Arnon Milchan: Hollywood Mega-Producer Admits He Did Secret Projects for Israel — Including its Nuclear Program

Arnon Milchan — one of Hollywood’s top movie producers — is well known as a creative Israeli who thinks out of the box. But only a few people knew that he took part in secret missions on behalf of Israeli intelligence. Shimon Peres, who now is Israel’s president, hired the young Milchan as a secret agent for defense projects. 

His missions included acquiring parts and other materials for the “nuclear potential” that Israel was building. Neither Peres nor Milchan will say precisely what Israel has built — but the CIA and many other authorities feel certain that Israel has a large arsenal of nuclear weapons. This is partially thanks to the energy and creativity of the movie mogul, Milchan.

Arnon Milchan, with Brad Pitt and Angelina Jolie (from thewrap.com)

Arnon Milchan, with Brad Pitt and Angelina Jolie (from thewrap.com)

Because Milchan chose, on an Israeli TV program this week, to confirm that he carried out secret missions for Israel’s defense, the world’s media are now highlighting the story.  Many of the stories refer to a book about Milchan’s double life, Confidential, by Meir Doron and Joseph Gelman.

We might also mention an article at the NBC News website a full ten years ago, when one of Milchan’s American colleagues was arrested. Yet Milchan was never charged with any crime or violation of U.S. export regulations.

Here is an exclusive excerpt of our book — Spies Against Armageddon: Inside Israel’s Secret Wars — about Milchan and his role in helping Israel develop its nuclear capability:

Another pillar supporting the nuclear project … was a young, ambitious Israeli—Arnon Milchan—who, years later, would be one of Hollywood’s wealthiest movie producers.

Born in 1945, Milchan inherited a small chemical and fertilizers business from his father and expanded it in the 1960s and ‘70s by winning licenses to represent such global giants as America’s DuPont. He also brokered deals for defense contractors and was paid sizeable fees.

In the late 1960s, Milchan had a key role in doing the CIA a favor in pre-revolutionary Iran. The Americans were hoping to build a large listening post there.

The Shah was among the regional players extremely impressed by Israel’s swift victory over Nasser and Arab nationalism in 1967. Thus, he was receptive to a request by Milchan and other Israelis to allow the CIA to build its listening post on Iranian soil: a billion-dollar collection of dishes, antennas, and computers to harvest electronic intelligence (elint) from the nearby Soviet Union. As part of the deal, the facility would occasionally help the Shah by turning its “ears” toward Iran’s neighbors—Pakistan and Iraq.

Milchan, who was in his early 20s, also earned commissions from American companies providing the elint equipment.

His “recruiter” for Israel’s nuclear project was Peres, who introduced Milchan to [Binyamin] Blumberg [director of secret scientific projects at an Israeli Defense Ministry unit called Lakam].

Despite a generation gap between the latter two and their different personalities—Milchan was funny and talkative, while Blumberg was quiet and monkish—they struck up a friendship. “The only times I have ever seen Blumberg smile,” said another Lakam operative, “was when he was with Milchan.”

They also got a lot of secret business done. In 1972, guided precisely by Blumberg and Israel’s atomic commission, Milchan was tasked with purchasing blueprints for centrifuges. Israeli scientists wanted to build their own devices for spinning uranium to weapons-grade potency.

That would give Israel another avenue, enriching uranium—and not only the reactor route—for making nuclear arms.

The Dimona project was mostly based around the reactor, which Israeli engineers had made much more powerful since the French initially built it. The reactor turned uranium in fuel rods into more radioactive and volatile plutonium. Plutonium bombs were typically smaller—requiring less than five kilograms of fissile material each, compared with over 25 kilograms for enriched uranium bombs. Plutonium devices were more apt to be miniaturized, to be the warheads on missiles.

So What Did Arnon Milchan Do?

Milchan was instructed to befriend a corrupt scientist at Urenco, a joint British-Dutch-German consortium that produced the centrifuges. With his charm and a lavish offer of $250,000, Milchan was successful.

