The Last Tycoon

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Instead, like a kid racing around the Monopoly board, Milchan gobbled up another half dozen businesses including electronics, chemicals, aerospace and plastics. Still in his early twenties, he met the Shah of Iran and reportedly talked the wily Persian into dozens of contracts, one to build much of Tehran’s airport. By then, he had met a sultry French model named Brigitte Genmaire in the lobby of a Tel Aviv hotel. “She converted to Judaism when she was nine months’ pregnant,” says Milchan. “It was funny, because part of her vows was declaring to the rabbi that she was a virgin.” Milchan says his young wife had no problem moving to Israel and raising three children there. “The problems began when she learned Hebrew and I really learned French,” he says with his well-practiced impish grin. “When we could finally communicate with each other, then there were problems.” The marriage ended in divorce.

Milchan says that 30 years ago he frequented a Tel Aviv restaurant where the best and brightest Israelis hung out. “There was this brilliant guy who wanted to start a new political party,” he recalls. The young man’s name was Shimon Peres, and he eventually did launch his own party, along with a handsome Israeli war hero named Moshe Dayan, a young Teddy Kolleck, Chaim Herzog and Milchan himself. Milchan’s partners nominated him to be finance minister, and he briefly flirted with a political career before deciding against a life in the public eye. Nevertheless, Milchan’s political connections would prove to be the foundation of his future empire. In addition to agriculture, there would be biotechnology, advertising, aerospace and the biggest jackpot of them all: arms.

“Mmm. You know he’s an arms dealer, don’t you?” the producer continues. Details are not provided, only a whispered confidence charged with admonition and awe. And notwithstanding Milchan’s denials, dismissals and wafflings, arms dealing has surely contributed to his fortune. (He claims that his parent company, Regency Enterprises, is valued at more than $1 billion.) As the Los Angeles Times coyly put it, “Milchan has also worked in arms consulting.” Throughout the 1970s, ’80s and even up until the Gulf War in 1991, Milchan was Israel’s foremost weapons procurer, brokering deals for such prized superweapons as the Hawk missile and the famous Scud-foil of the Gulf War, the Patriot—”everything from nuclear triggers to rocket fuel to guidance systems,” according to NBC News. At different times in his career, his Israeli company, Milchan Brothers, has represented arms manufacturers such as Raytheon, North American Rockwell, Beechcraft, Bell Helicopter and Magnavox. Or, as Milchan downplays it, “there were a bunch of them.” Nevertheless, he bristles at being called an arms dealer. “I’m their rep in Israel,” he says emphatically. “I get a fee, a commission. I’m not even the buyer. I’m an agent. Never, ever, ever,” he says, growing visibly irritated, did he sell to countries other than Israel. “I want to make that point, because I know some people would label me an arms dealer.

“What we do is send my people to the United States,” Milchan explains, curiously in the present tense, “so we know what these guys are talking about, and you go back and say to the buyer, `I think this guy has some interesting stuff. Would you meet with him?’ And then you arrange a meeting with the head of the [Israeli] air force and the head of this and the head of that.” Representing Israel, a country that practices war games during the lulls when it is not waging war, is about as plum as it gets in the arms bazaar. “Israel was the only place where America could use their systems in battle without having to send soldiers,” he explains. “That’s why Israel is so strategically important for the aerospace industry.”

Gilliam says he’ll never forget a visit to the Paris Air Show with Milchan during the filming of Baron Munchausen. “It was wonderful to see how the whole arms business worked,” says Gilliam. “Amon was very psyched about the video games. He brought his son with him, who was then a teenager, to play the games, which can replicate the destruction of the planet. He took me to the Raytheon booth, and it was all showmanship. He was obviously a big star to Raytheon.”

Milchan’s relationship with Raytheon has been a long and, at times, bumpy one. His first flap with controversy came in 1975, over an “improper $300,000 commission paid to his company by a Raytheon subsidiary for the sale of Hawk missiles,” according to Robert Windrem, coauthor of Critical Mass: The Dangerous Race for Superweapons in a Fragmenting World. The case made headlines, but Milchan was eventually cleared of any wrongdoing. Considerably more trouble and bad press resulted from one of Milchan’s ventures in South Africa in the mid-’70s, erupting in a national scandal dubbed Muldergate.

With both Israel and South Africa increasingly isolated at the time, the two countries had embarked on a series of joint ventures running the gamut from public relations to the acquirement of nuclear technology. “Yes, there was a coordinated effort to explain apartheid in a way that it was not such a bad thing,” says Milchan, who claims he was innocently and naively brought into a project whose goal was to buy media sources around the world in order to promote a better image of South Africa. According to Andrew and Leslie Cockburn, authors of Dangerous Liaison, “the Rabin government recruited … Milchan to launder cash … to purchase influential publications.” Milchan puts it another way, saying he was asked by prominent Israelis if “we can use your companies to make deals to buy newspapers. I said, `Sure. It sounds like fun.’ Basically, I was used as a middleman.” Later, Milchan says, when he realized the true nature of apartheid, he pulled the plug on the deal.

Milchan’s closest call with catastrophe came in 1985, when a business associate, Richard Kelly Smyth, was indicted by a federal grand jury in Los Angeles on charges of smuggling 810 krytons (electronic timing devices that can be used to trigger nuclear explosions) to Israel. Smyth first met him in the early 1970s when he was working for Rockwell. In 1973, Smyth started his own company called Milco, financed, according to the Washington Post, by Milchan, hence its name. Up to 80 percent of Milco’s business was reportedly with Milchan and Israel. Milchan claims he has never had any financial interest in Milco. Although selling arms to Israel is legal, any weapon or resource with a nuclear capability requires either a munitions license or an end-user certificate, both of which would be denied by the State Department because Israel has refused to sign the Nuclear Nonproliferation Treaty. However, in 1980, the federal indictment asserted, Smyth and Milco sent 610 krytons to Israel without the necessary licenses, plus another 200 in 1982.

In August 1985, U.S. Customs subpoenaed the financial records linking Smyth and Milchan. The records were neither turned over nor found. Smyth and his wife disappeared just days before his scheduled trial, which almost certainly would have involved Milchan. “I don’t know what the hell they were talking about,” he told Windrem about the Smyth case. Milchan’s lawyer also claimed he had proof that his client’s company had instructed Smyth to apply for the proper licenses. Milchan refuses to divulge details but offers a cryptic aside. “Let’s assume that there’s nothing that Israel and the United States do separately,” he says with a trace of amusement. Smyth, a U.S. fugitive for more than a decade, was last seen in Herzliya Pituach, an affluent suburb of Tel Aviv, where Milchan owns a home.


This feature originally appeared in the April 2000 issue of Los Angeles magazine

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