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The Inside Story of the Making of the New Book "Confidential: The Life of Secret Agent Turned Hollywood Tycoon Arnon Milchan"

EDITOR’S NOTE: “Confidential: The Life of Secret Agent Turned Hollywood Tycoon Arnon Milchan,” has already received a considerable publicity in the tabloids for its sprinkling of a few salacious tidbits about celebrities. But do not allow that to fool you. This is a deadly serious book, chock-a-block with far more weighty revelations than a few details about Brad and Angelina’s love life.

With speed and in great detail, “Confidential,” published by Gefen Books NY, and 21st Street Books, reveals how one of the most prolific producers in Hollywood history was, in a previous life, also one of the most important secret agents that Israeli intelligence had ever fielded. 

Whispers about him have swirled in Hollywood for decades serving only to heighten his mystique. Every so often, a reporter would scratch the surface with vague references to “arms dealing.”

Now, with the publication of “Confidential,” it seems that the mystery has been solved. As described, not only was Arnon Milchan a covert operative, but a key figure whose many far-flung companies served as fronts for Israeli intelligence, as well as for securing technology and materials for Israel’s nuclear weapons program.

The book also asserts that he fronted off-shore bank accounts that financed the special needs of Israeli intelligence worldwide, including some of its most important and well know operations… and that those bank accounts were capitalized by “commissions” earned on large arms transactions that Milchan himself “brokered” on behalf of the Israeli government. It reveals the real sources of his personal wealth that ranks him in the middle of the Forbes 400, as well as the drama that has been his personal life.

In an exclusive for FoxNews.com, the co-authors of "Confidential" reveal for the first time the complicated back-story of this book, and how they “outed” the mysterious Hollywood tycoon. A man who as a Hollywood producer brought such classics as “L.A. Confidential,” “Once Upon a Time In America” and “Pretty Woman” to the screen but who also lived an intriguing covert existence that in many ways puts the fictitious James Bond to shame. 

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The Story Behind "Confidential, The Life of Secret Agent turned Hollywood Tycoon Arnon Milchan" -- How two journalists outed one of Hollywood’s most prolific movie producers as a former key secret agent for Israel’s Mossad and LAKAM.

On a family cruise to Mexico in 2008, the subject of the mysterious Hollywood producer, Arnon Milchan, came up while the two of us, Meir Doron and Joseph Gelman, were drinking margaritas and sunbathing on deck off the coast of Cabo San Lucas. (We're brothers-in-laws.) 

We both marveled at how the same man who over the last four decades had emerged as a singular powerhouse in the global film industry with hits like Pretty Woman, JFK, Mr. and Mrs. Smith and L.A. Confidential… one of the richest men on the planet, was also a key operative on behalf of Israeli intelligence and arms procurement, something we’d become aware of over the years through vague press reports and rumors in Israel.

The more we talked about it the more obvious it became: Though Milchan is not a mogul whose name is as well known as, say, Rupert Murdoch, Sumner Redstone, or David Geffen, he’s not only in their league as a business tycoon but his personal story is as worthy of book treatment as any of them, if not more so, and for some reason no one had ever written it.

By the end of the conversation we both agreed that the combination of real-world espionage and Hollywood mega-success made for a great truth-is-stranger-than-fiction story and that despite our ignorance of most of the details, we were the men to tell it. 

Our close friendship, working dynamic, deep connections in Israeli media and politics, familiarity with the Milchan family, language, and culture, and the institutions from which our subject emerged, gave us the unique knowledge and skills needed to write this book.

However, from the outset, we took for granted that a former intelligence agent like would never agree to cooperate, given the covert nature of espionage and arms procurements and as evidenced by the few times he’d ever granted interviews in the past. We also assumed that unless we spent the time, resources and energy producing a complete, well researched, and well written story, no agent or publisher would take the book idea seriously, especially pitched by two relatively unknown writers.

So we hatched a plan to research, report, and write the entire book in secret and present Milchan with a full manuscript as a fait accompli. 

