U.S., Russia swap spies

Washington (CNN) -- The United States and Russia completed a spy swap Friday, exchanging the agents on chartered planes at an airport in Vienna, Austria, a U.S. official and Russian media said.

The plane carrying 10 Russian agents, who were expelled from the United States on Thursday for intelligence gathering, landed at Moscow's Domodedovo Airport on Friday afternoon, the airport press office said.

"The United States has successfully transferred 10 Russian agents to the Russian Federation and the Russian Federation has released four individuals who had been incarcerated in Russia," Dean Boyd, a spokesman for the National Security Division at the U.S. Department of Justice, said in a statement released as the plane landed in Moscow. "The exchange of these individuals ... has been completed".

The elaborately choreographed transfer -- which took place while the planes sat on the ground for about an hour -- was reminiscent of a scene from the Cold War.

The White House was first briefed in general terms in February by the FBI, the CIA and the Department of Justice about the program and some of the individuals involved, a White House official said. Additional briefings occurred in subsequent months, the official said.

President Obama was first briefed on the matter on June 11 and given details of the individuals involved over the past decade.

A week later, Obama chaired a meeting of the National Security Council to discuss the issue.

The idea of a swap was discussed among the administration's national security team before the arrests were made, the official said.

The four individuals freed by the Russians were selected based on humanitarian concerns, health concerns, and other reasons, the official said.

The 10 Russian agents pleaded guilty in the United States on Thursday for failing to register as foreign agents and were ordered out of the country. They then boarded a U.S.-chartered flight accompanied by U.S. marshals, a federal law enforcement source said.

"As a result of the successful exchange ... the U.S. Attorney's Office for the Southern District of New York has requested that the court dismiss any remaining charges against the 10 Russian agents," U.S. Attorney Preet Bharara said Friday.

In Washington, Attorney General Eric Holder said none of the 10 had passed classified information and therefore none had been charged with espionage.

"They were acting as agents to a foreign power," he told CBS News, referring to the Russians who, U.S. officials have said, had been under observation by federal authorities for more than a decade.

Four young children of the Russian agents are now in Russia, according to attorneys for the agents. Two older children are no longer in the United States, though their exact location is unknown. Another two older children have remained in America, the attorneys indicated.

White House Chief of Staff Rahm Emanuel told PBS' "NewsHour" that although the 10 agents didn't plead guilty to being spies, they "were clearly caught in the business of spying".

In a conference call with reporters, senior administration officials said the agents agreed never to return to the United States without permission from the U.S. government.

Holding them would have conferred no security benefit to the nation, they said.

This "clearly serves the interests of the United States," one official said.

A second official said the four prisoners in Russia were in failing health, a consideration that prompted quick completion of the deal.

Under the plea agreements, the defendants disclosed their true identities in court and forfeited assets attributable to the criminal offenses, the Justice Department said in a news release.

"Defendants Vicky Pelaez, Anna Chapman and Mikhail Semenko, who operated in the United States under their true names, admitted that they are agents of the Russian Federation; and Chapman and Semenko admitted they are Russian citizens," the Justice Department said.

Carlos Moreno, an attorney for Pelaez, said his client does not want to take up residence in Russia and would prefer ultimately to live in her native Peru or in Brazil, where she has family. Pelaez hopes to continue her work as a journalist, according to Moreno.

Pelaez told the court that Moscow promised her free housing in Russia and a $2,000 monthly stipend for life, as well as visas for her children to travel to see her. Pelaez and her husband, both naturalized American citizens, were stripped of that citizenship as a part of the plea deal.

Authorities have lost track of an 11th suspect, who was detained in Cyprus, released on bail, and then failed to check in with authorities as he had promised to do.

In Moscow, Russian President Dmitry Medvedev signed a decree Friday pardoning the four Russians imprisoned for alleged contact with Western intelligence agencies, the Kremlin press service said, according to state-run RIA Novosti.

"Three of the Russian prisoners were convicted of treason in the form of espionage on behalf of a foreign power and are serving lengthy prison terms," the Justice Department said in a letter to U.S. District Judge Kimba M. Wood, who handled the case in the United States. "The Russian prisoners have all served a number of years in prison and some are in poor health. The Russian government has agreed to release the Russian prisoners and their family members for resettlement".

