Row over unexplained Surrey death of Alexander Perepilichnyy, a key witness in fraud case of £140m in tax stolen from Russia

A security vehicle at the entrance to St George’s Hill private estate near Weybridge, Surrey in November, where Alexander Perepilichnyy died in mysterious circumstances. Photograph: Olivia Harris/Reuters

Police and anti-fraud agencies have been criticised by the alleged victim of a multimillion-pound international fraud for ignoring dossiers of evidence – including death threats and intimidation – linking the crime with the UK, months before a witness connected to the case was found dead in unexplained circumstances.

The body of Alexander Perepilichnyy, 44, was found outside his Surrey home on 10 November. His cause of death is described as “unexplained” following two postmortems, with further toxicology tests to come.

He was a key witness in a fraud case involving the theft of £140m in tax revenue from the Russian government. The alleged fraudsters are said to have stolen three companies from a UK-based investment firm, Hermitage Capital, and used them to perpetrate the fraud – leaving Hermitage in the frame for the criminal acts.

The case is known as the “Magnitsky case”, after one of Hermitage’s Russian lawyers, Sergei Magnitsky, who was found dead in a Russian prison in 2009 with his body showing signs of torture.

A motion from the parliamentary assembly of the Council of Europe said Magnitsky had been “killed … while in pre-trial detention in Moscow after he refused to change his testimony”.

Bill Browder, the founder of Hermitage Capital, has been trying to secure convictions for the death of Magnitsky, as well as those implicated in the alleged fraud against his company, for four years.

Documents seen by the Guardian show that in January and February Browder’s lawyers passed a criminal complaint to the City of London police, the Serious Fraud Office (SFO), the Financial Services Authority (FSA) and Serious Organised Crime Agency (SOCA).

The complaint alleged Britain had ties to the alleged criminal conspiracy from its earliest stages: a UK citizen, Stephen John Kelly, served as a nominee, or “sham” director, for British Virgin Islands-based offshore companies involved in liquidating the companies used to claim the allegedly fraudulent tax refunds. Separately, a crucial couriered package of evidence, used as a pretext to raid offices in Russia, was sent from UK soil.

And, significantly, the complaint alleged lawyers working in the UK for Hermitage on the case had been subject to death threats made by phone, and intimidation via surveillance of their offices.

Hermitage claim the alleged theft of the companies was carried out using documents taken from their offices during a police raid, then “representatives” of the companies engaged in an elaborate series of steps to secure a tax rebate of about £140m. The three firms, now with no assets and more than £600m of debts, were then sold on and liquidated via the British Virgin Islands.

The Conservative MP Dominic Raab wrote to the same police and anti-fraud agencies again in August also encouraging an investigation, after being contacted by Hermitage with respect to their complaints.

Raab had previously urged action in the House of Commons against individuals allegedly implicated in Magnitsky’s death, mirroring a US bill that was formally passed by the Senate on Thursday evening.

Raab also informed the Home Office last month that one of the alleged leaders of the Russian criminal gang had apparently travelled to the UK on two occasions in 2008, despite having previous convictions in relation to a multimillion-pound fraud, and asked them to investigate. He also passed details of 60 individuals allegedly involved in the plot to UK authorities to assist in monitoring of their movements.

Raab said the lack of information from any UK authorities was troubling.

“The first thing is, we don’t know about Perepilichnyy and his cause of death,” he said. “But we do know there was some sort of hit-list in Russia with his name on it and he’s obviously given evidence in these money-laundering proceedings.

“I think the key thing is the Home Office give the police all the support they can. At the moment, there’s a lack of transparency, it’s very difficult to know. We’ve got no idea if anything’s been actioned, or even how many people linked to the case have been travelling in and out of Britain. We just don’t know.”

City of London police said they had met Hermitage but had found no evidence of UK involvement in the alleged offences.

“Detectives met with the company’s solicitors and having reviewed the complaint concluded there was no evidence of criminality in the UK and would be taking no further action,” said a spokesman”.

The SFO, FSA and SOCA declined to comment, citing policies barring them from confirming or denying the existence of any specific investigations.

A spokesman for the Home Office confirmed they had been contacted by Raab and were looking into his queries, but said they did not comment on individual visa cases.

Surrey police have still been unable to establish a cause of death for Perepilichnyy, who collapsed and died outside his luxury home in Weybridge, Surrey. He had been out jogging, his wife Tatyana said, and was found in the street wearing shorts and trainers.

Perepilichnyy appears to have been part of the alleged criminal group but to have fallen out with other members of the syndicate. He fled to Britain three years ago, taking with him bank documents, details of Credit Suisse accounts and other evidence.

In the UK Perepilichnyy kept a low profile, with few Russians in the capital having heard of him. He passed a bundle of evidence to Hermitage Capital; Hermitage then handed the documents over to the Swiss police. As a result Swiss investigators closed down several accounts allegedly belonging to figures in the criminal gang.

Andrei Pavlov, a Russian lawyer, told Kommersant, Russia’s leading daily, that Perepilichnyy appeared exhausted and frightened during two meetings the men had last year. “He wanted to make peace with [ex-partner Vladlen] Stepanov,” the lawyer said. Pavlov did not respond to repeated requests for comment by the Guardian’s deadline.

Stepanov, and his ex-wife Olga Stepanova, are among those accused by Hermitage of taking part in a complex scheme to illegally funnel Russian taxes from companies once owned by Hermitage. Information released by Hermitage, and uncovered by Magnitsky, shows how Stepanova, the former head of a Moscow tax office, and her husband bought wildly expensive properties in Moscow, Montenegro and Dubai.

In a video interview with Vedomosti, a respected financial daily, in May 2011, Stepanov attempted to explain his personal wealth, which he claims was gained through investing the money he made in the 1990s from tunnel construction and optics. He called Browder’s investigations “fabricated facts”. “With these fabricated facts, they have blamed me for everything – that there is blood on my hands.”

He also said he had fallen out with Perepilichnyy, calling him a man with “many problems”.

“He ran away. He’s not here. He doesn’t answer the phone. He’s hiding. It’s like he doesn’t exist.” Perepilichnyy is believed to have fled to the UK after becoming unable to pay back debts amid the global financial crisis.

…

James Ball, Luke Harding and Miriam Elder
The Guardian, Sunday 9 December 2012 18.35 GMT

Find this story at 9 December 2012

© 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved.

A Russian whistleblower who had been helping authorities in Western Europe investigate a gigantic money-laundering scheme involving Russian government officials, has been found dead in the United Kingdom. Alexander Perepilichnyy, who had been named by Swiss authorities as an indispensible informant in the so-called Hermitage Capital scandal, was found dead outside his home in Weybridge, Surrey, on November 10. The 44-year-old former businessman, who sought refuge in England in 2009, and had been living there ever since, is the fourth person linked to the money-laundering scandal to have died in suspicious circumstances. The company, Hermitage Capital Management, is a UK-based investment fund and asset-management company, which Western prosecutors believe fell victim to a massive $250 million fraud conspiracy perpetrated by Russian Interior Ministry officials who were aided by organized crime gangs. In 2006, the company’s British founders were denied entry to Russia, in what was seen by some as an attempt by the administration of Vladimir Putin to protect its officials involved in the money-laundering scheme. The scandal widened in late 2009, when Hermitage Capital lawyer Sergei Magnitsky, who had been arrested in connection with the case, died while in police custody. According to the coroner’s report, Magnitsky, who was 37 and in good physical health, died suddenly from acute heart failure at a Moscow detention facility. Some observers speculate that the lawyer was killed before he could turn into a whistleblower against some of the perpetrators of the fraud scheme. Following Magnitsky’s death, Alexander Perepilichnyy was elevated as a key witness in the case, after providing Swiss prosecutors with detailed intelligence naming several Russian government officials involved in the money-laundering scheme, as well as their criminal contacts outside Russia. This led to the freezing of numerous assets and bank accounts in several European countries. There is no word yet as to the cause of Perepilichnyy’s death. British investigators said yesterday that the first post-mortem examination had proved inconclusive and that a toxicological examination had been ordered for next week.

