Hollywood Producer Opens Up About Past as Israeli Operative

‘It was like being a 20-something guy whose country decided to let him be James Bond,’ says Arnon Milchan.

Haaretz

Move over, “Argo.” On Monday night, the real-life story of the interaction between the glitter of Hollywood and the intrigue of clandestine international arms deals aired on Israeli television.

After weeks of hype and anticipation, the investigative program “Uvda” broadcast a show telling the story behind the glitzy career of one of the most influential figures in Hollywood: Arnon Milchan, the Israeli producer of such hit movies as “Pretty Woman,” “Fight Club” and “L.A. Confidential.”

Though it wasn’t the first time Milchan’s double life as an arms dealer and Israeli intelligence operative has been reported, it was the first time the Israeli-born Milchan, a multi-billionaire, discussed it openly in front of the cameras, and the first time some of the movie stars and studio executives who know him spoke about it on the record.

The show traced Milchan’s career from the late ’60s and early ’70s, when he was a young and successful businessman in the United States who had a close relationship with Shimon Peres. At the time, Peres was in the midst of creating the Dimona nuclear reactor, and Milchan began helping in the effort to acquire equipment and knowledge for Israel’s nuclear project through the secretive agency Lakam, Israel’s Bureau of Scientific Relations.

“Do you know what it was like to be a 20-something guy whose country decided to let him be James Bond? Wow! The action! That was exciting,” Milchan said. “Uvda” reporter Ilana Dayan described how Milchan would set up bank accounts and companies, all used to acquire material and equipment for the agency, while working for spy masters Rafi Eitan and Benjamin Blumberg. Dayan reported that at the peak of Milchan’s activity, he was operating 30 companies in 17 different countries.

In the 1970s, Milchan brokered deals for hundreds of millions of dollars between Israel and U.S. companies for helicopters, missiles and other equipment, “Uvda” reported. Though records showed that his company made profits off the deals – sometimes as much as 60 percent – Milchan insisted on camera that he never kept the money and that every penny made its way back to Israel.

The show revealed that Milchan convinced a German engineer to take home classified documents from a safe where he worked: plans that detailed how to construct a nuclear facility that Israel desperately needed but that no state would share for any amount of money. Saying the engineer “couldn’t be bought,” Milchan said he persuaded him to leave them on a table and went out to dinner with his wife on the understanding that someone would enter the house and photograph them.

Another revelation is that director Sydney Pollack, who died in 2008, was Milchan’s business partner in many of his activities. The director of “Tootsie” and “Out of Africa,” Milchan said, “was my partner in aerospace manufacturing and airplanes, all kinds of things.” When asked if Pollack knew of and participated in all of Milchan’s activities, Milchan said: “He had to decide what he was willing to do and what he was not willing to do. On a lot of things he said no. On a lot of other things he said yes.”

The acquisition of nuclear triggers for Israel by Milchan’s company Milco was what nearly got him into serious trouble when the FBI discovered that they were shipped to Israel without the proper licensing, which led to the 1985 indictment of aerospace executive Richard Kelly Smyth, who used one of Milchan’s companies to ship triggers to Israel.

Milchan claimed on the show that “I didn’t know Israel ordered the triggers. I didn’t even know what triggers were.”

Robert De Niro, who was making a movie with Milchan at the time, said his friend “told me that he was an Israeli and he of course would do these things for his country – there was something with the little things that trigger a nuclear thing … I remember asking Arnon something about that, being friends. I was curious, not in an accusatory way, I just wanted to know, and he said, ‘Yes, I’m Israeli, that’s my country.’”

After the trigger incident, which was followed by the 1986 arrest of Jonathan Pollard for spying on behalf of Israel, the Bureau of Scientific Relations was shut down.

Milchan also admitted to having used his Hollywood and media connections to help the South African apartheid regime in its attempts to polish its international image, in exchange for helping Israel acquire uranium. Dayan suggested on camera that perhaps his current role as co-producer of the hit movie “12 Years a Slave,” set in the United States before the Civil War, was on some level an attempt to atone for that sin. Milchan nodded and agreed that it very well might be.

When Milchan’s friends and business associates were asked if the rumors of his activities on behalf of Israel’s military had done anything to tarnish his reputation in the entertainment industry, they said no, adding that the success of his films and his personal charm trumped any misgivings. Media mogul Rupert Murdoch told Dayan: “Hollywood is a very Jewish industry. Very pro-Israel. Many would honor him for it. Others might be a bit frightened by it, but that’s all right.”