It added, "Some of the Russian prisoners worked for the Russian military, and/or for various Russian intelligence agencies. Three of the Russian prisoners have been accused by Russia of contacting Western intelligence agencies while they were working for the Russian (or Soviet) government".

The individuals pardoned by Russia are Alexander Zaporozhsky, Gennady Vasilenko, Sergei Skripal, and Igor Sutyagin.

All four appealed to the Russian president to free them after admitting their crimes against the Russian state, press secretary Natalia Timakova said.

But in Washington, State Department spokesman Mark Toner denied Thursday that Sutyagin had been a spy.

The Russian Ministry of Foreign Affairs said the move was made "in the general context of improving Russian-American relations, and the new dynamic they have been given, in the spirit of basic agreements at the highest level between Moscow and Washington on the strategic character of Russian-American partnership".

Police say they've spotted man accused of weekend shooting

Rothbury, England (CNN) -- Police in northeastern England believe they've spotted Raoul Thomas Moat, wanted for a series of shootings last weekend.

Northumbria police said a man fitting Moat's description has been located in the river bank area in the vicinity of Rothbury. There is an "ongoing operation" in the area and police are "negotiating," but no arrests had been made, they said.

A Rothbury resident named Ryan Phillips said he was walking his dog along the river bank when a man wearing a cap was seized by policemen. One policeman held a gun to the man's head, said Philips.

Resident Carolynn Crawford said she was trying to get to a wedding reception on the other side of the river. Guests couldn't get there because of the ongoing police operation, she said.

On the perimiter of the standoff, there was a man in tears among the witnesses gathered. He said his wife was stranded in the area cordoned off by the police.

Moat has been missing since Saturday, July 3. That's when he allegedly shot and wounded his former girlfriend and killed her new partner. Moat also allegedly shot and wounded a police officer on patrol on Sunday.

Rothbury has been in a state of "lockdown" this week, amid suspicion the 37-year-old Moat is hiding in the area. Armed police were at checkpoints on roads in and out of Rothbury and stationed on street corners. Residents were warned to stay indoors, and police said Moat was "armed and dangerous".

3 Chinese firms in top 10 of Fortune 500

A total of 54 Chinese companies are in the Fortune Global 500 companies list by revenue, with three of them in the top 10, chinanews.com.cn reported, citing the newest ranking issued on Thursday.

The three Chinese companies, namely Sinopec, State Grid and China National Petroleum, ranked 7th, 8th and 10th, respectively.

China's private firm Huawei Technologies entered the list for the first time, ranking 397th with $21.8 billion in revenue.

Wal-Mart regained the No 1 spot, with revenue of $408.2 billion, leaving behind oil companies Royal Dutch Shell and Exxon Mobil.

The oil-spilled BP and recall-slapped Toyota didn't seem to be affected by their business troubles, ranking 4th and 5th, respectively.

Arizona immigration law unlikely to survive federal lawsuit

Legal experts cite the longstanding principle that the federal government has exclusive control over immigration

By David G. Savage, Tribune Washington Bureau

Reporting from Washington — 

Arizona's law giving local police immigration enforcement powers is likely to be struck down, most legal experts predict, now that the Obama administration has gone to court asserting that it conflicts with federal law.

They cite the longstanding principle that the federal government has exclusive control over immigration and that "no state can add or take away" from the policy set in Washington.

However, they caution that one large uncertainty is that the current Supreme Court has not ruled directly on such a state-federal clash over immigration.

Traditionally, the federal government's view carries extra weight in disputes over immigration.

"It's one thing for MALDEF [Mexican American Legal Defense and Educational Fund] or the ACLU to say this [Arizona law] interferes with federal policy. It is quite a different thing when the federal government goes to court and says it," said Jack Chin, a University of Arizona law professor. "The clear rule has been that states do not have the power to regulate immigration".

Arizona's leaders have said their law does not conflict with federal immigration policy. However, the Justice Department argued that the state exceeded its authority by making it a state crime for an illegal immigrant to apply for a job or to be caught without immigration papers. Such "unlawful presence" is a civil violation, not a federal crime, and thus the state cannot make this immigration violation into a crime, the department contended.

The administration also asserted that the federal policy is to target "dangerous aliens" such as violent criminals, fugitives and gang members, rather than to arrest and deport the millions of illegal immigrants living in this country.

