Russian officer guilty of betraying spy ring in US (AP)

MOSCOW – A senior Russian intelligence officer convicted of working for the United States fled Russia on a train just before the Americans busted his ring of 10 Russian sleeper agents.

Details of Col. Alexander Poteyev's quick escape and farewell text message to his wife — asking her to "try to take it calmly" — were among evidence produced by the court Monday as it found him guilty in absentia of high treason and desertion.

Pinup spy Anna Chapman, one of the 10 agents deported from the U.S. in July, testified during the closed trial that only Poteyev could have provided the information that led to their arrest last summer, Russian news agencies reported, citing a summary of the evidence read by the judge as he issued his ruling.

Chapman testified that she was caught after an undercover U.S. agent contacted her using a code that only Poteyev and her personal handler knew, the reports said. She said she immediately felt during the meeting that something was wrong and called her handler in Moscow, who confirmed her suspicions. Chapman and others were arrested shortly after.

The agents, who were arrested a year ago Monday, were deported in exchange for four suspected Western agents who had been imprisoned in Russia. It was the biggest spy swap since the Cold War.

The Moscow military court sentenced the 59-year-old colonel to 25 years in prison and also stripped him of his rank and state medals.

The court said Poteyev got word that the agents were being rounded up in the U.S. and was in such a hurry to leave Russia that he rushed out of a meeting at intelligence headquarters, the Interfax news agency reported. It said Poteyev fled to Belarus, crossed the border into Ukraine and then moved west to Germany and, finally, on to the United States using a passport in another person's name.

He had no time to say goodbye to his wife and later bid his farewells in a text message: "Mary, try to take this calmly. I'm leaving not for some time, but forever. I didn't want to, but I had to. I will start my life from scratch and will try to help the children."

Poteyev's grown son and daughter reportedly have been living in the United States for years.

His court-appointed lawyer, Andrei Kucherov, said Poteyev's wife believes he is innocent and wants to join him in the U.S.

Mikhail Lyubimov, a veteran Soviet spy, described the court's ruling against Poteyev as "symbolic."

"He must be rubbing his hands together and laughing at that together with his family somewhere in the U.S." Lyubimov said, according to Interfax.

The court said Poteyev had overseen the Russian sleeper agents in the U.S. as deputy head of the "S" department of Russia's Foreign Intelligence Service.

In addition to Chapman, other agents also confirmed that only he had access to the sensitive information that allowed the U.S. authorities to apprehend them, the RIA-Novosti news agency said.

The court said Poteyev had begun working for American intelligence around 1999-2000 — betraying the agents, their means of communication and financial information. It said Poteyev had sought to hamper the agents' work by forcing them to meet in places that were unsafe and providing them with inferior equipment.

The Russian spies were given a hero's welcome when they returned home, and President Dmitry Medvedev bestowed them with the nation's highest awards in October.

Russia's Prime Minister Vladimir Putin, a 16-year veteran of the KGB, sang patriotic songs with the spies to celebrate their return. Putin warned in December that traitors come to a bad end and "whatever equivalent of 30 pieces of silver they get, it will get stuck in their throats."

Unlike other members of the spy ring who have stayed out of the limelight, Chapman has basked in the attention. She has stripped down to lingerie for a photo shoot by the Russian edition of Maxim under the caption "For Your Eyes Only," become the new celebrity face of a Moscow bank, joined the leadership of the youth wing of the main pro-Kremlin political party and hosted a TV program.

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Arrest of Pakistani officer raises fears

File photo of Hizb ut-Tahrir activists shouting anti-government slogans during a protest in Karachi on April 17.Khan is the most senior officer to face such allegations since 1995Abbas: Efforts were underway to arrest members of Hizb ut-Tahrir Hizb ut-Tahrir has urged soldiers to rebel against the military hierarchyThe group was banned in 2004 but a Pakistani court overturned it

(CNN) -- Brigadier General Ali Khan was close to retiring at the end of a distinguished career in the Pakistani Army when he was detained early in May -- and accused of links with an outlawed Islamist group.

