Seeking a Way Out

By George J. Church.

He had a three-day growth of beard and was still wearing the rumpled tan trousers he had on when arrested 13 days earlier. But Nicholas Daniloff was < ebullient, witty and still possessed of his reporter's instinct for summarizing a story. As the Cadillac carrying him from Moscow's Lefortovo Prison on Friday night stopped before cheering reporters gathered nearby, Daniloff, 51, popped out, threw his arms into the air and whooped with joy. Nonetheless he quickly observed, "I am not a free man today." Later, as he and his wife Ruth took up temporary residence at the U.S. embassy, Daniloff explained that he must stay in the Moscow area as long as espionage charges against him are pending. Said the U.S. News & World Report correspondent: "I have exchanged one hotel for another, much better hotel."

Just as Daniloff was getting sprung from Lefortovo, U.S. marshals in New York City, where it was early afternoon, escorted Gennadi Zakharov from the Metropolitan Correctional Center to a Brooklyn federal courtroom for a hearing that took all of three minutes. The Soviet U.N. employee stood ramrod- straight and stone-faced as Judge Joseph McLaughlin read the espionage charges against him. Zakharov said only, "Not guilty." The judge then told him that "contingent on the prior or simultaneous release of Nicholas S. Daniloff," he too was being let go in the custody of his ambassador. Other conditions also were nearly identical to those imposed on Daniloff: Zakharov must not travel more than 25 miles from U.N. headquarters in New York, and he must check in by phone with a federal marshal every day. Soviet Ambassador Yuri Dubinin promised in writing to produce Zakharov in court when required; the U.S. similarly guaranteed that Daniloff will show up in a Soviet court if ordered.

The parallel procedures looked like the first steps toward exactly what the Reagan Administration had repeatedly vowed not to arrange: a straight swap of Zakharov for Daniloff. Washington appeared to be conceding that the cases should be treated as equivalent, despite its repeated thunders that Zakharov is a real spy arrested in the act of trying to buy classified documents while Daniloff is the innocent victim of a crude KGB frame-up that began when a Soviet acquaintance thrust a package of documents into his hands in Moscow on Aug. 30.

Some Administration officials were privately bitter that the U.S. seemed to have caved in to Kremlin bullying. But they were overruled by none other than Ronald Reagan, whose compassion in this instance overpowered his visceral anti-Sovietism. Reagan personally approved the arrangement Thursday afternoon (it took nearly 24 hours to nail down) for the simplest of reasons: he had been touched by the plight of Daniloff, and just wanted to get the reporter sprung. Said the President: "We are so relieved and happy that Mr. Daniloff is out of his 8-by-10-ft. cell, which he was sharing with someone we believe was an informant, and that he won't be subjected to four hours of interrogation each day."

In a press conference Saturday in Moscow, Ruth Daniloff seemed to confirm the suspicion that her husband's cellmate was an informer. When Daniloff was about to be released, she said, the Russian "suggested to Nick that he take out some sort of mathematical formula for him." Daniloff declined. Mrs. Daniloff noted that her husband had lost weight -- "His clothes are just hanging on him" -- and that "he is nervously and emotionally exhausted . . . It is sinking in that he is still a hostage." George Shultz put the best face on the arrangement that he could when he told skeptical reporters who packed the White House pressroom on Friday that the deal was only an "interim" step that changed nothing but the location of the two former prisoners. Said Shultz with considerable vehemence: "These two people, Zakharov and Daniloff, are in no way comparable. And we are not going to trade them off against each other." The U.S., Shultz said, still regards Daniloff as a "hostage" and "will continue to make every effort to secure his prompt departure from the Soviet Union and safe return home." That is a tall order: if there is to be no trade, the U.S. would somehow have to persuade the Soviets eventually to let Daniloff go free while Zakharov is brought to trial.

Daniloff's release from Lefortovo seemed to prevent, at least for the moment, further escalation of a crisis that had threatened to reverse the modest gains in U.S.-Soviet relations painfully wrought over the past year or so. There still remains a possibility that Washington will send some signals of displeasure to the Kremlin. For example, U.S. Ambassador Arthur Hartman, now in Washington for consultations, could be kept home for an extended stay. But the air is now clearer, and when Soviet Foreign Minister Eduard Shevardnadze visits Washington for talks with Shultz Friday and Saturday, they may find it possible to discuss their original subject: arrangements for a summit meeting between Ronald Reagan and Mikhail Gorbachev late this year. Though Shultz promised to press for a full release of Daniloff, that subject + no longer seems likely to crowd everything else off the agenda.

