August 1986–October 1986
“The Iceland Cometh”: The Arrest of Daniloff; SDI and the Reykjavik Summit


267. Telegram From the Embassy in the Soviet Union to the Department of State

Source: Department of State, Central Foreign Policy File, Electronic Telegrams, D860663–0226. Limited Official Use; Niact Immediate.


268. Telegram From the Department of State to Secretary of State Shultz

Source: Department of State, Central Foreign Policy File, Electronic Telegrams, D860663–0267. Secret; Immediate; Exdis. Drafted by Purnell; cleared by Parris, by telephone by A. Surena (L), Coffey, Pascoe, and Smith; approved by Simons.


269. Report Prepared in the Central Intelligence Agency

[Source: Central Intelligence Agency, Office of the Director of Central Intelligence, Job 88B00443R: Policy Files (1980–1986), Box 20, DCI Memo Chron (1–30 Sept ‘86). Secret. 2 pages not declassified.]


270. Telegram From the Department of State to Secretary of State Shultz

Source: Department of State, Central Foreign Policy File, Electronic Telegrams, [no film number]. Confidential; Immediate; Nodis. Sent for information to Moscow. Drafted by Parris; cleared by Thomas, Sofaer, S. Coffey, Pascoe, and Boucher; approved by Armacost. Reagan wrote in his September 3 diary entry: “The Soviets are holding American journalist (U.S. News & World Report) charging him with being a spy. It is of course a frame up & the 4th time they’ve done it. Each time we have arrested one of their K.G.B. agents they have done this. The last time before was in ‘78. Each time before they grabbed an American businessman. Then they try to arrange a prisoner exchange.” (Brinkley, ed., The Reagan Diaries, vol. II: November 1985–January 1989, p. 634)


271. Letter From President Reagan to Soviet General Secretary Gorbachev

Source: Reagan Library, Executive Secretariat, NSC Head of State Files, U.S.S.R.: General Secretary Gorbachev (8690616, 8690659). No classification marking. A typed notation in the bottom margin of the letter reads: “Memo for the Record: no original letter sent.” A handwritten note on a September 4 covering memorandum from Matlock to Poindexter, forwarding the letter for Reagan’s signature, reads: “dacom to mil aide to the President at the ranch, to be delivered immediately to the President for signature. Mil Aide should notify us upon signature. Copy to Rod McDaniel.” A handwritten note on a routing slip stated: “Dx’ed to the President last night. He signed copy & sent to State for transmission to Emb. Moscow.” Reagan was at his ranch in California August 29–September 8. (Reagan Library, President’s Daily Diary) On September 4, Reagan wrote in his diary: “Had our ride, but 1st I called Geo. S. re our man Daniloff in the Soviet U. I asked his opinion of my thought that perhaps I should communicate directly with Gorbachev & tell him Daniloff was not working for our gov’t. At about 5 P.M. I signed such a message.” (Brinkley, ed., The Reagan Diaries, vol. II: November 1985–January 1989, p. 634)


272. Note From the Deputy Executive Secretary of the Department of State (Pascoe) to the Under Secretary of State for Political Affairs (Armacost)

Source: Department of State Executive Secretariat, S/S, Top Secret/Secret Sensitive Memorandum, Lot 91D257, Daniloff Detention in the USSR September 1986 (Yogurt). Secret; Sensitive. Although the note is undated, a handwritten notation under Pascoe’s signature reads: “9/5/86 (0730).”


273. Memorandum From Secretary of State Shultz to President Reagan

Source: Reagan Library, Executive Secretariat, NSC Head of State Files, U.S.S.R: General Secretary Gorbachev (8690616, 8690659). Secret. A typewritten notation on another copy of the memorandum reads: “9/6 sent via special S/S–I courier to the WH at 9:00 PM. ABA.” (Department of State, Executive Secretariat, S/S, Top Secret/Secret Sensitive Memorandum, Lot 91D257, Daniloff Detention in the USSR September 1986 (Yogurt))


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

Source: Reagan Library, Stephen Sestanovich Files, Daniloff: 1985–1986. Secret. Sent for information. A copy was sent to Regan.


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

Source: Reagan Library, Tyrus Cobb Files, Country File, USSR 1986 (3); NLR–98–5–23–12–0. Secret; Sensitive. Sent for information. This memorandum is Tab I of a September 8 memorandum from Linhard to Poindexter, forwarding NST information to Reagan. Reagan’s initials are at the top of the memorandum but are struck through by an unknown hand.


276. Telegram From the Department of State to the Embassy in the Soviet Union

Source: Reagan Library, Jack Matlock Files, USSR Subject File, 1981–1986, Daniloff (1). Secret; Immediate; Nodis. Drafted by Parris; cleared by Simons, Ridgway, Pascoe, and Boucher; approved by Shultz.