At that point we knew that he’d be faced with a choice: Cooperate with us to some degree to ensure a more accurate book over which he might have some influence, or risk the publication of a book about him that he knew nothing about. If he rebuffed us entirely, we knew we could publish the book anyway, as many unauthorized biographies have been published in the past. 

By the end of the cruise, we’d made a firm commitment to each other to write the book no matter what the obstacles and no matter how long it took. In truth, we had little idea what we were getting ourselves into.

Within days, we began to pull together every word that had ever been written about the elusive tycoon in English and Hebrew over the last 5 decades. A few articles had been published before the internet era and needed to be purchased from archives. 

We used Nexis/Lexis for court records, property ownership deeds, business incorporations, and any other information we could find. We delved into a long list of books that scratched the surface of Mr. Milchan’s activities over the years.

We also found a number of never-before-translated items in the Hebrew press referencing Milchan’s covert activities. Through an obscure Israeli rare-books dealer, Meir discovered the existence of a self-published autobiography in Hebrew that Arnon Milchan’s grandfather, Chaim Eliezer Milchan, had written in the late fifties and early sixties (shortly before his death). 

The autobiography documented the entire family history, from the pogroms of the late 1800’s to his grandfathers arrival, alone on the shores of Ottoman Palestine at the age of 14, in 1894, and the creation of the small settlement of Rehovot where Arnon Milchan would be born years later. We purchased the book which was the only known copy available for sale anywhere.

Through further research, and almost by accident, we came across the name, ‘Dr. Jon Schiller,’ the author of an obscure self-published book from 2008, called "Irrational Indictment & Imprisonment for Exporting Krytron’s to Israel." 

Because the book recounted a story similar to a series of fascinating events involving the illegal transport of nuclear materials that Milchan and one Richard Kelly Smtyh had been involved in during the 1980’s, we ordered a copy of the book from ‘Dr. Schiller’. 

The book made efforts to disguise the real people involved in the international saga by using fictitious names. However, the basic storyline was too similar to a real case we knew of involving Milchan to be coincidental, and we began to suspect that Dr. Jon Schiller may in fact be Richard Kelly Smyth, a Milchan operative and fugitive who was eventually convicted of smuggling nuclear triggers to a company owned by Milchan in Israel.

We communicated with Dr. Schiller by e-mail and asked if he was in fact the former fugitive Richard Kelly Smyth. Initially, he pretended not to know who Richard Smyth was. After numerous e-mails, ‘Jon Schiller’ stated that “all I had to say about Mr. Milchan is in my book.” Convinced now that we were communicating with the convicted agent, we located ‘Jon Schiller’s’ residence in the town of Lompoc (home to a large federal penitentiary), California, north of Santa Barbara, and drove to his mobile home. The sign on the door read ‘The Smyths.’ We knocked on the door and, indeed, Richard Kelly Smyth the convicted nuclear smuggler was suddenly standing in front of us.

He confirmed his real identity to us, and confirmed that he had written the book Irrational Indictment and Imprisonment, for Exporting Krytrons to Israel under the name, Dr. Jon Schiller. Through further research, we confirmed that ‘Jon Schiller’ was an alias that Smyth had used throughout his long exile, while hiding from the FBI as a fugitive in Europe, supported by the LAKAM, a secret organization within Israel’s intelligence community. We confirmed the address of Richard and his wife Emily’s residence in Malaga, Spain, including their e-mail and phone numbers while fugitives there. The Smyth’s/Schiller’s quickly emerged as the tragic, main supporting characters of the saga we would tell, and the short time we spent with Richard, along with the account in his self published manuscript, became valuable as source material.

Through book, magazine, newspaper, internet, and library research, we slowly began to piece together a picture of this mysterious Hollywood mogul focusing primarily, but not exclusively, on his covert life. 

We assiduously avoided contacting anyone whom we suspected might alert Mr. Milchan to our project. 

By compiling a list of all the defense contractors known to be represented by Milchan in Israel over the past forty years, and cross-referencing their products with the publicly known inventory of the entire Israel Defense Forces, we were able to piece together a picture of the size and scope of Milchan’s arms procurements for Israel and the kind of money that changed hands. Milchan’s Hollywood story was easier to develop because much of it was a matter of public record. After more than a year we had a compelling manuscript of over 90,000 words.