"There is a tension between the federal policy and the state of Arizona," said Washington lawyer Paul Virtue, former general counsel for the Immigration and Naturalization Service, an agency that no longer exists. "The state is setting different priorities and different penalties".

The Constitution authorizes Congress to set a "uniform rule of naturalization" and says the laws of the United States are the "supreme law of the land". The Justice Department cites this basic provision in arguing why the Arizona law should be declared "invalid, null and void".

In one famous case, the Supreme Court in 1941 threw out a Pennsylvania law that required immigrants to carry an "alien identification card." The justices ruled that the state had no such authority.

In recent years, some states and cities have sought to enforce restrictions on illegal immigrants on the basis that the federal government had failed to enforce the existing laws.

Most of those efforts have run aground, however. A federal judge in Los Angeles blocked California's Proposition 187 from taking effect in 1994 on the grounds that it regulated immigration. The state dropped its appeal before the case was decided by an appellate court. Three years ago, a federal judge blocked Hazleton, Pa., from prohibiting illegal immigrants from renting housing.

Some legal experts think the Supreme Court may be ready to reconsider the issue.

"This is an unsettled area of constitutional jurisprudence. The last major pronouncement on the question was against a completely different landscape," said Temple University law professor Peter Spiro. The justices "may be willing to cut [states] some slack in the face of Washington's now persistent failure to deal with immigration reform".

On June 28, the high court announced it will hear a separate Arizona immigration case in the fall. The Arizona Legislature voted to take away the business licenses of employers who continue to knowingly hire illegal workers. To the surprise of many, a federal district court judge and the U.S. 9th Circuit Court of Appeals upheld that law, citing a provision in the 1996 law passed by Congress.

The U.S. Chamber of Commerce appealed and won the backing of the Obama administration. The court then voted to hear the case.

The current court also may view more favorably the Arizona law giving police more arrest authority.

"It wouldn't surprise me that five members of the court would think that the mere enforcement of immigration law does not change immigration law," said John Eastman, dean of the Chapman University School of Law.

Arizona's lawyers say their law, due to take effect July 29, would not conflict with federal law because it authorizes police during a lawful stop to question a person when there is a "reasonable suspicion" he or she is here illegally.

If a judge blocks the measure from taking effect, the state can immediately appeal to the 9th Circuit Court. The state may also seek a quick appeal to the U.S. Supreme Court if that fails.

S.Africa finmin says Q2 growth moderated: paper

JOHANNESBURG (Reuters) - South Africa's growth probably moderated in the second quarter but the recovery is still intact and the economy will grow in 2010 more than the 2.3 percent projected in February, the finance minister said.

"We have seen a gradual improvement in economic conditions. The pace of growth probably moderated somewhat in the second quarter," the Business Day newspaper quoted Pravin Gordhan as saying on Friday.

South Africa's economy grew by 4.6 percent quarter-on- quarter in the first quarter, quickening the pace of a recovery that started in the third quarter of 2009, after the country's first recession since 1992.

Data has shown manufacturing -- a key contributor to GDP -- was slowing partly on concerns about a slowdown in Europe.

Gordhan said the economy was still on course for a recovery and growth in calendar 2010 would likely be more that the 2.3 percent the Treasury forecast in February.

"The recovery in South Africa has been stronger than expected, and we don't see ourselves making major revisions to the forecast at this point," he said.

The Treasury releases its official growth forecasts twice a year in February and October.

Suicide attack in Pakistan tribal village kills 45

At least 45 people have been killed in a suicide bombing in a Pakistani tribal village on the border with Afghanistan, officials said.

At least 90 people were wounded in the explosion in Yakaghund village in the Mohmand tribal region.

The bomber came on a motorbike and blew himself up near the gate of the local administrator's office, witnesses said.

Mohmand is part of Pakistan's lawless tribal belt where Taliban and al-Qaeda are believed to be strong.

The explosion hit a commercial area, destroying vehicles and shops and burying a number of people under the rubble.

The blast damaged the wall of a nearby prison, allowing some prisoners to escape.

Witnesses said a large number of people were waiting outside the administrator's office when the explosion took place.

"It appeared as though the bike lost its balance and was about to fall, and just then there was a huge explosion," a soldier who was on duty at the office said.

Security forces have cordoned off the area and rescue teams are working at the site of the blast.