277. Memorandum From Stephen Sestanovich of the National Security Council Staff to the President’s Assistant for National Security Affairs (Poindexter)

Source: Reagan Library, Stephen Sestanovich Files, Daniloff: 1985–1986. Secret. Sent for information. Copies were sent to Cockell, Matlock, and Major. A stamp in the upper right-hand margin reads: “Natl Sec Advisor has seen.” Poindexter also wrote: “Steve, Good points. Thanks, JP.”


278. Special National Intelligence Estimate

Source: Department of State, Executive Secretariat, S/S Records, Ambassadors Henry F. Cooper and Max Kampelman, Program Files for the Delegation to the Negotiations on Nuclear and Space Arms (S/DEL), Lot 93D592, USSR 1986–1987. Secret; [handling restriction not declassified]. A note on the cover page reads: “Information available as of September 12 was used in the preparation of this estimate, which was approved by the National Foreign Intelligence Board on that date.” In a handwritten note to Reagan, attached to another copy of this SNIE, Poindexter wrote: “Mr. President, Note this was prepared before the Iceland announcement. John.” Reagan initialed this copy of the SNIE. (CIA Electronic Reading Room)


279. Memorandum From Secretary of State Shultz to President Reagan

Source: Department of State, Executive Secretariat, S/S, Top Secret/Secret Sensitive Memorandum, Lot 91D257, Daniloff Detention in the USSR September 1986 (Yogurt). Secret; Sensitive. Drafted by Simons on September 15; cleared by Ridgway. Parris initialed for Ridgway.


280. Letter From Soviet General Secretary Gorbachev to President Reagan

Source: Reagan Library, Executive Secretariat, NSC Head of State Files, U.S.S.R: General Secretary Gorbachev (8690529). No classification marking. Printed from an unofficial translation. The text of the letter, translated from Russian, was provided by the Soviet Embassy. Reagan wrote in the top margin: “The blue ink scratches are mine. RR.” Shevardnadze presented this letter to Reagan during a September 19 meeting in the Oval Office; see Document 283. In his memoir, Gorbachev wrote: “I received a letter from Reagan during my holiday in the Crimea in the summer of 1986 [see Document 254]. It looked to me like an attempt to uphold the pretense of a continuing dialogue, another tactical move in the ‘double game’ played by the Americans. Eduard Shevardnadze telephoned me to say that he had already sent a draft reply for approval, adding that we did not need to give a detailed reply since there were no significant proposals in Reagan’s message. Still, we could not leave it unanswered. On the next day, Anatoly Chernyaev (who had accompanied me to the Crimea) made his daily report and showed me Shevardnadze’s draft reply to President Reagan’s message. It was a short, routine statement, and as I was reading it, I suddenly realized that I was gradually being forced into accepting a logic that was alien to me—a logic that was in open contradiction to our new attitude, to the process we had started in Geneva and—most important—to the hopes of ordinary people. I said that I could not sign such a letter, and told Anatoly about the thoughts that had been haunting me for days. In the end, I decided to take a strong stand, suggesting an immediate summit meeting with President Reagan to unblock the strategic talks in Geneva, which were in danger of becoming an empty rite. A meeting was needed to discuss the situation and to give new impetus to the peace process. It could take place in England or Iceland. I immediately telephoned Shevardnadze, Gromyko, Ryzhkov and Ligachev. They all agreed to my idea. We sent an urgent message to the American President.” (Gorbachev, Memoirs, p. 414)


281. Memorandum From Tyrus Cobb and Robert Linhard of the National Security Council Staff to the President’s Assistant for National Security Affairs (Poindexter)

Source: Reagan Library, Tyrus Cobb Files, Country File, USSR 1986 (4); NLR–98–5–24–8–4. Secret; Sensitive. Sent for action. Cobb initialed for Linhard.


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

Source: Reagan Library, Executive Secretariat, NSC National Security Decision Directives, NSDD 240 [Instructions for NST Round VI]; NLR–751–10–23–12–8. Secret. Sent for action. Drafted by Tobey and Linhard. Reagan initialed the memorandum in the top right-hand margin.


283. Memorandum of Conversation

Source: Reagan Library, George Shultz Papers, Daniloff File (09/20/1986); NLR–775–22–33–2–9. Secret; Sensitive. There is no drafting information. This memorandum of conversation contains the records of three separate meetings on September 19: the meeting between Shultz and Shevardnadze in the Secretary’s office from 9 until 11:45 a.m.; a brief record of Shevardnadze’s meeting with Reagan in the Oval Office from 12:15 until 1 p.m.; and the private meeting between Shultz and Shevardnadze from 5:30 until 6 p.m.


