British agents had planted electronics and a transmitter in an imitation rock on a Moscow street, allowing agents to upload classified computer data, which could then be downloaded by British Embassy employees.

A stone being used as a high-tech version of the spy's traditional letter-box or dead drop in which agents can anonymously deliver or retrieve information.

A FSB video of a person, allegedly a British embassy staff member walking on a street, to collect intelligence information provided by Russian agents, in a park outside Moscow.

Rock of agents

Ian McPhedran 25jan06

BRITAIN'S diplomatic ties with Russia have hit a rocky patch, with Moscow accusing London of spying.

In an incident that would not have been out of place in an episode of Get Smart or a James Bond movie, Russian security services say they caught British diplomats downloading secret information into a fake rock. Maxwell Smart's colleagues from Control often hid inside rocks or trees as they spied on agents from KAOS.

"Q", the technical genius from the Bond films, favoured modern gadgets rather than natural disguises for his high-tech gizmos. According to the Russians, four British agents from the foreign spying service MI6 and their Russian mole used the "spyrock" beside a Moscow footpath to store and transfer secret information. They even produced video showing an agent kicking the offending rock and then carrying it away after it apparently malfunctioned, probably due to a flat battery. Russian TV broadcast pictures of the spyrock with its lid off. It appeared to contain electronic equipment.

According to Russian security agents, spies would walk past the rock and beam digital secrets into it. Later, a British agent would pass by and use a hand-held device to retrieve the information. The system was apparently designed to eliminate the need for risky face-to-face meetings and, unlike emails or phone calls, the data held in the spyrock could not be traced. It is a variation on the old dead letterbox where agents would leave written material, often in brown envelopes, for their handlers to collect.

According to Russian TV, the double agent who blew the lid on the plot said he was recruited by the Britons during a foreign trip. It is not clear what information the spies were gathering, given the Cold War ended almost 20 years ago and Russia is hardly a technological leader. The Britons have also been accused of channelling illegal funds to pro-democracy non-government organisations in Russia.

Britain's Foreign Office flatly denied the claims and British Prime Minister Tony Blair made light of the allegations at his monthly press conference saying, "the less said about that the better".

Russia has threatened to punish the four alleged spies. Britain warned that any diplomatic sanctions would be reciprocated. - herald sun

What is really going on?

Putins now totalitarian Russia wants a crackdown on all Non Govermental organisations working in the country - These NGO's range from humanitarian to legal / human rights issues...Many NGO's are believed to be infiltrated and/or sponsored by State actors as a method used in the control of organized dissent...

a stunt like this would present Putin with an opportunity to crack down on ALL dissent - especially those NGO's or other groups, which have not been compromised...

So if looked at in this context...is Blair actually taking part in a G8 energy cartel stage-managed political theatre... which helps solidify Putins ever emerging Police state as it creates an impression of tit for tat spying in G8 member countries...which enables a crackdown across the board IN ALL COUNTRIES?

Putin: UK spy flap justifies NGO crack-down Russian president levies spy charges at NGO funding

Charles Digges, 2006-01-26 11:18 - President Vladimir Putin accused foreign intelligence operatives on Wednesday of using non-governmental organisations (NGOs) to interfere in Russia's internal affairs, saying that accusations that four British diplomats were spies justified new government curbs on the organisations, news agencies reported.

Putin: "Now much is apparent as to why Russia passed a law regimenting the activities of NGOs.

He did not say if he would expel the diplomats, but noted: "If we send them away, more will come. Maybe clever ones will come. And we will have to struggle to find them. Let's think about that."

Putin has previously criticised foreign support for groups in Russia, but on Wednesday he linked the groups to intelligence agencies more explicitly than before.

His remarks intensified a furor that erupted after the disclosure of what officials said was a British espionage operation that used a device concealed in a fake rock to exchange information with a Russian agent. Many Russian news organisations have speculated the fake rock was actually a model taken from a KGB museum.

Russian Federal Security Service (FSB) footage first aired on the state controlled Rossiya channel Sunday supposedly shows one of the accused British diplomats, Marc Doe, and the other diplomats, downloading information onto hand-held computers from transmitters hidden in fake rocks in Moscow.