November 30, 2012 by Joseph Fitsanakis 3 Comments

By JOSEPH FITSANAKIS | intelNews.org |

Find this story at 30 November 2012

Hearing ahead of full inquest also hears Litvinenko was working for MI6 when he was poisoned with polonium-210

Alexander Litvinenki died in a London hospital in November 2006, three weeks after drinking poisoned tea. Photograph: Natasja Weitsz/Getty Images

The government’s evidence relating to the death of Alexander Litvinenko amounts to a “prima facie case” that he was murdered by the Russian government, the coroner investigating his death has been told.

The former KGB officer was a paid MI6 agent at the time of his death in 2006, a pre-inquest hearing also heard, and was also working for the Spanish secret services supplying intelligence on Russian state involvement in organised crime.

Litvinenko died in a London hospital in November 2006, three weeks after drinking tea which had been poisoned with the radioactive isotope polonium-210.

The director of public prosecutions announced in May 2007 that it would seek to charge Andrei Lugovoi, a former KGB officer, with murder, prompting a diplomatic crisis between the UK and Russia, which refused a request for Lugovoi’s extradition. Britain expelled four Russian diplomats, which was met by a tit-for-tat expulsion of four British embassy staff from Moscow. Lugovoi denies murder.

At a preliminary hearing on Thursday in advance of the full inquest into Litvinenko’s death, Hugh Davies, counsel to the inquest, said an assessment of government documents “does establish a prima facie case as to the culpability of the Russian state in the death of Alexander Litvinenko”.

Separately, a lawyer representing the dead man’s widow, Marina, told the coroner, Sir Robert Owen, that Litvinenko had been “a paid agent and employee of MI6” at the time of his death, who was also, at the instigation of British intelligence, working for the Spanish secret service.

“The information that he was involved [in] providing to the Spanish … involved organised crime, that’s the Russian mafia activities in Spain and more widely,” Ben Emmerson QC told the hearing.

Emmerson said the inquest would hear evidence that the murdered man had a dedicated MI6 handler who used the pseudonym Martin.

While he was dying in hospital, Emmerson said, Litvinenko had given Martin’s number to a Metropolitan police officer and, without disclosing his MI6 connection, suggested the police follow up the connection. He said Litvinenko had also had a dedicated phone that he used only for phoning Martin.

“Martin will no doubt be a witness in this inquiry, once his identity has been made known to you,” Emmerson told the coroner.

The inquest would also hear evidence that Lugovoi had been working with Litvinenko in supplying intelligence to Spain, the lawyer said, adding that the murdered man had also had a separate phone used only for his contact with the other Russian.

While he was dying in hospital, Litvinenko had phoned Lugovoi on this phone to tell him he was unwell and would be unable to join him on a planned trip to Spain, Emmerson said. The purpose of the trip was for both men to deliver intelligence about Russian mafia links to the Kremlin and Vladimir Putin.

So advanced were the arrangements for the trip that the conversation “descended to the level of discussing hotels”, Emmerson said.

The case against Lugovoi centres on a meeting he and another Russian, Dmitry Kovtun, had with Litvinenko at the Palm bar at the Millennium hotel in Mayfair on 1 November 2006. It is alleged that Litvinenko’s tea was poisoned with the polonium-210 at that meeting. Kovtun also denies involvement.

At the instigation of MI6, Emmerson said, Litvinenko had been supplying information to a Spanish prosecutor, José Grinda González, under the supervision of a separate Spanish handler who used the pseudonym Uri.

Emmerson cited a US embassy cable published in the 2010 Wikileaks disclosures that detailed a briefing given by Grinda González on 13 January 2010 to US officials in Madrid. At that meeting, the lawyer said, the prosecutor had quoted intelligence from Litvinenko that Russian security and intelligence services “control organised crime in Russia”.

“Grinda stated that he believes this thesis is accurate,” the lawyer quoted.

He said that payments from both the British and Spanish secret services had been deposited directly into the joint account Litvinenko shared with his wife.

Contrary to Davies’s submission, Emmerson said the inquest should consider whether the British government had been culpable in failing to protect Litvinenko, arguing that “the very fact of a relationship between Mr Litvinenko and his employers MI6” placed a duty on the government to ensure his safety when asking him to undertake “dangerous operations”.

“It’s an inevitable inference from all of the evidence that prior to his death MI6 had carried out a detailed risk assessment and that risk assessment must in due course be disclosed.”

Neil Garnham QC, counsel for the Home Office, representing MI6, said the government would not comment on claims that Litvinenko was a British agent. “It is central to Mrs Litvinenko’s case that her husband was an employee of the British intelligence services. That is something about which I cannot or will not comment. I can neither confirm or deny it.”

The Investigative Committee of the Russian Federation has indicated that it would like to be formally designated an “interested party” in the inquest, which would give it the right to make submissions to the coroner and appoint lawyers to cross examine witnesses.

…

Esther Addley
The Guardian, Thursday 13 December 2012 19.00 GMT

Find this story at 13 December 2012

© 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved.

Inquiry told Alexander Litvinenko was spying for Britain and Spain – and Russia killed him

Secret details of Alexander Litvinenko’s life as a British intelligence agent were revealed yesterday at a preparatory hearing into the poisoned former KGB officer’s death.

The inquiry was told that the 43-year-old not only worked for MI6, but was helping the Spanish intelligence services investigating organised crime in Russia.

Mr Litvinenko died in hospital three weeks after being poisoned with radioactive polonium-210 after meeting fellow former KGB contacts for tea at a Mayfair hotel in 2006. The night before, the High Court judge Sir Robert Owen was told, he met with his MI6 handler “Martin”.

The inquest next May is likely to increase tensions between the UK and Russia, with the British government providing evidence that the foreign state was involved in the murder of its former agent.

Ben Emmerson QC, representing Mr Litvinenko’s widow Marina, claimed the British had failed to protect the former KGB officer: “At the time of his death Mr Litvinenko had been for a number of years a registered and paid agent in the employ of MI6.

“That relationship between Mr Litvinenko and his employers MI6 is sufficient to trigger an enhanced duty by the British government to ensure his safety when tasking him on dangerous operations.”

Paid through a bank account or in cash, Mr Litvinenko had a dedicated telephone to MI6, which tasked him with helping Jose Grinda Gonzalez, the Spanish prosecutor for corruption and organised crime.

A US embassy cable described how Mr Gonzalez had met the Americans and told them he was working on a thesis by Mr Litvinenko that “the Russian intelligence and security services – Grinda cited the Federal Security Service (FSB), the Foreign Intelligence Service (SVR) and military intelligence (GRU) – control organised crime in Russia. Grinda stated that he believes the thesis is accurate”.

As an agent to the Spanish intelligence services through a handler called “Uri”, Mr Litvinenko had been planning a trip to Madrid with Mr Lugovoi – a member of the FSB, and the man suspected of the murder – until he became ill from poisoning.

Mr Emmerson continued: “He made a phone call to Mr Lugovoi in hospital to discuss their planned trip together to Spain to provide intelligence to the Spanish prosecutor investigating Russian mafia links with the Kremlin and Vladimir Putin. He explained he was ill and could no longer go on their planned trip.”

Both Mr Lugovoi and Mr Kovtun – who also met him for tea at the Mayfair hotel – have denied any involvement in the killing but have refused to surrender to the British authorities.

Neil Garnham QC, representing the Government, responded that he could not comment on assertions that Mr Litvinenko was in the pay of MI6: “I can neither confirm nor deny.”

Hugh Davies, the barrister to the inquest, revealed that almost a year after it was invited to participate in the inquest, the Russian government had applied to be represented. On Wednesday, Mr Davies explained a letter was received requesting that the Investigative Committee of the Russian Federation – sometimes compared with the American FBI – be granted “interested-person status” at the inquest in May.

He added that, having examined documents supplied by the British government, the inquiry team had failed to find evidence that supported a wide variety of theories including claims Mr Litvinenko had been murdered by the Russian oligarch Boris Berezovsky, the Spanish mafia, Italian academic Mario Scaramella or Chechen organisations.

However, he added: “Taken in isolation, our assessment is that the government material does establish a prima facie case as to the culpability of the Russian state in the death of Alexander Litvinenko.”

