The man who produced such films as Once Upon a Time in America, Pretty Woman, JFK, Natural Born Killers, Alvin and the Chipmunks: The Squeakquel, and 105 others was an Israeli spy, tasked with stealing American nuclear technology, according to a new biography vetted by the producer.
The story fits, given that Arnon Milchan owned Milco International, Inc., the Southern California company whose CEO, Richard Kelly Smyth, fled the country in 1985 after he was arrested by the FBI for selling nuclear bomb triggers to an Israeli company, Heli Trading Co., which was also owned by Milchan.
Also in 1985, “The Year of the Spy” [FBI link], another, more famous Israeli spy was unearthed, Jonathan Pollard, an intelligence analyst at the Navy’s Anti-Terrorist Alert Center in Maryland. Pollard remains in prison despite continuing Israeli pleas for a pardon, as in a letter sent to the White House in January by Prime Minister Benjamin Netanyahu.
Smyth was finally arrested in Spain 16 years later and extradited to the United States, where he pled guilty, was sentenced to prison, only to be allowed to walk free on immediate parole, as David Rosenzweig reported for the of the Los Angeles Times in 2002:
A Southern California engineer who fled the country in 1985 after being indicted on charges of selling Israel electronic devices that can be used to fire nuclear weapons was sentenced Monday to 40 months in federal prison.
Richard Kelly Smyth, now 72 and in frail health, was discovered living in southern Spain last year. He was arrested by local police and extradited to the United States.
He pleaded guilty in December to violating the U.S. Arms Export Control Act and making a false statement about the contents of one shipment of the devices, which are known as krytrons and have a variety of applications, from triggering nuclear warheads to operating photocopying machines.
Despite the sentence, federal Judge Pamela A. Rymer ruled that Smyth could immediately apply to be released on parole. She also fined him $20,000.
Israeli authorities denied having acquired the 2-inch-long krytrons for their nuclear weapons arsenal. After Smyth’s indictment, they returned the remaining devices to U.S. authorities.
Yossi Melman reports for Haaretz on the revelations of Confidential: The Life of Secret Agent Turned Hollywood Tycoon Arnon Milchan by Meir Doron and Joseph Gelman :
One of the major sources for the book was Israeli President Shimon Peres, a close friend of Milchan.
“I am the one who recruited him,” Peres is quoted as saying.
This occurred in the 1960′s, when Peres was Deputy Minister of Defense. The relationship continued in the 1970′s, when Peres became Minister of Defense. He recruited Milchan as an agent for Lakam, an acronym for ‘Science Liaison Bureau.’ Lakam is the name of a secret unit in the defense ministry that was tasked with purchasing equipment, namely technological parts and materials for Israel’s alleged nuclear program.
Since its founding in the mid-1950′s, the agency was headed by Benjamin Blumberg. Blumberg was fired in 1978 by Defense Minister Ezer Weizman following the Likud’s party rise to power. Weizman claimed that Lakam was involved in illegal money transfers to different bodies, including the Labor Party.
Blumberg was Milchan’s friend, and used him (as well as other Israeli businessmen) to set up straw companies around the world, and to open secret bank accounts for financing the nuclear plant in Dimona and other Israeli security industries.
The basis for Milchan’s secret actions was the family firm Milchan Brothers, which represented foreign chemical companies in Israel since before independence.
According to the book, right after the “switches” fiasco Milchan called his friend Peres, then prime minister, and asked for his help in dealing with the Ronald Reagan administration. Milchan is quoted in the book as saying he never received money for his services, and that everything he did was for the state of Israel.