"We see that there are attempts to work with non-governmental organisations with the help of special services and that there is financing of non-governmental organisations through the channels of foreign secret services," Putin said in televised remarks from St. Petersburg, where he was meeting with leaders of other former Soviet republics. He was referring to the controversial NGO law-which was protested vociferously by many Western countries and NGOs-which he signed earlier this month, and cited the UK spy dust-up as all the more reason for the law to exist.

Russian president Vladimir Putin approved quietly the controversial NGO bill on January 10th. The bill was published in the official Russian newspaper Rossiyskaya Gazeta on January 17th, thus becoming a law.

"This law is designed to block foreign governments from interfering in the internal politics of the Russian Federation and create favourable, transparent conditions for financing NGO operations," Putin said at a news conference in St. Petersburg.

Putin said it was "regrettable" that foreign intelligence agencies were financing Russian NGOs.

"I think that nobody has the right, in the given situation, to claim that money has no smell," he added.

Britain's Doe oversees British grants to private organisations, including some prominent groups that promote democracy and human rights.

The NGOs Russia has linked to the affair-without specifying illegalities-include the Moscow Helsinki Group and the Centre for Democracy and Human Rights. The scandal could worsen relations with Britain and other countries as Russia presses its assault on European and American financial support of groups that criticise the Kremlin.

NGOs speak out

NGOs have denounced the FSB spy allegations that aired on Rossiya television as an attempt to discredit them. They have stressed that they won grants from the Global Opportunities Fund and not from Doe personally or British intelligence.

Ulrich Fischer, the president of the International Helsinki Federation for Human Rights called the accusations against its Moscow branch and other groups slanderous and "part of an official Russian policy to silence criticism and strengthen ever further a centralised state power."

The Bellona foundation, which has two offices in Russia, also spoke out against the ever-growing Kremlin juggernaut against. Russia programme director Nils Bøhmer said "we are very concerned about the developments in Russia."

"It is essential to have independent NGOs to develop democracy," said Bøhmer. "Putin's statements yesterday, and the new NGO law show that in the future, it will be difficult to operate as an independent NGO in Russia."

Bellona's Alexander Nikitin, who heads Bellona's St. Petersburg office agreed. "We also consider that special services should not be trying to influence the work of NGOs," said Nikitin, who spent five years fending off charges of espionage for contributions he made to a Bellona report on the Russian Northern Fleet. He was entirely exonerated in 2000. During his trial he became head of Bellona's St. Petersburg operations. "We have not had any brushes with the special services, but it is well known that there are constant attempts by the FSB to influence non-governmental organizations in Russia."

Doe's alleged role

The FSB says Doe authorised grants to 12 Russian non-governmental organisations, including the Moscow Helsinki Group and the New Eurasia Foundation.

While Russian intelligence officials acknowledged there was no direct connection between those grants and the espionage that has been alleged, the distinction has largely evaporated in the fury of Russian reaction to the spy scandal. The British Foreign Office has rejected any allegation of improper conduct with Russian NGOs.

Duma's non binding resolution against 'spies' financing NGOs

Parliament's lower house adopted a non-binding resolution in a vote of 401-6 Wednesday denouncing support for private groups by foreign spies. "Such actions undermine trust in non-commercial non-governmental organisations," the Duma press service said in a statement posted on its web site.

"The deputies believe such actions undermine confidence in NGOs as a widely recognised important institution of civil society," it read.

This month. Putin signed into law new controls over private groups, requiring them to reregister and prohibiting foreign financing of activities deemed political. Foreign leaders and Russian representatives of the groups called the curbs a bid to stifle political discourse.

The whereabouts of the diplomats

Diplomats caught spying red-handed are usually expelled immediately, Ivan Safranchuk, head of the Moscow office of the Washington-based Centre for Defence Information, told The Moscow Times

"The Russian government probably figures they will leave the country themselves, because it would be very uncomfortable for them to continue working here if they stayed," Safranchuk said. "If Russia expelled them, they would likely have one of their diplomats expelled in return. Besides, Russia might already have information that the embassy workers had already left" he said.