His arrest, which became public Tuesday, shocked fellow officers at army headquarters and again raises the specter that senior ranks of the Pakistani officer corps may be infiltrated by Islamist militants.

Brigadier Khan is the most senior officer to face such allegations since 1995, according to a CNN analysis of previous cases.

Army spokesman Major General Athar Abbas said Khan was believed linked to Hizb ut-Tahrir (Party of Liberation). He said efforts were underway to arrest members of the group who had been in contact with Khan.

"The military has zero tolerance for any such activity and strict disciplinary action will be taken against those involved," said Major General Abbas.

Pakistani officials say Brigadier General Khan, who is 59, had an administrative role at army headquarters in Rawalpindi. His work did not involve counterterrorism and he did not command any unit. But he would have seen plenty of sensitive information.

Khan comes from a military family stretching back three generations, and has a son in the armed forces. Pakistani media report that one of his brothers is a colonel with the intelligence service.

Reuters news agency quoted Khan's wife as dismissing the allegations as "rubbish," saying her husband was "an intellectual, an honest, patriotic and ideological person."

"It's a fashion here that whosoever offers prayers and practices religion is dubbed as Taliban and militant," Reuters quoted her as saying.

One of his brothers, Bashir Khan, told the Pakistani television network Aaj that the brigadier had been in the army for 25 years - serving with UN peacekeepers in Bosnia and spending time in the United States. In 2008, Khan received the highest honor available to soldiers of his rank.

Khan's detention comes amid heightened concern about religious extremism within Pakistan's armed forces.

Hizb ut-Tahrir says it is committed to non-violence but has urged soldiers to rebel against the military hierarchy and its goal it to establish a global Islamic Caliphate.

Pakistani sources tell CNN that in the aftermath of the raid that killed Osama bin Laden in Abbottabad, it produced pamphlets urging soldiers to turn against their commanders.

The group was outlawed by General Pervez Musharraf in 2004 but a Pakistani court subsequently overturned the ban. It is also active in the United Kingdom, Malaysia and Indonesia.

Simon Valentine, a British researcher who has studied extremism in the Pakistani armed forces, said that while Hizb ut-Tahrir doesn't advocate violence "a cardinal element of its ideology and modus operandi is to infilitrate the armed forces and, once gaining sufficient support, cause a military coup."

"Despite claims of zero tolerance of HuT within the Army," he said, "militant Islam, including the HuT, has much support from the grass roots to the highest level within all branches of the armed forces."

Valentine, who has researched Hizb ut-Tahrir in depth, said its views enjoy widespread support throughout Pakistani society.

"Such militancy as seen in the HuT is fuelled by an increasing anti-Americanism which is rife throughout Pakistan," he told CNN.

Hassan Abbas, a scholar at Columbia University who has written extensively about Pakistani military intelligence, the ISI, told CNN he suspected there was more to the case than any alleged contacts with Hizb ul-Tahrir.

"Association with such a group would not be enough to hold him for six weeks," especially as Khan was weeks away from retirement, he said.

Abbas, author of "Pakistan's Drift into Extremism: Allah, the Army and America's War on Terror," said there is an alarming trend that includes Pakistani pilots refusing to bomb militant strongholds, and units surrendering to militant groups rather than fire on them.

Last month, Pakistani Taliban insurgents stormed the Naval Air Station in Karachi, apparently armed with inside information on its layout and security. They destroyed two U.S. supplied surveillance aircraft.

Days before he was abducted and murdered, Pakistani journalist Syed Shahzad described that attack as "the violent beginning of an internal ideological struggle between Islamist elements in the Pakistani armed forces and their secular and liberal top brass."

He went on to quote unnamed sources in the ISI, Pakistan's military intelligence service, as saying: "It was shown several months ago that the Pakistan navy is vulnerable to Islamists when a marine commando unit official was arrested.....Now, they (intelligence) realize how the organization (navy) is riddled and vulnerable to the influence of militant organizations."

