Undercover U.S. military mtelhgence agencies have been operating out of Ann Arbor's Michigan National Guard Armory since at least 1970, the SUN has learned. The armory, at 223 E. Ann St., may also be functioning as an observation postmeeting place for increasing numbers of federal narcotics agents in the area. Despite initial refusal by occupants to divulge their identity, the SUN learned last week that a two person Defense Investigative Service (DIS) office is operating out of the building. Thtidentification was confinned by a Department of Defense (DOD) spokeswoman in Washington, D.C. The DIS office was apparently set up in October, 1972 to replace an office of the 1 12th Military Intelligence (MI) Group, Región II, which occupied the same space and may have been staffed by the same persons. The Ml office was part of the domestic intelligence network compiling dossiers - on political activists and groups for a national computer data bank. While the files were ordered destroyed in 1970, a number of federal operations have kept alive. suspicion that a domestic surveillance network still exists. The problem is, which agency and where? The primary purpose of DIS is supposed to be background investigations for security clearances. Last year a retired naval officer, Rear Adm. Eugene LaRocque, charged the new DIS has "virtually no limitations on the type of surveillance and actions it may undertake." He also called it a potential "plumbers" unit and said it is not subject to review by Congress. Finally identifying himself last week as Mr. Kleinbeck, one of two known DIS agents operating out of the armory called LaRocque's charges "defamatory" and "blown out of proportion." While Kleinbeck also denied the building is being used by law enforcement agencies, street observorshave described to the SUN what may be meetings of undercover narcotics agents in the building. According to reports from Ann St., as many as twenty persons sport ing boards, long hair and blue jeans have been seen entering the armory at times when it is closed to the public. The sources say cars with federal stickers, sotne with Ohio license plates, have been left on the street during meetings. Persons in the armory have also been linked to several drug arrests down the street in the vicinity of the Derby Bar. The location of the DIS office, on the second floor and in the southwest corner of the building, gives it an unobstructed view of the block where heroin and stolen merchandise is frequently traded. While knowlegeable observors discount the possibility that a DoD unit is coordinating the activities of federal narcotics agents, they do note that undercover personnel belonging to one agency frequently introduce thpse of another into the community. Besides its advantageous location, the armory is also usually locked and empty, except for a Michigan National Guard office on the first floor, southeast corner. LOOSE UPS SINK SHIPS The Defense Department say DIS performs background investigations for security clearances, but the language of the unit 's charter appears to authorize it to do nearly anything. As Adm. LaRocque pointed out last year, the DIS charter also authorizes it to: conduct "other special investigations as the Secretary of Defense may direct." "maintain liason" and "render appropriate assistance to" various military and civilian, law enforcement and intelligence agencies. "provide personnel security investigative support" to the National Security Agency (NSA). LaRocque pointed out this last item might be designed to allow the highly cretive NSA toengagein domestic, rather than the foreign activities for which it is authorized. A spokesman for DIS, Air Force Col. Mason W. Gant III, said last year he could understand why LaRocque was concerned over the charter's language, but said it was put there only "to leave the option open to the the Secretary sothat if he wanted someone checked out for criminal ■ or counterintelligence matters, he could." In testimony to a House subcommittee in January 1973, a few months after the unit was formed, DIS director and Air Force Brig. Gen. Joseph Cappuccisaid DIS had conducted only two or three special investigations to get to the source of "security material that appeared in the press." A back-up directive obtained by LaRocque could be construed as open season on dissidents, however. It apparently authorizes the unit to investígate persons who undertake "subversión of loyalty, discipline or morale" of the armed forces. "These agencies get formed under the aegis of the government," LaRocque told the' SUN in a telephone interview over the weekend, "but once they're started the people in them can decide to save the country and we have very little control over what they do." LaRocque, a frequent critic of the military establishment, is director of the Washington based Center for Defense Information. "If they're investigating for security clearances," he said of the