Daniloff Case Endangers Summit, Reagan Aides Say : Washington and Kremlin Aides Clash Over Charges

On the opening day of an East-West “town meeting” in this Baltic resort, a senior U.S. official and a Soviet deputy foreign minister exchanged heated words Monday over the arrest on spy charges of American journalist Nicholas Daniloff.

“A shocking event has cast a deep shadow over U.S.-Soviet relations and cannot help but have an impact on our deliberations,” Jack F. Matlock Jr., the senior Soviet affairs specialist on the National Security Council staff, said in an opening speech to 2,200 people gathered in a huge concert hall. The audience included 270 Americans.

“Nick Daniloff’s arrest seems to us nothing other than the seizure of a hostage,” he said.

Deputy Foreign Minister Vladimir V. Petrovsky, red-faced and angry, replied that “Americans know very well” why Daniloff was arrested. “Let’s not introduce propaganda into this conference. This is not a show,” he said to loud applause.

The meeting, in the Soviet republic of Latvia, was almost canceled after the arrest of Daniloff, Moscow correspondent for U.S. News & World Report on Aug. 30 on spy charges. The magazine, U.S. officials and Daniloff have said the charges were trumped up.

But the sponsor, the Chautauqua Institute of Jamestown, N.Y., agreed to go ahead after Daniloff and Gennady F. Zakharov, accused Soviet spy arrested in New York, were released Friday to their respective embassies while diplomats worked on a solution.

Matlock was interrupted by laughter from the Soviet audience when he added, “We cannot and will not equate a professional spy caught red-handed with an innocent American journalist.”

Petrovsky countered by suggesting the Americans were using the Daniloff case to sabotage Soviet efforts at arms control. Secretary of State George P. Shultz has promised to bring up the case at his pre-summit preparatory meeting Friday with Soviet Foreign Minister Eduard A. Shevardnadze if the situation is not resolved.

“This is a bad attempt in bad conscience to include the Daniloff case in Soviet-American relations,” Petrovsky said, reiterating the Soviet stance since Daniloff’s arrest.

“Someone, somewhere is simply against the achievement of mutual cooperation and is against our attempts to achieve disarmament,” he said.

Free-Wheeling Exchange

There was a free-wheeling exchange during a question-and-answer session with Soviets and Americans in the audience asking about human rights, Jewish issues, arms control and propaganda.

One Soviet woman objected to the Voice of America broadcasts and another asked why the United States took so long to open a Western front against the Germans in World War II.

An American woman said she lost her family in a concentration camp and talked about the “cultural genocide” of the Jewish people in the Soviet Union.

Jurmala, a health resort nestled in a towering pine forest on the sea, is about 12 miles from the Latvian capital of Riga.