While Russia's counter-intelligence agents were busy arresting a mother of seven from Vyazma and having her indicted for high treason for calling the Ukrainian embassy with a rumor of a Russian military deployment to Ukraine, they might have missed a more important fish. In New York.
With auspicious timing at the lowest point in U.S.-Russian relations, the FBI arrested a deep cover Russian intelligence officer and identified in the public indictment two other agents from Russia's foreign intelligence agency, SVR, accusing them of collecting economic intelligence and building clandestine espionage networks in New York.
Observers focused on the mundane nature of the revealed Russian intelligence efforts to penetrate the U.S. financial markets and their interest in information widely available to professionals (it is fair to ask whether it is the job for spooks to inform the government about high-speed trading algorithms). But the affair masks a larger scandal that neither side is rushing to publicize.
The U.S. indictment is based on evidence from physical and electronic surveillance of Russian operatives who exhibited sloppy tradecraft. But it also makes clear that the most compromising evidence came from a listening device that the FBI somehow implanted within the secure perimeter of the SVR station at Russia's United Nations mission in Manhattan. Which basically means that the FBI had a mole within the SVR station who installed the transmitter. And that is the real scandal.
That U.S. officials went public with this information means that the Russians have already found the bug and may have identified the mole.
That the FBI arrested the Russian intelligence operative who had no diplomatic immunity may suggest that the Russians have arrested their double agent and that a spy swap is in the works. This might explain why both sides prefer to keep silent over the juicier affair.
Anyhow, the damage to Russia's intelligence operations in the U.S. is enormous with the entire SVR station in New York and perhaps some of their sources compromised.
Moreover, the U.S. indictment states that a senior SVR official who visited New York may have knowingly outed, with U.S. agents listening in, the now arrested deep cover officer to his boss at the Russian bank who was unaware of the man's undercover status. If true, it would be a criminal offense subject to prosecution. Heads should be rolling at the SVR headquarters at Yasenevo.