Confidential: New biography says Hollywood producer worked as Israeli spy, arms dealer

The Hollywood producer of such films as "Pretty Woman," "Fight Club," and the flick that brought Brangelina together "Mr. & Mrs. Smith," also helped send nuclear trigger devices and other equipment to aid Israel's nuclear program, according to a new biography.

Arnon Milchan, who was born in then-British mandate Palestine in 1944, worked in his family's Israeli chemicals business before starting a Hollywood production company, New Regency Films. In 2008, Milchan formed a joint venture, Shine Pictures, with Elisabeth Murdoch, daughter of the currently embattled media tycoon Rupert Murdoch. In 2009, Forbes ranked Milchan #334 in its list of the world's billionaires.

But for much of his life, Milchan has had a second clandestine career as an arms dealer assisting Israel's intelligence services, Yossi Melman reports today in the Israeli daily Haaretz:

Milchan was a longtime weapons dealer and Israeli intelligence agent who purchased equipment for the alleged Israeli nuclear program, a new biography --["Confidential: The Life of Secret Agent Turned Hollywood Tycoon Arnon Milchan"] -- claims. [...]

Milchan's services to the Israeli security services have been made public before, but he has always denied or refused to acknowledge them. This is the first time Milchan confirms these claims, albeit indirectly. ....

According to Melman's report, Milchan was first recruited in the 1960s by then-Israeli deputy defense minister Shimon Peres, who now serves as Israel's president, to aid a clandestine Israeli scientific bureau tasked with acquiring sensitive technology.

"I am the one who recruited him," Peres told Confidential's authors, Meir Doron and Joseph Gelman.

Known by its acronym LAKAM, the covert Israeli science bureau "used [Milchan] (as well as other Israeli businessman) to set up straw companies around the world, open secret bank accounts to finance the alleged nuclear plant in Dimona and other Israeli security industries," Melman writes.

Milchan's alleged clandestine activities on behalf of Israel led to some diplomatically sticky situations. According to the Haaretz report, Milchan called on Peres personally for help with the Reagan administration in the 1980s, after a firm he owned in California was accused by the Justice Department of sending to Israel thousands of dual-use electronic devices, known as Krytrons, that can be used in nuclear triggers. The charges were reportedly the result of a more than two year investigation.

The CEO of the firm, Richard Kelly Smyth, fled the country in 1985 while awaiting trial, but was arrested in Spain in 2001. He was later tried and sentenced in the United States, but received parole due to his age.

Evidence of Peres' help trying to defuse the crisis with the United States over the alleged nuclear smuggling case is not hard to find. As Time magazine reported in 1985 when Smyth was awaiting trial: "When the Israelis were first informed of the investigation by Assistant Secretary of State Richard W. Murphy earlier this year, they apparently were not aware of the export licensing requirements for Krytrons," Time wrote. "Prime Minister Shimon Peres last week told a U.S. television interviewer that Israel's close relationship with the U.S. obviates any need to smuggle out sensitive technology."

Indeed, LAKAM itself was closed in 1986 following revelations that it had recruited an American naval researcher, Jonathan Pollard, to spy for Israel against the United States, causing the largest crisis in the history of U.S.-Israeli relations.