Putin and Medvedev Face up to Shakeup of Russian Spy Agencies

The Kremlin finally appears to have woken up from a long slumber and found the will to conduct a comprehensive reform of Russia's traditionally untouchable spy services.
That President Dmitry Medvedev, and especially Prime Minister Vladimir Putin, had been roused to action was apparent from the unheard-of admission by Moscow that the ten Russian spies arrested in the United States last June were betrayed by a Russian espionage official.
He was first identified on Nov. 11 in the Russian Kommersant as Col. Shcherbakov or Col. Poteyev and described as head of the "sleepers" department of the SVR – the Russian CIA, who defected on an undisclosed date to the US and retired now to a secret condo. SVR assassins were said to be sent to kill him.
In a subsequent release, Russian intelligence sources referred to two separate defectors: "Scherbakov, a counterintelligence operative" said to have escaped two-to-five years ago; and Poteyev, who reportedly escaped roundabout May-June, 2010, while working with covert Russian agents in the US.
Poteyev was described as employed by the CIA from 2003. His family moved legally to American before his escape.
The conflicting versions of the same affair attest to a debate within the Kremlin and top intelligence echelons.
Friday, Nov. 12, President Medvedev stepped in with a rare confession that the June arrests of Russian agents were made possible by the defection of a senior intelligence official.
On Sunday, November 14, Russian lawmaker Gennady Gudkov, himself a former KGB colonel who also served for five years in the SVR, confirmed that a Foreign Intelligence Service colonel who betrayed 11 sleeper agents was possibly recruited by the United States several years ago.

An orchestrated prelude to a major shakeup

All this was interpreted by intelligence experts as a well-orchestrated campaign by Russian leaders to pass the buck for the Russian intelligence fiasco in America and pin it on SVR Director Mikhail Fradkov. This ploy was designed to clear the way for his removal and the reunification of the SVR and the FSB, the Russian version of the FBI.
In its previous incarnation during the Soviet period, the SVR was called the First Chief Directorate, FCD. Operating out of Yasenevo (headquarters today of the SVR), the FCD branch of the KGB struck fear and respect in the Western intelligence agencies which fought it.
As professionals, the American CIA, the British MI6 and the Israeli Mossad could only envy Russian wizardry in the arts of recruiting double agents and planting them in their enemies' ranks to run clandestine spy networks from inside Western agencies.
As the Cold War wound down, US spy chiefs admitted the FCD had them beat in human intelligence, whereas this American shortcoming was compensated for by superiority in signals and technical intelligence.
These parameters held true in the Cold War and most of the 1990s, but not today.
While deeply immersed in America's combat operations against Al Qaeda and the Taliban and its involvement in Iraq and other arenas, US intelligence has been able to get the better of the SVR in at least two major instances.
One was the exposure in June, which Moscow admitted, of 11 Russian spies who had managed to obtain US citizenship and set up sleeper cells to await Moscow's instructions for going into action.

Netting the Russian Viktor Bout

An even more striking coup was the extradition from Thailand on Tuesday, November 16, of the Russian Viktor Bout, 43, who earned the sobriquet of Merchant of Death as one of the biggest arms traffickers in the world.
Captured in a joint US-Thai sting operation in 2008, he fought extradition to the US in a year-long legal battle – and lost. Wednesday, he pleaded not guilty to four US terrorism-related charges – three of which carry maximum life sentences and the fourth up to 15 years in jail.
For Moscow, Bout was much more than an arms merchant. As a former Soviet Air Force military translator with strong ties to Russian intelligence, Bout made several fortunes through his many air transport companies. He acquired surplus transport planes during the Soviet Union's breakup and used them to ship illegal arms cargoes through the 1990s to conflict zones, such as Angola, Liberia, the DR Congo, the Middle East and Colombia, and before that to Afghanistan and Bosnia.
While claiming he was innocent of anything but providing logistical help, he gained notoriety as an accomplished sanctions buster. A decade ago, a United Nations listed him as "a well-known supplier of embargoed non-state actors" – the international body's definition of arms suppliers to rebels.
Wherever in the world the UN or the US clamped down sanctions, whether Saddam Hussein's Iraq or Omar Bashir's Sudan, Bout was to be found with an air fleet ready for immediate delivery of munitions or any other items required.
Our intelligence sources report that in Western undercover services, he came to be known as the human satellite.

Moscow complains

This globe-girdling operation was clearly not the work of a solo arms trafficker. Many intelligence sources suspect Bout is himself an intelligence officer or at least had a quid pro quo arrangement with GRU (military intelligence) and SVR going up to very senior levels of Russian government. According to this suspicion, they supported him and he supplied their agents with clandestine information about the war zones to which he gained access.
If these allegations are correct, his extradition to the US puts him in position to potentially give away valuable information not only about his own shady arms operations but also to shed embarrassing light on sensitive Russian involvement.
Hence the sharp response from Russian Foreign Minister Sergey Lavrov: It is deeply regrettable that the Thai authorities have yielded to political pressure from outside and carried out this illegal extradition of VA Bout, he said Tuesday, Nov. 16. "Contrary to two rulings by a Thai criminal court which concluded that Viktor Bout's guilt was not proven, he has still – by a decision of the Thai government – been extradited to the United States."
He complained further: "I consider this to be unprecedented political pressure on the judicial process and on the government of Thailand. This whole story is an example of blatant injustice. We, as a state, will continue to render all necessary assistance to Viktor Bout as a Russian citizen."
DEBKA-Net-Weekly's sources in Moscow report that the Bout affair is what finally sealed the fate of SVR chief Mikhail Fradkov. They expect Moscow to issue a statement about his dismissal in the coming days.