Russia Irked Over U.S. Ambassador's Mansion

With the United States and Russia busy expelling each other's diplomats, another issue has emerged. Why is the U.S. paying only $3 a year for its ambassador's magnificent Moscow residence?

Russian and American officials have been arguing about the ambassador's residence for years, but Russian officials say the dispute has now taken on "a political character" — an apparent reference to the expulsions.

Russia today identified four American diplomats it was ordering out in an initial wave of expulsions. A Russian Foreign Ministry statement said the four, who were not publicly identified, were being expelled for "activities incompatible with their diplomatic status," a phrase usually used for allegations of spying.

Russia has said it will expel 46 other Americans in retaliation for the expulsion of 50 Russian diplomats from Washington.

Russia's actions are in response to President Bush's expulsion of scores of Russian diplomats from the United States after the arrest of Robert Hanssen, a 25-year veteran of the FBI who's accused of spying for the Soviet Union and Russia since 1985.

Turn-of-the-Century Splendor

Spaso House, a pastel yellow, turn-of-the-century mansion in central Moscow, has been the official residence of the American ambassador since 1933. Under a 20-year lease extension agreed in 1985, the U.S. rents the building for 72,500 rubles a year.

That was $90,000 at the artificially inflated Soviet exchange rate. But after the demise of the Soviet Union in 1991 and the collapse of the rouble, the annual rent now comes to just $3. Not bad for a dozen bedrooms, crystal chandeliers and a magnificent dome.

When a fire destroyed records in 1993, Russia stopped sending rent reminders and the U.S. missed two payments. That, say the Russians, made the 1985 contract null and void. The United States has been making its token payments since then (currently 75 cents a quarter), but the Russian Foreign Ministry has sent them back.

Russian officials want to raise the rent to the market level and charge the United States for back rent. Deputy Foreign Minister Ivan Sergeyev told the Interfax news agency that the United States owes Russia more than $6 million in back rent, adding that Russia is considering international arbitration if the matter isn't resolved soon.

ABCNEWS' Sergiusz Morenc, Alex Lutz and Olga Padorina in Moscow contributed to this report.