Details of US-Russia spy swap


The post has been written in the wake of the latest spy scandal that erupted in the US and the subsequent spy swap between Russia and the US. 

The recent spy swap between the USA and Russia is reminiscent of the Cold War era intensified espionage game played by the Soviet regime and the USA, Britain and their allies in the so-called Free World.

The FBI and CIA were aware of the existence of a substantial sleeper spy cell in the suburbs of New York, planted with meticulous planning by the Russian foreign intelligence agency, SVR (Sluzhba Vneshney Razvedki).

 Russian spies deported included:

  • “Richard Murphy” and “Cynthia Murphy” admitted they were Russians Vladimir Guryev (44) and Lydia Guryev (39).
  • “Donald Howard Heathfield” and “Tracey Lee Ann Foley” admitted they were Russians Andrei Bezrukov (49) and Elena Vavilova (47).
  • “Michael Zottoli” and “Patricia Mills” admitted they were Russians Mikhail Kutsik (49) and Natalia Pereverzeva (36).
  • “Juan Lazaro” admitted he was Russian Mikhail Vasenkov (66) – married to Vicky Pelaez (55), journalist born in Peru.
  • Anna Chapman, 28 (maiden name Anya Kushchenko) – real estate entrepreneur, daughter of Russian diplomat Mikhail Semenko – apparently operated under own name.
  • MISSING – 11th suspect known as “Christopher Metsos”, disappeared while on bail in Cyprus.

The Spies pardoned and deported to UK (2) and USA (2) are:

  • Igor Sutyagin, nuclear scientist jailed in 2004 for spying for CIA.
  • Sergei Skripal, ex-military intelligence (GRU), jailed for spying for UK in 2006.
  • Alexander Zaporozhsky, ex-agent of foreign intelligence service (SVR), jailed for thirty years.
  • Gennady Vasilenko, said to be former KGB agent, jailed in 2006 over illegal weapons, but actually for passing on secret intelligence to the West.

A White House official has revealed that the Obama administration was considering a spy swap well before the 10 were arrested on 27 June. White House officials were first briefed on the spy ring in February, while President Barrack Obama was made aware of the case on 11 June.

“The idea of a swap was discussed among the administration’s national security team before the arrests were made,” the source added. According to the White House, the US itself chose the names of the four men to be freed by Moscow. Its decision was based on “humanitarian concerns, health concerns, and other reasons”.

Peter Earnest, a former CIA officer, welcomed the release of the four. “This sends a powerful signal to people who co-operate with us that we will stay loyal to you,” he told the Associated Press news agency, “Even if you have been in jail for years, we will not forget you.”

Negotiating spy swap

The FBI was aware of the spy ring for nearly ten years. The agency followed their movements, mounted foot and mobile surveillance and monitored their phone calls. Leon Panetta, the CIA chief was kept informed. Taking into consideration the usual practice of the agencies neutralizing “sleeper spy ring” or Long Term Resident Agents (LTRA) at the earliest opportunity possible, it was expected that the Russian spy ring would be neutralized sooner than it was done.

According to reports, the president was told about the case on June 11, 16 days before the Russian agents were actually arrested. A swap emerged as an option that could resolve a potentially volatile situation without undercutting Mr. Obama’s effort to rebuild Russian-American relations. The Russian spy ring would be broken, the Americans would secure the release of four Russian prisoners and both sides could then put the episode behind them. The arrest was also delayed because the Russian President Dmitry Medvedev’s State visit to Washington on June 24.

President Obama’s national security team spent weeks before the arrest of Russian spies preparing for their take down and assembling a list of prisoners Moscow might be willing to trade for the agents, senior administration officials said Friday.

U.S. officials began negotiating with their Russian counterparts shortly after the spies were arrested late last month. Before long, both sides had reached an agreement that included pledges that neither would engage in any further “retaliatory steps,” such as a diplomatic freeze or expulsions, and that neither would harass each others’ officials or citizens. Officials concentrated on what they described as the smooth integration of the administration’s law enforcement, intelligence and diplomatic teams in tracking the Russian agents and turning the situation into a national security victory rather than a source of political and public concern and potential criticism. The officials spoke on the condition of anonymity because, they said, the undertaking had been a group effort, authorized by the president.