Safranchuk speculated earlier this week that the FSB might have planned the leak to Rossiya as a way to defend the NGO legislation and might have been planned it as early as November, when the Duma first started considering the bill.

European Response

In Strasbourg, France, the Parliamentary Assembly of the Council of Europe on Wednesday declared that Russia's NGO law did not meet European norms for NGOs, Interfax reported.

Konstantin Kosachyov, head of the Russian delegation to the continent's main human rights body, said he was disturbed by the declaration, which he said "discredits the assembly."

Meanwhile, another Russian-British dispute emerged this week when St. Petersburg prosecutors announced that they were reopening an investigation into the business activities of the St. Petersburg office of the British Council, the British Embassy's cultural department that offers fee-based English-language lessons. An investigation into whether the council had carried out illegal business activities was closed in July due to lack of evidence, but prosecutors recently decided to reopen it, a prosecutor's office spokesman told Interfax on Tuesday.

A British Embassy spokesman said Wednesday that Britain considered the investigation unwarranted. "We find the continued actions against the British Council hard to understand," he said, speaking on the condition of anonymity. "The British Council has made every effort to meet the excessive demands of the Russian authorities."

He said the Foreign Ministry had informed British officials in Moscow of the investigation and that it was unclear which laws the council was accused of violating. - bellona

Russia arrests two British spies

Sat Jan 28, 2006 MOSCOW (Reuters) - Russian security services have arrested two spies working for British intelligence, the Interfax news agency reported on Saturday, citing the former head of Russia's state security service.

"Two British spies have been arrested. Of course they are not silent they are talking," Nikolai Kovalyov, the former head of the FSB, told Russia's NTV television station in a programme that will be aired on Sunday night, Interfax reported.

A spokesman for the FSB said he could neither deny nor confirm the report, advising Reuters to watch the programme and listen to Kovalyov's comments.

Russia this week accused Britain of running a James Bond-style spying operation in Moscow using a receiver hidden in a fake rock to gather secret information and said it had caught British spies funding pressure groups.

Four British diplomats were named as spies in a programme shown on state television last Sunday. The programme said one Russian, who had been turned by British agents while abroad, had been arrested for treason.

President Vladimir Putin, himself a former KGB spy, said on Wednesday he had not decided whether to expel the diplomats who were named. - reuters

Putin: Spy Flap Justifies NGO Law

By Carl Schreck Staff Writer

President Vladimir Putin on Wednesday cited a purported British spy ring as justification for the controversial law that will tighten state control over nongovernmental organizations. But he said he had not decided whether four British diplomats accused of being spies should be expelled.

Two days after the Federal Security Service, or FSB, announced that it had uncovered a spy ring of four mid-ranking diplomats at the British Embassy and their Russian contact, Putin said that "it has now become clear to many why Russia passed a law regulating NGO activities." - moscowtimes

Rights Group Faces Closure

By Anatoly Medetsky Staff Writer

The government agency that registers nongovernmental organizations said Friday that it asked a court to shut down an umbrella human rights center supported by two prominent NGOs, the Moscow Helsinki Group and the Union of Soldiers' Mothers Committees, over minor legal infractions. The Justice Ministry's Federal Registration Service also said it successfully sued to close 300 NGOs last year and that more than 400 similar cases were pending.

NGOs said the lawsuits were part of a plan by authorities to clamp down on civil society, which they said also included the recent passage of a law restricting NGOs and a spy scandal purportedly involving British diplomats who authorized grants for NGOs.

The registration agency last month accused the Russian Human Rights Research Center, which brings together 12 NGOs including the Moscow Helsinki Group and the Union of Soldiers' Mothers Committees, of not having informed the authorities of its existence since 1999, Galina Fokina, deputy head of the service's department for nongovernmental and religious organizations, said Friday.

If the agency wins the case scheduled for Feb. 27 in Moscow's Basmanny District Court, the center will lose its status as a legal entity and will not be allowed to maintain a bank account, she said. Without a bank account, an NGO cannot accept outside funding.

Lyubov Vinogradova, the center's director, said it sent the notices in the past two years and was reviewing its files to check if such notices were sent in previous years. But she said she was sure that the legal action against her center was a sign of a growing pressure on NGOs. "We feel ... that the attitude toward us has changed," she said. "All kinds of faults are blamed on us."