Sir Robert, sitting as Assistant Deputy Coroner, is expected to rule early next year on what will be admissible at the inquest as well as whether there is a case under the European Convention of Human Rights that the British state was culpable in the death “either in itself carrying out, or by its agents, the poisoning or by failing to take reasonable steps to protect Mr Litvinenko from a real risk to his life”.

A tangled web: Litvinenko’s network

*Alexander Litvinenko served in the KGB and its successor the Federal Security Service (FSB) but left in 2000, having been arrested for exceeding the authority of his position, charges which were dismissed.

*In 1998, Mr Litvinenko and other FSB officers accused their superiors of ordering the assassination of the Russian tycoon Boris Berezovsky. He later worked on the oligarch’s security team and the men became friends.

*Having fled to Britain seeking asylum, he began working as an agent of MI6.

…

Terri Judd
Friday, 14 December 2012

Find this story at 14 December 2012

© independent.co.uk

Allegations of involvement in Libyan rendition and the death of the Russian spy raise questions about MI6’s handling of sources

The MI6 headquarters in Vauxhall, London. Photograph: Martin Argles for the Guardian

Spying is a dangerous game, in reality as in fiction. It is also exotic. Sometimes the sheer adrenaline and excitement can make the spy drop his – or her – guard and judgment can be affected. Spies – both spymasters and their agents – can be seduced by the prospect of praise heaped on them by their political masters.

MI6 may have succumbed to these pressures and temptations in their handling of the former KGB spy, Alexander Litvinenko – and also of two prominent Libyan dissidents it helped to abduct and render to Muammar Gaddafi. The two cases are separate but they will both bring unwelcome publicity to Britain’s Secret Intelligence Service for months to come.

Litvinenko was killed in November 2006, poisoned by the radioactive isotope polonium-210. Yesterday, at a pre-inquest hearing into her husband’s death, Litvinenko’s widow, Marina, articulated her belief that MI6 failed to protect him. Her counsel, Ben Emmerson, said: “Mr Litvinenko had been for a number of years a regular and paid agent and employee of MI6 with a dedicated handler whose pseudonym was Martin.”

He added that at the behest of MI6, Litvinenko was also working for the Spanish security services, where his handler was called Uri (the Russian was supplying the Spanish with information on organised crime and Russian mafia activity in Spain, the hearing heard). Emmerson said the inquest should consider whether MI6 failed in its duty to protect Litvinenko against a “real and immediate risk to life”.

He suggested there was “an enhanced duty resting on the British government to ensure his safety when tasking him with dangerous operations involving engagement with foreign agents”. Emmerson continued: “It is Marina Litvinenko’s belief that the evidence will show that her husband’s death was a murder and that Andrey Lugovoy [also a former KGB officer] was the main perpetrator”.

It is easy for victims of espionage to blame the spymaster. MI6 should know that. What risks the MI6 handlers took with Litvinenko, what advice and warnings they gave him, whether or not he heeded them, may – or may not – emerge during the inquest.

MI6 did not emerge well from another inquest earlier this year. The coroner at the inquest into the death of Gareth Williams a GCHQ employee seconded to MI6 and found dead in a zipped-up bag in his London flat, sharply attacked MI6 officers for hampering the police investigation into the case. For more than a week after Williams’s disappearance, MI6 did not alert the police or get in touch with any member of his family. A senior MI6 officer identified as F blamed G, Williams’s close colleague, referring to a “breakdown in communications”.

Ironically, perhaps, in light of Emmerson’s comments at Thursday’s pre-inquest hearing, G said Williams was frustrated by the bureaucracy – what he called “the amount of process risk mitigation” – inside MI6. Williams’s family solicitor said their grief was exacerbated by MI6’s failings.

Sir John Sawers, the head of MI6 apologised “unreservedly”, saying lessons in the Williams case had been learned, “in particular the responsibility of all staff to report unaccounted staff absences”.

Lessons may have been learned over Litvinenko’s death. We can be sure they are also being learned over the abduction in 2004 of two prominent Libyan dissidents – Sami al-Saadi and Abdel Hakim Belhaj – and their families. Al-Saadi settled on Thursday, accepting an offer of £2.2m in compensation. Belhaj intends to keep fighting and pursue his court case against ministers and officials.

…

Richard Norton-Taylor
guardian.co.uk, Friday 14 December 2012 16.45 GMT

Find this story at 14 December 2012

© 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved.

A Canadian naval intelligence officer has pleaded guilty to spying for Russia, a public admission of an embarrassing espionage scandal that has damaged Canada’s reputation among allies and will likely reverberate for years.

In a Halifax court Wednesday, Sub-Lieutenant Jeffrey Delisle, 41, pleaded guilty to two charges under the Security of Information Act of “communicating with a foreign entity,” and a Criminal Code offence of breach of trust.

His admission lifts a publication ban placed on details of the Crown’s case against SLt. Delisle. A prosecutor at bail hearings in the spring said Russia was the beneficiary of SLt. Delisle’s four-and-a-half years of espionage, and cited intelligence sources who feared it could push Canada’s relations with allied intelligence organizations “back to the Stone Age.”

The sailor, whose last post was the ultra-secure Trinity naval intelligence gathering centre in Halifax, had access to top military secrets – databases with protected information from Canada and the country’s allies through intelligence-sharing systems such as the “Five Eyes” network linking Australia, Canada, New Zealand, Britain and the United States.

SLt. Delisle, the court was told, searched military databases for the term “Russia,” smuggled the details out of his office using a USB memory stick – and handed the fruits of his labours over to agents for Moscow every 30 days.

The information was mostly military but also contained reports on organized crime, political players and senior defence officials. It included e-mails, phone numbers and a contact list for members of the intelligence community.

The naval officer has been held in custody at the Central Nova Scotia Correctional Facility in Halifax since his arrest in January and will not be sentenced until early next year.

SLt. Delisle could be looking at a long stay behind bars but not life imprisonment, his lawyer suggested.

The Crown, meanwhile, will be scouring the world for case law to convince a judge that the sailor must remain imprisoned as there are no precedents in law. This is the first time anyone in Canada will be sentenced under the Security of Information Act, which was created more than a decade ago in response to the Sept. 11 terrorist attacks.

SLt. Delisle was a rare catch for the Russian government: a spy who walked in from the cold.

It was back in mid-2007 that the Canadian Forces member first embarked on his traitorous side career. He strode into the Russian embassy in Ottawa, volunteering to sell out his country. He would earn about $3,000 a month for this service.

“I said I wanted to talk to a security officer, which are usually GRU,” SLt. Delise said of Russian military intelligence, in a statement read by a Crown prosecutor this spring. “I showed my ID card. They took me into an [office] … asked me a bunch of questions, took my name and off I go.”

It would be the only time SLt. Delisle would meet personally with a Russian handler on Canadian soil.

SLt. Delisle had an escape plan in place – one he never got a chance to use, the court heard. If he needed to seek refuge or re-establish contact with the Russians, he was told he could walk into a Russian embassy – preferably not the one in Ottawa – and inform them he was “Alex Campbell.”

The Russians would then ask him “Did I meet you at a junk show in Austria?” And he was supposed to reply: “No, it was in Ottawa.”

The “day I flipped sides,” as SLt. Delisle described it to his Canadian police interrogators, came as his marriage of nearly a decade was unravelling.

The naval officer told authorities he didn’t do it for money but rather for “ideological reasons” – and was acutely aware his life as he knew it was now over.

“That was the end of my days as Jeff Delisle,” the sailor said, according to the Crown prosecutor. “It was professional suicide.”

The Canadian sailor was paid by wire transfer for the first four years. At first he was paid $5,000 but this quickly dropped to about $2,800 a month and then finally $3,000 every 30 days. This continued until about five months before he was caught, when the Russians changed how they paid him.

The Russians had devised a simple method for SLt. Delisle to hand over information. He and his Russian handler shared a single e-mail account on Gawab.com, a Middle Eastern provider.

The Canadian spy would log in and compose an e-mail. He’d copy and paste the stolen information into the body of the e-mail. But instead of sending the message he would save it in the draft e-mail folder and log out.

