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FBI Treasury Customs investigation
of MILCO
- Heli nuclear trigger smuggling to Israeli Ministry of Defense
"...also met Benyamin
Netanyahu while Netanyahu worked at Heli Trading..."
Documents
California-based
MILCO International Inc. shipped 15 orders totaling 810 krytrons to the
Israeli Ministry of Defense between 1979 and 1983. Israeli
movie producer Arnon Milchan's Heli Trading Company brokered the
transactions. A krytron is a gas-filled tube used as a high speed switch.
Export from the US requires a US State Department munitions license
because krytrons can be used as triggers for nuclear weapons. The
US rejected several requests for krytron export licenses to Israel.
MILCO obtained the krytrons from EG&G Inc., but listed them as
"pentode" radio tubes before shipment to Israel. The ruse was uncovered
by the FBI in 1983.
A US Attorney
tried to get MILCO President Richard Kelly Smyth to implicate Milchan in
the illegal krytron export during plea bargaining. The negotiation
failed, and in May, 1984, Smyth was indicted on 30 counts of smuggling
and making false statements. In
1985 a Federal Grand Jury was convened in Los Angeles to investigate
potential Atomic Energy Act and Arms Export Control Act violations, but
no charges were ever filed against Milchan.
Smyth and his wife fled the US and remained at large
until captured in Malaga, Spain in July of 2001 after Smyth applied for
Social Security benefits. Smyth pled guilty to violating the US
Arms Export Control Act. In November, 2001 Smyth was sentenced to
40 years in prison and a $20,000 fine, though he was paroled due to his
"advanced age." In 2016, Arnon Milchan received a 10-year resident visa
after Israeli Prime Minister Benjamin Netanyahu lobbied Secretary of
State John Kerry to grant one over the objections of career State
Department employees.
New file
release May 3, 2017 (Download PDF)
A 2011 biography
called "Confidential: The Life of Secret Agent Turned Hollywood Tycoon
Arnon Milchan" claims
Milchan was recruited into Israel's LAKAM economic espionage unit in
his 20's and became a key operative for Benjamin Blumberg (head of
LAKAM), and Rafi Eitan (who ran Jonathan Pollard and infiltrated NUMEC).
Milchan is the confidant of Shimon Peres and Benjamin Netanyahu.
According to the book, Blumberg taught Milchan how to establish front
companies and secret bank accounts to launder millions in commissions
obtained during LAKAM and Mossad transactions. Milchan encouraged
Smyth in 1972 to incorporate MILCO to share profits on export sales with
his Tel Aviv-based Milchan Brothers company. Milchan Brothers
received purchase orders from Blumberg and sent them via secure telex to
Smyth. MILCO did 80 percent of its business with Milchan,
including transfers of other US technologies useful to Israel's clandestine nuclear
weapons programs. (Gyroscopes, neutron generators, high-speed
oscilloscopes, computerized flight control systems.) According to
the book, after Smyth was ordered to appear before a federal prosecutor
in Los Angeles, Milchan claimed "I felt bad, but I was ordered to cut
all contact with Smyth." Milchan officially denies any knowledge of
MILCO or Milchan Brothers roles in krytron smuggling
The following FBI files reveal the
FBI's interest in Milchan after a confidential informant revealed his
ties to Smyth in 1992. The declassified but heavily redacted
"secret" communications detail the bureau's fascination with Milchan,
from his entry in "Who's Who" to star-studded associates
such as Robert Di Niro and an
Iran-Contra operative. The final page of the
FBI file is a clipping of Thomas Friedman's May, 1985 New York Times
interview with Milchan who had quickly left the US for Jerusalem.
Milchan told Friedman "that a krytron was a small little gizmo which
anyone can go buy freely in the United States. You can use them or
all kinds of things, including, incidentally, making cholent."
Friedman clarified that "Cholent is a stew of beans, carrots, potatoes
and beef that is a traditional Jewish dish prepared on Friday night for
eating on the Sabbath. Mr. Milchan said that with a krytron timer a
stove could be set to turn on automatically to heat up cholent on the
Sabbath without anyone working to light the fire."
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Document/PDF
by release date |
Contents |
05/2017
New! |
U.S. Department of Treasury files released by DHS and ICE.