Details of some of the Russian spies handed over to the West:

  • For several years in the 1990s, Mr. Zaporozhsky, a colonel in Russian intelligence who became deputy chief of the American Department, was secretly working for the C.I.A., one of the highest-ranking American moles in history, Russian prosecutors say. After surprising his colleagues by retiring suddenly in 1997, he moved with his wife and three children to the United States and went into business. But in 2001, confident that his C.I.A. link was unsuspected, Mr. Zaporozhsky was lured back to Moscow by his former colleagues for what they promised would be a festive K.G.B. anniversary party. He was arrested at the airport, convicted of espionage and sentenced to 18 years in prison. On Friday, Mr. Zaporozhsky was flown to Vienna and then to the Washington area for the 10-for-4 spy exchange that promises to bring to a swift conclusion the saga of the Russian spy ring exposed by the F.B.I. early last week.
  • Another of the four, Sergei V. Skripal, seems to fit the classic cold war model, though without quite the roller-coaster intrigue of the Zaporozhsky case. A retired colonel in Russia’s military intelligence service, Mr. Skripal was convicted in 2006 of having passed classified information to British intelligence, MI6, for a decade, in return for $100,000 wired to a bank account in Spain.

But there is at least a little post-Communist ambiguity surrounding the two other men in the swap.

  • Gennadi Vasilenko, a former K.G.B. major, was arrested in 1998 for contacts with a C.I.A officer but soon released, only to be arrested again in 2005 and imprisoned not for spying, but for illegal trafficking in weapons and explosives.
  • And Igor V. Sutyagin, working at a Moscow thinktank, did contract research for a British company, which may or may not have been a front for Western intelligence. He has maintained his innocence, and human rights activists have defended him. But his swap prove that Sutyagin really worked for MI6 (Secret Service).

While the Russian media gave credible coverage to the spy swap some US commentators reacted severally. Simon Shuster of writes the US and Russia seem to have both avoided the topic of the 11th suspect: “Both sides also seem to have skirted the 11th alleged Russian spy named in the US indictment. He disappeared last week in Cyprus after authorities there granted him bail, and no public mention of his fate has been made amid the swap negotiations. On Thursday, Gennady Gudkov, deputy chairman of the Russian parliament’s security committee, said the most important part of the deal was damage control, not details.”

Espionage activities

Perhaps Russia avoided uncovering of its other intelligence operations by quickly agreeing to a swap. Chris Stirewalt at the Washington Examiner feels that USA might be getting the bad end of the deal with Russia: “We are sending them 10 Russians accused of living under false identities and actively trying to get information about American defense, industry and government. We are getting in return Russian citizens who were found – some a generation ago – to have had contact with the CIA or suspected CIA front organizations.”

Such criticism in a free democracy is inevitable. But the tradecraft that Russia had applied in putting in place a large number of Long Term Resident Agents is worth appreciation. One of the spies was the daughter of a former Russian diplomat, another one was an artist married to a Peruvian lady. They spoke US accented English, studied American mannerism and social habits and had developed ostensible means of income. Their neighbours never suspected them for espionage activities. Intelligence agencies take meticulous care in targeting, training, infiltrating and embedding agents.

Agents are of different categories. Agents are recruited after assessing the task in a target area, organizations, and countries. HUMINT (human agents) are recruited after in depth study of the person, his adaptability, suitability and capability. This part of the intelligence tradecraft is applied by case officers under guidance of his superior operations directorate. All aspects are analysed by the experts and than a decision is taken to recruit a human asset and convert him/her to an agent (Curious readers may like to read my book: Operation Triple X). An agent meant for locating in a foreign country has to undergo rigorous training. Take the cases of 10 Russian agents planted in the USA. They were given American names, were taught American social behavioral patterns, imparted training to speak in American accent and even adopt Catholic or Protestant religious rituals. Most Russians owe allegiance to Orthodox Church.

