Bush administration spokesman familiar with his case described him as "a major defector who made a valuable contribution to our country and national security." Sheymov joined the KGB in 1971 and was assigned to the ultra-secret 8th Directorate, which at the time handled KGB communications intelligence and intercept activities. Following his defection and a year of CIA debriefings, he was awarded the U.S. Intelligence Medal.

Excavation work for the new U.S. Embassy complex in Moscow began on Nov. 22, 1979, under a contract with Soyuzvneshstroyimport, a Soviet government firm. Digging and pile-driving were still underway when, on May 16, 1980, the CIA smuggled Sheymov and his wife and child out of Moscow.

Sheymov said one of the first things he told the CIA was that he knew of "the general plans and capabilities that would be used in penetrating the new embassy, but not all the details."

He said a "special enterprise," which runs a factory near a Moscow subway stop and a concrete plant on the city's outskirts, was assigned "to deal with the building materials for the U.S. Embassy, using a rather sophisticated technique."

The result, a member of the House Foreign Affairs Committee said years later, was "a building that is essentially an eight-story microphone plugged into the Politburo."

The concrete columns and beams for the job were prefabricated by the "special enterprise," which Sheymov said was controlled by the KGB's 8th and 16th directorates. The 16th Directorate was spun out of the 8th to take over all communications intercept activities.

U.S. officials have said they were denied permission to visit the site where the precast beams and columns were being poured.

According to Sheymov, installation of the prefabricated items was only one round of the bugging. Another, he said, involved digging tunnels to the foundation walls. From there, he said, KGB technicians could drill into the basement walls and then upwards, creating channels to send listening and even video devices to the topmost floors.

The next round of bugging, Sheymov said, would be an open-ended one, installing additional devices in furniture, office equipment, "whatever they can get their hands on."

"The KGB is known for the redundancy of its operations," Sheymov said. If the same conversation is picked up by more than one device, he said, each intercept is separately transcribed, to make sure nothing is missed.

U.S. officials said they knew the Soviets would make every effort to install eavesdropping devices in the new building, but they failed to appreciate the magnitude of the effort. "The proper decision at that time {in 1980} would have been to scrap all the plans, regain control of the site and start again," Sheymov said.

Instead, an interagency committee headed by the CIA decided to let the Soviets install the bugs on the assumption that U.S. experts could tear them out when that phase of the construction was done.

"It was so naive," said a State Department official familiar with the strategy. "The CIA decided to let the Russians do the building, then throw them out and spend three months taking the bugs out. . . . We didn't realize that if you took them all out, you were undermining the structure."

Abnormalities in the construction work began showing up as early as 1982, indicating "extensive Soviet bugging of the structure," according to a 1987 Senate intelligence committee report.

U.S. concerns were heightened in 1984 by the discovery of bugs in electric typewriters in use for years at the old embassy on Tchaikovsky Street and at the consulate in Leningrad. U.S. officials were tipped off by French intelligence that various pieces of equipment might have been compromised. It took months for National Security Agency experts to find the bugs. Insulated wires were hidden inside typewriter springs and even screws were hollowed out to use power from the machine itself.

"The typewriters showed that the Soviets had a technical competence of which we were not aware," said another source, a former Reagan White House official. "We said, 'Holy smoke, this is pretty good stuff.' "

As for the new building rising on nearby Konyushkovskaya Street, this official said the fact that whatever the KGB was doing was "not well understood" was seen as a reason to let the work continue. "There was a premium on not doing anything until you know what's going on," he said. "By 1984-85, we had great suspicions that the thing was a giant antenna -- or a giant woofer."

Finally, the Soviets were locked out without warning in August 1985, with their part of the work almost done. About $23 million of the $65 million in the U.S. budget for the project had been spent.

It took exhaustive testing to find out what had been done. Technical counterintelligence teams, assuming some bugs were active, worked around the clock in silence. Walls were torn out. Special neutron X-ray equipment was brought in.

Bugs eventually were found in the precast concrete along with a hodgepodge of diodes and other items tossed in to frustrate the search.

"It wasn't just diodes, it was literally junk," said former representative Dan Mica (D-Fla.), who investigated security breaches in Moscow as a House Foreign Affairs subcommittee chairman. "They put in tin cans, pipes, wrenches. If you tried to take all those things out, you'd be left with a structure worse than Swiss cheese."

According to several sources -- confirming and adding to details first reported in Ronald Kessler's 1989 book, "Moscow Station" -- other bugs were found in spots where metal I-beams were welded together. The bugs were composed of materials with the same density as the metal so that normal X-rays could not detect them.

In addition, the sources said, steel reinforcing rods set into the concrete were cut into varying lengths, apparently so they could serve as antennas. Elements of the building were configured so that microwaves could be directed at it from a KGB post and they would bounce back, with the waves changed or modulated by the voices, sounds and waves they picked up at the embassy.

Suspicions about the KGB post centered on a church across the street, which investigators dubbed "Our Lady of Telemetry."

"It gives off a lot of energy," said a House staff member.

Despite the discoveries, a State Department official who asked not to be named said that the CIA was insisting as late as January 1987 "that we could neutralize anything in the building."

But in June 1987, former CIA director and defense secretary James R. Schlesinger, working as a special State Department consultant, reported that the Soviets had "extensively salted" the new building "with a full array of intelligence devices for which we do not yet understand either the technology or the underlying strategy."

Official inquiries proliferated. The State Department, already under fire for security breaches at the old embassy, was widely castigated for being too lax. Officials at State felt the CIA got off too lightly.

The problems were traced back as far as December 1972, when the Nixon White House, anxious to get Soviet leader Leonid Brezhnev to come here for a summit meeting, agreed to let the Soviets put up the basic structure in accord with Moscow "norms and rules."

The State Department objected to the arrangement, and then-Assistant Secretary of State Walter J. Stoessel Jr. signed it under protest. But the door was opened to the use of Soviet labor as well as off-site casting of concrete columns and beams.

The State Department is now seeking Moscow's approval to rebuild with U.S. materials and labor.

Sheymov said he believed his warnings were taken seriously at the CIA and conveyed to the State Department "at a very high level."

That, however, was not clear. In 1987, then-Assistant Secretary of State Robert E. Lamb, in charge of diplomatic security, indicated to a House subcommittee that U.S. officials did not foresee the possibility that the Soviets would use "the structure itself as part of the bugging."

The CIA declined to comment.

Staff researchers Bruce Brown and Ralph Gaillard Jr. contributed to this report.

Designed by U.S. architectural firm and Soviet engineer

Cost so far: $190 million

Assembled from prefabricated modules built U.S. Inspection

Originally scheduled for 1983 opening at cost of $90 million