Shipping documents, code word "PINTO," conspiracy to use general
license rather than munitions license, evasion of end user
certificate, reference to krytrons as "pentodes," denial
krytrons were used in nuclear weapons program by the Israeli
government, rap sheet, Israeli promise to deliver "unused"
krytrons back to the United States. |
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06/2016 |
June 5, 1996 classified file, associates, case narrative,
redacted, July 19, 1992 secret memo to FBI director, Arnon
Milchan activities reported by an informant, friends Oliver
Stone, Sidney Pollack, Barbara Streisand, Tom Cruise, Richard
Dreyfuss and Robert DeNiro. Israeli labor party friends, arm
dealing links, MILCO. July 1992 request to government of Israel
to obtain statement. Subpoena, disappearance of Richard Kelly
Smyth, contacts at Rockwell, Founding of MILCO in 1973,
recruitment of Air Force Scientific Advisory Board members to
MILCO, atomic bomb designers, MILCO nuclear weapons related
sales. July 1992 report, Vanunu revelations of Israel's nuclear
weapons program, January 1983 burglary of MILCO, FBI discovery
of krytron shipments to Israel, attempts to get Smyth to
implicate Milchan/MILCO,. May 1984 indictments of Smyth on 30
counts of smuggling and making false statements, overlap with
Iran Contra affair bank accounts, Israeli assassinations of
Iraqis associate with nuclear program. February 1993 memo about
possible ABC Nightly News story, April 1993 video tapes, open
source information on Arnon Milchan, |
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04/2002 |
Counterintelligence debriefing of Richard Kelly
Smyth. After he is arrested in Malaga, Spain and
extradited to the United States, Smyth is debriefed by FBI
special agents at the Los Angeles US attorney
office. Smyth details his recruitment by
Arnon Milchan, meetings with Benjamin Netanyahu who
then worked at smuggling front Heli
Trading (Milchan Brothers Trading Company)
in Israel, and how the "Project Pinto"
smuggling operation was rolled up
after his arrest for smuggling 800 nuclear
triggers and subsequent flight
from the U.S. |
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06/05/1996 |
Open source news database information and "Who's
Who in America 1996" entry on smuggling case. "Case Agent
[redacted] has requested that this matter be placed in a closed
status at this time." [Redacted pages]
News clipping, The New York Times,
Saturday, May 18, 1985
"Israelis Deny Knowing of Export Bar for Device Usable in
A-Bomb" by Thomas Friedman
News clipping The
Washington Post, May 15, 1985
"US Asks Israel to Account for Nuclear Timing Devices" by John M
Goshko |
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12/28/2011 |
FOIA release letter |
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11/30/1993 |
Message distribution to national an international
offices. "The enclosed is for your information. If
used in a future report, conceal all sources of paraphrase
contents...This entire communication is classified SECRET.
LA is advised to provide an appropriate UCFN
for captioned matter." (Universal Case
File Number) |
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04/23/1993
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Message to FBI Director. "Enclosed for Los
Angeles is one videotaped copy of two installments of NBC
Nightly News that highlights some of the information that was
provided to the Bureau and Los Angeles..."
[Redacted]
"Inasmuch as Los Angeles has not initiated any
investigative activity re subject, Portland will no longer query
mentioned source re subject." |
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03/29/1993 |
Message distribution to national an international
offices. "The enclosed is for your information. If
used in a future report, conceal all sources of paraphrase
contents...This entire communication is classified SECRET.
LA is requested to furnish a communication regarding the status
of this pending matter to CI-2F Unit." (Confidential Informant) |
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02/25/1993 |
Priority message to the FBI
Director and Los Angeles office that "...during the later part
of next week, during an NBC Nightly News broadcast, Tom Brokaw
would reveal the background story of...MILCO" |
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08/17/1992
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Record of a routine search on
8/17/1992. [Redacted] |
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08/14/1992
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Secret record of a secure
telephone call from special agent in charge of Los Angeles field
office to a special agent in Portland on 7/16/1992.
[Redacted] |
07/15/1992
Section 4 |
[Redacted] |
07/15/1992
Section 3
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..."At the time of [Smyth's]
disappearance, the U.S., did not have any reliable information
that the Israelis were enriching uranium via uranium
hexafluoride. That information did not surface for another
year until an individual named [Mordecai Vanunu] detailed
drawings and photographs of Dimona, Israel's nuclear research
center, to the London Times."
"When they repeatedly asked if
proper licenses had been obtained and, on 7/24/1982, they
resigned. During January, 1983, MILCO's Huntington Beach Offices
were burglarized and [redacted] filed a report with the FBI.
The FBI advised the U.S. Customs Service of these activities,
and during May, 1983, Customs realized that the 'tubes' were
actually the mentioned highly-restricted krytrons."
During December, 1984, AUSA
[redacted] began plea bargaining negotiations with [Smyth]
regarding the illegal sales in efforts to get [Smyth] to provide
the government with information regarding [Milchan's] illegal
activities. These negotiations failed, and in May, 1984, Smyth
was indicted on 30 counts of smuggling and making false
statements, based on 15 shipments of krytrons to Israel." Notes
on individuals involved in Iran-Contra affair, disruption of
Iraqi nuclear reactor through sabotage. |
07/15/1992
Section 2
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Phone call record continues.
"On 8/9/1985, two weeks from the trial date of [Richard Kelly
Smyth] the U.S. Department of Justice requested Israel to obtain
a sworn statement from [redacted] on same date, U.S. Customs
served a subpoena on [redacted] seeking all records of business
dealings...On this same date [Smyth] disappeared and a few days
later he failed to appear for a motion hearing. As a
result his bail was revoked and a warrant was issued for his
arrest. He is still a fugitive." Details on how an Air Force
Scientific Advisory Board member steered contracts to MILCO.
SAB members that invested in and joined MILCO's board of directors.
SAB member that worked as an atomic bomb designer at Lawrence
Livermore and Los Alamos during the Manhattan Project. "Large
volume of the Israeli business at MILCO and whether some of the
equipment being sold was sensitive and related to nuclear
weapons field." |
07/15/1992
Section 1 |
Record of a
phone call between a supervisory special agent in Los Angeles
and a special agent in Portland classified as "secret." The
special agent notifies LA of impending news media coverage of
"an extremely successful movie producer in Hollywood" [Arnon
Milchan] noting his ties to "Oliver Stone, Sidney Pollack,
Barbara Streisand, Tom Cruise, Richar Dreyfuss and Robert
DeNiro. The subject's likely location and wealth "close to
$1 billion" and close ties to "Labor Party officials in Israel"
is noted. Milchan's arms dealing through MILCO and ties to
another American are explored in the heavily redacted file. |
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