Although the broad details of the operation were already known, the manner in which the FBI chose to release the new material and its content showed for the first time how completely the Russian agents’ every movement were tracked.
The surveillance operation that resulted in their arrest was called ‘Operation Ghost Stories’, the FBI disclosed for the first time.
A video dated January 2010 shows her on a shopping trip to Macy’s department store in New York where she is seen buying leggings and trying on hats.
She is also seen apparently transmitting coded messages while sitting in a coffee shop, while another video shows her setting up her laptop in a bookshop.
“Technical coverage indicated that a computer signal began broadcasting at the same time,” a heavily edited report on the incident said, suggesting she was communicating with her handlers.
In one video, Chapman is seen meeting an a man (who was actually an undercover FBI agent) in a Manhattan coffee bar.
During the exchange, she asks: “You’re positive no one is watching?”. He then tells her how to hand over a false passport, asking “Are you ready for this step?” She replies: “S—, of course”.
In another secretly recorded 2004 video spy suspect Christopher Metsos (who was arrested but escaped) is shown conducting a “brush pass” in a station during which he swaps an identical orange shopping bag with another man said to contain cash to keep the spy network funded.
The group were said to have used a number of spy tools ranging from invisible ink to cryptographic software that hides messages in digital images posted on the internet.
The 10 deported agents including Ms Chapman were famously unsuccessful when it came to the actual business of spying but the FBI said that the spies – who worked for Russia’s SVR foreign intelligence service – were a real threat likening them to the Cambridge Five.
“We were able to capture wirelessly the communications between her and her handler,” Figliuzzi said. “There were six locations throughout New York,” that Chapman used, he said. “She transmits and receives messages from the official who is in close proximity but not anywhere near visibly close to her … she is transmitting encrypted code that the FBI was able to break.”
Because they broke the code, the FBI was able to place an informant into the spy ring. At one point, Chapman even hands her laptop over to the informant so he can fix some technical problems she was having. She didn’t know, of course, she was having trouble with her laptop because of measures taken by the FBI. The FBI dubbed the operation that caught Chapman and her colleagues “Ghost Stories,” because many of the Russian spies assumed the stolen identities of dead Americans.
“We were dealing with the most sophisticated cadre the Russians could put here,” Figliuzzi said.
All of its members spoke fluent English, many had attended U.S. colleges or graduate schools, and some married each other, had children, and assumed American middle class lives, all the while searching out top level contacts U.S. policy making.
“What we have learned here is the absolute resolve of a foreign intelligence service to penetrate U.S. foreign policy circles,” Figliuzzi said, adding that the Russians were in it for “the long haul — they were patient enough to wait decades to achieve their objective.”
“They identified colleagues, friends, and others who might be vulnerable targets, and it is possible they were seeking to co-opt people they encountered in the academic environment who might one day hold positions of power,” it said. “Perhaps the most famous example of this tactic, the Cambridge Five, took place in Great Britain. Soviet intelligence ‘talent spotters’ were able to recruit Cambridge University students in the 1930s including future spy Kim Philby who would later rise to power in the British government and become Soviet operatives during World War II and into the 1950s.”
That’s another tease from the FBI. The name of the financier, the party and the cabinet official have all been ommitted. Yet you don’t have to be a sleuth with knowledge of the dark arts of international espionage to be able to use Google.
The briefest search reveals that Murphy was in touch with Alan Patricof, a New York financier and top Democratic party funder who was head of finance for Hillary Clinton’s 2008 run on the White House.
They “were getting very close to penetrating U.S. policymaking circles” through a friend of an unnamed member of President Barack Obama’s Cabinet, FBI assistant director for counterintelligence C. Frank Figliuzzi told The Associated Press.
He did not give details, but Russian spy Cynthia Murphy of Montclair, N.J. provided financial planning for a venture capitalist with close ties to Bill and Hillary Clinton.
The linchpin in the case was Col. Alexander Poteyev, a highly placed U.S. mole in Russian foreign intelligence, who betrayed the spy ring even as he ran it. He abruptly fled Moscow just days before the FBI rolled up the deep cover operation on June 27, 2010. Poteyev’s role in exposing the illegals program only emerged last June when a Russian military court convicted him in absentia for high treason and desertion.
The U.S. swapped the 10 deep cover agents arrested by federal agents for four Russians imprisoned for spying for the West at a remote corner of a Vienna airport on July 9, in a scene reminiscent of the carefully choreographed exchange of spies at Berlin’s Glienicke Bridge during the Cold War.
While freed Soviet spies typically kept a low profile after their return to Moscow, Chapman became a lingerie model, corporate spokeswoman and television personality. Heathfield, whose real name is Andrey Bezrukov, lists himself as an adviser to the president of a major Russian oil company on his LinkedIn account.
President Dmitry Medvedev awarded the 10 freed spies Russia’s highest honors at a Kremlin ceremony.
The swap was Washington’s idea, raised when U.S. law enforcement officials told President Barack Obama that it was time to start planning the arrests.
The case was brought to a swift conclusion before it could complicate the president’s campaign to “reset” U.S. relations with Russia, strained by years of tensions over U.S. foreign policy and the 2008 Russian-Georgian war. All 10 of the captured spies were charged with failing to register as foreign agents.
