Just days before he is to travel to Moscow for talks on arms control and other issues, U.S. Secretary of State George Shultz states that he is "damned angry" about possible Soviet spy activity in the American embassy in the Soviet Union. Soviet officials indignantly replied that the espionage charges were "dirty fabrications."
Secretary Shultz was scheduled to travel to Moscow for talks on a number of matters, but the foremost issue was the reduction of medium-range nuclear missiles in Europe. President Ronald Reagan and Soviet leader Mikhail Gorbachev had discussed arms reduction during their summit in Iceland in October 1986, but talks had ended on an acrimonious note. Gorbachev linked progress on the reduction of the missiles to U.S. abandonment of the proposed Strategic Defense Initiative (the so-called "Star Wars" antimissile program). A new summit was scheduled for December 1987, and Shultz's visit was in preparation for that event. However, charges of Soviet espionage in the U.S. embassy in Moscow threatened to derail any discussions. In particular, U.S. officials charged that since at least the early 1980s, Soviet espionage agents had gained access to the American embassy in Moscow by working through the Marine guards stationed there. In addition, there were allegations that the new U.S. embassy under construction was riddled with Soviet spying equipment. Shultz declared, "They invaded our sovereign territory, and we're damned upset about it."
In the long run, the arms negotiations were not affected by the spying allegations. In December 1987, Reagan and Gorbachev negotiated the Intermediate-Range Nuclear Treaty, which eliminated U.S. and Soviet medium-range nuclear missiles from Europe. In the short run, however, the episode indicated that while relations between the United States and the Soviet Union had improved dramatically in recent years, long-held animosities and suspicions lingered just beneath the surface.