From Dan Bilefsky, the New York Times:  It could be the plot of a Cold War thriller: a Russian spy working undercover as a prison psychologist seduces an attractive female army major, dubbed the Czech Mata Hari, who passes on state secrets from three senior generals. The spy flees the country. The generals resign in disgrace.

But in what some here have called the worst espionage scandal in the Czech Republic since 1989, the Rakhardzho affair — named for Robert Rakhardzho, a wily Russian spy — appears to contain elements of both fact and fiction. Distinguishing the two is difficult, but the tale includes a subplot involving one of the largest nuclear power deals in Czech history, an intricate web of deceit and a cast of characters that has reached the highest levels of the army and government. …

The scandal, which began to surface last summer, is still reverberating in a country where the memory of 40 years of communist rule overseen by the Soviet Union remains strong. Fears are intensifying that Russia, under Prime Minister Vladimir V. Putin, is seeking to re-establish its influence in its former satellites, using its vast energy resources — and a network of Russian spies masquerading as diplomats and businessmen — to dominate the region. …

Fears about shadowy Russian influence have intensified in recent weeks with ferocious jockeying over a $20 billion project to build several nuclear reactors at Temelin, in the south of the country, that has pitted a consortium led by a subsidiary of Rosatom, the Russian state nuclear company, against separate bids by Westinghouse, which is owned by Toshiba, and Areva of France.

The government said in October that the winner would be chosen in 2013. State security officials despair that Russia will do whatever it takes to emerge on top of what has become a highly symbolic showdown between pro-Russian and pro-Western forces in the country.

That has set off alarms among the intelligence community that Prague — with its large Russian-speaking community, Slavic culture, and Russian-linked energy industries — is becoming a hotbed of Russian espionage not seen since the Cold War.  (graphic: en.academic.ru)