U.S. to Root Out and Punish Spies, Reagan Says

President Reagan, serving notice that his Administration will continue to root out spies and punish them severely, reasserted Friday his refusal to “tolerate the imprisonment of innocent American citizens in retaliation for protecting ourselves from espionage.”

“Those around the world who would steal our secrets and technology to subvert our values and institutions and to violate the privacy of our communications must realize this fact: The American people will no longer tolerate this conduct,” Reagan told an audience of about 10,000 at a dedication of two new National Security Agency buildings just outside Washington.

His comments apparently referred to the case of Nicholas Daniloff, the U.S. News & World Report correspondent accused of spying against the Soviet Union. He was apprehended a week after Gennady F. Zakharov, a Soviet scientist employed at the United Nations, was arrested for espionage in New York. Efforts to work out a solution that will ensure Daniloff’s freedom have been complicated by Soviet protests against a U.S. order expelling 25 employees from Moscow’s U.N. Mission; the Administration has branded all 25 spies.

The President has resisted Soviet efforts to swap Daniloff for Zakharov, saying Daniloff is a hostage while Zakharov is a spy.

Reagan delivered the brief speech during a stopover on a helicopter trip from the White House to the presidential retreat at Camp David, Md. The buildings being dedicated at the ceremony where he spoke cost $130 million and will add 1.1 million square feet to the available work space at the National Security Agency.

Reagan’s remarks followed a statement of determination to act to prevent further loss of official secrets, ending with the oblique reference to the Daniloff case.

“Already, we have taken steps to demonstrate that we will not allow our adversaries to abuse the great freedoms of this country to our detriment. . . . We will root out spies, we will punish them severely. . . . Nor will we tolerate the imprisonment of innocent American citizens in retaliation for protecting ourselves from espionage,” the President said.

Referring indirectly to NSA’s super-secret mission--intercepting and analyzing foreign coded messages, protecting the security of U.S. communications and setting computer security standards for the government--Reagan reminded the many NSA employees in the audience that they will get little public credit for their work but emphasized that they hold secrets in trust for the nation.

In an apparent warning to officials who leak classified materials, Reagan added: “There can be no excuse for breaking that trust. Let us remember that those who would take it on themselves to declassify vital information endanger all our lives, our freedom and our way of life.”