The registration service last year filed lawsuits seeking to shut 825 NGOs as legal entities, Galina Fokina, deputy head of the service's department for nongovernmental and religious organizations, said Friday.

Moscow's Basmanny District Court revoked the registration of 300 NGOs last year, Alexei Zhafyarov, head of the service's NGOs and religious organizations department, said by telephone Friday. The NGOs were not represented in court, he said, without naming the NGOs concerned.

Ninety-nine other NGOs had corrected their violations and kept their bank accounts, Zhafyarov said. More than 400 cases are to be heard later this year, he said.

The service demanded the NGO closures on the grounds that they broke laws enacted from 1995 to 2002, Fokina said. From 1995 to 1999, the laws required NGOs to reregister, and from 2002 NGOs were required to file annual reports and inform the authorities that they were still operating, she said.

Human rights groups are also battling last week's accusation by President Vladimir Putin and the Federal Security Service that several of them received funding from British spies. The groups said in a joint statement Friday that the accusations, first broadcast on Rossia state television Jan. 22, were reminiscent of smear campaigns during the time of Stalin's purges.

"It is deplorable that journalists and state officials are discussing the financing of NGOs by British intelligence as a proven fact. Frequent repetition does not make a lie the truth," said the statement, which was signed by 85 activists from dozens of rights organizations across the country, including some singled out in the television program. "This provocation has reminded many people of the system of denunciation and slander in the notorious years of mass repression in the Soviet Union."

The FSB said last week it had uncovered British spies, one of whom had signed off on British government grants to Russian NGOs. The statement said NGOs would take legal action to defend their reputation.

Lyudmila Alexeyeva, head of the Moscow Helsinki Group, which was specifically accused of taking money from British spies, told Ekho Moskvy radio on Friday: "There are very well-known and highly qualified lawyers who are prepared to conduct legal proceedings if we decide to go to court."

The spy scandal broke 12 days after Putin signed a law imposing tough restrictions on Russian NGOs, mostly concerning foreign funding. - moscow times

Remembering the time-frame for these events is one which has seen Russia & China agree to process Nuclear fuel for Iran, and Bush agree in principal to this proposal

...As British agents are accused of planting bombs, stoking fires in Iran which affects the price of OIL...and as Georgia & Ukraines cost of gas supplies have been manipulated by Kremlin owned Gazprom...perhaps in the hope they will rely on Iranian oil , of which they have a stake...

"Six years ago when I came to this post I dedicated my work to increasing economic freedoms in Russia. Six years on, the situation has changed radically. This is a state model with the participation of state corporations, which although they are public in name and status, are managed above all for their own personal interests," - Recently resigned / sacked economic advisor to Putin Andrei Illarionov "The Russian presidency of the 'Eight' will be associated not with roses but with a large quantity of healthy thorns," the daily Moskovsky Komsomolets predicted.

Russia is head of G8 as of Jan 1st 2006 ...the former KGB spy-turned-president, easing into the driving seat of the elite Group of Eight on January 1 will be a crowning moment after years of Russia being treated as a wild card by the United States and other G8 partners. In July, Putin will play the statesman when he hosts the key summit in his hometown of St. Petersburg with U.S. President George W. Bush and the leaders of Japan, Britain, France, Italy, Germany and Canada as his guests.Analysts say his action to soften proposed curbs on human rights bodies and charities in Russia signals Putin's aim of making Russia's time in office smooth and non-controversial. So, Russia's G8 agenda comprises only non-contentious themes -- energy policy, fighting disease and the war on terror. Held at arms-length by the G7 because of doubts about its democratic course and its commitment to the free-market, Russia has for some years been in the club but not fully a part of it. "It will be very important for Mr Putin to show that Russia is not only a junior member of this very influential club, but a member who can chair the whole club for a while," said Nikolai Petrov of the Carnegie Endowment for International Peace. "It is very important from a symbolic point of view." While still not in the top-10 of the world's largest economies, Russia joined the group in 1998, but does not participate in meetings of G7 finance ministers. The G8 does not have a formal structure and its agenda is set by the presidency.reuters

