Russia dismisses talk of new spy scandal with U.S.

MOSCOW (Reuters) - Russia said on Thursday that the Kremlin had nothing to do with a network alleged by the United States to be smuggling military technology to Moscow.

The U.S. Justice Department said on Wednesday it had broken up an elaborate network aimed at illegally acquiring U.S.-made microelectronic components for Russian military and spy agencies. It charged 11 people with taking part.

The Russian Foreign Ministry expressed surprise at the allegations.

'The charges are of a criminal nature and have nothing to do with intelligence activity,' Deputy Foreign Minister Sergei Ryabkov told Russian news agencies.

The situation had caused deep concern in Russia, whose relations with its former Cold War enemy are difficult despite President Barack Obama's call for a new start.

Authorities were questioning the Russian nationals who were among the accused, Ryabkov said.

Foreign Ministry spokesman Alexander Lukashevich said Washington had informed Moscow that the charges were criminal and unrelated to espionage.

'We will look into this situation and what really happened, and what charges are being imposed on our citizens,' he said.

U.S. authorities had 'not properly informed' Russia of the arrest of its citizens and Russian diplomats were seeking access to them, he added. A consul had met one in a courtroom, he said.

Foreign Minister Sergei Lavrov said in an interview this week that Moscow and Washington must do more to strengthen relations because the 'reset' called for by Obama could not last forever.

Republican candidate Mitt Romney has accused Obama of being soft on Moscow during his four-year term and described Russia as the United States' 'number one geopolitical foe'.

In a case in 2010 that harked back to the Cold War, the United States arrested 10 suspected Russian agents who were later sent back to Russia in the biggest spy swap since the Soviet era.

SECURITY EXPECTS PUZZLED

The U.S. Justice Department said 11 people, and companies based in Houston, Texas and Moscow, had been accused on Wednesday of illegally exporting high-tech components to Russian security agencies. The U.S. companies from whom the components were bought were not identified.

A U.S. official said Alexander Fishenko, a Kazakhstan native who immigrated to the United States in 1994 and has frequently travelled to Russia, had been charged with operating in the United States as an unregistered agent of the Russian government. He was being held in custody with seven others in Houston.

The Justice Department said the three others were in Russia including Sergei Klinov, identified as CEO of Apex System, which it said served as a certified supplier of military equipment to Russia's government, working through subsidiaries.

Klinov, reached by telephone in his office in Moscow, said he had learned about the accusations from media reports.

'Honestly, I am very upset. I just don't know what to say. Everyone has his own truth and it is somewhere in the middle,' he told Reuters.

Asked whether he worked either for the security services or for the Defense Ministry, he said: 'I am floored by this. I don't know what I'm supposed to say.'

Russia's Federal Security Service, successor of the KGB, and the Defense Ministry denied immediate comment.

Another person facing accusations was named as Yuri Savin and described as the marketing director of Russia-based company Atrilor. The company denied having an employee of that name.

Asked about the allegations, a Russian security expert said such practices has not been unusual in Soviet times.

'To me, this is ordinary - through maybe risky - business. Many companies and people did business this way in Soviet times,' said Andrei Soldatov, head of the Agentura think tank.

'Many tycoons made their first money this way. To say they were all spies would be wrong,' said Soldatov, whose organization monitors security and intelligence agencies.

He said however that Russian military institutes, whose work on developing technology lags that of their U.S. counterparts, may have tried to acquire new technology this way.

(Editing by Timothy Heritage and Angus MacSwan)



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