Friday, November 12, 2010

U.S. Spy Ring betrayed by Defecting SVR Colonel

The sensational case of the ten illegal Russian agents (see previous blog) gets yet another intriguing twist. According to investigative journalists of the Russian newspaper Kommersant, SVR (Russian Foreign Intelligence) Colonel Aleksandr Vasilyevich Shcherbakov blew the cover of the spy ring, before defecting to the United States. It is questioned whether Vasilyevich is the real name of the defector.

Update November 19: Russian intelligence sources (see links below) named Colonel Alexander Poteyev as the double agent who betrayed the spy ring. Poteyev was reportedly deputy director of the SVR's Directorat S that controls the illegal agents in the United States. He is a former KGB ‘Zenith’ Special Forces member who served in Afghanistan. In the 1990's, he was operating undercover in New York where he was recruited by the CIA in return for a financial settlement.

Meanwhile, Russia's Intelligence Services remain silent and the U.S. State Department has no comment. The Kommersant source said that Poteyev is nothing more than a traitor: "We know who he is and how he did it. Money was his only incentive. Make no mistake, we already send a Mercader after him." (ref. Ramon Mercader was the KGB assassin who killed Leon Trotski). According to a Kremlin source, Poteyev's fate is more than unenviable, as he will live in fear for the rest of his life.

Officially, the FBI and other law enforcement agencies busted the spy ring after a many years investigation. As it turns out now, Colonel Poteyev, who worked at the Illegals department, betrayed SVR General Michael Vasenkov (A.K.A. Juan Lazaro), one of the illegal agents in the U.S. spy ring. This started the avalanche of arrests, leading to the expulsion of the ten illegal agents, the biggest spy scandal since the end of the Cold War.

Michael Vasenkov (photo right) started his intelligence career in the 1960's when the KGB's First Chief Directorate PGU (Foreign Intelligence) sent him to Spain. In the 1970's, during a tour in South-America, he obtained Peruvian citizenship as Juan Lazaro, by using a Uruguayan birth certificate of a 1947 deceased boy. In the 1980's, he married the Peruvian journalist Vicky Pealez (one of the also expelled spy ring members) and moved to the United States. This was the start of an impressive deep cover carrier.

Vasenkov assimilated perfectly. He earned a degree in political science and he cultivated highly placed friends among left wing Democrats. He apparently provided the Soviet Union with invaluable information. In the 1980's he received the Hero of the Soviet Union distinction, the highest possible Soviet award, and was recently promoted to General.

After Poteyev's tip-off, Vasenkov was arrested but insisted during the interrogations that his arrest was a mistake. His cover was so perfect that U.S. intelligence had no evidence against this respected 65 year old family man. Many influential American friends and relatives, who had no idea of the truth, backed up his fake identity. He kept denying until Poteyev provided a folder with documents that identified Lazaro as SVR operative Michael Vasenkov. According to Gennady Gudkov, member of the Committee on National Security, "there is indirect evidence that Poteyev was recruited by the Americans several years ago and, thus, he was able to prepare his escape, taking files of our agents and even information he might have obtained from other departments".

It is now clear that both Russia and the United States downplayed the espionage case and resolved it with a swift spy exchange to preserve the reset in relations between the two countries. An unprecedented investigation is now initiated by Russia's law enforcement, including Russia's Federal Intelligence Agency FSB, to find out why Poteyev betrayed the 10 agents and how Russia's intelligence failed to notice the betrayal and could not prevent his defection. Especially the fact that he betrayed a highly respected deep cover agent fell very bad within the intelligence services.

The SVR had no idea and never suspected Colonel Poteyev, not even after he refused a promotion to an even more sensitive post, possibly to evade the required thorough background check a lie detector test. This occured one year before the fall of the spy ring. Poteyev's daughter already lived in the United States and his son, an officer in the federal drug enforcement service Gosnarkokontrol, left Russia for the United States shortly before the spy ring was uncovered. No one within the SVR questioned his behaviour. Poteyev fled to the United States only three days before President Medvedev's visit to the United States. The FBI arrested the illegals soon after Medvedev's return to Moscow.

This again puts the pressure on Mikhail Fradkov, head of the SVR. The embarrassing case fuels the criticism on the segregation of the SVR after the radical reform of the intelligence services in 1991, and supports the proponents of reorganising the SVR back under control of one large intelligence agency, just as the First Chief Directorate was a part of the KGB during the Soviet era.

Meanwhile, Russian President Medvedev said that there was nothing new to the case and that he knew the details about the betrayal from the very start. Indeed, last July, Prime Minister Putin stated during an interview that it was a sell-out and they knew the traitors by name. The ten spies had a tough job and their arrests were not caused by their own mistakes. According to Medvedev's press secretary, the SVR agents received state awards during a Kremlin ceremony last month. As I predicted in my July blog... again, case all but closed.

More about this story on the Russian Коммерсантъ news paper (translation). More about Alexander Poteyev at Interfax Moscow (translation). The case is also followed closely by CI Centre. More details about the spy ring on my blogs Large SVR Spy Ring Arrested in the U.S. and U.S. - Russian Spy Exchange.

Update November 3, 2011: The FBI release a large number of documents, photos and videos from operation Ghost stories, the investigation and arrests of the ten illegal SVR agents. All information is released through the FBI records webpage The Vault.

More video news from Moscow on this case below and at Russia Today Youtube. As an end note, a more than entertaining view on the 'Mercader' treatment by Bazzel Baz on MNSBC

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