Top Russian spy defects after betraying ring in U.S.

MOSCOW (Reuters) - The head of Russia’s deep cover U.S. spying operations has betrayed the network and defected, a Russian paper said Thursday, potentially giving the West one of its biggest intelligence coups since the end of the Cold War.

Russian spy suspects are seen in this courtroom sketch during their appearance in Manhattan Federal Court in New York, July 8, 2010. REUTERS/Christine Cornell

The newspaper, Kommersant, identified the man as Colonel Shcherbakov and said he was responsible for unmasking a Russian spy ring in the United States in June whose arrests humiliated Moscow and clouded a “reset” in ties with Washington.

The betrayal would make Shcherbakov one of the most senior turncoats since the fall of the Soviet Union and could have consequences for Russia’s proud Foreign Intelligence Service (SVR) and its chief, former Prime Minister Mikhail Fradkov.

Kommersant said Shcherbakov, whose first name it did not give, had been responsible for “illegal spying” in the United States, meaning spies operating under deep cover without diplomatic immunity.

Confirming Kommersant’s report was accurate, Gennady Gudkov, deputy chairman of the Russian parliament’s security committee, said it was a major failure by Russian intelligence and a success for the United States.

“It is a major blow to the image of the Russian intelligence services,” he told Reuters.

A U.S. Central Intelligence Agency spokesman in Washington declined to comment.

The paper said Shcherbakov had left Russia days before U.S. authorities announced the spy ring arrests on June 28 and quoted a Kremlin official as saying a Russian hit squad was probably already planning to kill him.

“We know who he is and where he is,” the unidentified official was quoted as saying. “Do not doubt that a Mercader has been sent after him already.”

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All 10 spies arrested in the United States pleaded guilty and were deported to Russia in a swap less than two weeks later.

Prime Minister Vladimir Putin, himself a former KGB spy, greeted them as heroes. He said traitors came to a bad end, and the informer would be left to the mercy of his own kind.

“The special services live by their own laws and everyone knows what these laws are,” he said shortly after the swap.

Despite Moscow’s tough talk, the revelation could damage the reputation of the SVR.

Former U.S. intelligence officer Mark Stout said: “Recruiting a Russian officer who was actually in charge of so-called ‘illegal operations’ in the U.S. is about as big a counter-espionage success as U.S. intelligence can hope to get.”

Kommersant quoted an unidentified source as saying Fradkov could be sacked and the SVR folded into the powerful Federal Security Service (FSB), the main successor of the Soviet-era KGB.

“The damage inflicted by Shcherbakov is so enormous that a special commission should be created to analyze the reasons which allowed this complete failure to happen,” Gudkov said, although he cautioned that it was too early to decide whether the SVR should be merged into the FSB.

Putin, who served a stint as FSB chief during his rise to power, has installed many allies from his KGB days in top government posts and former members of the security services are considered to wield a great deal of power inside the Kremlin.

Foreign Intelligence Service spokesman Sergei Ivanov declined to comment on the Kommersant report.

U.S. authorities said in June the Russian spy ring had been operating in the United States for 10 years, its members adopting false identities and blending in while they tried to gather intelligence for Moscow.

Espionage historian Phillip Knightley said the report should be viewed in the context of the smoke and mirror world of Moscow’s spy agencies.

“How do we know it is not a plant to draw Western attention away from the real betrayer? Or just to sow confusion in Western spy services?” Knightley said.

Additional reporting by William Maclean in London; Writing by Thomas Grove and Guy Faulconbridge; Editing by Andrew Dobbie