The Russians would subsequently log in to the Gawab account, retrieve the information and then write him a draft e-mail in reply – one that was saved but never sent.

In the months before they arrested SLt. Delisle, Canadian authorities managed to break into the Gawab account and trick the sailor into leaving purloined secrets for them.

He also felt pressured to comply with the Russians, who made not too subtle threats.

“They had photos of me. They had photos of my children. I knew exactly what it was for,” the Crown said SLt. Delisle told them.

The Canadian spy’s relationship with Moscow began to change in late summer of 2011. It started with a trip to Brazil to meet a Russian handler named “Victor.”

The Crown’s narrative has gaps in it but it appeared that either the sailor or the Russians believed his ability to gather intelligence might be curtailed.

Moscow proposed that the Canadian Forces member’s role change – that he become what they called “the pigeon” – the liaison between all agents in Canada working for Russia’s military intelligence unit.

…

STEVEN CHASE and JANE TABER

OTTAWA and HALIFAX — The Globe and Mail

Published Wednesday, Oct. 10 2012, 8:52 PM EDT

Last updated Wednesday, Oct. 10 2012, 10:50 PM EDT

Find this story at 10 October 2012

© Copyright 2012 The Globe and Mail Inc. All Rights Reserved.

American intelligence officials supplied vital information in the early days of the investigation that climaxed with the arrest of an accused spy inside Canada’s top-secret naval signals centre, sources say.

The involvement of the United States in building the case against Sub-Lieutenant Jeffrey Delisle adds a key new detail to a story that Ottawa is anxious to keep under wraps.

The Canadian government has been tight-lipped on how it learned that there was a leak of confidential secrets to a foreign power – and the way it went about building a case against the sub-lieutenant.

Canadian officials have privately identified Russia as the recipient of secrets, and the Russian ambassador to this country said last February that Moscow has an agreement with the Canadian government to “keep quiet” about any connection between his nation and the spy case.

SLt. Delisle is in custody after being charged in January with passing state secrets to a foreign country. The sailor, who last worked at Trinity, a Halifax naval intelligence hub, faces the possibility of life in prison if convicted.

SLt. Delisle, 41, has not yet entered a plea; his next court appearance is in June.

The Globe and Mail reported in March that the fallout from the Delisle case has done significant damage to Ottawa’s treasured intelligence-sharing relationships with key allies such as the U.S. It’s also embarrassed the Department of National Defence, which is now looking to restore confidence in its ability to keep secrets.

A source familiar with the matter said Canada helped build its investigation of SLt. Delisle through contact with its biggest ally: “It’s not just one nugget of information that I would describe as a tipoff. [Rather]It’s an accumulation of information that leads to an investigation coming to a point where, okay, we have enough to go after this person.”

The extent of what the U.S told Canada is still unclear. “Sometimes we’re able to match – or in some cases co-ordinate – some of that intelligence and paint the picture that we need to make decisions,” the source said.

The source said Canada and the U.S. have a privileged relationship in sharing this type of information through security forces including the Central Intelligence Agency, the Canadian Security Intelligence Service, and the Communications Security Establishment Canada.

…

STEVEN CHASE

OTTAWA — The Globe and Mail

Published Wednesday, May. 23 2012, 4:00 AM EDT

Last updated Wednesday, Oct. 10 2012, 10:48 AM EDT

Find this story at 23 May 2012

© Copyright 2012 The Globe and Mail Inc. All Rights Reserved.

OTTAWA—The Harper government had a host of military and possibly commercial reasons for not blaming and shaming Russia in the aftermath of an embarrassing spy scandal involving a junior intelligence officer, a series of internal briefings suggest.

The case of Sub-Lt. Jeffery Delisle, which exploded across the front pages in January, has largely disappeared into a black hole of secrecy and court-ordered silence that even a Wall Street Journal story failed to dislodge last spring.

The New York-based publication recently quoted U.S. intelligence sources saying Delisle’s breach in communications secrets was roughly as big in volume as the notorious U.S. data loss to WikiLeaks.

Yet, the Harper government has remained mute, even in the face of suggestions the case caused a major rift with Washington.

Several sources within the government and the military say there was a vigorous debate within the halls of power about whether to call out the former Cold War adversary over Delisle, whose case has been adjourned until June 13 while his lawyer awaits security-washed documents.

A small cadre of cabinet ministers, notably Defence Minister Peter MacKay, argued for a measured, nuanced response to the crisis, which continues to have the potential to cause serious strains among allies, said the sources.

The Conservatives have previously shown no hesitation to paint Moscow as a bogey man, especially when it comes to justifying their military build-up in the Arctic.

But to alienate Russia over the alleged betrayal by a navy sub-lieutenant, potentially setting off tit-for-tat diplomatic expulsions, had more downsides than upsides, sources and briefing documents suggest.

The rivalry over Arctic boundaries, which is expected to come to a head next year with a United Nations submission, is being driven by the suggestion of mineral wealth under the melting polar sea.

The Department of Foreign Affairs and National Defence have repeatedly pointed out, in internal briefing reports, that Russian interest in the Arctic is weighted towards oil and gas exploration — something that Canada can appreciate and possibly exploit.

“Indeed, these commonalities could yield political and commercial opportunities for co-operation between Moscow and Ottawa,” said a July 12, 2011 briefing note prepared for MacKay.

“From a defence perspective, in spite of disagreements over Russian (Long Range Aviation) flights, there is mutual interest with regard to co-operation in (search-and-rescue) and Arctic domain awareness. Defence is continuing to explore the potential for further co-operation with Russia in these fields.”

The note was written as security services investigated Delisle’s alleged treachery.

Among the more sensitive areas of mutual co-operation is an international counter-terrorism exercise known as Vigilant Eagle.

The manoeuvres, which began in 2008, see NORAD and the Russian air force practise how to handle a hijacked airliner in international airspace. Tension over Russia’s intervention in Georgia cancelled the 2009 event, but at the time of Delisle’s arrest plans were already well advanced for Canada’s participation in the 2012 edition.

Russian co-operation in the Arctic and elsewhere was paramount to Canada’s interests, as well as Moscow’s ability to influence events in potential global flashpoints such as Iran and North Korea, MacKay reportedly argued with his colleagues.

The government’s initial reaction was to go public with the allegations, but sources said cooler heads pointed out that such a reaction would complicate relations with the erstwhile ally, which has been engaged in increasingly aggressive spy operations.

Defence and intelligence experts have said there is growing exasperation with Russia.

“As you know, about a year ago, a British minister complained publicly about Russian espionage, the scale of it and the intensity of it and the aggressiveness,” said Wesley Wark, an expert at the University of Ottawa. “He asked the question: What are you doing? And warned them to scale it back because you’re causing us problems in terms of us pursuing other legitimate targets.”

…

Published on Monday May 21, 2012
Murray Brewster
The Canadian Press

Find this story at 21 May 2012

© Copyright Toronto Star 1996-2012

Canadian government officials have refused to confirm or deny media reports that Ottawa expelled several Russian diplomats recently in connection with an alleged espionage affair. The alleged expulsions are reportedly connected with the case of Royal Canadian Navy Sub-Lieutenant Jeffrey Paul Delisle. Earlier this week, Delisle became the first person to be charged under Canada’s post-9/11 Security of Information Act, for allegedly passing protected government information to an unspecified foreign body. According to media reports, Delisle, who had top-level security clearance, worked at Canada’s ultra-secure TRINITY communications center in Halifax. Canadian authorities have refused to reveal the country for which Delisle allegedly spied. But late last night, CTV revealed that the names of two Russian diplomats and two technicians stationed at the embassy of the Russian Federation in Ottawa had been quietly dropped from the list of recognized diplomatic officials in Canada. The list, which is approved periodically by the Canadian Ministry of Foreign Affairs and International Trade, contains the names of all foreign diplomats legally permitted to operate in Canada. One of the missing names, that of Lieutenant Colonel Dmitry V. Fedorchatenko, bears the title of the embassy’s Assistant Defense Attaché. Russian consular officials in Canada rejected speculation that the missing diplomats were expelled by the Canadian government in connection with the Delisle affair. It appears that Canadian counterintelligence investigators had been monitoring Jeff Delisle for quite some time, perhaps even before 2010. If Delisle acted —as he is reported to have done— as an unregistered foreign agent of Russia, it is certainly not surprising that he was a naval officer. He was probably selected by the Russians because he was a member of the Royal Canadian Navy. Ever since Canada joined NATO, in the late 1940s, its tactical contribution to the Organization has been mostly naval. Along with Norway and Iceland, Canada has acted as NATO’s ‘eyes and ears’ in the north Atlantic Ocean. Since the end of the Cold War, Canada has been particularly critical when it comes to the maneuvers of Russian submarines —whether conventional or nuclear— in the northern seas. Delisle’s precise intelligence duties are not clear at this moment, and may never be publicly revealed; but if he had any access at all to ACOUSTINT (Acoustical Intelligence) data on Russian vessels, or other maritime intelligence collected by Canadian naval forces, he would have been especially useful to the GRU (Russian military intelligence). Meanwhile, Washington has remained silent on the subject.