284. Memorandum of Conversation

Source: Reagan Library, George Shultz Papers, 4D, 1986 Soviet Union September. Secret; Sensitive. There is no drafting information. Cleared by Davies and Pascoe. An unknown hand initialed for Pascoe. The meeting took place at the Department of State. For the records of the morning and afternoon meetings of Shultz and Shevardnadze, and the Reagan-Shevardnadze meeting, see Document 283.


285. Memorandum of Conversation

Source: Department of State, Executive Secretariat, S/S Records, Memorandum of Conversations, 1981–1990, Lot 93D188, September 19 & 23, 1986, Shultz/Shevardnadze in Washington (Daniloff case). Secret; Sensitive. Drafted by Zarechnak; cleared by Hill. The meeting took place in the Secretary’s office.


286. Memorandum of Conversation

Source: Reagan Library, George Shultz Papers, 4D, 1986 Soviet Union September. Secret; Sensitive. There is no drafting information. Cleared by Davies and Pascoe. An unknown hand initialed for Pascoe. The meeting took place at the Department of State.


287. Memorandum of Conversation

Source: Reagan Library, George Shultz Papers, 4D, 1986 Soviet Union September. Secret; Sensitive. There is no drafting information. Cleared by Davies and Pascoe. An unknown hand initialed for Pascoe. The meeting took place at the Department of State.


288. Memorandum of Conversation

Source: Department of State, Executive Secretariat, S/S Records, Memorandum of Conversations, 1981–1990, Lot 93D188, September 19 & 23, 1986, Shultz/Shevardnadze at the UN. Secret; Sensitive. The meeting took place in the President’s office at the UN. There is no drafting information Shultz wrote in his memoir: “I saw Shevardnadze on Tuesday. The Soviets wanted either no trial for Zakharov or Daniloff or trials for both. As a sweetener, after both were out, Shevardnadze said, ‘We might give you a present’ of a dissident release. Gorbachev had approved the release of the renowned Soviet physicist Yuri Orlov, who had been prominent on the list I had given Shevardnadze in Washington. On the matter of the Soviet mission staff, Shevardnadze took a tough line. His proposal was constructive, I told him, but unacceptable. Back and forth we went haggling over the terms—at our UN mission and at the Soviet UN mission. Each day a new formula was proposed and knocked down.” (Shultz, Turmoil and Triumph, p. 745)


289. Memorandum of Conversation

Source: Department of State, Executive Secretariat, S/S Records, Memorandum of Conversations, 1981–1990, Lot 93D188, September 19 & 23, 1986, Shultz/Shevardnadze at the UN. Secret; Sensitive. There is no drafting information. The meeting took place in the Soviet UN Mission. Reagan wrote in his personal diary on September 24: “Back to Wash. arrived at W.H. about 8:30. No new progress on Daniloff,” and then on September 25: “Geo. S. had called from N.Y. to counsel with us about Daniloff. He has had (Geo. S. I mean) with Shevardnadze & the deal cooking is Daniloff free—Zakharov free in exchange for Orlov + others if possible. I think we’ll have to settle for Orlov but I recommended only if Orlov comes here as Z. leaves. The Soviets want Z. first & then Orlov about 15 days later. Of course we hold fast that the 25 KGB’s leave the U.N. and go home.” (Brinkley, ed., The Reagan Diaries, vol. II: November 1985–January 1989, p. 642)


290. Notes of a Meeting

Source: Department of State, Executive Secretariat, S/S Records, Top Secret/Secret Sensitive Memorandum, Lot 91D257, Daniloff Detention in the USSR September 1986, Yogurt II. No classification marking. Prepared by Hill. The editor transcribed Hill’s handwritten notes specifically for this volume. An image of the notes is Appendix C. A note in the upper-right corner reads: “9/26 1600.” Shultz evidently dictated the text to Hill at 4 p.m. after returning to his office from the White House. In his memoir, Shultz recalled that on September 26, he “met with President Reagan at the White House in the early afternoon. Regan and Poindexter were present, too. We discussed in excruciating detail the phrasings of what we would accept from the Soviets: how many hours would pass between the release of Daniloff and that of Zakharov, when and how various steps would be publicly announced, and so on. I took care to get everything down in writing and read my notes back to the president. I wanted to be absolutely sure I was operating with clear presidential authority.” (Shultz, Turmoil and Triumph, p. 746) Reagan wrote in his diary on September 26: “After lunch a meeting with Geo. S., Cap W. & Bill Casey plus our W.H. people Don R. John P. etc. It was a sum up of where we stand in negotiations between Geo. & Shevardnadze. The difference between us is their desire to make it look like a trade for Daniloff & their spy Zakharov. We’ll trade Zakharov but for Soviet dissidents. We settled on some bottom line points beyond which we wont budge.” (Brinkley, ed., The Reagan Diaries, vol. II: November 1985–January 1989, pp. 642–643) According to the President’s Daily Diary, Reagan met with Shultz, Weinberger, Regan, and Poindexter from 1:32 to 2:36 p.m. (Reagan Library, President’s Daily Diary)


