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U.S., Russia negotiating swap of spy suspects

By Walter Pincus and Karen DeYoung
Washington Post Staff Writer
Thursday, July 8, 2010; A01

The United States and Russia are negotiating a swap in which 10 Russian spy suspects would be freed after a plea deal in exchange for Moscow's release of a defense researcher held for the past decade on espionage charges, a U.S. official said.

The official confirmed that talks between the two governments began last week shortly after the June 27 arrest of the suspects, who have been charged with conspiring to act as secret Russian agents in this country. Nine of them are also charged with money-laundering. An 11th person, also named in the indictment, is at large.

The diplomatic discussions depend on lawyers reaching a plea arrangement in federal court in New York, which an attorney for one of the suspects said could come as early as Thursday. Three arrested in Northern Virginia and two arrested in the Boston area were transferred to New York on Wednesday, joining the five others.

In Moscow, an attorney for Igor Sutyagin, a Russian arms researcher who has spent 11 years in prison on espionage charges, said her client was unexpectedly brought to the capital on Tuesday from a penal colony in the far northwest and told that he was being included in the exchange. Sutyagin, who has maintained his innocence, was also issued a passport.

The legal negotiations over a guilty plea for the suspects were being conducted separately from discussions between the State Department and Russia over a possible swap. Undersecretary of State for Political Affairs William J. Burns, the department's third-ranking official, met Wednesday with Sergey Kislyak, Russia's ambassador to the United States.

The arrests, announced just days after Russian President Dmitry Medvedev visited the White House, have been an unwelcome interruption in the Obama administration's efforts to keep relations with Russia on a steadily improving trajectory.

They have also revived Cold War memories that, until recently, seemed like ancient history. Past spy swaps were the stuff of high drama, from the 1962 release of Soviet spy Rudolf Ivanovich Abel in exchange for U-2 pilot Francis Gary Powers to the 1986 release of dissident Anatoly Shcharansky and three others for five Soviet agents.

Federal prosecutors have not accused the 10 suspects indicted Wednesday of carrying out espionage; the allegations centered largely on their concealed identities and receipt of relatively small amounts of money provided by Moscow Center, as U.S. officials have referred to the Russian intelligence headquarters.

Most of the suspects had been living undercover in the suburbs. According to initial charges and a federal indictment unsealed Wednesday, eight had been under surveillance for at least four years; some of them had been watched since 2000. It remained unclear why the FBI had not moved against them sooner and why it arrested them when it did.

On a day of fast-moving developments, officials across the government declined to discuss the possibility of a plea arrangement followed by a swap, with the Justice and State departments referring all questions to each other. The Justice Department issued a brief statement saying that the defendants were "being transported to the Southern District of New York to face the charges against them" and that the unsealed indictment was "the next step in that process."

But the issuance of the indictment -- without any new charges -- the sudden transfers and the possibility that all 10 defendants might plead guilty together were highly unusual in a federal criminal case.

Only one of the suspects, Vicky Pelaez, arrested in New York, is a naturalized American citizen; the others are Russian citizens. They include Pelaez's husband, Juan Lazaro, also arrested in New York. The others are Natalia Pereverzeva and Mikhail Kutsik, who were living together in Alexandria as a married couple under the names Patricia Mills and Michael Zottoli. Mikhail Semenko was also arrested in Alexandria.

In Boston, the defendants known as Donald Heathfield and his wife, Tracey Lee Ann Foley, identified themselves as Russians but waived their rights to identity and detention hearings. Five of the suspects, including two couples, were arrested in New York. The 11th person named in the indictment, Christopher Metsos, was arrested on the Mediterranean island of Cyprus but fled after being released on bail.

Several of the spy suspects have children, although their nationalities and futures are uncertain. Tim Foley, 20, is a student at George Washington University who was featured in a November article in The Washington Post about budding entrepreneurs. He said he was born in Toronto, attended high school in Boston, and wanted to live in Asia and work in the banking industry.

Sutyagin, a 45-year-old researcher of arms control and nuclear weapons, was hastily moved from a prison colony in Kholmogory in the Arkhangelsk region Monday and taken to Moscow's Lefortovo prison, where authorities allowed relatives to visit him.

"This morning, his parents called me and said that they'd talked to Igor and he said that he is being exchanged for Russian alleged spies detained in the U.S.," his attorney, Anna Stavitskaya, said in a telephone interview. She said he asked his family to make his story public because he was told that if he did not sign papers, he was confessing to the crime he had always denied committing. He was also warned that his family would be in danger and that the prisoner exchange would be scuttled.

The lawyer said that upon arrival at the Moscow prison, Sutyagin was taken into a room where unidentified Americans and Russian officers were present. "He doesn't know who they were or whom they represented," she said, adding that the Americans "did not talk much," according to her client. She said a Russian officer told him that "we want to exchange you" for the Russians held in the United States.

"I've been in prison for 11 years, and I know what it's like," Stavitskaya quoted her client as telling his relatives, "and I don't want others to be in prison, so if I can save someone, fine, I'll do that."

Special correspondent Natasha Abbakamova in Moscow and staff writer Jerry Markon and staff researcher Julie Tate in Washington contributed to this report.

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