…

January 20, 2012 by Joseph Fitsanakis Leave a comment

By JOSEPH FITSANAKIS | intelNews.org |

Find this story at 20 January 2012

An undated photo shows Soviet dictator Josef Stalin with his daughter Svetlana Alliluyeva. Alliluyeva, who changed her name to Lana Peters. (AP Photo/Courtesy Icarus Films)

(TheBlaze/AP) — Newly declassified documents show the FBI kept close tabs on Soviet dictator Josef Stalin’s only daughter after her high profile defection to the United States in 1967, gathering details from informants about how her arrival was affecting international relations.

The documents were released Monday to The Associated Press under the Freedom of Information Act following Lana Peters’ death last year at age 85 in a Wisconsin nursing home. Her defection to the West during the Cold War embarrassed the ruling communists and made her a best-selling author. And her move was a public relations coup for the U.S.

One April 28, 1967, memo details a conversation with a confidential source who said the defection would have a “profound effect” for anyone else thinking of trying to leave the Soviet Union. The source claimed to have discussed the defection with a Czechoslovak journalist covering the United Nations and a member of the Czechoslovakia “Mission staff.”

“Our source opined that the United States Government exhibited a high degree of maturity, dignity and understanding during this period,” according to the memo, prominently marked “SECRET” at the top and bottom. “It cannot help but have a profound effect upon anyone who is considering a similar solution to an unsatisfactory life in a Soviet bloc country.”

Svetlana Alliluyeva, only daughter of late Russian dictator Josef Stalin, steps off a plane at Kennedy International Airport in New York on April 21, 1967 after defecting from the Soviet Union. Upon her arrival she said, “I have come here to seek the self-expression that has been denied me for so long in Russia.” (AP Photo)

When she defected, Peters was known as Svetlana Alliluyeva, but she went by Lana Peters following her 1970 marriage to William Wesley Peters, an apprentice of famous architect Frank Lloyd Wright. Peters said her defection was partly motivated by the Soviet authorities’ poor treatment of her late husband, Brijesh Singh, a prominent figure in the Indian Communist Party.

“I have come here to seek the self-expression that has been denied me for so long in Russia,” she reportedly said upon arriving in the States.

Another memo dated June 2, 1967, describes a conversation an unnamed FBI source had with Mikhail Trepykhalin, identified as the second secretary at the Soviet Embassy in Washington, D.C.

The source said Trepykhalin told him the Soviets were “very unhappy over her defection” and asked whether the U.S. would use it “for propaganda purposes.” Trepykhalin “was afraid forces in the U.S. would use her to destroy relationships between the USSR and this country,” the source told the FBI.

(Photo: AP)

An unnamed informant in another secret memo from that month said Soviet authorities were not disturbed by the defection because it would “further discredit Stalin’s name and family.”

Stalin, a dictator held responsible for sending millions of his countrymen to their deaths in labor camps, led the Soviet Union from 1924 until his death in 1953. Stalin’s successor, Nikita Khrushchev, denounced him three years later as a brutal despot.

And even though Peters denounced communism and her father’s policies, Stalin’s legacy haunted her in the United States.

“People say, `Stalin’s daughter, Stalin’s daughter,’ meaning I’m supposed to walk around with a rifle and shoot the Americans,” she said in a 2007 interview for a documentary about her life. “Or they say, `No, she came here. She is an American citizen.’ That means I’m with a bomb against the others. No, I’m neither one. I’m somewhere in between.”

Another FBI source, reporting on a 1968 May Day celebration in Moscow, said “the general feeling” is that she defected “because she was attracted by the material wealth in the United States.”

(Photo: AP)

George Kennan, a key figure in the Cold War and a former U.S. ambassador to the Soviet Union and Yugoslavia, advised the FBI that he and Alliluyeva were concerned Soviet agents would try to contact her, a December 1967 memo reveals. The memo notes that no security arrangements were made for Peters and no other documents in the file indicate that the KGB ever tracked her down.

Many of the 233 pages released to the AP were heavily redacted, with the FBI citing exemptions allowed under the law for concerns related to foreign policy, revealing confidential sources and releasing medical or other information that is a “clearly unwarranted invasion of personal privacy.”

Lana Peters is photographed on a rural road outside of Richland Center, Wis., in 2010. (Photo: AP)

An additional 94 pages were found in her file but not released because the FBI said they contain information involving other government agencies. Those pages remain under government review.

More than half of the pages released to AP were copies of newspaper articles and other media coverage of her defection.

…

Here is 1967 video of Peters speaking about her struggle with communism, and how, when she looked around her, the results weren’t as promised “theoretically.” She also denounced her father’s murderous actions, but said the regime and the “ideology” as a whole should be blamed:

Posted on November 19, 2012 at 11:24pm by Erica Ritz

Find this story at 19 November 2012

All information © 2012 TheBlaze LLC

Josef Stalin’s only daughter, who went by the name of Lana Peters after marrying an American in 1970, died in a Wisconsin nursing home in 2011.

MADISON, Wisconsin — Newly declassified documents show the FBI kept close tabs on Soviet dictator Josef Stalin’s only daughter after her high-profile defection to the United States in 1967, gathering details from informants about how her arrival was affecting international relations.

The documents were released Monday to The Associated Press under the Freedom of Information Act following Lana Peters’ death last year at age 85 in a Wisconsin nursing home. Her defection during the Cold War embarrassed the ruling Communists and made her a best-selling author. Her move was also a public relations coup for the U.S.

When she defected, Peters was known as Svetlana Alliluyeva, but she went by Lana Peters following her 1970 marriage to William Wesley Peters, an apprentice of Frank Lloyd Wright. Peters said her defection was partly motivated by the Soviet authorities’ poor treatment of her late husband, Brijesh Singh, a prominent figure in the Indian Communist Party.

George Kennan, a key figure in the Cold War and a former U.S. ambassador to the Soviet Union and Yugoslavia, advised the FBI that he and Alliluyeva were concerned Soviet agents would try to contact her, a December 1967 memo reveals. The memo notes that no security arrangements were made for Peters, and no other documents in the file indicate that the KGB ever tracked her down.

One memo dated June 2, 1967, describes a conversation an unnamed FBI source had with Mikhail Trepykhalin, identified as the second secretary at the Soviet Embassy in Washington, D.C.

The source said Trepykhalin told him the Soviets were “very unhappy over her defection” and asked whether the U.S. would use it “for propaganda purposes.” Trepykhalin “was afraid forces in the U.S. would use her to destroy relationships between the U.S.S.R. and this country,” the source told the FBI.

An unnamed informant in another secret memo from that month said Soviet authorities were not disturbed by the defection because it would “further discredit Stalin’s name and family.”

Stalin, who was held responsible for sending millions of his countrymen to their deaths in labor camps, led the Soviet Union from 1924 until his death in 1953. Stalin’s successor, Nikita Khrushchev, denounced him three years later as a brutal despot.

Even though Peters denounced communism and her father’s policies, Stalin’s legacy haunted her in the United States.

