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Article from Israeli Newspaper Ha´aretz, Internet Edition 

Israeli secrets could be exposed by nuclear trigger dealer's arrest

By Yossi Melman

July 24, 2001


There is deep concern at the Defense Ministry that the arrest in Spain two weeks ago of an American charged with illegal arms trading could reveal details of how Israel acquired materials for its nuclear initiatives.

Neither the U.S. nor Spain have yet asked Israel for any information regarding the Malaga arrest of Richard Kelly Smith, the 71-year-old fugitive who jumped bail rather than face charges in the U.S. in 1985 of illegally selling Israel and Taiwan Krypton triggers used in the manufacture of nuclear bombs, a defense ministry source said yesterday.

But behind a fa?ade of calm, the ministry is seriously concerned that Smith's extradition to the U.S. to stand trial could lead to exposure of some of the inner workings of Israeli purchasing for its nuclear initiatives, and its special relations with the U.S.

Smith was arrested two weeks ago by Spanish police responding to a long-standing extradition request by the U.S. News of his arrest was released this weekend. The extradition request, said a spokesman for the Spanish Justice Ministry, was sent in 1992.

Smith was the president of a West Coast company called Milco, which manufactured microchips, and worked for NASA, the U.S. space administration. In May 1985, he was arrested on suspicion of illegally selling the Israeli defense ministry 850 electronic Krypton triggers, used for triggering the detonation of nuclear bombs. After interrogation by the police in Los Angeles, he posted $100,000 bond for his trial on charges of counterfeiting and illegal export of material used for nuclear weapons development. But he and his wife disappeared from Los Angeles, leaving behind a half-million dollar home and the forfeited bond money. Over the years there have been rumors he was seen in Israel and Britain. The FBI declared him a wanted fugitive at the time and reports then suggested he may have left the U.S. on board his yacht.

During the investigation into his activities, U.S. authorities learned he also sold the triggers to Taiwan. Like Israel, Taiwan is not a signatory of the Nuclear Nonproliferation Treaty, making it illegal for a U.S. citizen to sell Israel or Taiwan equipment used for manufacturing nuclear bombs.

Smith's investigation led to Arnon Milchin, now a top Hollywood producer, who owned a company called Hailey that served as the link between Milco and the Israeli Defense Ministry. The investigation revealed that between 1973 and 1985 when he was arrested, some 80 percent of Milco's sales were to Israel, which raised suspicions that Milco itself was an Israeli front for illegal purchases by the Israeli Defense Ministry in the U.S.

Milchin, originally from Rehovot, was never indicted in the case. But a number of years ago in interviews about his rise to prominence in Hollywood as a producer, he hinted that he had been involved "in certain kinds of activities that are best not talked about."

At the time of the Milco scandal in 1985, Israel denied that it was using the Krypton triggers for its nuclear program, claiming they had been used for the pharmaceutical industry here. But three months after Smith disappeared, the FBI arrested Jonathan Pollard, a junior officer working for the Navy and spying for Israel. Pollard had been transferring documents to Israeli contacts from Lakam, a then-little-known unit in the Defense Ministry headed by Rafi Eitan, an appointee of Ariel Sharon, when the latter was Defense Minister in the early 1980s.



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