As agreed, the scientist brought the blueprints to his home for a weekend and left his back door unlocked. Israelis from the Caesarea operations department subtly surrounded the house, and Mossad photographers copied the thousands of documents in a matter of hours. The scientist and his wife returned home, and on Monday he returned the documents to his office without arousing any suspicions.

Based on the drawings, Israel was able to design and build gas centrifuges. They were installed in Dimona and soon started enriching gaseous uranium hexafluoride, to produce fissile material for bombs.

Only two years later, Abdul Qader Khan would steal the very same blueprints. He was a Pakistani nuclear scientist, carrying out research at the Urenco consortium. A.Q. Khan returned home, built centrifuges, plotted the procurement of uranium, and was hailed there as “the father of the Pakistani nuclear bomb.” He is even more notorious as the driving force behind notions of “an Islamic bomb,” and Khan rightly became known as the world’s biggest nuclear proliferator. He sold his knowledge to Iran, Libya, and perhaps other countries in the late 1990s.

Israel, in the meantime, kept upgrading and improving the centrifuges at Dimona to make them more efficient. Yet, the old ones also proved to be of great value. In 2008, they would serve as a test bed for the computer worm invented by a joint Mossad-Aman-CIA operation: the malicious Stuxnet virus planted inside Iran’s computers, which were controlling a Urenco-type centrifuge array. The Iranian machinery would be severely damaged, and that would be a significant setback to an enemy’s program seen as highly threatening.

In appreciation of Milchan’s success in getting Israel its own centrifuges, he was one of the very few Israelis—outside a tight circle of cabinet ministers, selected members of parliament, and senior military personnel—to be honored with a tour of the Dimona facility.

In 1973, Milchan launched a chain of business decisions that would bring Israel sophisticated triggers for nuclear bombs. These were krytrons: a type of high-speed switch, resembling the kind of cathode tubes old radios had, costing only $75 each but requiring a U.S. government license to be exported.

Milchan persuaded an engineer at Rockwell, the American defense contractor, to start a company in California. Milchan promised Richard Smyth that the new firm, Milco, would get plenty of orders. Milchan and his friends in Tel Aviv would see to that. For years, Lakam sent Milco lists—often using codewords for nuclear-related items—and Smyth was earning handsome commissions for shipping the parts to Israel.

In 1985, federal agents raided Milco and charged Smyth with illegally exporting more than 800 krytrons to Israel. Milchan, despite obvious ties to Milco, was not charged; apparently, that was because Peres, his longtime patron, persuaded Reagan Administration officials not to prosecute Milchan.

Milchan told two authors [Meir Doron and Joseph Gelman], writing a book about him, that he had not violated any American laws. He added that he had been “ordered” to cut off all contact with Smyth, who fled to Europe and could never get Milchan or Lakam to return his phone calls. Israel’s defense ministry did send Smyth money for several years.

Smyth, after almost 15 years, was located by U.S. authorities and extradited from Spain. He was sentenced to 40 months in prison, and in 2010— when he was 80—the two authors found him, practically broke, living in a trailer park in California.

Milchan continued to do very well. He produced many hit movies, dividing his time between Los Angeles and Tel Aviv and unceasingly helping Israel with its secret intelligence and defense requirements. He refused to accept any payment from Israel for his assignments on behalf of Lakam, but many of his missions were indirectly rewarding. Peres, Blumberg, and Moshe Dayan introduced Milchan to international leaders and key security officials, and he was able to make highly profitable deals with monarchist Iran, the isolated government of Taiwan, and the doomed apartheid regime of South Africa. He invested in various enterprises in Iran, which he wisely sold about a year before the Shah’s downfall in 1979.

When deals involved products delivered to Israel, Milchan put the commissions into a huge slush fund: millions in cash that Israeli intelligence could use for special assignments. Milchan controlled the checkbook.

Patriots who donated their time and energies to the cause, such as Milchan, helped Israel acquire what it needed to be an undeclared nuclear power.

December 12, 2013

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