Last year two serving officers -- including a colonel - and two former officers were indicted in a court martial for allegedly planning a terrorist attack on the Shamsi airbase.

Shamsi -- in Balochistan province -- is a remote base reportedly used by the United States drone program. The four were alleged to have been in contact with Hizb ut-Tahrir. They have pled not guilty.

And in 2004, several lower-ranking air force personnel were convicted in connection with assassination attempts against Pakistan's leader at the time, General Pervez Musharraf.

One of them, Abdul Islam Siddiqui, was hanged but maintained he was innocent of involvement. Other soldiers said they had been tortured into implicating him.

Valentine, who is a regular visitor to Pakistan, said Khan's arrest may be "part of an attempt to bolster the army's reputation amid accusations that it is pro-militant," in the wake of the raid by U.S. special forces that killed bin Laden.

But Hassan Abbas believes the military had no desire for the Khan case to become public. "The military is in deep crisis in the aftermath of Abbottabad," he says. "They would have preferred to hush this up."

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Budget officer forecasts bigger deficits (Reuters)

OTTAWA (Reuters) – Canada's economy and fiscal health will fare worse than expected in coming years, the country's budget officer said on Wednesday in a downbeat report days ahead of the government's budget.

The Parliamentary Budget Officer (PBO) issued a report providing the office's own economic growth forecasts for the first time, rather than using the consensus private sector forecasts published by the government.

It predicted the government would not be able to eliminate the federal deficit by 2014-15 as it has planned due to higher projected operating expenses.

Mediocre growth, unemployment remaining above 7 percent until 2016 and a persistently strong Canadian dollar mean the Bank of Canada will be reluctant to raise interest rates too quickly, it said.

"Reflecting the sluggish recovery, PBO projects that the output gap will close gradually, restraining the pace of interest rate hikes by the Bank of Canada," said the report.

The PBO's fiscal outlook excludes new measures announced by the government in its March budget, which was never adopted because of the general election. The Conservatives, who won a majority on May 2, will present another budget on Monday, which they say will be largely the same as the previous document, with some minor tweaks.

The PBO sees a budget deficit in 2011-12 of C$26.1 billion, slightly below Ottawa's latest projection of C$27.8 billion.

While the Conservatives predict a return to balance in roughly 2014-15, the PBO sees a shortfall of C$13.3 billion that year and C$7.3 billion the year after.

"PBO's estimate of the structural deficit does not mean that the government's budget will not return to balance or that its fiscal structure is not sustainable," the report said.

"Rather, it suggests that policy actions to increase revenues and/or reduce spending would be required to ensure that the budget is balanced once the economy returns to its potential."

Gross domestic product will grow 2.9 percent this year, the PBO estimated, in line with government forecasts. Growth in 2012 and 2013 will be below government forecasts at 2.2 percent and 2.3 percent, respectively.

PBO projects budgetary deficits totaling $128.2 billion from 2010-11 to 2015-16, compared with the C$93.6 billion projected by the government.

Finance Minister Jim Flaherty responded to the PBO report by suggesting Budget Officer Kevin Page should read the March budget proposal to see how Ottawa plans to return to surplus.

"It's all set out how we would do it. It's in the budget that we filed March 22," Flaherty said.

The cost of measures announced in the March budget -- and excluded from PBO's calculations -- totaled C$7.6 billion over six years, the government said at the time. It also said it had found savings of C$6.2 billion over five years.

In addition, it promised to squeeze out an additional C$11 billion in savings between now and 2016 but did not include those savings in its projections.

Ottawa has said the budget will restate commitments made in the original plan and add a couple of campaign promises.

On Tuesday, Flaherty said the spending plan will use the same economic growth forecasts as the original budget, which assumed 3.1 percent expansion this year and 2.8 percent in 2012.

(Reporting by Louise Egan; editing by Rob Wilson)

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