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US fugitive held in arms trade inquiry

By Julian Borger in Washington

Tuesday July 31, 2001

The Guardian Unlimited



The arrest of a 71-year-old American fugitive in Spain has reopened a US inquiry into a smuggling operation that supplied sensitive technology to Israel through a company owned by a leading Hollywood film producer.

Richard Kelly Smyth, an avionics expert and a former Nasa consultant, was arrested on July 10 in Malaga on charges of nuclear arms trafficking and falsifying documents. He and his wife had disappeared a week before his trial in 1985, triggering reports that they had been killed to silence them.

In the 1980s Mr Smyth's firm, Milco International Inc, sold high-speed switches, known as krytrons, to an Israeli company, Heli-Trading.

Heli-Trading was owned by Arnon Milchan, an Israeli-born businessman responsible for producing a long list of Hollywood blockbusters including Pretty Woman, LA Confidential and Fight Club. His company, Regency Productions, has become a fixture of the Hollywood scene.

Krytrons are used in high-speed photography and strobe lights, but the glass switches can also serve as a trigger for a nuclear bomb, and their export is subject to strict controls under the Arms Export Control Act.

However, according to Mr Smyth's indictment, Mr Milchan exported the krytrons falsely labelled as radio tubes.

Mr Milchan was not available for comment yesterday, but in an interview last year on the CBS news programme 60 Minutes he said he had allowed the Israeli government to use his companies as a means of trading with the US. He said he was not personally involved in the krytron deal.

Before establishing himself as a movie producer, Mr Milchan was an arms trader, serving as a middle-man between Israel and other governments, including the South African apartheid regime.

Heli-Trading and Milchan Brothers, another firm owned by the producer, also asked Milco to supply lasers and chemicals used in solid fuel for powering long-range missiles.

A former Milco director, a nuclear scientist called Robert Mainhardt, resigned claiming that Mr Milchan and Mr Smyth had asked him to obtain designs for advanced nuclear reactors and uranium hexachloride, used in the enrichment of uranium to bomb-grade quality.

Mr Milchan, who is a citizen of both the US and Monaco, and who counts the Israeli politicians Shimon Peres and Ehud Barak among his close friends, told CBS he was addicted to danger.

"There was something in me that wanted to do the most scary things," he said. "For me, it's maybe like a drug. I guess I need a dose of it for oxygen."

The US justice department did not return calls about Mr Smyth's case yesterday, but Washington is expected to request the fugitive's extradition from Spain shortly.

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