Arnon Milchan and the Krytron Smuggling Operation

Summary

Between 1979 and 1983, approximately 800 krytrons — high-speed electronic switches that can be used as triggers for nuclear weapons — were illegally exported from the United States to Israel through a smuggling operation codenamed “Project Pinto.” The export of krytrons to Israel required a U.S. State Department munitions license, and the U.S. government had repeatedly refused such licenses. The operation ran through MILCO International, a California front company, and Heli Trading Company in Tel Aviv, which was owned by Israeli film producer Arnon Milchan — the Hollywood mogul behind Pretty Woman, Fight Club, and L.A. Confidential. MILCO’s president, Richard Kelly Smyth, was eventually convicted; Milchan himself was never charged. In November 2013, Milchan confessed on Israeli television that he had worked for decades as an Israeli intelligence operative procuring restricted technology for Israel’s nuclear program, and said he was proud of it. This is one of the rare cases in this archive supported by an on-camera confession from the principal himself.

Background

Krytrons are gas-filled tubes that function as extremely fast, precise electronic switches. Their civilian uses are limited and specialized, but they have a critical military application: triggering the conventional explosives that initiate a nuclear detonation. For that reason their export was strictly regulated, requiring a U.S. State Department munitions license. The U.S. government had specifically rejected several requests for krytron export licenses to Israel — making any transfer a deliberate circumvention of a known U.S. refusal.

Arnon Milchan, according to the extensively reported 2011 biography Confidential: The Life of Secret Agent Turned Hollywood Tycoon Arnon Milchan by Meir Doron and Joseph Gelman, was recruited in the 1960s into LAKAM — the Israeli Defense Ministry’s Bureau of Scientific Relations, the same economic-espionage unit later associated with the Jonathan Pollard case. LAKAM’s mission was to secure nuclear material and technology for Israel’s clandestine weapons program. The biography described Milchan as among the bureau’s most productive operatives.

What Happened

The operation’s structure is documented in heavily redacted FBI files and the federal case record. At Milchan’s encouragement, California aerospace engineer Richard Kelly Smyth incorporated MILCO International in 1972 to serve as a front. Between 1979 and 1983, MILCO purchased krytrons from the U.S. defense contractor EG&G and exported them — in fifteen shipments totaling roughly 800 units — falsely declaring them on export documents as harmless “pentodes” or radio tubes to evade the licensing requirement. The devices were routed through Milchan’s Tel Aviv-based Heli Trading Company (also known as Milchan Brothers) and forwarded to the Israeli Ministry of Defense, which had supplied the funds for the purchases.

The scheme unraveled almost by accident. In January 1983, following a reported break-in at MILCO’s Huntington Beach offices, an FBI inquiry into the burglary led agents to the “tubes” — which Customs quickly identified as krytrons. By May 1983 a search warrant had yielded details of the operation, including its “Pinto” codename.

Federal prosecutors pursued Smyth. According to FBI records, a U.S. attorney attempted during plea bargaining to “flip” Smyth to implicate Milchan, whom investigators believed was the operation’s organizer. Smyth refused. In May 1984 he was indicted on thirty counts of smuggling and making false statements. Rather than stand trial, Smyth and his wife fled the United States and lived abroad — primarily in Spain — for seventeen years. He was located only in 2001, after he began claiming U.S. Social Security benefits, and was extradited by Interpol. In November 2001 he was convicted of exporting the 800 nuclear triggers.

A federal grand jury was convened in Los Angeles in 1985 to investigate related Atomic Energy Act and Arms Export Control Act violations. The 1985 indictment named Milchan’s companies as the recipients of the krytrons. But no charges were ever filed against Milchan himself, and charges connected to him were effectively dropped during the Reagan administration.

The 2013 Confession

What moves this case from well-documented allegation to admitted fact is Milchan’s own decision to speak. In November 2013, Milchan gave an extended interview to investigative journalist Ilana Dayan on the Israeli Channel 2 program Uvda (“Fact”).

In the interview, Milchan described his recruitment by Shimon Peres and his decades of clandestine work procuring arms and technologies that Israel needed for its nuclear program. “I did it for my country and I’m proud of it,” he said. Describing the thrill of his early intelligence work, he said: “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.”

The confession was corroborated on camera by figures who would know. Shimon Peres — by then President of Israel, and the founder of Israel’s nuclear program decades earlier — confirmed that he had personally recruited Milchan: “It was I who recruited him… when I was at the Ministry of Defense. Arnon was involved in numerous defense-related procurement activities and intelligence operations. His strength is in making connections at the highest levels. His activities gave us a huge advantage, strategically, diplomatically and technologically.” Milchan’s longtime friend Robert De Niro told Dayan that Milchan had once told him directly that he was an Israeli and “of course, he would do these things for his country.”