“People say, ‘Stalin’s daughter, Stalin’s daughter,’ meaning I’m supposed to walk around with a rifle and shoot the Americans,” she said in a 2007 interview for a documentary about her life. “Or they say, ‘No, she came here. She is an American citizen.’ That means I’m with a bomb against the others. No, I’m neither one. I’m somewhere in between.”

Many of the 233 pages released to the AP were heavily redacted, with the FBI citing exemptions allowed under the law for concerns related to foreign policy, revealing confidential sources and releasing medical or other information that is a “clearly unwarranted invasion of personal privacy.”

An additional 94 pages were found in her file but not released because the FBI said they contain information involving other government agencies. Those pages remain under government review.

More than half of the pages released to AP were copies of newspaper articles and other media coverage of her defection.

…

FBI Releases Stalin’s Daughter Files
21 November 2012
The Associated Press

Find this story at 21 November 2012

© Copyright 2012. The Moscow Times. All rights reserved.

A Russian spy ring busted in the U.S. two years ago planned to recruit members’ children to become agents, and one had already agreed to his parents’ request, according to current and former U.S. officials.

When the suspects were arrested in 2010 with much fanfare, official accounts suggested they were largely ineffectual. New details about their time in the U.S., however, suggest their work was more sophisticated and sometimes more successful than previously known.

One of them infiltrated a well-connected consulting firm with offices in Manhattan and Washington, D.C., by working as the company’s in-house computer expert, according to people familiar with the long-running U.S. investigation of the spy ring.

The effort to bring children into the family business suggests the ring was thinking long term: Children born or reared in America were potentially more valuable espionage assets than their parents because when they grew up they would be more likely to pass a U.S. government background check.
Cast of Characters in Russian Spy Ring

View Interactive

A spokesman at the Russian embassy in Washington declined to comment. Officials in Moscow have previously acknowledged the spy ring but haven’t commented further. All the captured suspects eventually pleaded guilty to acting as secret agents for the Russian government.

Tim Foley was among the children most extensively groomed for a future spy career, officials say. Though he wasn’t American-born, his parents lived in the U.S. for more than a decade, under the assumed names Donald Heathfield and Tracey Foley. Mr. Foley was 20 when his parents were arrested and had just finished his sophomore year at George Washington University in the nation’s capital.

His parents revealed their double life to him well before their arrest, according to current and former officials, whose knowledge of the discussion was based on surveillance by the Federal Bureau of Investigation that included bugging suspects’ homes. The officials said the parents also told their son they wanted him to follow in their footsteps.

He agreed, said the officials. At the end of the discussion with his parents, according to one person familiar with the surveillance, the young man stood up and saluted “Mother Russia.” He also agreed to travel to Russia to begin formal espionage training, officials said.

Officials wouldn’t say where or when the conversation between Mr. Foley and his parents took place or whether he made it to Russia before the spy group was arrested, though they said he eventually went there. Many details of the investigation remain classified.

Peter Krupp, a Boston lawyer, provided a statement from Tim Foley’s parents calling the U.S. officials’ accounts “crap.” The lawyer said it would have been too risky for the parents to reveal the operation to their son.

Mr. Krupp said that since the summer of the spy roundup, Mr. Foley—who wasn’t accused of any wrongdoing—has tried to return to the U.S., but unspecified obstacles have prevented him from doing so, and he remains in Russia. Efforts to find him there were unsuccessful. A lawyer who represented Mr. Foley’s mother during the U.S. case didn’t return calls seeking comment.

Based on their extensive surveillance of the secret agents and their messages to handlers back in Moscow, U.S. counterintelligence officials believe the grooming of Mr. Foley was part of a long-term goal for some of the group’s children to become spies when they got older.

At the time of their arrests, the spies had seven children ranging in age from 1 to 20, most U.S.-born, and one agent also had an older son from a relationship before she joined the espionage network. Anna Chapman, the spy who garnered the most attention because of her glamorous looks, didn’t have children.

Though U.S. officials believe the ring planned to recruit some members’ children, not every child was set along this path. One child, a teenager, was allowed to stay in the U.S. after his parents were arrested, and officials said the son isn’t viewed as a risk to national security. His father, who went by the name Juan Lazaro, wanted his son to become a concert pianist, according to a former colleague of the father. A lawyer for the family declined to comment.

Most members of the ring were what are known in espionage parlance as “illegals”—agents who go to a country using a false identity and without official cover such as a diplomatic position. If caught, illegals have to assume their home country won’t come to their rescue.

Ring members were trained agents of the SVR, a successor agency to the KGB, according to court documents filed by federal prosecutors in New York. U.S. authorities say they worked under the direction of SVR headquarters, known in the West as “Moscow Center.”

Besides the plans to recruit children, the new details about the spy ring show more about what its members were up to.

U.S. officials say one of them, Richard Murphy—whose real name was Vladimir Guryev—worked for several years as the in-house computer technician at a U.S. consultancy called the G7 Group, which advised clients on how government decisions might affect global markets. The firm’s experts included its chief executive, Jane Hartley, an active Democratic fundraiser, and Alan Blinder, a former Federal Reserve vice chairman.

The infiltration is further evidence the spying focused on economic secrets as well as military and political information.

Mr. Murphy came to the G7 Group through a temporary-help agency in the early 2000s and stayed about three years, according to Ms. Hartley, who said she eventually concluded he didn’t have the technical sophistication the firm required. She said she didn’t believe he used his position to steal information.

Mr. Blinder said he didn’t believe he knew or even had heard of Mr. Murphy. “My reaction, of course, is surprise. The G7 Group wasn’t the sort of place a Russian spy would find interesting,” said Mr. Blinder, who is a professor at Princeton University.

A lawyer who represented Mr. Murphy after his arrest said she wasn’t aware he had worked for a firm in Manhattan. After Mr. Murphy left the G7 Group, Ms. Hartley sold it, and many of its principals later reformed under a different name.

The spies’ false identities, also called “legends,” were good enough for them to get jobs and mortgages and start families in America, but they weren’t airtight. A background check for a job with the U.S. government or a government contractor might have exposed them. The spies were careful not to try to get too close to the heart of U.S. government, according to interviews and court documents.

Mr. Murphy spoke with an accent and didn’t socialize well with his co-workers, according to Ms. Hartley. Difficulties he had blending in at the G7 Group underscore the value agents’ children might have had to Moscow, being fully Americanized with flawless English.

One purpose of having such agents in the U.S. was to act as go-betweens for other operatives who might have been more closely monitored by U.S. counterintelligence, the current and former U.S. officials said.

“There was much more to this than just trying to make friends with important people,” said one official. “This was a very long-term operation.”

After the parents were arrested, the children became an important part of the negotiations between the Russian and U.S. governments.

The admitted secret agents were eventually flown to Austria, where, in a scene reminiscent of a Cold War spy drama, they were swapped on a Vienna airport tarmac for four men who had been imprisoned in Russia, most on charges of spying for the West.

Write to Devlin Barrett at devlin.barrett@wsj.com

Corrections & Amplifications
Peter Krupp, a lawyer for Russian spy known as Donald Heathfield, was relaying a statement from Mr. Heathfield and his wife on U.S. allegations that they had intended to recruit their son into the spy ring. An earlier version of this article attributed the statement that such allegations were “crap” directly to Mr. Krupp.

A Russian spy ring busted in the U.S. two years ago planned to recruit members’ children to become agents, and one had already agreed to his parents’ request, according to current and former U.S. officials.

When the suspects were arrested in 2010 with much fanfare, official accounts suggested they were largely ineffectual. New details about their time in the U.S., however, suggest their work was more sophisticated and sometimes more successful than previously known.

One of them infiltrated a well-connected consulting firm with offices in Manhattan and Washington, D.C., by working as the company’s in-house computer expert, according to people familiar with the long-running U.S. investigation of the spy ring.

The effort to bring children into the family business suggests the ring was thinking long term: Children born or reared in America were potentially more valuable espionage assets than their parents because when they grew up they would be more likely to pass a U.S. government background check.

A spokesman at the Russian embassy in Washington declined to comment. Officials in Moscow have previously acknowledged the spy ring but haven’t commented further. All the captured suspects eventually pleaded guilty to acting as secret agents for the Russian government.

