Thursday, July 14, 2016


The Power Vertical

Mergers And Acquisitions

FSB headquarters on Lubyanka Square in Moscow.
FSB headquarters on Lubyanka Square in Moscow.
Back in July there was a fair bit of media chatter that Prime Minister Vladimir Putin would attempt to use the scandal surrounding the unmasking of 10 Russian agents in the United States to reshape the intelligence services (see the Power Vertical's coverage here and here).

Specifically, the reports -- which were based on unidentified intelligence sources -- suggested that the Foreign Intelligence Service (SVR) would be swallowed by the Federal Security Service (FSB). Such a move, which insiders say has long been on Putin's wish list, would essentially recreate a monolith Russian spy agency reminiscent of the old Soviet KGB -- reversing one of the landmark reforms of the early 1990s.

Putin himself fed this narrative when he suggested that the unmasking of the Russian spies "was the result of betrayal."

Apparently, Putin's comment was more than just the usual hyperbole. When news this week that a man identified as Colonel Shcherbakov, who ran Russia's deep-cover espionage operations in the United States, was responsible for unmasking the spy ring to American officials -- and has since defected.

It was a major intelligence coup for Washington. But as Leonid Belekhov, deputy editor-in-chief of the weekly "Sovershenno sekretno" notes in an interview with RFE/RL's Russian Service, it also gives Putin the opening he has been waiting for:

In addition to removing [SVR director Mikhail] Fradkov from his post and replacing him with either [Kremlin Chief of Staff Sergei]  Naryshkin, or possibly somebody else, and then re-establish the FSB's Foreign Intelligence Service -- a long-cherished dream of  [Security Council Secretary Nikolai] Patrushev and [FSB director Aleksandr] Bortnikov.

The daily "Kommersant," which broke the story of the Shcherbakov defection on Thursday, makes a similar prediction:

The investigation into the SVR's failure, which a number of Russian law-enforcement agencies are contributing to, has been called unprecedented. 'It's a big deal that will result in a lot of heads rolling,' a source familiar with the investigation told Kommersant. According to the source, talk has been revived that the SVR should be reformed and put back under the roof of the main intelligence agencies, from which it was removed by President Boris Yeltsin in the 1990s. 'Everybody is criticizing the removal of the SVR from the KGB structure. The most active supporter of changing things back is Security Council Secretary Nikolai Patrushev.

The "Kommersant" report by journalists Vladimir Solovyov and Vladislav Trifonov was based on information leaked by officials in the Russian intelligence community -- something that doesn't happen by accident.

And as if on cue, as soon at the story hit the streets lawmakers in the State Duma began calling for Fradkov's resignation and for the creation of a parliamentary commission to investigate how the SVR failed to uncover Shcherbakov.

We will no doubt be hearing much more about this in the weeks and months ahead.

-- Brian Whitmore
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by: Mark Galeotti
November 12, 2010 17:58
Nice round-up of the current chatter. I confess that I don't think ultimately the SVR will be swallowed by the FSB (http://inmoscowsshadows.wordpress.com/2010/11/12/kgb-or-koschei-will-the-svr-be-swallowed-by-the-fsb/), but given that this predominantly depends on operational common sense rather than the ebb and flow of inner-circle power politics, I may be being over-optimistic. We can expect the SVR to get a good kicking, though...

by: Anonymous from: USA
November 12, 2010 22:00
If the FSB does ultimately swallow up the SVR and become more monolithic, it won't change the desires of certain agents to defect given that several have already done so. Wasn't Livinenko a former FSB agent? What about Oleg Kalugin? Alexander Lebedev? People defect because they become unhappy with the system of government that they work for, especially after working in other countries and finding life better. It all relates to the parasitic, criminal, Russian elite who think that hard work is for the underclass. As soon as a member of the underclass achieves wealth by working, a faceless bureaucrat is lurking in the shadows waiting to take it away from them--a legacy of the Soviet era. "We pretend to work, and they pretend to pay us". Aside from a terrible work ethic, is this not a recipe for disloyalty? There is a very simple philosophy: If people betray their country, then they are not patriots. But, if their country betrays them, it is not worthy of patriotism. Loyalty and patriotism are fundamental traits of any intelligence agent from any country. Those 10 Russian agents expelled from the USA last summer had better be well treated for the rest of their lives, or they themselves could become disloyal and defect. From what I understand from media reports, some of them wanted to leave the SVR--they became too comfortable living in the US off the Kremlin's budget.

by: Andras from: Brussels
November 13, 2010 23:17
Excellent briefing about the current situation. Not very surprising that Patrushev is the most ardent supporter of the merger. I wonder if this whole story is not one side of a similar clan warfare we have already seen in 2007-08. The liberal circles in the Kremlin gained considerable influence under the crisis, and now that Medvedev's popularity is at its peak and the Potemkin village of modernisation is a constant topic, siloviki need to get back in shape, I suppose. Of course, this might as well be coordinated and thought out by the tandem, but it's obvious that even if Medvedev and Putin cooperate 100%, their teams and coworkers do not always do that...

http://russia2012.blogspot.com/2010/11/potemstroika.html

by: Snapple from: USA
November 14, 2010 13:31
I read that the FSB has already created its own foreign intelligence service. I can't remember where I read this. Do you have any information about that?
In Response

by: Mark Galeotti
November 15, 2010 01:39
Since 2006, the FSB has had the right to operate outside Russia, especially in counter-espionage and anti-terrorism roles. However, there isn't a separate foreign intelligence service within the FSB so much as elements within key functional directorates which handle activities outside Russia's borders.

by: Snapple from: USA
November 17, 2010 10:42
Andrei Soldatov says that the FSB was now building its own foreign intelligence arm. What does he say is happening?
http://legendofpineridge.blogspot.com/2010/11/coneheads-return-why-is-kommersant.html
Kommersant is owned by Gazprom's Alisher Usmanov. Is Gazprom against the SVR? Is Gazprom closer to the FSB?

In Response

by: Snapple from: USA
November 20, 2010 15:35
If the Americans really have this Russian spy, perhaps we can find out what he knows about how the Kremlin/Gazprom and so-called "respected" Kommersant (which is owned by the Gangster Alisher Usmanov) trashed the climate scientists as greedy liars. Maybe the US government doesn't want to embarrass the Russians for diplomatic reasons, but I think the US government should protect our scientists from these kompromat campaigns.

by: Anonymous
November 20, 2010 01:57
If the US really has this Russian SVR officer, we should ask him about the Russian role in the campaign of kompromat against climate scientists.
Usmanov's Kommersant is attacking the British climate scientists, so maybe we can find out about that. Better yet, the Russians should admit that they are smearling climate scientists--like they admitted making up stories about our scientists making AIDS.

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The Power Vertical is a blog written especially for Russia wonks and obsessive Kremlin watchers by Brian Whitmore. It offers Brian's personal take on emerging and developing trends in Russian politics, shining a spotlight on the high-stakes power struggles, machinations, and clashing interests that shape Kremlin policy today. Check out The Power Vertical Facebook page or