More than 40 seriously wounded people have been taken to hospitals in Peshawar city while more lightly injured people were treated in a local hospital.

Witnesses said the dead and injured included women and children.

'Militancy spillover'

The Mohmand tribal region borders Afghanistan's Kunar province. To the north, it borders Pakistan's Bajaur tribal region.

Over the last three years, Mohmand has witnessed a spillover of militancy from Bajaur.

Local militant groups have emerged to challenge Pakistani authority in the region, the BBC's M Ilyas Khan in Islamabad says.

The military has been largely able to restore its control over all the main towns and countryside in Mohmand and in September last year the commander of local forces in Mohmand said 80% of the area had been cleared of militants.

But the military have apparently not been able to crush them conclusively, our correspondent adds.

There have been frequent militant attacks on security check-points and military convoys in the area since then.

Last month, militants launched a major assault on a border post in Mohmand, forcing many soldiers to flee into Afghanistan.

Most of them were later handed over by Afghan authorities to Pakistan but nearly a dozen soldiers are still missing, believed to have been captured by the Taliban.

In subsequent weeks, military jets have carried out bombings of suspected militant hideouts in the region.

US and Russian 'spy-swap planes' land in Vienna

Two planes said to be taking part in an exchange of spies between Russia and the US have landed in Austria's capital, Vienna.

The 10 Russian agents were earlier deported from the US after a court hearing at which they admitted spying for a foreign country.

Russian President Dmitry Medvedev pardoned four people convicted of espionage in Russia.

They reportedly submitted a plea for pardon admitting their guilt.

Reports said that a Russian emergencies ministry plane had landed at Vienna airport at about the same time as the Vision Airlines jet from New York.

Television pictures showed the two aircraft parked side-by-side on the runway.

The BBC's Bethany Bell in Vienna says there is no official word on how the swap will take place, but adds that in the past third parties have been used to help with such exchanges.

A senior Russian official was quoted by Agence France-Presse news agency as saying the Russian agents were expected to arrive back in their homeland on Friday

The lawyer for Igor Sutyagin, one of those released by Russia, has confirmed that his client has left Moscow, Austrian media say.

'Conspiracy'

The 10 Russian agents earlier pleaded guilty in New York to "conspiracy to act as an unregistered agent of a foreign country". More serious money laundering charges against them were dropped.

Their New York court appearance was the first time they had all appeared in public together since being arrested last month.

Prosecutors said the accused had posed as ordinary citizens, some living together as couples for years, and were ordered by Russia's External Intelligence Service (SVR) to infiltrate policy-making circles and collect information.

BBC Washington correspondent Kevin Connolly says there is broad agreement in the US that the agents are being deported swiftly because neither government wants this to damage attempts to reset their often prickly relationship.

Court documents revealed the real names of five of the Russians involved:

• "Richard Murphy" and "Cynthia Murphy" admitted they were Russian citizens named Vladimir Guryev and Lydia Guryev
• "Donald Howard Heathfield" and "Tracey Lee Ann Foley" admitted they were Russian citizens named Andrey Bezrukov and Elena Vavilova
• "Juan Lazaro" admitted that he was a Russian citizen named Mikhail Vasenkov

"Michael Zottoli" and "Patricia Mills" had admitted earlier they were Russian citizens named Mikhail Kutsik and Natalia Pereverzeva, Anna Chapman and Mikhail Semenko had apparently operated in the US under their own names, while Vicky Pelaez was born in Peru.

An 11th suspect known as "Christopher Metsos" went missing after being released on bail in Cyprus, where he had been arrested.

The Kremlin named the four released in Russia as:

• Igor Sutyagin, a nuclear scientist jailed in 2004 for spying for the CIA
• Sergei Skripal, a Russian military intelligence officer convicted of spying for the UK in 2006
• Alexander Zaporozhsky, a former employee of Russia's foreign intelligence service jailed for espionage in 2003
• Gennadiy Vasilenko, reportedly a former KGB agent

Moved to Moscow

The US state department said after the hearing that there would be "no significant national security benefit" in sentencing the 10 to lengthy jail terms.

"The network of unlawful agents operating inside the United States has been dismantled," spokesman Mark Toner said.

"The United States took advantage of the opportunity presented to secure the release of four individuals serving lengthy prison terms in Russia, several of whom were in poor health".

