Milchan - Getty Images - 2005
Milchan with Shimon Peres in 2005. Photo by Getty Images
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Israeli businessman and Hollywood producer Arnon Milchan was a longtime weapons dealer and Israeli intelligence agent who purchased equipment for Israel's alleged nuclear program, a new biography claims.

The book, “Confidential: The Life of Secret Agent Turned Hollywood Tycoon Arnon Milchan,” written by Meir Doron and Joseph Gelman, recounts Milchan's life story, from his days as a boy in Rehovot through his friendships with Israeli prime ministers, U.S. presidents and Hollywood stars.

Milchan's services to the Israeli security industry 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.

Even though the authors claim to have written an unofficial biography, Milchan agreed to meet with them, answer their questions and correct their mistakes. One of the major sources for the book was Israeli President Shimon Peres, a close friend of Milchan.

"I am the one who recruited him," Peres is quoted as saying.

This occurred in the 1960's, when Peres was Deputy Minister of Defense. The relationship continued in the 1970's, when Peres became Minister of Defense. He recruited Milchan as an agent for Lakam, an acronym for 'Science Liaison Bureau.' Lakam is the name of a secret unit in the defense ministry that was tasked with purchasing equipment, namely technological parts and materials for Israel's alleged nuclear program.

Since its founding in the mid-1950's, the agency was headed by Benjamin Blumberg. Blumberg was fired in 1978 by Defense Minister Ezer Weizman following the Likud's party rise to power. Weizman claimed that Lakam was involved in illegal money transfers to different bodies, including the Labor Party.

Blumberg was Milchan's friend, and used him (as well as other Israeli businessmen) to set up straw companies around the world, and to open secret bank accounts for financing the nuclear plant in Dimona and other Israeli security industries.

The basis for Milchan's secret actions was the family firm Milchan Brothers, which represented foreign chemical companies in Israel since before independence.

Lakam was in effect an intelligence unit dealing with technological and scientific espionage, and served as a kind of "theft contractor" for the Israeli security industry. Besides using businessmen, Lakam also appointed scientific attaches in Israeli embassies around the world. After he was fired, Blumberg was replaced by Rafi Eytan, who continued to use his services.

For years, Milchan operated in secret, yet in the mid-1980's U.S. customs uncovered an attempt to smuggle "switches" – equipment that can be used both for medical purposes and for nuclear weapons manufacture – by the California-based Milco company, owned by Milchan. The company's CEO, Richard Kelly Smyth, was arrested and released on bail. He fled the country soon after.

Smyth was declared a fugitive, and according to some reports found refuge in Israel. In 2001 he was captured in Spain and was brought back to the U.S., where he stood trial and was incarcerated. The FBI began an investigation into Milchan's affairs, yet he has never been charged.

According to the book, right after the "switches" fiasco Milchan called his friend Peres, then prime minister, and asked for his help in dealing with the Ronald Reagan administration. Milchan is quoted in the book as saying he never received money for his services, and that everything he did was for the state of Israel.