Foreign Relations of the United States, 1981–1988, Volume V, Soviet Union, March 1985–October 1986

274. Memorandum From the President’s Assistant for National Security Affairs (Poindexter) to President Reagan¹

Washington, September 8, 1986

SUBJECT

• Daniloff Case

As you prepare for your meeting with George Shultz and me, a number of issues seem to me to be crucial.²

Daniloff’s Conduct: George has wanted to collect all the facts with respect to Daniloff’s own past activity so that we can gauge Soviet perceptions of his alleged links with the CIA.³ I agree it is important to understand how the Soviets may view the legalities of the case; but that should not affect our position, which is soundly based on the real facts of the case and on some basic issues of principle. [less than 1 line not declassified] Daniloff’s behavior was that of a scrupulously independent reporter. It’s fruitless to speculate what the Soviets really believe; we can never know conclusively. But we do know that Daniloff is not a U.S. intelligence agent; we do know the Soviets framed him in this instance; and we also know that Soviet laws contain so many traps and such severe restrictions that they arrest people freely for what anywhere else would be permissible activity. This cannot possibly be a mitigating factor excusing Soviet behavior.

Previous “Hostage” Cases and Their Implications: Since 1960, we have arrested five Soviet officials who did not have diplomatic immunity (all worked at the UN Secretariat) in four different incidents. In three of the four incidents, Justice pressed espionage charges, and each time the Soviets responded by arresting an American (or Americans) in Moscow on trumped-up charges. This is the second time the Soviets have arrested a journalist. In 1978 they arrested and briefly detained a Baltimore Sun and a New York Times reporter, after they arrested businessman Crawford. (In response, we expelled two Soviet journalists; they then released our journalists.) The only time an American was not arrested was in 1970, when a KGB officer employed in the UN Secretariat was expelled, in lieu of being charged with espionage, at State’s request.

Thus, Soviet behavior has been consistent over the years. Until this case, our reaction to their hostage-taking has been similarly consistent and predictable, and this pattern probably misled the Soviets into expecting a milder response than they received on this occasion. This history underlines the importance of breaking the precedent now, and making absolutely clear to the Soviets that in this and future cases we will not tolerate the seizure of innocent Americans as hostages to be traded for Soviets guilty of espionage against the United States.

Unfortunately, the relative mildness of our initial response to Daniloff’s seizure may have reinforced Soviet expectations of a generally benign U.S. reaction. Your letters to Gorbachev have set the written record straight; but they must now be backed by specific actions to give them credibility and convince the Soviets that hostage-taking will not achieve their goals, and that it in fact works to their net detriment in this situation.

Asymmetries in U.S./Soviet Positions: There are wide disparities in the permanent U.S. and Soviet presences in each other’s country. You know the figures: 200 U.S. personnel in Moscow and Leningrad versus 320 Soviets in Washington and San Francisco; plus another 284 Soviets at their UN Mission and 310 in the UN Secretariat for which there are no U.S. counterparts in the Soviet Union. Thus, the total is 200 Americans versus 914 Russians, giving the Soviets the basis for a massive espionage establishment on U.S. territory, roughly two-thirds of it diplomatically protected. [4½ lines not declassified]

[4 lines not declassified] In this sense, Zakharov’s activity was unusual, and effective prosecution is essential to make clear to the Soviets that they are not free to use UN Secretariat personnel to commit espionage with impunity. Otherwise, such personnel acquire de facto diplomatic immunity, and the pool from which the Soviets can draw to support their espionage in the U.S. would be significantly expanded. This would dramatically add to the FBI’s already heavy burden of neutralizing Soviet espionage, and could undo a substantial amount of the benefit which will otherwise be achieved by the programmed drawdown of 105 diplomatically protected personnel at the Soviets’ UN Mission.

Journalist vs. Businessman: The fact that the hostage this time is a journalist rather than a businessman has certain interesting implications. Among other things, it is undoubtedly designed to discourage all other Western journalists in the U.S.S.R. from being too enterprising in cultivating sources and searching out information. (Perhaps the Soviets spared the businessmen because they are now seeking to attract more Western trade.) If we fail to punish the Soviet misbehavior toward Daniloff, we potentially jeopardize all U.S. journalists working in Moscow by increasing the likelihood that the Soviets will again resort to this type of behavior whenever it suits their purposes. At the same time, the uproar in the American media at the arrest of a newsman is so intense that we will now have even stronger bipartisan support for a tough response. Indeed, we are likely to run into intense and broad-based criticism if we are seen as too soft.

Costs of Delay: I agree with George that we don’t want to derail other important negotiations with the Soviets or preparations for a summit. Paradoxically, a weaker response by us is really the most dangerous: It lets the crisis drag on until damage to other negotiations becomes inevitable. George is to see Shevardnadze on September 19–20; that meeting is bound to be disrupted or clouded by the Daniloff case if the case isn’t resolved by then. Bringing the matter to a head quickly by a dramatically tough U.S. response may be the only way to avoid a long-term festering crisis. I am convinced that Soviet stonewalling up to now is due in large part to the fact that our verbal protests have lacked credibility. They have contemptuously rejected two personal messages from you. Our lack of concrete action has only led them to conclude you are not entirely serious: With every passing day they are dug in deeper and it will be harder for them to extricate themselves.

The tougher scenario that the NSC proposes in fact offers the best prospect for insulating the case from broader political issues in U.S.-Soviet relations. It directs the brunt of the cost onto the KGB, which originated the incident. It provides forceful measures other than cancelling meetings and toughening our negotiating positions on other issues.⁴

If we do not react with measures which are manifestly proportionate but effective, public and Congressional pressures may well push us into a situation where rational negotiation, and even meetings themselves, will become impossible. We can only manage these pressures by demonstrating that we are moving forcefully and appropriately.