"Whatever the political or legal problems are, in the short term, these countries should pay for their energy at today's energy prices to improve the efficiency of their economies." Pascal Lamy, director of the World Trade Organization

Putin Warns of Terrorists-NGO Link By Simon Saradzhyan Staff Writer MOSCOW - President Vladimir Putin on Tuesday urged the Federal Security Service to prevent foreign governments from interfering in Russia through NGOs and said terrorists should be hunted down “in caves ... like rats.” In a speech at the annual meeting of the top brass of the Federal Security Service, or FSB, at its Lubyanka headquarters, Putin also criticized NGOs for a lack of diligence when accepting foreign grants. In a reference to recent FSB accusations that four British diplomats worked as spies, he said NGOs were to blame if they got caught up in scandal. “One can only regret that this scandal has cast a shadow over NGOs, but you have nothing to do with it,” Putin told his FSB audience. “It is those who accept financial aid who need to be more scrupulous.” While the security services should allow NGOs to operate, they should protect “society from any attempts to use these organizations for the interference of foreign countries in Russia’s internal affairs,” Putin said, according to a version of his comments posted on the Kremlin web site. Putin also advised the agency, which he headed before being appointed prime minister in 1999, on tracking down terrorists. “Make pinpoint strikes against them, find them in all the caves where they are hiding, and eliminate them like rats,” he said. In his opening remarks during the televised part of the meeting, FSB director Nikolai Patrushev listed several North Caucasus republics as among his biggest security challenges. In a thinly veiled warning to nationalists and religious extremists, Putin also called on the FSB to thwart any attempts to provoke religious or ethnic violence in the country, which has seen a steady rise in xenophobic attacks in recent years. In other comments published Tuesday, Putin made a foray into a range of domestic and foreign policy issues in an interview with Spanish media a day before his visit to Spain. Putin said he would welcome another amnesty for Chechen rebels and that authorities would be prepared for a dialogue with rebels who agreed to lay down their arms and were not guilty of violent crimes, the Kremlin web site reported. Putin also said Russia would oppose the Organization of Security and Cooperation in Europe becoming an overseer of other countries in the Commonwealth of Independent States, reiterating the Kremlin’s criticism of Western monitoring of those countries’ elections. Going through a checklist of other foreign policy issues, Putin portrayed Russia’s recent gas war with Ukraine as a successful attempt to secure market prices and uninterrupted supplies to Europe. He also praised the International Atomic Energy Agency’s decision to refer Iran to the UN Security Council as “a balanced decision” and expressed hope that this would lead to the resolution of Iran’s nuclear standoff. In a rare explanation of the state’s tactics in acquiring Yukos, Putin said that any buyer of Yuganskneftegaz, the stricken oil company’s production unit that was auctioned off to pay back tax debts in December 2004, had to be wary of legal risks. “The future owners had to think about how they would work ... in case of lawsuits. So when Baikal Finance Group bought the stake, it became the owner. Everything else happened on the secondary market. “In this way, the potential legal claims on anyone who gained this property were practically eradicated,” he said. Soon after the auction, Baikal sold Yugansk to state oil company Rosneft. Putin also told the Spanish journalists that he was unaware that Yukos’ former owner, Mikhail Khodorkovsky, had been held in solitary confinement in the Chita region camp where he is serving an eight-year sentence. “Prison isn’t a holiday camp,” Putin said. “That Khodorkovsky found himself in a punishment cell, I can say openly, I heard first from you. “As you have drawn my attention to this, I will ask the justice minister what is going on, where they have sent him and for what.” - times.spb.ru

G8 energy cartel cronies have another agenda Blair has decided to equip Britain with a new generation of deterrent nuclear weapons, to replace those currently deployed on Trident submarines... A new nuclear deterrent would cost some 10 billion pounds (14.4 billion euros, 18.5 billion dollars) In October 2005 Putin & Blair pledged to increase joint efforts to combat terrorism. They were briefed by top British officials in the high-security meeting room of the civil contingencies committee, known as COBRA - an acronym for Cabinet Office Briefing Room A