Arnon Milchan and the Krytron Smuggling Operation

In November 2013, the man who produced Pretty Woman, Fight Club and L.A. Confidential sat down with the Israeli journalist Ilana Dayan and explained that he had spent decades as an intelligence operative buying restricted technology for Israel’s nuclear weapons program.

“I did it for my country and I’m proud of it,” Arnon Milchan said. He seemed to have enjoyed it. “Do you know what it’s like to be a 20-something-year-old kid and his country lets him be James Bond? Wow! The action! That was exciting.”

Shimon Peres, by then President of Israel and the man who had built its nuclear program in the first place, appeared on the same broadcast to confirm that he had recruited Milchan personally. “It was I who recruited him,” Peres said, “when I was at the Ministry of Defense… His activities gave us a huge advantage, strategically, diplomatically and technologically.” Robert De Niro, a friend of thirty years, told Dayan that Milchan had told him he was an Israeli and that of course he would do these things for his country.

American investigators had worked out most of this in 1985. They were never able to charge him with any of it.

What a krytron is, and why it was refused

A krytron is a gas-filled tube that switches electrical current extremely fast and extremely precisely. Its civilian applications are narrow. Its military application is not: it fires the conventional explosives that compress the core of a nuclear weapon and start the detonation.

For that reason exporting one required a munitions license from the U.S. State Department, and the United States had specifically refused several requests to license krytrons for Israel. That refusal is what makes this a case rather than a transaction. Every unit that moved was a deliberate route around a known American no.

Project Pinto

The structure appears in federal court records and in heavily redacted FBI files.

In 1972, at Milchan’s encouragement, a California aerospace engineer named Richard Kelly Smyth incorporated a company called MILCO International. Between 1979 and 1983 MILCO bought krytrons from the American defense contractor EG&G and shipped them out in fifteen consignments totaling roughly eight hundred units, declaring them on the export paperwork as “pentodes,” ordinary radio tubes, so that no license would be required. They went to Heli Trading in Tel Aviv, a company Milchan owned, and from there to the Israeli Ministry of Defense, which had put up the money.

It came apart by accident. In January 1983 someone broke into MILCO’s offices in Huntington Beach. The FBI came to investigate the burglary, found the tubes, and Customs identified them within short order as krytrons. By May a search warrant had produced the shape of the whole operation, including its codename: Pinto.

Who paid for it

Prosecutors went after Smyth. FBI records show a U.S. attorney trying during plea negotiations to turn him against Milchan, whom investigators believed had organized the operation. Smyth would not do it. He was indicted in May 1984 on thirty counts of smuggling and false statements, and rather than face trial he and his wife left the country.

They stayed gone for seventeen years, mostly in Spain. What eventually located him was his own paperwork: he filed for U.S. Social Security benefits. Interpol extradited him, and in November 2001 he was convicted of exporting eight hundred nuclear triggers.

A federal grand jury in Los Angeles had been convened back in 1985 to look at related violations of the Atomic Energy Act and the Arms Export Control Act. The indictment that came out of it named Milchan’s companies as the recipients of the krytrons. Milchan himself was never charged, the matters connected to him were dropped during the Reagan administration, and Israeli officials did not cooperate with the investigation.

One claim that does not belong in the established column

There is a persistent story attached to this case that Benjamin Netanyahu, later Prime Minister, worked for Heli Trading and met Smyth during the smuggling years. It traces to statements attributed to Smyth in FBI interview records and a letter he is said to have written.

That is what it is: an assertion by the convicted smuggler, recorded by the Bureau. It has not been independently established, and Milchan said nothing about Netanyahu in connection with the smuggling when he confessed in 2013. It is noted here at the evidentiary level it actually occupies, and no higher.

Why it matters

Eight hundred nuclear triggers that the United States had expressly declined to license left an American factory for an Israeli ministry, hidden behind a false description on an export form. That much is settled by a federal conviction.

What the case shows beyond that is how differently the two ends of the operation were treated. The American at the front of it was indicted on thirty counts, spent seventeen years as a fugitive, and went to prison. The Israeli who organized it was named in the indictment only through his companies, was never charged, watched the matter dropped, and built one of the most successful careers in Hollywood.

Then, twenty-eight years after the FBI opened the file, he described the whole thing on national television as a source of pride, with the founder of Israel’s nuclear program sitting beside him to confirm the recruitment. Nothing happened after that either. By the time the admission arrived it had stopped being legal exposure and become a story worth telling on camera.

Sources

Uvda (Channel 2 Israel), interview with Arnon Milchan by Ilana Dayan, November 2013 — the on-camera confession, with the Peres and De Niro corroboration
U.S. federal court record, United States v. Richard Kelly Smyth (indicted 1984/1985; convicted 2001), U.S. District Court, Central District of California
FBI files on the MILCO/Heli krytron operation, obtained under FOIA — the “Pinto” codename and the attempt to turn Smyth
NBC News, “Israel-Hollywood Nuclear Connection,” 1993 — the 1985 indictment
Times of Israel, “Hollywood Producer Arnon Milchan Reveals Mossad Past,” November 25, 2013
Fox News, “Hollywood Producer Arnon Milchan Admits Double Life as Israeli Spy,” November 2013
Meir Doron and Joseph Gelman, Confidential: The Life of Secret Agent Turned Hollywood Tycoon Arnon Milchan (2011)