Tim Foley was among the children most extensively groomed for a future spy career, officials say. Though he wasn’t American-born, his parents lived in the U.S. for more than a decade, under the assumed names Donald Heathfield and Tracey Foley. Mr. Foley was 20 when his parents were arrested and had just finished his sophomore year at George Washington University in the nation’s capital.

His parents revealed their double life to him well before their arrest, according to current and former officials, whose knowledge of the discussion was based on surveillance by the Federal Bureau of Investigation that included bugging suspects’ homes. The officials said the parents also told their son they wanted him to follow in their footsteps.

He agreed, said the officials. At the end of the discussion with his parents, according to one person familiar with the surveillance, the young man stood up and saluted “Mother Russia.” He also agreed to travel to Russia to begin formal espionage training, officials said.

Officials wouldn’t say where or when the conversation between Mr. Foley and his parents took place or whether he made it to Russia before the spy group was arrested, though they said he eventually went there. Many details of the investigation remain classified.

Peter Krupp, a Boston lawyer, provided a statement from Tim Foley’s parents calling the U.S. officials’ accounts “crap.” The lawyer said it would have been too risky for the parents to reveal the operation to their son.

Mr. Krupp said that since the summer of the spy roundup, Mr. Foley—who wasn’t accused of any wrongdoing—has tried to return to the U.S., but unspecified obstacles have prevented him from doing so, and he remains in Russia. Efforts to find him there were unsuccessful. A lawyer who represented Mr. Foley’s mother during the U.S. case didn’t return calls seeking comment.

Based on their extensive surveillance of the secret agents and their messages to handlers back in Moscow, U.S. counterintelligence officials believe the grooming of Mr. Foley was part of a long-term goal for some of the group’s children to become spies when they got older.

At the time of their arrests, the spies had seven children ranging in age from 1 to 20, most U.S.-born, and one agent also had an older son from a relationship before she joined the espionage network. Anna Chapman, the spy who garnered the most attention because of her glamorous looks, didn’t have children.

Though U.S. officials believe the ring planned to recruit some members’ children, not every child was set along this path. One child, a teenager, was allowed to stay in the U.S. after his parents were arrested, and officials said the son isn’t viewed as a risk to national security. His father, who went by the name Juan Lazaro, wanted his son to become a concert pianist, according to a former colleague of the father. A lawyer for the family declined to comment.

Most members of the ring were what are known in espionage parlance as “illegals”—agents who go to a country using a false identity and without official cover such as a diplomatic position. If caught, illegals have to assume their home country won’t come to their rescue.

Ring members were trained agents of the SVR, a successor agency to the KGB, according to court documents filed by federal prosecutors in New York. U.S. authorities say they worked under the direction of SVR headquarters, known in the West as “Moscow Center.”

Besides the plans to recruit children, the new details about the spy ring show more about what its members were up to.

U.S. officials say one of them, Richard Murphy—whose real name was Vladimir Guryev—worked for several years as the in-house computer technician at a U.S. consultancy called the G7 Group, which advised clients on how government decisions might affect global markets. The firm’s experts included its chief executive, Jane Hartley, an active Democratic fundraiser, and Alan Blinder, a former Federal Reserve vice chairman.

The infiltration is further evidence the spying focused on economic secrets as well as military and political information.

Mr. Murphy came to the G7 Group through a temporary-help agency in the early 2000s and stayed about three years, according to Ms. Hartley, who said she eventually concluded he didn’t have the technical sophistication the firm required. She said she didn’t believe he used his position to steal information.

Mr. Blinder said he didn’t believe he knew or even had heard of Mr. Murphy. “My reaction, of course, is surprise. The G7 Group wasn’t the sort of place a Russian spy would find interesting,” said Mr. Blinder, who is a professor at Princeton University.

A lawyer who represented Mr. Murphy after his arrest said she wasn’t aware he had worked for a firm in Manhattan. After Mr. Murphy left the G7 Group, Ms. Hartley sold it, and many of its principals later reformed under a different name.

The spies’ false identities, also called “legends,” were good enough for them to get jobs and mortgages and start families in America, but they weren’t airtight. A background check for a job with the U.S. government or a government contractor might have exposed them. The spies were careful not to try to get too close to the heart of U.S. government, according to interviews and court documents.

…

Find this story at 26 July 2012

Write to Devlin Barrett at devlin.barrett@wsj.com

Corrections & Amplifications
Peter Krupp, a lawyer for Russian spy known as Donald Heathfield, was relaying a statement from Mr. Heathfield and his wife on U.S. allegations that they had intended to recruit their son into the spy ring. An earlier version of this article attributed the statement that such allegations were “crap” directly to Mr. Krupp.

Copyright ©2012 Dow Jones & Company, Inc. All Rights Reserved

The notion that several children of the sleeper spies arrested in 2010 in the United States were groomed by Russian authorities to become foreign spies as adults is more evidence of the absurdity of the whole operation.

Tim Foley, 20, is the eldest son of Donald Heathfield and Tracey Foley, whose real names are Andrei Bezrukov and Yelena Vavilova. Tim became a problem for U.S. authorities from the outset of the spy scandal. He had already finished his sophomore year at George Washington University when his parents were arrested by U.S. authorities. Following the deportation of the Russian agents from the United States, Foley informed the university that he still planned to continue his studies there. But since Foley reportedly knew sensitive details about his parents’ activities, Russian authorities have not allowed him to return to the United States.

On July 31, The Wall Street Journal reported that the FBI had determined Tim Foley’s desire to serve Russia’s intelligence services after bugging the Foleys’ home. According to FBI officials, Tim’s parents told their son they wanted him to follow in their footsteps, after which Tim stood up and swore allegiance to “Mother Russia,” the Journal said.

As a result of this article, many journalists concluded that the Russian spies could have posed a greater threat to U.S. national security than was thought two years ago because their children grew up in that country and could better integrate into American life and one day infiltrate U.S. government agencies.

In 2010, the United States and Russia interpreted the spy scandal differently. Washington saw it as proof of the failure and backwardness of Russian intelligence, while Moscow claimed it was a proud achievement that it could infiltrate U.S. society. Russian leaders believed the Foreign Intelligence Service had finally restored the prestigious status that it lost after the end of the Cold War.

At the time, I explained to U.S. journalists that Russia’s secret operation was a complete failure. After all, the spies had been working undercover for years and had failed to obtain a single government secret. What’s more, the Russian side considered the operation a success only because the agents had managed to initially fool U.S. authorities with fake passports. But the agents did absolutely nothing of importance while in the United States, so their accomplishment of securing fake passports was negligible at best.

This notion that a spy operation is successful by simply establishing a physical presence in a foreign country was inherited by the Foreign Intelligence Service from its predecessor, the KGB. It is worth noting that the Foreign Intelligence Service is the only intelligence agency in Russia that was not subjected to post-Soviet reforms. It was simply spun off into a separate agency after the Soviet collapse. As a result, the agency kept all of the outdated traditions and practices of the KGB without understanding that they have no relevance to today’s environment.

One of the largest anachronisms of this Soviet legacy was the practice of sending Russian citizens to live in the West undercover. This emerged in the late 1940s when new secret agents were needed to replace a decreasing supply of Communist sympathizers in the West. In reality, the practice of using Communist sympathizers was never really successful anyway because they did not have professional intelligence backgrounds, nor did they have the social connections needed to secure sensitive government posts. Faced with a shortage of foreign agents, Russian intelligence came up with the idea of sending sleeper agents that Moscow hoped would be able to strike from within Western society at the needed moment — that is, if the Cold War turned hot.

Why has this outdated practice continued in Russia when almost every other country gave it up many years ago?

One of the biggest problems is that the Foreign Intelligence Service answers directly to President Vladimir Putin, not to the parliament or the public. It was therefore a relatively easy task to convince Putin of the wisdom of continuing the old tradition of supporting sleeper agents in foreign countries. What’s more, the opportunity to plant Russian agents in the United States appealed to Putin’s ongoing desire to outdo Russia’s former Cold War enemy any way he could. Still stuck in the past, Putin views this superpower rivalry much in the same way he wants Russian athletes to get more medals than the Americans at the Olympic Games.

