There may be a dozen dozens of reasons why Putin kept supporting Iraq and let Russian secret services spy for Saddam. Stupidity is out of question. His ignorance of the goings-on may be one. He was once a relatively low-level KGB semi-spy, and later a relatively high-level executive in the mayoral office of Russia’s second-largest city. No reason why he should be privy to all the intricacies of Russia’s spying system.
My preferred hypothesis is different. You can’t stop secret agencies from doing what they’re doing: like a huge grinding wheel, it keeps spinning long after the initial impetus. It’s a shady, self-governing black box teeming with action. Occasionally, when there is demand for some type of public revelation, someone provides an “insight” that purports to explain what really has been going on in these somber enclaves — an insight, naturally, tailored to meet the demand for the right kinds of insights. A snapshot of a Brownian motion is presented as an objective and meaningful portrayal of “reality”.
Anyway, there is so much going on behind the curtain, and so many secret exchanges between the major players — can it be otherwise? — that some minor leak is not going to have any difference, except for the clueless blogosphere.
As for Putin, well, it was hard for him to express optimism for the Anglo-Saxon cause with 75% of his electorate wishing for the Allies’ defeat. He nonetheless went as far as to assert, on Russian TV, that a military defeat of the US would not be in Russia’s economic interest. [His trademark stuff, as it turned out later.]