Ann Arbor office, "then that's what they're supposed to do. But at the very least they should put a sign on their door to identify themselves, and teil people who they are when they're asked. The reason we don't know what's going on is that everything is so secret." MILITARY INTELLIGENCE AND DEFENSE INVESTIGATION "I can assure you there is no affiliation whatsoever between DIS and the MI units," a Major Kirby from the DIS office in Washington told the SUN on Tuesday. According to official doctrine, DIS is an investigative rather than an intelligence unit. That is, DIS is supposed to check for Communist friends in the backgrounds of persons working for the DOD or military contractors, not compile dossiers on the Revolutionary Student Brigade or Interfaith Council for Peace. In Ann Arbor, however, DIS not only replaced the local MI office but occupies the same space and may be staffed by the same persons. According to a DOD statement released on Friday: "The U.S. Intelligence Agency did have a regional office of the 1 1 2th Military Intalligence Group at the armory until the group was phased down during the consolidation of the personnel secur' ity mission...(This subsequently) became the mission of the Defense Investigative Service when it was established in October of 1972." Nationally the MI mission began in 1965 as an early warning system for civil disorders, but by 1967 it was gathering intellicontinued on page 21 The SUN has uncovered a military intelligence unit operating out of the Ann St. armory. Last year, a retired admiral called the agency a potential "plumbers" unit, with virtually no limitations on the type of actions it may undertake. What's Going On At The Ann St. Armory? continued from page 3 gence on the membership, ideology, programs and practices of civil rights, white supremacy, black power and antiwar groups. Since the operation was secret, a characteristic cover for the thousand plainclothes soldier-agents and 300 offices around the country was that t'hey were- you guessed it-performing background investigations for security clearances. By the time the Washington Monthly disclosed the MI operation in January 1970, the U.S. Army Intelligence Command was planning to particípate in a national computerized data bank with the FBI, the Secret Service, the Passport Office, the CIA, the NSA, the Civil Service Commission, the AEC and the three military services. Plans for the data bank are supposed to have been scrapped about the same time DOD and executive directives ordered the dossiers destroyed, but seven million security clearanCe dossiers are reported on file in the Investigative Records Depository at Fort Holabird, Baltimore. While it isn't known when the 1 12th first set up in Ann Arbor, according to the General Services Administration in Chicago it signed a five year lease for four hundred square feet of armory office space in 1970. DIS now occupies that office. WHAT HAPPENS WHEN YOU WORK IN A PUBLIC BUILDING AND DONT IDENTIFY YOURSELF The SUN investigation into the armory began on the morning of November 2. a Saturday, when a reporter first encountered Kleinbeck at the locked entrance to the building. Although the SUN reporter presented credent als and noted the armory was a public building, Kleinbeek refused to iden1 tify himself. A Sgt. Nutt of the Michigan National Guard was also in the building at the time, but while identifying himself, also refused to identify Kleinbeck. After receiving calis frorn DOD in Washington and Ann Arbor State Rep. Perry Bullard's office, Kleinbeck finally identified himself on Nov. 27. A second man. Mr. Barcus, identified himself over the telephone During a ten minute interview, Kleinbeck said his office was not involved in any special or criminal investigations. He said the Ann Arbor office conducts background investigations for security clearances only, explaining that the Ann Arbor área has "special investigative requirements" because of the military research and manufacturing industries here. Kleinbeck said he was "not at liberty to reveal" how many persons operated out of the Ann Arbor office, where other fices in Michigan were located or whether he had worked for the 1 12th MI before working for DIS. According to a reliable source on Ann St. however, Kleinbeck has been in the área "about three years," or before the local MI office was transformed into the DIS office. During the interview, Kleinbeck declined to have his picture taken, later refused to divulge his first name or answer further questions beca use of instructions from his superiors. Questions which the SUN has forwarded to the Defense Dept. in Washington, but which have yet to be answered, include: When was 1 1 2th MI established in Ann Arbor? Was there any change in personnel when DIS replaced 1 12th MI in October 1972? What is the difference in function between DIS and 1 1 2th MI? Is the Ann Arbor office cooperating with any law enforcement agencies?