Still, Administration officials insisted over and over that the really hard bargaining in the Daniloff case has not even begun. Said one: "Only the chess pieces have been moved." Last week some State Department officials were convinced that there would be no way to get Daniloff released without arranging something that the Soviets could claim was a trade. As an Administration official puts it, however, "there are swaps and there are swaps." One idea now is that the Soviets might let Daniloff go with the understanding that Zakharov would be traded later for someone more suitable: a prominent Soviet dissident, perhaps, or a Soviet citizen convicted of spying for the U.S. That is roughly what happened in 1978, when the Soviets freed U.S. Businessman F. Jay Crawford after he was accused of smuggling; two Soviet U.N. employees who had been imprisoned in the U.S. for espionage were later traded for five Soviet dissidents.

Reading Kremlin motives preoccupied the Administration for the best part of a week. It was obvious, of course, that Moscow wanted to demonstrate to its operatives abroad that it would go to almost any lengths to free those who might be caught, but what else might it be up to? Was Gorbachev seeking an excuse to torpedo the summit? Or was he caving in to hard-liners who believe he allowed Reagan to best him during last November's Geneva summit?

Reagan's advisers eventually came to a different conclusion. The Kremlin, they argued, had simply displayed a knee-jerk reaction -- if a spy is caught, take a hostage -- and monumentally miscalculated the degree of public fury that the seizure of Daniloff would provoke. That reading dictated putting off any retaliatory steps until after the Soviets had been given a way to save face. Says one Administration official: "The bear when cornered is ferocious." Yet the bear can also show a more agreeable side: on Saturday the Soviets announced they were allowing five well-known dissidents to emigrate, a positive gesture on the eve of the Shultz-Shevardnadze meeting. Initially, the Administration tried to play the whole affair in a very low key, saying little while trying to engage Moscow in quiet negotiations. The President said nothing openly until last Monday, when he warned that continued imprisonment of the reporter could seriously damage U.S.-Soviet relations. Four days earlier Reagan, relying as always on his powers of persuasion, had sent Gorbachev a personal letter assuring the Soviet leader that Daniloff was not a spy and asking for his release. Within a few days, negotiations were under way in both Washington and Moscow. Dubinin and other senior Soviet diplomats made at least four unannounced calls at the State Department last week to confer about Daniloff, while in Moscow U.S. Charge d'Affaires Richard Combs pursued contacts at the Soviet Foreign Ministry.

Despite the decision to turn Zakharov loose, the incident has underlined Washington's determination to reduce the Soviets' swollen diplomatic missions to the U.S. and the United Nations. The Soviets have some 320 diplomatic and consular postings in the U.S. and more than 200 employees like Zakharov in their missions to the U.N. The FBI estimates that 35% of these Soviets are intelligence officers. The U.S. has just 130 people in its mission to the U.N., and the Reagan Administration has told Moscow to reduce its U.N. missions to 177 employees by April 1, 1988. At its embassy in Moscow, the U.S. has fewer than 200 Government employees, and they are outnumbered by the 225 Soviet citizens employed in the building.

Another reason for dissatisfaction with the Zakharov/Daniloff arrangement is that it does nothing to dispel the suspicion that U.S. reporters may be spies. In Moscow on Saturday, a Soviet Foreign Ministry spokesman insisted again that Daniloff was a CIA agent who has been spying for years and that proof of this had been furnished to the U.S. Yet in 1977 the CIA adopted a directive forbidding the employment of journalists (or clergymen or academics) as agents or giving journalistic "cover" to real agents. It is still in force. Though no one can say flatly that journalists never act for the CIA, there is no evidence that Daniloff ever did. Moscow, by contrast, regards journalism as an excellent cover; over the years many Soviet "journalists" have been expelled for espionage from countries around the world.

If there have been any exceptions to the CIA directive, they have been extremely rare. Generally, reporters are wary of any contacts with the CIA going beyond the routine exchange of information that occurs when they interview officers in American embassies overseas. Doubtless the Kremlin is aware of all that, and cannot really believe Daniloff was a spy. He was -- and at week's end remained -- a hostage, pure and simple.

With reporting by James O. Jackson/Moscow and Barrett Seaman/Washington