Milchan also described recruiting others in Hollywood into aspects of his work and using his entertainment-industry connections as cover for intelligence operations — including, he said, an attempt to use a major star to entice a U.S. nuclear scientist to a private meeting.

Key Figures

Arnon Milchan — Israeli film producer (Pretty Woman, Fight Club, L.A. Confidential); LAKAM operative; owner of Heli Trading; organizer of the krytron procurement; never charged; confessed on Israeli TV in 2013.
Richard Kelly Smyth — California aerospace engineer and NATO consultant; president of MILCO; convicted in 2001 of exporting 800 krytrons; fled the U.S. for 17 years.
Shimon Peres — Founder of Israel’s nuclear program; recruited Milchan; confirmed on camera in 2013 that he had done so.
LAKAM — Israeli Defense Ministry’s Bureau of Scientific Relations; the economic/scientific espionage unit, also tied to the Pollard case, disbanded in 1987.
Robert De Niro — Milchan’s longtime friend; corroborated on camera that Milchan had told him of his work for Israel.

On the Netanyahu Allegation

A persistent claim associated with this case is that Benjamin Netanyahu — later Israel’s Prime Minister — was an employee of Heli Trading and met with Smyth during the smuggling period. This claim originates with statements attributed to Richard Kelly Smyth in FBI interview records and a letter he reportedly wrote. It is documented as Smyth’s assertion, recorded in FBI files, rather than as an independently established fact, and Milchan did not mention Netanyahu in connection with the smuggling in his 2013 confession. This article notes the allegation at the evidentiary level it actually occupies: a claim made by the convicted smuggler, recorded by the FBI, not a proven fact.

Official Response

The U.S. government’s handling is itself part of the record. Having named Milchan’s companies in the 1985 indictment as the recipients of the triggers, it never charged Milchan himself; the charges connected to him were dropped under the Reagan administration, and Israeli officials did not cooperate with the investigation. Milchan faced no U.S. legal consequence at any point — before or after his 2013 confession — and maintained close ties to Israel’s political leadership for decades.

Consequences

The operation succeeded in its purpose: roughly 800 nuclear triggers reached the Israeli Ministry of Defense, in deliberate circumvention of a U.S. licensing refusal. Smyth was the only person convicted; Milchan was never prosecuted and went on to one of the most successful careers in Hollywood.

Significance

The Milchan case is one of the most strongly documented entries in this archive, because its central figure eventually confessed on camera to exactly what the U.S. government had investigated him for decades earlier. The facts are not in serious dispute: nuclear-trigger components that the United States had specifically refused to license for export to Israel were smuggled there in their hundreds through companies Milchan owned, his American associate was convicted, and Milchan himself later told Israeli television he had spent decades procuring nuclear-related technology for Israel and was proud of it — with the founder of Israel’s nuclear program confirming the recruitment on the same broadcast. The case is significant on two levels. First, as documentation: an admitted, corroborated operation to obtain U.S. nuclear-weapons technology in circumvention of an explicit American refusal. Second, as pattern: the American front-man went to prison while the Israeli organizer was never charged, his role acknowledged only when he chose to acknowledge it himself, by which point it had become a source of public pride rather than legal exposure. That a man could organize the procurement of 800 nuclear triggers from the United States, evade all charges, build one of Hollywood’s most successful careers, and then describe the operation approvingly on national television is among the clearest illustrations this archive contains of how differently the two ends of an Israeli intelligence operation are treated.

Sources

Fox News, “Hollywood Producer Arnon Milchan Admits Double Life as Israeli Spy,” November 2013
Times of Israel, “Hollywood Producer Arnon Milchan Reveals Mossad Past,” November 25, 2013, and “Film Mogul, Power Broker, Ex-Spy, Arnon Milchan Is Central to Netanyahu Graft Probe,” 2017
NBC News, “Israel-Hollywood Nuclear Connection” (reporting on the 1985 indictment and Milchan’s profit-sharing), 1993
Meir Doron and Joseph Gelman, Confidential: The Life of Secret Agent Turned Hollywood Tycoon Arnon Milchan (2011)
Uvda (Channel 2 Israel), interview with Arnon Milchan by Ilana Dayan, November 2013 — the on-camera confession, with Peres and De Niro corroboration
U.S. federal court record, United States v. Richard Kelly Smyth (indictment 1984/1985; conviction 2001), U.S. District Court, Central District of California
FBI files on the MILCO/Heli krytron operation, obtained via FOIA — documenting the “Pinto” codename and the attempt to flip Smyth