291. Memorandum of Conversation

Source: Department of State, Executive Secretariat, S/S Records, Memorandum of Conversations, 1981–1990, Lot 93D188, September 19 & 23, 1986, Shultz/Shevardnadze at the UN. Secret; Sensitive. No drafting information appears on the memorandum. The meeting took place in the U.S. Mission to the UN. See Document 290.


292. Memorandum of Conversation

Source: Department of State, Executive Secretariat, S/S Records, Memorandum of Conversations, 1981–1990, Lot 93D188, September 19 & 23, 1986, Shultz/Shevardnadze at the UN. Secret; Sensitive. There is no drafting information. The meeting took place at the Soviet Mission to the UN. In his memoir, Shultz recalled: “I arrived at the Soviet mission in New York at 8:30 P.M. on Sunday and did not leave until well after 11:00. After some very hard dealing, Shevardnadze and I agreed:

“• Day 1: the Soviets permit Daniloff to leave the USSR.

“• Day 2: twenty-four hours after Daniloff’s departure, Zakharov pleads nolo contendere (no contest), a legal equivalent of guilty, and the United States expels him.

“• Day 3: as soon as Zakharov departs, the U.S. announces that Yuri Orlov and his wife will be allowed to leave the Soviet Union by October 7.

“• The Soviets acquiesce in our reduction of the number of personnel at the Soviet mission to the United Nations.

“• On Tuesday, September 30, we announce that Reagan and Gorbachev will meet in Reykjavik on October 10–12, 1986.

Shevardnadze also gave me his commitment to work on getting other dissidents and refuseniks released. I trusted him to do this.” (Shultz, Turmoil and Triumph, p. 745)


293. Memorandum From Secretary of State Shultz to President Reagan

Source: Department of State, Executive Secretariat, S/S Records, Top Secret/Secret Sensitive Memorandum, Lot 91D257, Eggplant III 1986. Secret; Sensitive.


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

Source: Reagan Library, Jack Matlock Files, Chronological File, 1980–1986, Matlock Chron October 1986. Secret; Sensitive. Sent for information. Prepared by Matlock. Copies were sent to Bush and Regan. In an October 2 covering memorandum to Poindexter, Matlock wrote: “You asked me to do a paper on the Soviet attitude toward small meetings, and the pros and cons that derive from the Soviet view. Frankly, I can think of very few cons, since the fact is that small confidential meetings are both the most efficient way to get things done with Soviet interlocutors, and also the most effective way to demonstrate the President’s authority. A Memorandum for the President is attached which explains the Soviet view toward these matters and suggests that the President decide on a ‘small group, strictly confidential’ approach.” Matlock recommended that Poindexter sign the memorandum to Reagan.


295. Paper Prepared by Jack Matlock of the National Security Council Staff

Source: Reagan Library, Alton Keel Files, Subject File, Iceland Planning 10/04/1986–10/06/1986; NLR–281–1–47–2–5. Secret; Sensitive. Copies were sent to Bush and Regan. Although the paper is undated, in an October 4 covering memorandum forwarding the paper to Reagan, Poindexter wrote: “I believe the way the Soviets handled Daniloff’s arrest illustrates some important differences in Soviet and American psychology, and that these are relevant to our tactics in other negotiations with the Soviets. Therefore, I asked Jack Matlock to summarize these points. You may wish to take a look at Jack’s paper, which has some thoughts that will be useful to bear in mind as you prepare for your meeting with Gorbachev in Reykjavik.”


296. Paper Prepared by the Senior Arms Control Group and the Arms Control Support Group

Source: Reagan Library, Sven Kraemer Files, [Oct 1986] Chron File: [No.13–No.17]. Secret; Sage. Handle via Sage Channels Only. In an October 6 covering memorandum to Poindexter, Brooks and Linhard explained: “We had a long combined SACG/ACSG meeting this afternoon. As a result we did some repackaging of Defense and Space and INF options. The Defense and Space changes reflect some agencies’ concern that even if the Soviets move in START we should respond only in START, not in other areas. The INF changes clarify where we might seek agreement in principle. Attached are revised talking points (Tab I) for your use at Tuesday’s NSPG, along with a highlighted copy of the revised SAGE 42 issue paper for your reference (Tab II), both reflecting the SACG/ACSG discussions. We have distributed the revised SAGE 42 to agencies for their principal’s use.”