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Russia's spies must learn from betrayal: Medvedev

SEOUL (Reuters) - President Dmitry Medvedev told Russia’s once mighty spy agency on Friday to put its house in order after a senior spymaster betrayed a network of agents to the United States.

Russia's President Dmitry Medvedev arrives at Haneda airport in Tokyo, for the APEC Summit in Yokohama, November 12, 2010. REUTERS/Toru Hanai

The Foreign Intelligence Service (SVR) is grappling with the network’s betrayal by the head of Moscow’s deep cover spying operations in the United States, one of Russia’s most serious intelligence failures since the end of the Cold War.

“There should be an internal investigation and lessons should be drawn,” Medvedev told reporters at a briefing after the Group of 20 summit in Seoul.

Asked about a report in the newspaper Kommersant which broke the story, Medvedev said: “For me the Kommersant publication is not news, I knew about it on the day it happened.”

Kommersant identified the man as Colonel Shcherbakov and said he was responsible for unmasking a Russian spy ring in the United States in June. The arrest of its members humiliated Moscow just days after a summit in Washington between Medvedev and President Barack Obama.

The detained agents were exchanged in July for Russians suspected of spying for the West in a Cold War-style spy swap.

They returned to a heroes’ welcome in Moscow, singing patriotic songs with Prime Minister Vladimir Putin, himself a former KGB spy, and receiving awards from Medvedev at a private Kremlin ceremony.

Putin said at the time they had been betrayed but the seniority of the U.S. mole and the fact that Shcherbakov was able to slip out of Russia have added to speculation that SVR chief Mikhail Fradkov could be sacked.

“The alleged spy was a senior Russian official and thus one with great access to highly sensitive information, such as the identities and operations of operatives in the United States,” said Jay LeBeau, a former CIA official.

“He would have been in a position to do enormous damage to Russian intelligence interests.

“One can be sure that this fellow provided his U.S. handlers with other information as well.”

The failure has weakened the spy agency’s position in Moscow, prompting a debate about whether it should be merged with the Federal Security Service (FSB), the main successor of the Soviet-era KGB.

Writing by Thomas Grove and Guy Faulconbridge; Editing by Andrew Dobbie