Putin Rips Russian Spy Bust

By EVAN PEREZ in Washington and RICHARD BOUDREAUX in Moscow

Russian Prime Minister Vladimir Putin on Tuesday criticized U.S. law enforcement, even as his government acknowledged that its citizens were among the 11 people that U.S. authorities charged were part of a long-running spy operation.

Both Mr. Putin and U.S. officials voiced hopes that the brewing scandal would not harm relations between the two countries, and there was no sign in Moscow of the kind of tit-for-tat action that a deeper diplomatic rift would imply.

Still, the emergence of an alleged cell of secret agents reporting back to handlers in Moscow undercut the Obama administration's claim of improved ties with Moscow as part of a "reset" of U.S.-Russia relations.

President Barack Obama last week took Russian President Dmitry Medvedev to his favorite hamburger joint, which turned out to be just blocks from the Arlington, Va., apartment building where one of the alleged Russian secret agents lived.

"I do not believe this will affect the resetting of our relationship with Russia," White House spokesman Robert Gibbs said at a briefing in Washington.

He said Mr. Obama was aware of the alleged spy ring, but the president didn't discuss the topic in face-to-face meetings last week with Mr. Medvedev.

The arrests of 10 people in the U.S., and one in Cyprus mark only the beginning of the effort by U.S. investigators and intelligence analysts to learn the scope of the Russian S.V.R. intelligence agency's "illegals" operation.

U.S. officials said intelligence analysts have spent recent days listening for a burst of "chatter," as Russian agents might try to alert other possible deep-cover agents hiding in the U.S.

Russian Prime Minister Vladimir Putin questioned US police actions after the arrest of Russian spy suspects. Video courtesy of Reuters.

A criminal complaint filed Monday by prosecutors in New York showed that Federal Bureau of Investigation agents have been investigating the alleged Russian agents for a decade, and have had access to communications between Moscow and the suspects.

Officials expect to unseal an indictment in the case by the end of July. That document could yield more information on the breadth and scale of the alleged spying operation.

Russian and U.S. officials on Tuesday attempted to limit the potential diplomatic fallout from the episode. The Russian Foreign Ministry called the arrests an unjustified throwback to the Cold War, while the State Department said the case was part of an evolving U.S.-Russia relationship in which the two countries didn't always agree.

Russian officials called on American authorities to give their citizens access to Russian consular officials and lawyers, and to take into account the "positive character" of U.S.-Russian ties in dealing with the case.

Ten of the suspects, mostly Russians, were arrested in recent days in several U.S. cities. The 11th person, whom U.S. authorities alleged was a ringleader purporting to be a Canadian named Christopher Metsos, was taken into custody Tuesday by police in Cyprus. He was released on bond, despite U.S. concerns that he might flee.

The FBI said it tracked the alleged Russian agents for years and accused them of being part of a program aimed at infiltrating U.S. policy-making circles while posing as ordinary Americans.

U.S. officials said that despite the appearance of an operation with low returns, it was a serious threat.

The agents were not directed to steal secrets or infiltrate U.S. government agencies. Instead, they were asked to meet people and gather information on potential targets—individuals with access to national-security and policy information. Those contacts could then be used by the S.V.R. for recruiting. Most of those contacted by the alleged agents had no idea they were targets, U.S. officials said.

U.S. investigators are still following leads in the case to determine if there are any accomplices in the U.S. and elsewhere, and whether the suspects had links to alleged money-laundering or other crimes, U.S. officials said.

A spokesman for the S.V.R. Sergei Ivanov, said the agency wouldn't comment.

Oliver B. Revell, a former FBI official in charge of investigation, intelligence, counter-terrorism and international programs for the bureau, said it was common for the government not to charge alleged foreign spies with the full extent of their crimes right away.

Instead, he said, the government often used that information and possible additional charges as leverage to try to extract more details from suspects.

Many Russian officials and analysts said they presumed that hawkish elements within the U.S. government had engineered and timed the arrests to embarrass President Obama and undermine the "reset." Mr. Putin echoed that concern during a meeting at his residence outside Moscow with former U.S. President Bill Clinton.

"Back at your home, the police went out of control [and] are throwing people in jail," Mr. Putin said. "But that's the kind of job they have," he added, drawing a laugh from Mr. Clinton when he heard the translation.

"I hope that all the positive gains that have been achieved in our relationship will not be damaged by the recent event," Mr. Putin added.

Several Russian analysts said the scandal could hinder, or at least delay, Senate ratification of a new treaty between the U.S. and Russia to reduce their nuclear arsenals. The new START accord, signed by Messrs. Obama and Medvedev in April, is the biggest achievement so far in Mr. Obama's policy toward Moscow, but the treaty faces skepticism among Senate Republicans.

"Whatever the outcome of this case, whatever the evidence, the damage has been done and is likely to linger," said Viktor Kremenyuk, deputy director of the Institute of USA and Canada, a Moscow think tank.

Alexander Torshin, a deputy speaker of the Russian parliament's upper house, said he thought the damage would be limited.
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"It's not a return to the Cold War, and I'm sure that this incident won't develop into a large-scale spy scandal," he told Russia's state-owned RIA Novosti news agency.

Nikokai Kovalyov, former chief of the Federal Security Service, the main KGB successor agency, told the ITAR-Tass news agency that he believed Russia would retaliate only if the U.S. went a step further and expelled Russian diplomats.

Espionage and counter-espionage between Russia and the West have continued in the nearly two decades since the collapse of the Soviet Union. Russia, fearful that the West is intent on weakening its influence with its former Soviet neighbors, has often accused Western powers of maintaining spying operations against it.

Western powers complain of Russian activity, especially in commercial and scientific areas. Last month, the German government accused Russia and China of industrial spying on its territory, saying it posed a threat to Germany's interests.

"You have a lot of inertia in the security services on both sides," said Dmitry Trenin, director of the Carnegie Moscow Center. "Like nuclear weapons built during the Cold War, they have no justifiable mission today. Yet they're still there, and they're being maintained because it's hard to shut them down."
Cast of Characters

Typically, countries that spy on each other assign intelligence officials to embassies, trade delegations and other official posts in the targeted country, where they work under official cover. The current case is unusual, because the suspected spies allegedly posed as ordinary citizens.

Mark Galeotti, a specialist on Russia security issues who runs New York University's Center for Global Affairs, said Mr. Putin's ascendancy to the leadership from the ranks of the KGB appeared to have solidified Russia's spying networks and traditions. Just as important, he said, is "an overblown belief among Russian policy makers in the value of spying."

"There's this assumption that there has to be a story behind the story within the story," he said. "Instead of reading the publications and going to the conferences, they think that somehow they're going to get the inside scoop on U.S. policy by having these highly trained, expensive deep-cover assets digging it up."