In case India intends to plant an agent in Pakistan the concerned agency is supposed to train him in similar fashion, make him a Muslim, teach all Islamic rituals, and teach Urdu and at least one dominant language (Punjabi).

In the current case the SVR had spotted, recruited and trained the assets with meticulous care. However, whatever little is known from FBI records, some of these agents had not observed the security lessons given to them by the SVR handlers. One lady agent had called her father, working in the FSB (internal intelligence) organization. Others also committed mistakes and behaved with laxity, which had drawn FBI attention. Thereafter the FBI had activated surveillance, conducted secret inquiry, monitored telephone lines and covered their several tradecraft modalities.

Agents cannot afford to be off guard. The counterintelligence agencies are not always five steps ahead of the LTRA. But once these LTRA assets commit tradecraft blunder they become easy prey.

It is expected that the Russian “sleeper agents” case will become a matter of serious case study by most intelligence agencies. The countries may be different, targets may vary, the agents may be multifarious but the tradecraft techniques are unique and more or less common to most agencies.

(Maloy Krishna Dhar retired as a Joint Director of India’s internal intelligence agency, Intelligence Bureau. He is a guest writer with Canary Trap.)

Bellary Reddys’ mining interests in Karnataka

The Bellary Reddys have been defiant in the face of allegations of illegal iron ore mining. After meeting their ‘thayi’ and BJP’s top leadership in the national capital, G Janardhan Reddy declared in Bangalore that they were pure as gold.

C V Nagesh, the lawyer representing the Reddys, has suggested that no mining lease has been issued in their name in Karnataka and there was no question of illegal mining or looting Karnataka’s state wealth as they don’t have any mining activity in the state.

While their lawyer defended the Reddy brothers, Canary Trap brings you exclusive details of how the Bellary Reddys not only have mining interests in the state but also how they control most of the mines through rising contractors, partners and other arrangements.

According to a report of the Central Empowered Committee (CEC) appointed by the Supreme Court of India, there are 90 mining companies in Bellary district of Karnataka, of which 82 are iron ore mines. The names of mining companies having Karnataka license that are situated adjacent to the Andhra Pradesh border are: BMC, Black Gold Mines, Y Mahaballeshwarappa Mines, NMDC, MML, Lakshmi Narayana Mines, HMM, Tumati Mines, Vibuthi Gudda Mines and , MBT Mines.

Out of these, BMC, Black Gold Mines, Y Mahaballeshwarappa Mines, Lakshmi Narayana Mines, HMM, MBT Mines are being run by Obalapuram Mines through rising contractors of their choice.

The CEC report states that OMC is undertaking mining activity in Karnataka through rising contractors in the following mines:

1. M/S Vinag Mines, Bellary (Mines situated in Hospet Taluka)

2. M/S Bellary Mining Corporation, Bellary Taluka

3. M/S Hind Traders, Bellary (Mines situation in Sandur Taluka)

4. M/S Mehaboob Transport Company, Bellary (Mines situation in Sandur Taluka)

5. M/S Associated Mining Company, Bellary (Mines situation in Sandur Taluka)

6. M/S H R Gaviappa & Company, Bellary (Mines situation in Sandur Taluka)

7. M/S Trident Minerals, Hospet (Mines situation in Sandur Taluka)

8. M/S Veem Private Ltd, Hospet (Mines situation in Sandur Taluka)

9. M/S N Shaik Sab, Hospet (Mines situation in Sandur Taluka)

The report further states that OMC is undertaking mining in the following mines in partnership:

1. M/S SB Minerals, Hospect (Mines situation in Hospet Taluka)

2. M/S Srinidhi Mines, Vysanakere (Mines situation in Hospet Taluka)

3. M/S Abubaker P (Mines situation in Sandur Taluka)

4. M/S H G Ranganagowda, Hospet (Mines situation in Sandur Taluka)

5. M/S Kanaiah Lal Duderia, Sandur (Mines situation in Sandur Taluka)

6. M/S M Srinivasulu, Bellary (Mines situation in Sandur Taluka)

7. M/S SB Minerals, Ramghad, Hospet (Mines situation in Sandur Taluka)

8. M/S SB Minerals, Jaisinghpur, Hospet (Mines situation in Sandur Taluka)

9. M/S Lad & Sons, Sandur (Mines situation in Sandur Taluka)

Despite no clearance being granted by Forest department, OMC is undertaking mining activity by appointing rising contractors in the following mines:

1. M/S Vinag Mines, Bellary Ingalagi, Hospet Range

2. M/S Krishnamachari, Bellary, Navalathi, Sandur Range

3. M/S Manjoor Ahmed, Hospet, Jaisinghpur, Sandur Range

4. M/S Trident Mining Ltd, Hospet, Venkatagiri, Sandur Range

The OMC is undertaking mining through partnership though no clearance is being granted by the Forest department.

1. M/S Ratnaiah Mines, Bellary, Bellary Range

2. M/S H P Manjunath, Bangalore, Hospet Range

3. M/S Mysore Minerals Ltd, Bangalore, Sandur Range

4. M/S Narayana Minerals Pvt Ltd, Hospet, Sandur Range

The report also discloses the names of mining companies that are undertaking mining activity with the blessing of OMC by paying them some percentage of their income. They are:

1. M/S Kariganoor Mining Industry, Hospet (Mines situated in Hospet Taluka)

2. M/S Smt R Mallamma, RP Mines, Hospet (Mines situated in Hospet Taluka)

3. M/S Auro Minerals, Hospect (Mines situated in Hospet Taluka)

4. M/S Ashwath Narayan Singh & Company, Sandur (Mines situated in Sandur Taluka)

5. M/S Bharath Mines and Minerals, Hospet (Mines situated in Sandur Taluka)

6. M/S H G Ranganagowda, Hospet (Mines situated in Sandur Taluka)

7. M/S Hothur Traders, Bellary (Mines situated in Sandur Taluka)

8. M/S KM Parvathamma, Bellary (Mines situated in Sandur Taluka)

9. M/S Lakshminarayana Mining Company, Bangalore (Mines situated in Sandur Taluka)

10. M/S Mysore Minerals Ltd, Bangalore (Mines situated in Sandur Taluka)

11. M/S S A Thawab, Bellary (Mines situated in Sandur Taluka)

12. M/S Zeenath Transport Company, Bellary (Mines situated in Sandur Taluka)

13. M/S Zeenath Transport Company, Bellary (Mines situated in Sandur Taluka)

14. M/S Zeenath Transport Company, Bellary (Mines situated in Sandur Taluka)

15. M/S H T Minerals, Bellary (Mines situated in Sandur Taluka). They have not yet received Forest department permission.

According to the CEC report, people belonging to the OMC (Dushyanth Reddy and Ravikalyan Reddy — both relatives of G Janardhan Reddy, Kampli MLA Suresh and his associates, Kudligi MLA Nagendra and his associates) are running all these above listed mines as rising contractors.

The report also states that even those mines which are running without the influence of OMC donate funds as and when it is asked by the latter. This shows the extent to which the Bellary Reddys have exploited the natural resources of Karnataka and are still untouched.

Karnataka CM B S Yeddyurappa defended them by saying there is no proof against the Reddy brothers. Perhaps he should stop defending the guilty and take action against those who are responsible for illegal mining of iron ore in the state.

Exclusive: The rise of Bellary Reddys

The illegal mining issue has rocked the Karnataka assembly and the “party with a difference” has failed to take action against the mining mafia in the state.

The Karnataka Government last Friday gave suo motu powers to the Lok Ayukta but kept elected representatives (CM, Ministers, MLAs) outside its purview. The BJP government is not taking decisive action against the mining lobby as some of the alleged accused are a part of its government. As promised, Canary Trap brings you exclusive details of the rise of Bellary Reddy’s (G Karunakara Reddy, G Janardhana Reddy, G Somashekara Reddy).

