U.S.-Russia may seek spy swap to free agents

Russia and the United States appeared to be considering a spy swap on Wednesday to send home a ring of suspected Russian agents whose arrest cast an unwelcome Cold War chill over warming diplomatic ties.

Officials for both governments declined to confirm a deal was in the works as U.S. federal prosecutors unsealed formal charges against the group.

But a Russian lawyer involved in the affair said a swap was discussed and a U.S. official said Washington might allow the suspected spies to plead guilty and then return to Russia in exchange for the release of certain Russian prisoners.

"It's a common practice. It's been done numerous times," the official, speaking on condition of anonymity, told Reuters.

All 10 suspects in U.S. custody are to be arraigned on Thursday before U.S. District Judge Kimba Wood.

Quick guilty pleas would avoid lengthy trials that officials fear may undercut improving U.S.-Russia relations. The two countries are cooperating on Russia's bid to join the World Trade Organization, the global standoff over Iran's nuclear program and other issues.

The Russian lawyer said the proposed plan includes exchanging Russian nuclear expert Igor Sutyagin, who was sentenced to 15 years in jail in 2004 for passing classified military information to a British firm which prosecutors said was a front for the U.S. Central Intelligence Agency.

"They want to exchange Sutyagin for one of those arrested in the United States for spying," Anna Stavitskaya, a lawyer acting for Sutyagin, told Reuters.

"It is a one-for-one exchange. So each of those detained in the United States will be swapped for one person from Russia."

The alleged Russian spy ring has been major news in the United States since counter-intelligence agents arrested the 10 people last month on suspicion of acting as deep-cover members of a network sent to infiltrate U.S. policymaking circles.

An 11th suspect was arrested in Cyprus but then disappeared after being granted bail.

"Very Sensitive Discussions"

Federal prosecutors in New York unsealed a grand jury indictment charging all of the suspects with acting as unregistered foreign agents and nine of them with conspiracy to commit money laundering.

Three suspects held in Virginia and two in Boston were ordered to be sent to Manhattan, court papers said. Two of the Virginia detainees have admitted they were in the United States under fake names, according to prosecutors.

Only one of the 10 suspects in U.S. custody -- Vicky Pelaez, a columnist for the New York Spanish-language daily El Diario -- has been granted release pending trial. The government has appealed that decision and a bail hearing has been set for Friday.

A lawyer representing another of the suspects, Anna Chapman, said he was in contact with Russian officials and that they had met with Chapman in jail.

"We are in very sensitive discussions ... about a possible resolution of her case," federal defender Robert Baum said in an email to Reuters.

U.S. and Russian officials have vowed the spy case will not set back the broader relationship and U.S. officials appeared eager to play down the affair.

William Burns, under secretary of state for political affairs, touched on the spy case in talks with the Russian ambassador on Wednesday, State Department spokesman Mark Toner said without giving any details.

"I'd have to refer you to the Justice Department on any speculation about a spy swap," Toner said.

Justice Department officials declined to comment.

A spokeswoman for Russia's Foreign Intelligence Service (SVR) also declined to comment and no Russian official has yet confirmed that a swap could take place.

News of the possible swap emerged after Sutyagin was suddenly moved this week from a prison in Kholmogory, in Russia's northern region of Arkhangelsk, to Moscow's high-security Lefortovo prison and allowed to see his family.

Sutyagin told his family, including brother Dmitry, of the plans to exchange him for the accused in the United States in a swap that would involve travel to Vienna and London.

Dmitry said Sutyagin had seen a list of names of other people who would be swapped. One name on the list was Skripal -- a likely reference to Sergei Skripal, a Russian officer who was convicted of spying for Britain in 2006.

"Sutyagin agreed to the swap offer as he had no other choice left. He knew that otherwise his whole life would be broken," said Stavitskaya. "But he still insists he is innocent."

[Source: By Guy Faulconbridge and Andrew Quinn, Reuters, Moscow and Washington, 08Jul10]

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