- The Washington Times - Monday, October 31, 2011

The FBI rounded up a network of deep-cover Russian spies last year after the group came close to placing an agent near a Cabinet official in the Obama administration, a senior FBI counterspy said Monday as the bureau released once-secret documents on the case.

Frank Figliuzzi, assistant FBI director for counterintelligence, did not identify the Cabinet official, but other U.S. officials said it was Secretary of State Hillary Rodham Clinton.

Mr. Figliuzzi said in an interview that the FBI decided to end its more than 10-year-long counterspy investigation of the network because of concerns that the spies were “getting very close to their objective.”

“These 10 Russian officers were sent to the U.S. on a specific mission to get close to U.S. policymakers and leaders in our government,” he said, noting that one had developed a friendship with someone close to a Cabinet official.

Mrs. Clinton’s spokesman at the time the case broke, P.J. Crowley, sought to distance her from the case, but did not deny that she was the person mentioned in court papers. “There is no reason to believe that the Secretary of State was a special target of this spy ring,” Mr. Crowley said in an email.

This undated image released by the FBI on Oct. 31, 2011, shows ... more >

The spy who triggered concerns about high-level infiltration was Cynthia Murphy, later identified as Russian Foreign Intelligence Service (SVR) officer Lydia Guryev. Court papers say she met several times with a prominent New York-based financier active in political fundraising and described as a “personal friend” of a Cabinet official.

It was later disclosed that the financier was Alan Patricof, director of the venture capital firm Greycroft LLC and a donor to Democratic candidates, including Mrs. Clinton when she was a U.S. senator from New York.

Mr. Patricof said last year that he met Gureyev, whom he knew only as Cindy Murphy, several times and that she had been hired to do personal bookkeeping.

Additionally, the spy ring’s reports to Moscow revealed that the group was providing important data on the international gold markets, U.S. foreign policy toward Russia and Asia, and the identities of people applying for positions at the CIA, Mr. Figliuzzi said.

“We said they were getting too close to their objective. We’ve made the case on 10 of them. We identified all 10 of them, we can take it down,” Mr. Figliuzzi said.

He said a key break in the case developed in the mid-2000s after the FBI was able to decipher coded electronic communications between Moscow and the deep-cover spies. The communications were used to unravel the network, ending the FBI probe that began more than a decade ago.

Breaking the electronic codes used by the “illegals,” as the Moscow spies are called, was a milestone in the case that allowed FBI agents to pose as the spies’ handlers and identify the spies.

“Ultimately, at the end of the case, we were able to become the Russians,” Mr. Figliuzzi said. “The point where we decrypted the communications allows us to basically own the network.”

FBI agents posing as Russians fooled spies Anna Chapman and Mikhail Semenko into giving up valuable information about the ring. They were the last two people in the ring to be confirmed as SVR officers, Mr. Figliuzzi said.

“They finally confirmed to us that, yup, they were engaged in a spy ring,” he said.

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