G Janardhana Reddy (GJR) took over the GRR Mines (G Raghava Reddy Mines) between 2000 and 2001 on sub-lease. He sub-leased these mines to one Anil Lad (then in BJP, now a Congress Rajya Sabha MP). Lad’s earnings, through foreign clients, increased and so GJR conspired with his associates and secured back the possession of these mines. The mining boom that began by the end of 2003 (when the price of iron ore rose from Rs 200 per metric tonne to Rs 2700 per metric tonne) made the Bellary Reddy’s the mining czars. The brothers earned huge money by exporting iron ore to China.

According to sources, the Obulapuram Mining Company Private Ltd (OMC) still stands to be under lease basis from G Raghava Reddy of Obulapuram village of Andhra Pradesh. While the OMC mines are located in the Ananthpur district of Andhra, its office is in Bellary. The daily turnover of these OMC mines is about Rs 5 to 6 crores daily, sources added.

Modest start

Sources say GJR and his eldest brother G Karunakara Reddy are learnt to have discontinued their studies sometime in early 1980s. While Karunakara entered into contract work like cable network, GJR joined a Kolkata-based financial firm. He bought his first vehicle (TVS-50) in 1983, a TVS Suzuki Bike in 1985, and an Ambassador car in 1987.

The fortunes of Reddy brothers changed after the 1999 Lok Sabha polls. Although the BJP’s Sushma Swaraj (their ‘thayi’) lost the Bellary seat to Congress President Sonia Gandhi, the brothers emerged as the latter’s trusted aides.

By the end of 1999 the BJP gave them the complete charge of party affairs in Bellary by making all of them district unit president by turn. In 2001, G Somashekara Reddy contested polls for Bellary City Municipal Council and got elected. In 2003, the Bellary Reddy’s snatched the sub-lease of mines from Anil Lad.

Congress link

The brothers have also invested about Rs 20000 crores into an integrated steel plant (Brahimini Industries Ltd) at Pulivendala in Kadapa district of Andhra Pradesh.

Sources add that GJR tried to enter the airways business but has not been granted permission by the Indian government due to his criminal background and that of his brother G Karunakara Reddy and close associate B Sriramulu.

In what could also weaken the Congress party’s campaign against illegal mining, sources say that late Andhra CM YSR Reddy’s son Jaganmohan Reddy receives huge amounts of money every month from GJR as a result of their partnership.

The Bellary Reddys also own a private cable TV network called Bellary City Cable and City Plus, which covers Bellary, Koppal, and Gadag. They also own a Kannada newspaper named Eee Namma Kannada Naadu.

Their mansion in Bellary is surrounded by security guards and gunmen. According to sources, Reddys are not happy as their mansion is not clearly visible from the main road. They feel that the houses around it are shielding the view and hence they are learnt to be threatening the residents around to shift to new houses, which they have offered to build for them elsewhere.

The brothers also have business interests in real estate.

Although the mining areas of Reddys is in Andhra Pradesh, they have been accused of transporting iron ore by violating state border in Bellary Reserved Forest area during the last two years. (2008-2009, 2009-2010).

The Karnataka Lok Ayukta Santosh Hegde has termed the illegal mining of iron ore in the state as the biggest scam the nation has witnessed.

“The value of the Bofors was only Rs. 69 crore. There was the coffin scam of Kargil, but I’ve never heard of one that has crossed the iron ore scam in terms of magnitude,” he told a news portal.

Now the onus lies on the BJP to prove that it can provide clean governance by dropping the Bellary Reddys from the cabinet and initiating an inquiry into their murky business.

BJP’s silence on Karnataka’s murky mining mess

India’s “party with a difference” is in the dock over the resignation of Karnataka’s Lok Ayukta Justice N Santosh Hegde over the mining racket in the state. Although the Lok Ayukta has withdrawn his resignation, the episode has again displayed that no party in India is free from corruption.

Between November 2009 and February 2010, around 35 lakh tonnes iron ore was illegally transported out of Karnataka, and nobody even knows where it went to. According to Hegde, the iron ore was smuggled through seven check-posts without the knowledge of mining & geology and forests officials. Sound’s strange, and what is more interesting is the fact that both the departments are under the Karnataka Chief Minister B S Yeddyurappa.