An 11th suspect, Christopher Metsos, who claimed to be a Canadian citizen and delivered money and equipment to the sleeper agents, vanished after a court in Cyprus freed him on bail. The FBI released surveillance photos of Metsos on Monday.
Attorney General Eric Holder said officials decided to arrest the spies because one was preparing to leave the U.S. and there was concern that “we would not be able to get him back.”
Both Holder and Figliuzzi said that the spies represented a real threat to U.S. security.
“This was a massive investigation that spanned the entire field offices of the FBI,” Figliuzzi said Monday. “Resources were dedicated in multiple field offices, multiple counter-intelligence squads across the nation and certainly here in Washington at FBI headquarters.”
But former Soviet intelligence officials now living in the West scratched their heads over what Russia hoped to gain from its ring.
“In my view this whole operation was a waste of human resources, money and just put Russia in a ridiculous situation,” said Oleg Kalugin, a former KGB major general who spied against the U.S. during the Soviet era, in an interview earlier this year. He now lives near Washington.
Alexander Vassiliev, a former KGB officer and journalist who has written extensively about Soviet spying in America, said the illegals were supposed to act as talent spotters and scouts, identifying Americans in positions of power who might be recruited to spill secrets for financial reasons or through blackmail.
Spies with the protection of diplomatic credentials would handle the more delicate task of recruiting and handling the agents.
Moscow’s ultimate aim, Vassiliev said, was probably to cultivate a source who could provide day-by-day intelligence on what the president’s inner circle was thinking and planning in response to the latest international crisis. But he said there was no evidence the Kremlin made any progress toward that goal.
“How are you going to recruit someone like that, on what basis? That’s quite a successful person. Why should he spy for the Russians? I can’t see any reason.”
The 10 Russian illegals included:
— Chapman, the daughter of a Russian diplomat, who worked as a real estate agent in New York City. After she was caught, photos of the redhead’s social life and travels were splashed all over the tabloids. Following her return to Russia, Chapman worked as a model, became the celebrity face of a Moscow bank and joined the leadership of the youth wing of the main pro-Kremlin party.
— Vicky Pelaez and Juan Lazaro, of Yonkers, N.Y. He briefly taught a class on Latin American and Caribbean politics at Baruch College. She wrote pieces highly critical of U.S. policy in Latin America as a columnist for one of the United States’ best-known Spanish-language newspapers, El Diario La Prensa.
— Michael Zottoli and Patricia Mills of Arlington, Va. He had worked at a telecommunications firm. The couple raised a young son and toddler in their high-rise apartment.
— Richard and Cynthia Murphy of Montclair, N.J. He mostly stayed home with their two pre-teen children while she worked for a lower Manhattan-based accounting firm that offered tax advice. As part of her job, she provided financial planning for a venture capitalist with close ties to Bill and Hillary Clinton.
— Donald Howard Heathfield and Tracey Lee Ann Foley of Cambridge, Mass. He worked in sales for an international management consulting firm and peddled strategic planning software to U.S. corporations, and graduated from the John F. Kennedy School of Government. She was a real estate agent.
—Mikhail Semenko of Arlington, Va., who spoke Russian, English, Spanish, Chinese and Portuguese. He worked at the Travel All Russia travel agency, where co-workers described him as “clumsy” and “quirky.”
In return for the return of the illegals, Moscow freed four Russians after they signed statements admitting to spying for the U.S. or Britain.
The U.S. spies included Alexander Zaporozhsky, a former colonel and deputy chief of Russian foreign intelligence’s American section, who had retired in 1997 and moved to suburban Baltimore in 2001. He was arrested after he returned to Moscow for what he thought was a reunion with KGB colleagues and was sentenced in 2003 to 18 years in prison for espionage.
Zaporozhsky may have provided information leading to the capture of Robert Hansen and Aldrich Ames, two of the most damaging spies ever caught in the U.S.
Gennady Vasilenko, a former KGB officer who worked in Washington and Latin America, was accused by Hansen of spying for the U.S. He was arrested in Havana in 1988, but released from Moscow’s notorious Lefortovo prison after six months for lack of evidence. But suspicions lingered, and Vasilenko was arrested again in 2006 in Moscow and sentenced to three years in prison for illegal weapons possession and resistance to authorities.
Vasilenko now has a home in Leesburg, Va. He declined the Associated Press’ request for an interview.
Arms control researcher Igor Sutyagin worked for what may have been a British-based CIA front, and he denies being a spy, saying he didn’t pass along any information that wasn’t available through open sources. He told reporters he signed a confession out of concern he would otherwise ruin the swap for the others — and for fear of abuse and misery in the three years remaining in his prison term.
The fourth was Sergei Skripal, a former colonel for Russian military intelligence, the GRU. He was sentenced in 2006 to 13 years in prison for passing the names of other Russian agents to British intelligence. Skripal, now about 60, is said to be suffering from diabetes. Both Skripal and Sutyagin went to Britain following their release.
U.S. officials have not commented on the Poteyev case.