How Far Are We Willing to Go? Can We Sustain Our Course? The tougher option is indeed sustainable if we have the will to stay the course. The measures are carefully limited and discrete and are directed at the source of the problem: the use of Soviet intelligence agents attached to international organizations. There is a simple and basic equity in our position: if the Soviet Union, contrary to its international obligations and basic morality, uses employees of international organizations for espionage, they will be punished. If the Soviet authorities react by compounding the offense by taking innocent Americans hostage, we are obligated to protect our citizens.

I have no doubt there will be strong bipartisan and public support for such a stance; the measures proposed are reasonable, appropriately targeted, and will indeed seem even mild to some, on both sides of the political spectrum. Media support will continue strong so long as our position is seen to be resolute, and aimed at the dual purposes of freeing Daniloff and deterring similar Soviet actions in the future.

The main potential threat to U.S. interests is the possibility of retaliation against U.S. installations in Moscow. This is why an essential part of the demarche is a warning that we are prepared to more-than-match the Soviets if they try to raise the stakes. If the Soviets are convinced that we will indeed bring their Embassy and consular personnel down to parity before counter-retaliating, they are very unlikely to embark on this course. If, however, they do, the consequences for us should be manageable, though admittedly unpleasant. But the Soviets would have to absorb considerably greater and more disruptive cuts.

Is this the way to deal with the Soviets? It is a constant Soviet claim that “you can’t deal with us by threats.” It is true that threats made public can push the Soviets into a corner and make it harder for them to get themselves out. That is why we should make the demarche as quietly and confidentially as possible, and announce the measures only as they are taken. It is important to leave the Soviets a graceful escape route, if feasible—or, at least, a way out which avoids gross humiliation.

At the same time, long experience has shown that the only way to deal with the Soviets is to make clear in advance that the cost to their interests will be high, so they can assess the impact of their actions. When they are convinced that they stand the most to lose, they typically find a way to shift course. Examples abound. They said they would never negotiate on INF if we deployed our missiles in Europe; they found a way out when it was clear that their interests were being damaged. Time and time again, on matters from the trivial to the apocalyptic, they have caved under real pressure, complaining all the time that “this is not the way to deal with us,” while proving precisely the opposite.

Your Credibility: You are now on the record publicly that Daniloff must be released and that there will be no trade.⁵ If we do not do something practical to bring this about, your public credibility—as well as your private credibility with Gorbachev—will be seriously eroded. That could affect your effectiveness in dealings with the Soviets across the board; foster unrealistic Soviet expectations of what might be achievable at the summit, if it occurs; and generally complicate our dealings with the Soviets in a variety of areas.

1. Source: Reagan Library, Stephen Sestanovich Files, Daniloff: 1985–1986. Secret. Sent for information. A copy was sent to Regan.
2. According to the President’s Daily Diary, Reagan returned to the White House from California on September 8. He met with Shultz, Meese, Regan, William Ball, and Poindexter on September 9 from 9:01 until 9:40 a.m. (Reagan Library) No formal record of the conversation has been found. On September 9, Reagan wrote in his personal diary: “A meeting—Geo. S. John P., Don R. & myself re the Daniloff case. We are going to try to get him released to our Ambas. pending trial. We’ll offer the same here with their spy. If its possible we’ll do something of an exchange but only if they’ll release some dissidents like Sakharov etc. Once we have him back I propose we kick a half hundred of their U.N. KGB agents out of the country so there can’t be a repeat of this hostage taking.” (Brinkley, ed., The Reagan Diaries, vol. II: November 1985–January 1989, p. 635)
3. In his memoir, Shultz went into great detail about trying to piece together this information on Daniloff. See Shultz, Turmoil and Triumph, pp. 733–735. In a September 8 note to Shultz, presumably forwarding a memorandum by Sofaer on Daniloff, Armacost wrote: “Abe’s memo to you indicates that there is more to the Daniloff-Agency issue than we had been led to believe. Mort has confirmed the essential facts directly with the Agency. It begins to look as if the Agency has done Daniloff a real disservice [text not declassified].” Sofaer’s September 8 memorandum to Shultz, included in a packet of material prepared for Shultz’s meeting with Reagan, explained: “Daniloff could credibly be convicted of espionage under Soviet law. Daniloff has admitted collecting information, some of which was classified Secret. Other evidence provides a reasonable basis for the Soviets to prove the remaining element—that Daniloff collected information for the U.S., and the CIA in particular. The conduct in which Daniloff engaged would also justify, at least theoretically, the prosecution under U.S. law of a Soviet journalist if he engaged in those activities here.” (Department of State, Executive Secretariat, S/S, Top Secret/Secret Sensitive Memorandum, Lot 91D257, Daniloff Detention in the USSR September 1986 (Yogurt))
4. See also footnote 3, Document 272.
5. Reagan, in his remarks made at a Senate campaign fundraiser in Denver on September 8, stated: “Before I begin my formal remarks today, let me first speak to a subject of great importance: The continuing Soviet detention of an innocent American is an outrage. Whatever the Soviet motive, whether it’s to intimidate enterprising journalists or to trade him for one of their spies that we have caught redhanded, this action violates the standards of civilized international behavior. There will be no trade. Through several channels, we’ve made our position clear. The Soviet Union is aware of how serious the consequences will be for our relations if Nick Daniloff is not set free. I call upon the Soviet authorities to act responsibly and quickly so that our two countries can make progress on the many other issues on our agenda, solving existing problems instead of creating new ones. Otherwise, there will be no way to prevent this incident from becoming a major obstacle in our relations.” (Public Papers: Reagan, 1986, Book II, p. 1147)