One of the important reason behind the Lok Ayukta’s resignation was the attempt by the state government to hush-up the entire matter. A state government minister recommended suspension of a Deputy Conservator of Forests who seized some of the unauthorised iron ore and filed an FIR against 11 exporters and Belekeri port officials. Instead of initiating an inquiry into the entire scam and taking action against the guilty, an honest officer was targeted.

The Bhartiya Janata Party (BJP) has a lot to answer to the people about its partnership with mining mafia in Karnataka. This is not the first time that questions have been raised about the Karnataka government’s inaction against the mining mafia in the state. Canary Trap has previously highlighted the Lok Ayukta’s report on illegal mining in the state. The Central Empowered Committee (CEC), appointed by the Supreme Court of India, has already exposed the involvement of some of the state government ministers in carrying out large-scale illegal mining.

Illegal mining

G Janardhan Reddy (State Tourism Minister) and G Karunakar Reddy (State Revenue Minister), the Bellary mining barons, have been named in the CEC report for their involvement in illegal mining, encroaching into forest land, and illegally shipping out iron ore from the state. The Bellary Reddy’s own the Obulapuram Mining Company Private Ltd (OMC).

OMC is engaged in the mining activity in Anantapur district of Andhra Pradesh, across Karnataka state border of Bellary district.

The CEC report states that the OMC has encroached the forest area of Karnataka, undertaken illegal mining activity, and transported iron ore.

“The OMC has encroached in mineral rich areas outside their mining leases and is carrying out large-scale illegal mining in unalloted Reserved Forest areas,” the OMC report stated.

“The OMC have also, after destroyed the boundary pillars, encroached on the forest land located between the State of Andhra Pradesh and Karnataka,” the report further states.

Relations with YSR

Initially, the Congress government of Andhra Pradesh gave a clean-chit to the Reddy’s. The stand taken by the AP government came under criticism from the CEC which stated that “the objectivity, fairness and impartiality which is expected from a state government is shockingly lacking here and does not inspire confidence.”

Interestingly, the Bellary Reddy’s had a good equation with the late Andhra CM YS Rajasekhara Reddy and also with his son Jagan Mohan Reddy. They have invested around Rs 20000 crores into a steel plant at Pulivendala in Kadapa district of Andhra Pradesh (YSR’s home district) by entering into an agreement with the AP government in May 2007.

It was only after the death of YSR that the Congress government started getting tough with the Bellary Reddy’s.

Now, coming back to the Lok Ayukta’s resignation. Santosh Hegde has withdrawn his resignation after BJP President Nitin Gadkari and Karnataka CM Yeddyurappa met him. Senior BJP leader L K Advani also appealed to him to withdraw his resignation. But does that mean the mining mess in Karnataka will be over?

Thayi’s advice

The Bellary Reddy’s, who are accused of being involved in illegal mining and transportation of iron ore by none other than the CEC of the Supreme Court of India, are still holding ministerial portfolios in the BJP government.

The BJP’s dependence on them was exposed during the political drama when they demanded the removal of the present CM Yeddyurappa last year. The dispute was resolved then and the Reddy brothers gave the credit for it to the BJP’s Leader of Opposition in the Parliament, Sushma Swaraj.

“We have agreed to the advice of our ‘thayi’,” G Janardhan Reddy had said.

Thayi means mother in Kannada. The Reddy duo have declared publicly that Swaraj is like a mother to them. Interestingly, Swaraj’s husband, Swaraj Kaushal, has been appointed as standing counsel of the Karnataka government in the Supreme Court of India.

With the Karnataka government promising action against the mining mafia, would ‘papa’ Kaushal be loyal to the government or to his wife’s children when he represents the state in the illegal mining case in the Supreme Court? It is also not clear whether Kaushal’s appointment was a pre-condition for truce between the beleaguered  and hapless Yeddyurappa and the Reddy brothers.

Keep logging on to Canary Trap. We will bring you exclusive details about the sudden rise of Bellary Reddy’s in the next post.