We were then ready to reach out to Arnon Milchan himself and reveal our activities. We had no idea what his reaction would be. 

We were naturally a little apprehensive, but confident that the manuscript was accurate and fair. In August of 2009, we called Milchan Brothers Ltd. in Israel and asked for a contact number for Mr. Milchan, and left a message with his personal assistant in Israel, Hadas Kline; “we have written a book about Mr. Milchan’s life. We are extending him an opportunity to respond. Should we not hear from him in a week, we will assume that he has no intention of responding and will go with what we have.”

Within less than twenty four hours, Joe’s cell phone rang: “Joe, it’s Arnon Milchan, I heard that you and your co-writer have written a book about me, should I be concerned?” 

Joe informed Mr. Milchan that he and Meir wrote the book as straightforwardly and fairly as possible, with no agenda other than to tell the full story of Milchan’s life as accurately as we possibly could. He asked a number of probing questions in an effort to get a sense of the depth of our knowledge. Joe didn’t beat around the bush about what he and Meir had uncovered in order that Milchan would understand right away that they were not star-struck journalists recycling previously printed rumors of Milchan-brokered arms deals, but rather investigative reporters who had pieced together enough information to reveal Milchan’s covert career, definitively and for the first time.

Joe informed Milchan that a significant portion of the book dealt with the LAKAM, an agency more secret and less known than the more widely known Mossad—Israel’s equivalent of the CIA, and Milchan’s covert activities on behalf of Israel over a period of decades, guided by now-President Shimon Peres and high level spymasters Benjamin Blumberg and Rafi Eithan. LAKAM is barely known even in Israel, and the name Benjamin Blumberg is even less known. Milchan’s involvement in the LAKAM is known only to a small circle of high government officials in Israel. Once Joe finished, Milchan realized what he was dealing with and requested a meeting at his office at New Regency Films on the 20th Century lot in Los Angeles.

The first meeting was very amicable. Milchan asked about which parts of the book he should be concerned about. We bluntly informed him that from his perspective the two assertions in the book that we thought would be most difficult for him would be that we portrayed his prolific activity as an arms dealer who enriched himself off of the difficult military predicament that Israel, and by extension the Jewish people, have found themselves in over the years, and that he had abandoned an important operative on the “field of battle” (specifically the above-mentioned Richard Kelly Smyth). 

Milchan countered that these were unfair characterizations and that we were not fully aware of all the facts. He requested to a series of meetings over the matter, which ended up involving many cigarettes, herbal teas, shots of tequila, and Stella beer. We met his wife Amanda and his new child Shimon (named after Shimon Peres), his butler John, and other friends and family in the casual setting of his Malibu home, the former home of acclaimed Director John Frankenheimer, and the house where Senator Kennedy stayed the night before his assassination at the Ambassador Hotel the following morning.

Slowly, in addition to being told many amusing and surprising anecdotes by Milchan, we extracted from him confirmation of, and new details about, many of our assertions relating to the most sensitive elements of the book. We also obtained a wide assortment of exclusive, never-before-published images.

Some of the revelations in our book include:

• Israel maintains large, secret, parallel offshore accounts, fronted by Arnon Milchan, which have financed most of Israel’s covert intelligence operations around the world for decades. A sizable percentage of US military aid to Israel has been secretly diverted over the years to these covert offshore accounts in the form of “commissions” paid to the supposedly-independent arms broker, Arnon Milchan, who in reality, has acted as an agent for the government of Israel to fill the coffers of these covert offshore accounts.

• Arnon Milchan was originally recruited to a little known Israeli intelligence unit called LAKAM (Hebrew acronym for the Office of Science Liaison), by the man who is today the President of Israel, Shimon Peres. Moshe Dayan and spymaster Benjamin Bloomberg were also involved in his recruitment.

• Arnon Milchan was the money-man for the great South African Information war of 1974-1979, before leaking details to the press that brought down the South African government and put it on a path towards the dismantling of Apartheid.

