Mergers and Acquisitions Putin-Style

By Jiri Kominek

With the recent Russian-US spy swap that occurred earlier in July fading from headlines, some Russia experts are beginning to speculate on what the ultimate consequences of the scandal may mean for the Russian intelligence community.

During his visit to Crimea on the back of a Harley Davidson motorcycle, Russian Prime Minister Vladimir Putin said that he recently met with the 10 Russian agents publicly exposed by US authorities.

Putin said that during the meeting he and members of the group sang patriotic songs including “With What the Motherland Begins“ from the 1968 Soviet film The Shield and the Sword, about the life of an undercover Russian spy in Nazi Germany.

Putin also said that the group was exposed to US authorities by a traitor whose identity is known. “Traitors always end badly. As a rule, they end up in the gutter as drunks or drug addicts,” Putin said. He went on to foreshadow what fate awaits those responsible for the betrayal. “The special services live under their own laws, and everyone know what these laws are,” said Putin.

Some Russia experts such as Brian Whitemore, senior correspondent at Radio Free Europe/Radio Liberty (RFE/RL) and co-author of a Russia-watcher blog, entitled The Power Vertical, began speculating that one outcome of the recent spy scandal could be that Putin could order the Russian Foreign Intelligence Service (SVR) to be merged with, or made subordinate to the Federal Security Service (FSB), which he lead in the late 1990s. Source:

Putin has never trusted or particularly liked the Sluzhba Vneshney Razvedki (SVR), which became independent from the once omnipotent KGB as a separate foreign intelligence gathering service in December 1991. Despite being much smaller than the FSB, the SVR, which is a descendent of the the First Chief Directorate (PGU) of the KGB, enjoys much influence inside Russian foreign policy circles.

Pavel Felgenhauer, the Moscow-based Russian defense and security analyst, argues that Putin could use the recent scandal involving the exposure of SVR agents in the US as a pretext for introducing sweeping personnel changes within the SVR and even the possibility of merging the organization with the much larger FSB.

“Putin is not a person who makes hasty decisions based on knee-jerk reactions to public opinion. If he does introduce changes to the Russian intelligence security and intelligence services it would be later in the year –say November, as part of a broader reorganization in which the SVR could be assisted by its bigger brother - the FSB,” said Ondrej Soukup, a Pague-based Russia expert.

Should such an M&A materialize, then Putin as de facto head of the Russian Korporatsiya state would succeed in re-establishing one of the pillars of the former Soviet Union – a new successor to his beloved former employer – the KGB.