November 14, 2010:
According to Russian officials, the ten Russian spies arrested in the United States last June were betrayed by a Russian espionage official (identified only as "colonel Shcherbakov") in the SVR (Russian CIA). The U.S. claimed they had been watching the ten sleepers for several years, which may indicate that Shcherbakov has revealed a lot more if he was on the American payroll all that time. Shcherbakov was in charge of the SVR sleeper cell operation. The Russians use military ranks in the police and intelligence services, and colonels are middle-management. There is political pressure on the head of SVR to resign, indicating that the damage was greater than anyone wants to admit.
Last July, after Shcherbakov was safely in the U.S., American and Russian officials conducted a spy swap in Vienna, Austria. This was the largest such swap since the Cold War. Russia pardoned and freed four Russians, including two former intel officers who had revealed the identities of numerous Russian agents in the West. These two are believed to have more information and insights of value. The U.S. released the ten Russians who had, for the last decade, been trying to pass themselves off as Americans, and operate as "illegals" (spies without diplomatic cover and protection). As part of the deal, the ten Russians had to admit their guilt. The FBI said that they caught on to this bunch early on, and have been watching them for years, trying to obtain more information on how Russian espionage operate in the United States. The FBI finally arrested these ten when it became apparent that the Russians had detected that they were being watched. Or because colonel Shcherbakov believed his SVR bosses were on to him, or because the colonel believed it was time to retire to that secret condo in the United States. Russian government officials are indicating that SVR assassins have been sent to kill Shcherbakov.
The FBI said they were puzzled by how little useful information these ten were able to obtain. As far as the FBI could tell, these ten spies never obtained anything important. But the Russians were eager to get them back, and avoid a trial in the United States. Russian state media said very little about the spy swap. The spy exchange was organized in less than a month, with the U.S. eager to get four valuable people back, and Russia equally intent on getting its ten embarrassing spies out of the news.
It's unclear why Russia undertook such an inept operation, although Shcherbakov should know. If he did, that information has not gone public. There are indications that many other Russian espionage operations are similarly sloppy (and will be revealed when arrests are made). This is in sharp contrast to the Cold War when, after it was over, it was revealed that the Russians were much better at the spy game than their Western opponents. But those super spies appear to have moved on to more lucrative work in the civilian sector, or the government. In any event, the past masters are no longer running the show. It's amateur hour now, and the Russians would rather not talk about it.