…

Find this story at 08 August 2012

Andrei Soldatov is an intelligence analyst at Agentura.ru and co-author of “The New Nobility: The Restoration of Russia’s Security State” and “The Enduring Legacy of the KGB.”
© Copyright 2012. The Moscow Times. All rights reserved.

State-sponsored foreign assassinations of military, religious, ideological and political figures are an ugly reality of world history.

By means of sudden, irregular or secret attack, there is even a common euphemism in international law which bluntly describes the practice: targeted killing.

According to a UN special report on the subject, targeted killings are “premeditated acts of lethal force employed by states in times of peace or during armed conflict to eliminate specific individuals outside their custody”.

And it works something like this.

A state deems a certain individual wanted or a danger to its national security. After ruling out any feasible attempt to bring them to their own jurisdiction, usually because they are based in a third country, it deems itself responsible with silencing them by whatever means necessary.

The operational dynamics are then conducted under the auspices of one of two possible dimensions.

Either to eliminate the target under a fog of plausible deniability, in order for the state authorities to wash their hands clean of any discreditable action in a foreign land, and by extension any prosecution should its agents be captured; or to have blatant disregard to the norms of international law by reference to domestic constitutions that empower them to act under the guise of self-defence – in order to protect themselves from imminent threats of attack.

The use of targeted killing has become quite common in the aftermath of 9/11. U.S. Predator drones strikes against Al Qaeda targets in Pakistan and the Yemen, Israeli airstrikes against Palestinian leaders in the occupied territories and Russian targeting of Chechen separatists in the Caucasus — are just a few recent examples.

But the covert practice of this art has always been a lot murkier.

In 1942, formerly secret memos now reveal how the British Special Operations Executive (SOE) secretly trained Czechoslovakian volunteers to assassinate Reinhard Heydrich, one of the most feared men in Nazi Germany, in a daring ambush on his motorcade.

Alternatively, the main security services of the Third Reich, the RSHA, had in place its own clandestine unit which planned to target Allied soldiers with poisoned coffee, chocolate and cigarettes; as part of a ruthless terrorist campaign.

During the Cold War, the Soviet Union’s equivalent of the CIA, the KGB, poisoned two of its dissidents abroad, once by firing a tiny Ricin-infested pellet from a specially designed umbrella into the target’s leg; and on another occasion by a spray gun firing a jet of poison gas from a crushed cyanide ampoule.

But even when the intended targets happen to miraculously survive a surreptitiously planned death, the devil that’s in the detail can be just as intriguing.

The CIA attempted to kill Cuban dictator Fidel Castro on numerous occasions by utilizing everything from exploding cigars, mafia contractors and femmes fatales — albeit without success.

On another occasion, the CIA unsuccessfully attempted to kill the Republic of Congo’s first Prime Minister, Patrice Lumumba, using a tube of doctored toothpaste which would have left him dead, apparently of Polio.

In 2004, Ukrainian opposition leader Victor Yushenko was poisoned with TCDD, the most toxic form of Polychlorinated Dibenzodioxins, otherwise known as Dioxins, by what is largely suspected were pro-Russian individuals within the state’s security apparatus.

Although many of the shrewd techniques that have been secretly used in the murder of dissidents and enemies abroad have long been acknowledged in the post-cold war era, many practices may still be eluding us by virtue of remaining shrouded in anonymity, even to this day.

But generally speaking, secret state-sponsored targeted killings are still synonymous with booby-trapped car bombs, sniper hits, exploding cell phones and even small arms fire.

In recent years, however, the art of these smart assassinations – designed in the most part to make a person’s death look somewhat natural – have now been refined by the most unthinkable of materials.

And you don’t have to look beyond what happened to Alexander Litvenenko, a former officer in Russia’s internal security force, FSB, and critic of Vladimir Putin’s rule, in London on November 2006.

After meeting what he ostensibly thought were two former KGB officers for tea in a hotel bar, within hours he was hospitalized with mysterious symptoms including progressively severe hair loss, vomiting and diarrhea for three weeks — before he ultimately succumbed to his horrible death.

His post-mortem finally furnished us with details. He was poisoned it turns out, with tiny a nuclear substance, the radioactive isotope, Polonium-210. Its acute radiation syndrome that he ingested virtually meant he had no chance of survival.

The UK authorities were able to piece together trails of the material as left by the culprits, incidentally right back to Russia itself, where almost all the world’s polonium is produced.

The logic of administering such toxic materials was in fact deliberate. Polonium-210 is something which is normally undetectable; as a rare radioactive isotope it emits alpha particles, not the common gamma radiation that standard radiological equipment would detect in hospitals.

The accused culprits may have underestimated the determination of the British authorities to uncover the whole plot, but simultaneously the incident also told us something; the Russians were not going to play by the old rules – they were going to rewrite them.

It would be wrong to assume, however, that biological poisons, chemical agents and nuclear materials are the only things used in smart killings. In fact, the use of materials designed for rudimentary medical procedures have also taken on a new course.

Israel’s Mossad, long considered the most effective intelligence agency in the world per magnitude, and no stranger to the world of targeted killing in foreign countries, has two shiny examples.

In September 1997, Mossad agents sprayed Hamas Leader Khaled Meshal with the poison Levofentanyl – a modified version of the widely-used painkiller Fentany – by using a small camera which served as a trajectory. Although the agents were later apprehended, and eventually exchanged the antidote (following lengthy behind-the-scenes negotiations before it was eventually given to the victim), the audacity of the materials they used spoke volumes: it was designed not to leave any visible or tell-tale signs of harm on the target’s body.

In January 2010, Hamas military commander Mohammad Al Mabhouh was found dead in his Dubai hotel room in what initially appeared to be death by natural causes.

However, upon thorough investigation, not only were 26 suspects (believed to have emanated from Israel) fingered, but the circumstances surrounding his death also soon transpired.

Al Mabhouh was injected in his leg with Succinylcholine, a quick-acting, depolarizing paralytic muscle relaxant. It causes almost instant loss of motor skills, but does not induce loss of consciousness or anesthesia. He was then apparently suffocated — ostensibly to quicken the pace of his death.

In his bestselling book, Gordon Thomas, author of Gideon Spies: The Secret History of the Mossad, gives a chilling and detailed account of how the Mossad uses Biochemists and genetic scientists in order to develop lethal cocktails as bottled agents of death.

This includes the development of nerve agents, choking agents, blood agents, and blister agents – including Tuban (virtually odorless and invisible when dispensed in aerosol or vapor form), Soman (the last of the Nazi nerve gasses to be discovered which also has a slightly fruity odour and is invincible in vapour format), blister agents (which include chlorine, phosgene and diphosgene, and smell of new-mown grass) and blood agents (including those with a cyanide base).

The point to extrapolate is clear. States that employ the practice of smart assassination techniques see them as effective strategies that are justified. They don’t need to admit to carrying them out, but we know they are happening.

An obvious concern raised here is that their almost pathological unwillingness to answer questions about the consequences of resorting to such assassinations – or covert targeted killings – will result in the practice becoming more widespread.

The arbitrary stretching of legal justifications for such assassinations, premised on what an individual country recognizes as self-defence, indirectly renders them to be bound by no limits — and by extension may serve as encouragement for other nations to follow suit, if they interpret their national security considerations being failed by international treaty and cooperation.

Just last month, British Police warned two outspoken Rwandan dissidents of threats to their lives by the Rwandan government, which could come in ‘any form’ or by ‘unconventional means’.

…

Find this story at 19 June 2012

By Mohammad I. Aslam
Tuesday, 19 June 2012 at 3:00 am

©independent.co.uk

A Russian court has convicted a reserve colonel of spying on behalf of the United States and sentenced him to 12 years in prison, the country’s intelligence agency said Thursday.

Vladimir Lazar would be sent to a high-security prison and stripped of his military rank, the Federal Security Service said in a statement.

Prosecutors alleged that Lazar purchased a disk with more than 7,000 images of classified topographical maps of Russia from a collector in 2008 and smuggled it to neighboring Belarus where he gave it to an American agent.

…

31 May 2012
The Associated Press

Find this story at 31 may 2012