• Arnon Milchan played a key role in obtaining the technology and equipment for Israel’s modern nuclear program—from obtaining the designs for centrifuges for uranium enrichment to the smuggling of nuclear bomb triggers, and much more. He was one of the most productive agent that Israel has ever fielded.

• Arnon Milchan secretly financed Western cultural events in Communist Poland through his friend Roman Polanki and assisted Lech Walesa and the Solidarity movement during the height of the Cold War.

As soon as Arnon became aware of the existence of our book, the need for us to conduct the research in secret disappeared. So we then sought out in-person and telephone interviews with some of the key players in Milchan’s story who could help us independently verify various assertions, without the fear of premature discloser to our main subject. We proceeded to set up appointments, and interviewed the following people among others:

• Israeli President Shimon Peres: We conducted an extensive interview, in person, at the Presidents residence in Jerusalem on February 8th, 2010. Without delving into details, the President confirmed the overall premise of the book, namely that Milchan had played an important and secret role in the development of Israel’s national security strategy, and that he [Peres] had personally recruited him.

• Senior NSA operative, Michael Ladeen: We conducted a phone interview in relation to the timing of his approach to Shimon Peres for assistance in what became the Iran-Contra affair, as the Krytron issue had just exploded.

• Milchan’s personal assistant for covert-activities for over 30 years, Dvorah Ben Yitzchak: We conducted a phone interview and confirmed that she worked directly with LAKAM and Mossad Chiefs, Blumberg and Eitan, and communicated with Arnon Milchan “almost on a daily basis” for decades. She also confirmed most key elements relating to Richard Kelly Smyth.

• Milchan’s personal assistant for non-covert-activities of over 30 years, Eti Kanner: We conducted an extensive interview in person on February 10th in Tel Aviv.

• Milchan’s lover of over 16 years, Ase Throstrom. We spoke with her at length by phone, from her location at Montfort-l'Amaury outside Paris. She agreed to send a collection of personal photos.

• One of Milchan’s best friends and neighbors, Meir Tepper: an extensive interview in person at his Malibu home)

• Milchan’s business colleague, former Warner Bros. Chairman and CEO Terry Semel: phone interview

• Milchan friend, Viacom owner and Chairman of the Board, Sumner Redstone: phone interview

• Convicted smuggler, Richard Kelly Smyth: Communications by e-mail and then personal meeting in his trailer home in Lompoc, California

• Michan’s wife, Amanda Coetzer

• Israel’s high profile journalist, and personal friend to Arnon Milchan, Yair Lapid: We conducted an extensive interview at his home in Ramat Aviv, Israel, February 4th, 2010.

• Israeli sources within Israel’s military procurement offices in New York: Confirmation that Milchan was the single largest weapons buyer for the state of Israel during the 1970’s and 80’s.

We also took the time to visit many of the locations described in the book. Of course, over the years, both of us had already been to many of the key locations, such as the main UBS branch in Zurich, the Cannes Film Festival, Paris, South Africa, Huntington Beach, the Weizmann Institute in Rehovot, and the Israeli Ministry of Defense, to name a few. Yet in the process of writing the book we also visited the offices of New Regency Films in Los Angeles, the old secret offices of the LAKAM in Tel Aviv, and the old offices of Milchan Brothers Ltd. We even visited the graves of Arnon Milchan’s father and grandparents at the old cemetery in Rehovot.

Every effort was made to get this story right, and in good faith; no effort or resource was spared. 

We think that Arnon Milchan respected that. And though he had no desire for anyone to write a book exposing this information about him, he realized that once we had already done so, he’d be better off helping to make sure it was as accurate as possible from his perspective.

We’re proud with what we’ve accomplished. We believe that we have cast a wide net and think the book will be of interest to several audiences: readers of biographies of business tycoons; readers of books about the movie and entertainment business; and readers of books relating to the Middle East conflict, to Israel—its history, security, and culture, readers of books relating national security, espionage and nuclear proliferation.

Joseph Gelman and Meir Doron