U.S. Offers Soviets Deal for Daniloff’s Freedom : In Return, Accused Spy for Moscow Would Be Released to Envoy’s Custody Pending N.Y. Trial

The Reagan Administration has proposed that a Soviet physicist being held on espionage charges in New York be temporarily released to the custody of the Soviet ambassador in exchange for the freedom of an American news correspondent being detained in Moscow, a senior Administration official said Wednesday.

“We made the offer,” the official said, adding that no response has been received from the Soviet Union to the proposal, which would still require that the accused Soviet spy stand trial in federal court in New York.

At the same time that it quietly made the offer, however, the Administration sought to apply greater pressure on the Soviet Union, and White House spokesman Larry Speakes warned: “Incidents like this certainly can have an effect on U.S.-Soviet relations. Obviously, this is not good.”

Thus, in diplomatic maneuvers being played both in public and private, it appears that the Administration is trying to give Moscow a way out of the dilemma. But at the same time, in the words of the senior official who disclosed the swap offer, the government was reminding the Kremlin that “the longer it drags out, the more we’re concerned.”

But even as the official discussed the proposed solution of what has become a new irritant in U.S.-Soviet relations, the Justice Department appeared to be balking. A senior department official said in a statement that there will be no talk of releasing the Soviet citizen, Gennady F. Zakharov, until the American, Nicholas Daniloff of U.S. News & World Report, was in the United States.

The arrangement, if accepted by the Soviet Union, would appear to follow the precedent of a 1978 case in which two Soviet citizens arrested in this country were turned over to the Soviet ambassador, pending trial, and a U.S. business executive arrested in the Soviet Union eventually was tried there, given a suspended sentence and allowed to return to the United States.

Neither Speakes, in Santa Barbara, nor State Department spokesman Charles Redman, in Washington, would comment during news briefings on the prospects for an exchange of Daniloff and Zakharov, a Soviet employee of the United Nations.

But Speakes said that the United States “will prosecute the (Zakharov) case in strict conformity with the law”--a solution that would not be barred by the Administration’s proposal.

Zakharov was arrested in New York on Aug. 23, and Daniloff was detained by the KGB, the Soviet secret police, one week later, and accused of engaging in espionage activities. Zakharov does not hold diplomatic immunity and thus is being held for trial, rather than simply being expelled from the United States.

White House Concurrence

Meanwhile, the senior Administration official, speaking on the condition that he not be identified, said that the White House concurred in the decision to hold the Soviet citizen for trial and that representatives of the National Security Council had been involved in decisions about the case before Zakharov was arrested.

The official said that President Reagan, who is on vacation at his ranch northwest of Santa Barbara, was not consulted before the decision to arrest Zakharov was made, but that “he has no problems with it.”

In Washington, Redman confirmed that Soviet Ambassador Yuri V. Dubinin had asked the U.S. District Court in New York to release Zakharov into his custody, but that the court magistrate refused. Redman said that the Soviet request was made soon after Zakharov’s arrest and before Daniloff was arrested in Moscow.

State Department officials cited the 1978 case as a precedent for the release of Zakharov to the Soviet ambassador. In that instance, Francis Jay Crawford, a representative of International Harvester, was arrested in Moscow and accused of currency law violations after two Soviet U.N. employees had been arrested in the United States on suspicion of espionage.

Released to Dobrynin

The United States released the two Soviet defendants into the custody of then-Ambassador Anatoly F. Dobrynin. They were later tried, convicted of espionage and released from prison the next year in an exchange for five Soviet dissidents. Crawford was tried in a Soviet court, given a five-year suspended sentence and released.

The current proposal differs from the 1978 arrangement in that the Administration is insisting on immediate freedom for Daniloff, while Crawford went through the formality of a trial. A senior State Department official said that the Administration wants to avoid any suggestion of a direct swap of Zakharov for Daniloff. But he said that the earlier exchange could serve as a model for solving the issue.

However, John L. Martin, chief of the internal security section of the Justice Department’s criminal division, said in a prepared statement on behalf of the department: “There will be no disposition of the Zakharov case in an atmosphere of coercion or intimidation. Any discussion of releasing Zakharov to the Soviet ambassador won’t even begin until Daniloff is freed and is back in the United States.”

Asked if Martin was strongly knocking down reports that a swap was being offered to the Soviets, another high Justice Department official indicated he was disturbed that such reports were not being attributed to any White House official by name.

“This is our understanding of what the Administration position is,” this official said. “It is certainly a strongly felt position here” at the Justice Department.

Times staff writers Robert L. Jackson and Doyle McManus, in Washington, contributed to this story.