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Russia's Federal Security Service (FSB) arrested US diplomat Ryan Fogle on May 14, who was allegedly caught red handed trying to recruit a Russian Interior Ministry official to spy for the CIA.

The story is all a bit strange and smacks of either a put-up job by the Kremlin or amateurish incompetence on the part of Fogle. Either way, the Kremlin made sure the story made a splash and was well covered by the media, because irrespective of the truth of the charges, the arrest fits neatly with the line that President Vladimir Putin is increasingly pandering these days: Russia is surrounded by enemies.

More pertinently, this story is a boon for the government, which is in the midst of a controversial current crackdown on non-governmental organisations. A new law demands that NGOs register as "foreign agents" if they have received money from foreign sources, with the implication that they are hives of spies trying to undermine the Russia's sovereignty.

The FSB swooped on Fogle, reported to be the third political secretary at the US embassy in Moscow, as he tried met with a Russian intelligence official who dealt with the North Caucasus region.

So far so good, but then it starts to get weird. Fogle purportedly turned up to the meeting in a wig (and had a spare one in his bag) and carrying what could be described as a Boy's Own Spy-O-Matix espionage kit, which also contained a map of Moscow, a telephone, about EUR100,000 in cash, various handheld devises - and a compass (can't the CIA afford smart phones with GPS?).

However, the strangest item said to have been found on his person was a "how-to-be-a-spy letter" that reads more like a phishing email from a "former assistant to deposed African president" that wants to send you $25m in cash.

"We are ready to offer you $100,000 to discuss your experience, expertise and cooperation. The reward may be much greater if you are willing to answer specific questions in addition to that we can offer up to $1 million a year for long-term cooperation, with extra bonuses if we receive some helpful information," reads the letter.

The letter then goes on to describe how the would-be spook has to set up an anonymous gmail account and send an email to unbacggdA@gmail.com in exactly one week and then wait for orders. The letter was signed "your friends."

There are several problems with this letter. First, the letter offers $100,000 as payment for a conversation, whereas Fogle was carrying EUR100,000 ($129,000) in cash. Second, these terms seems to be extremely generous if compared with the money received in other spy cases.

Alexander Kondaurov, a former general in the KGB's fifth directorate, told a Moscow radio station that the sums involved were unrealistic, reports the FT. "A million dollars is way over the top. That must be some super information. For a million you could recruit someone in the leadership of the FSB."

But the most glaring oddity is the fact of the letter itself. It doesn't say anything that couldn't be said verbally (and more eloquently) in a few minutes. The only part of the letter that needs writing down is the CIA email address. But by writing out their formal "job offer", Fogle has created a damning piece of unnecessary evidence that can, and has been, used for massive propaganda effect. Let's just say this doesn't seem like very good tradecraft.

"It's very unlikely that a embassy official was recruiting spies for the CIA," a diplomatic source tells bne. "We are all too closely watched. We all assume that our apartments are bugged and that are phones are tapped and traced. If Fogle was carrying a mobile phone with a charged battery in it, then you have to assume that not only would the FSB know exactly where he was at all times, but they could use the phone to listen to him through it, even if it is switched off. It's too easy to send a real spy to Moscow with a real cover story if you want to recruit new agents. Why take the risk of using embassy staff?"

Poor form

While this whole story appears fishy, there is a president for unbelievable incompetence when it comes to spying on the Russians.

In January 2006, a British diplomat (again a third secretary, the lowest diplomatic grade) was caught on film trying to extract information from a fake rock in a flowerbed in central Moscow that contained high-tech transmitting equipment that was used as a "dead letter box" by spies.

That spy was ejected and Fogle has also already been made persona non grata and has to leave Russia within 24 hours.

Putin made a lot of hay out of the rock fiasco. When asked if he intended to expel the British diplomat, Putin at first wryly said: "With spies of this caliber I think it is better to leave them here."

However, there is a serious subtext to Fogle's case. At the time of the arrest of the British spy, the FSB immediately linked the case to the funding of NGOs. Putin explicitly linked spying to NGOs when adopting the controvertial NGO law earlier last year that forces any organization that accepts foreign donations (nearly all of them) to register as a "foreign agent" with all the derogatory implications that carries.

"We have seen attempts by the secret services to make use of NGOs. NGOs have been financed through secret service channels. No-one can deny that this money stinks," said Putin at the time of the passage of the law. "This law has been adopted to stop foreign powers interfering in the internal affairs of the Russian Federation."

It seems clear that the arrest of Fogle, irrespective of the facts of the case, is being used by the Kremlin to bolster this argument. The coverage is aimed at the domestic audience and is designed to defuse any criticism of the crackdown on the NGO law.

And the media coverage was well orchestrated. RT, the Kremlin-backed English-language broadcaster, had footage of the arrest almost as soon as the story broke on Tuesday afternoon and quickly followed up with footage of Fogle looking dour under arrest in the FSB offices. The same tape was also posted on YouTube. There were also pictures of the letter and Fogle's spy kit quickly and widely available. In short, everything you need to do a really great spy story, which of course is front page news today.

There was an added bonus, as the US Ambassador Mike McFaul was due to give a live Twitter Q&A Tuesday afternoon almost exactly the same time as the story broke, which was cancelled as McFaul was called into the Russian Foreign Ministry to explain himself.

The US embassy is now in a difficult position, as even if Fogle was not a spy it will be difficult to deny and even if they do no one will believe them. So far the US embassy has declined to comment.

A spokesman for the US state department said: "An officer of the US embassy was briefly detained and released." He declined to provide further information about the individual or the events.