MOSCOW, Nov. 11 (Reuters) - The head of Russia's deep cover U.S. spying operations has betrayed the network and defected, a Russian paper said on Thursday, potentially giving the West one of its biggest intelligence coups since the end of the Cold War.
The newspaper, Kommersant, named the man as Colonel Shcherbakov, and said he was responsible for unmasking a Russian spy ring in the United States in June whose arrests humiliated Moscow and clouded a "reset" in ties with Washington.
The betrayal would make Shcherbakov one of the most senior turncoats since the fall of the Soviet Union and could have consequences for Russia’s proud Foreign Intelligence Service (SVR) and its chief, former prime minister Mikhail Fradkov.
Kommersant said Shcherbakov — whose first name it did not give — had been responsible for ‘illegal spying’ in the United States, meaning spies operating under deep cover without diplomatic immunity.
"There has never been such a failure by Section S, the American department that Shcherbakov directed," said Gennady Gudkov, deputy chairman of the Russian parliament’s security committee, confirming that Kommersant’s report was accurate.
The paper said Shcherbakov had left Russia days before U.S. authorities announced the spy ring arrests on June 28 — and quoted a Kremlin official as saying a Russian hit squad was probably already planning to kill him.
"We know who he is and where he is," the unidentified official was quoted as saying. "Do not doubt that a Mercader has been sent after him already."
Ramon Mercader was the Russian agent who murdered exiled Bolshevik Leon Trotsky with an ice axe in Mexico in 1940.
SPY SWAP
All the 10 spies arrested in the United States pleaded guilty and were deported to Russia in a spy swap less than two weeks later.
Prime Minister Vladimir Putin, himself a former KGB spy, greeted them as heroes. He said traitors came to a bad end, and that the informer would be left to the mercy of his own kind.
"The special services live by their own laws and everyone knows what these laws are," he said.
Despite Moscow’s tough talk, the revelation could damage the reputation of the SVR.
Kommersant cited an unidentified source as saying that Fradkov could be sacked and the SVR folded into the powerful Federal Security Service (FSB), the main successor of the Soviet-era KGB.
"The damage inflicted by Shcherbakov is so enormous that a special commission should be created to analyse the reasons which allowed this complete failure to happen," Gudkov said.
"And then we should decide what should happen to the SVR and its unique Section S."
Putin, who had a stint as FSB chief during his rise to power, has installed many allies from his KGB days in in top government posts, and former members of the security services are considered to wield a great deal of power within the Kremlin’s walls.
Foreign Intelligence Service spokesman Sergei Ivanov declined to comment on the Kommersant report, saying: "We have no comment on this and will not have any."
U.S. authorities said in June that the Russian spy ring had been operating in the United States for 10 years, its members adopting false identities and blending in while they tried to gather intelligence for Moscow.
The announcement came four days after President Dmitry Medvedev left the United States after an upbeat summit with President Barack Obama during which they hailed a "reset" of long-strained ties. Kommersant reported that Shcherbakov had long been a double agent and had refused an offer of promotion before the scandal erupted, presumably to avoid a routine lie detector test.