The lawyer for Anna Chapman played down the importance of the Russian group's espionage in the US.

Robert Baum told Associated Press: "None of the people involved from my understanding provided any information that couldn't be obtained on the internet".

A lawyer for Vicky Pelaez, John Rodriguez, said a Russian official had told his client she would receive $2,000 a month for life and free housing in Moscow, but added she would be allowed to leave Russia if she wanted to. Mr Rodriguez indicated Ms Pelaez would return to Peru.

The Russian foreign ministry issued a statement saying that the exchange by Russia's Foreign Intelligence Service and the US Central Intelligence Agency was being conducted in the context of "overall improvement of the US-Russian ties and giving them new dynamics".

One of the Russian prisoners pardoned by Moscow, nuclear specialist Igor Sutyagin, was earlier transferred to Moscow from a prison near the Arctic Circle.

He reportedly told his family in Moscow that he would be flown to Vienna and released as part of a deal between the US and Russian governments.

Crowds storm streets after verdict in killing of unarmed black man

Oakland, California (CNN) -- Hundreds stormed the streets of downtown Oakland on Thursday night after a verdict in the trial of a white former police officer who fatally shot an unarmed black man.

Johannes Mehserle was found guilty of involuntary manslaughter Thursday, a conviction that usually carries a maximum four-year sentence.

But some in Oakland expected a tougher penalty for the former police officer, and took to the streets in protest.

Crowds broke the glass of a Foot Locker and other stores. Others threw sneakers out of the store as police wearing gas masks stormed the area.

Oakland Police Chief Anthony Batts said there were 50 arrests and he expected the number to double by the end of the night.

At the high point of the protests about 8 p.m. (11 p.m. ET), there were an estimated 800 people in the streets, Batts said.

By 10:30 p.m, there were about 75 left, Batts said.

The protests were contained to the downtown area, police said.

Oakland Mayor Ron Dellums downplayed the demonstrations.

"People were preparing for everything to explode, but I am extremely happy that so far it has not, and I hope that it doesn't," Dellums said. "We're not going to tear our own community apart, because we've got issues that we've got to deal with".

Oakland police had prepared for protests and ways of quelling the demonstrations days before the verdict.

Mehserle could have been found not guilty, guilty of second-degree murder, guilty of voluntary manslaughter -- or guilty of involuntary manslaughter -- as the jury decided.

Mehserle, a Bay Area Rapid Transit police officer at the time of the incident, was accused of shooting 22-year-old Oscar Grant on an Oakland train platform on January 1, 2009.

The trial was moved from Alameda County to Los Angeles because of pre-trial publicity.

Mehserle, wearing a gray suit, blue shirt and red tie, showed no emotion during the reading of the verdict. The former officer did not saying anything to Superior Court Judge Robert Perry or attorneys. About a dozen Los Angeles County deputies escorted the handcuffed defendant out of the courtroom after the verdict was announced.

Outside the courtroom, Grant family members expressed outrage at the verdict.

"My son was murdered. He was murdered. He was murdered. My son was murdered," said Grant's mother, Wanda Johnson. "The system has let us down, but God will never ever let us down".

Johnson and other speakers said African-Americans have been the victims of police abuse and a biased judicial system. She said Mehserle wasn't found accountable.

"We couldn't get even six hours of deliberations," said Johnson, who accused jurors of being unfair.

Mehserle, who was on duty when the shooting occurred, said at the trial that he intended to draw and fire his Taser rather than his gun, CNN affiliate KTVU reported.

Sentencing is set for August 6. Involuntary manslaughter carries a maximum sentence of up to four years in prison under California law. But the judge could add an "enhancement" that could provide a longer sentence because a firearm was used.

Members of the jury, which included no African-Americans, said they were unanimous in their decision. Their finding indicates that Mehserle was criminally negligent.

The shooting was captured on a bystander's cell-phone video camera. The video was widely circulated on the Internet and on news broadcasts, and it spurred several protests in and around Oakland.

Bay Area Rapid Transit police were called to Oakland's Fruitvale station on January 1, 2009, after passengers complained about fights on a train. Officers pulled several men, including Grant, off the train when it arrived at Fruitvale.

The video showed Mehserle pulling his gun and fatally shooting Grant in the back as another officer knelt on the unarmed man.

Mehserle resigned his position a few days after the incident and was later arrested in Nevada.