Arnon Milchan – a key figure in a corruption case threatening Israeli Prime Minister Benjamin Netanyahu – is best known as the producer of such Hollywood blockbusters as “Pretty Woman,” “L.A. Confidential” and “Fight Club.”
In recent years, though, details have emerged about a more secret aspect of his life: his deep ties to Israel’s military establishment and intelligence services.
On Tuesday, police recommended that Milchan be indicted on bribery charges for showering Netanyahu and his wife, Sara, with lavish gifts, allegedly in exchange for help in various pursuits that required the prime minister’s political clout.
According to the police, Netanyahu received 1 million shekels (about $280,000) worth of champagne, cigars, jewelry and clothing, both on demand and systematically, from both Milchan and Australian billionaire James Packer. Milchan was the key supplier, though, supplying about three-quarters of the gifts, the police say.
In an interview broadcast on Israeli television in 2013, Milchan confirmed long-standing speculation that he had worked as an agent for Israel’s clandestine security services for many years, purchasing arms for the country and assisting in the development of the nuclear capabilities that foreign media attribute to Israel. The state has never confirmed or denied any of Milchan’s claims.
Milchan revealed that he had succeeded in recruiting several big Hollywood names to the effort.
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In the interview, which ran on the investigative and current affairs show “Uvda” (“Fact”), Milchan disclosed that he had been enlisted into the secret services by Shimon Peres, the former Israeli prime minister who played an instrumental role in building the country’s military capabilities in its early years. “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 told “Uvda” reporter Ilana Dayan.
Before launching his career in Tinseltown in the 1980s, Milchan was employed by Lekem (aka Lakam), an intelligence agency that recruited spies in Western countries before being disbanded in the ’80s. He disclosed on “Uvda” that he used his connections with the apartheid regime in South Africa to help Israel acquire uranium.
Robert De Niro, a close associate of Milchan’s who also appeared on the show, revealed that the Hollywood producer once told him “he was an Israeli, and that of course he would do these things for his country.”
The show confirmed many of the revelations published several years earlier, in an unauthorized 2011 biography by Meir Doron and Joseph Gelman, “Confidential: The Life of Secret Agent Turned Hollywood Tycoon Arnon Milchan.”
Milchan, who is not an American citizen, lived in the United States for years and renewed his visa there every 10 years. The Uvda report, however, sparked deep concerns about his loyalties, and after it was aired, he was told he would be required to renew his visa every year from then on.
According to the statement published by police on Tuesday night, Milchan proceeded to enlist Netanyahu’s help to regain eligibility for the 10-year visa. Israeli media reports said Netanyahu personally intervened on Milchan’s behalf in the matter with both the former U.S. Secretary of State John Kerry and the former American ambassador to Israel Dan Shapiro. This intervention was another reason police recommended indicting him on bribery charges.
An earlier 2000 profile of Milchan, published in Los Angeles Magazine, described him as “Israel’s foremost weapons procurer” in the 1970s, the ’80s and even up until the first Gulf War in 1990. It said Milchan had been engaged in brokering deals “for such prized super weapons as the Hawk missile and the famous Scud-foil of the Gulf War, the Patriot.”
According to the LA Magazine article, Milchan represented Israel in arms negotiations over the years with such heavyweights as Raytheon, North American Rockwell, Beechcraft, Bell Helicopter and Magnavox. He insisted he had never helped sell arms to any other country but Israel, and therefore should not be labeled an “arms dealer.”
Blue Sky thinking
The most recent evidence of Milchan’s deep ties to the Israeli defense establishment is Blue Sky International – a global security company he founded in 2008, and which was based in both Israel and Switzerland. The company, to which he later recruited Packer as an investor, employed many former Israeli defense and security experts, including Dan Dagan (son of the late Meir Dagan, at the time the head of Mossad). At one stage, Milchan and Packer tried to recruit Yossi Cohen, who was Netanyahu’s then-national security adviser, to be a partner in the company. The appointment fell through, though, and Cohen has since been named as head of Mossad.
BSI, which has since closed down, was established right after the Mumbai terror attacks in November 2008. Its biggest client initially was the Taj hotel chain, owned by Indian businessman Ratan Tata. Eventually, it began working with other companies in the Tata conglomerate. The Indian businessman was subsequently questioned by Israeli police with regard to the bribery case involving Milchan and Netanyahu.
According to the police report published Tuesday, Netanyahu helped advance a deal involving Tata, who had been a business partner of Milchan’s. The police said that Netanyahu “pushed the deal, even though officials in the Defense Ministry and the Prime Minister’s Office opposed the project.”
At a certain point, BSI also began providing services to information-security, information-gathering and consulting businesses owned in Australia by Packer. According to reports in the Australian press, Packer invested about $15 million in BSI.