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COLUMN ONE : A Mogul's Bankroll--and Past : Arnon Milchan has emerged as one of Hollywood's most powerful producers. His background is unusual: agribusiness and munitions.


"I'd do anything I can for my country within the bounds of the law," Milchan said. "My family and I risked our lives to make sure Israel stays alive. Patriot missiles saved a lot of people from the Scud attacks (during the Persian Gulf War), and if I had anything to do with it," he adds vaguely, "I'd be proud."

Years earlier, Milchan's name surfaced in connection with another scandal--this one involving South Africa. The "Muldergate" case revolved around accusations that officials from the office of then-Information Minister Cornelius P. Mulder tried to favorably influence international public opinion in the 1970s through the use of a secret slush fund thought to be more than $100 million.

The money reportedly was used to buy influential news publications and communications outlets around the world and to oppose politicians critical of the South African regime. Press reports at the time quoted Eschel M. Rhoodie--Mulder's deputy and a key figure in the scandal--as saying that some funding went to candidates who defeated liberal Democratic Sens. John Tunney of California and Dick Clark of Iowa.

In response to a written inquiry from The Times, Rhoodie said he had been introduced to Milchan, but could not recall the producer participating in any Muldergate-related affairs. However, in their 1980 book, "Muldergate," South African journalists Merven Rees and Chris Day described Milchan as one of Rhoodie's "front men," though they did not detail his alleged activities in the propaganda campaign.

Milchan has given contradictory accounts of his South African dealings over the years.

In an initial interview with The Times, Milchan insisted that his involvement was limited to a three-day visit to South Africa in the mid-1970s.

The Ministry of Information "probably had plans for me," the producer acknowledged. "But that was before I received the shock of my life. At the local zoo, I came across a sign saying, 'No Asians, Blacks, or dogs allowed.' I realized that, as an Asian--since I was from Israel--I couldn't go in. I never set foot in that country again."

A 1986 article in the Jerusalem Post, an English-language Israeli newspaper, told a different story. Milchan, it alleged, had served as the "Israeli money man" for the Muldergate conspirators, laundering funds through a bank in Italy. According to the Post, Milchan acknowledged his role; the paper quoted him as saying he blew the whistle on the operation because "he couldn't sleep at night."

Confronted with this newspaper account in a second interview with The Times, Milchan did an about-face.

Maintaining that strong feelings against apartheid make the subject painful for him, he acknowledged some involvement with the operation. "I worked with them, but I wasn't the 'money man,' " he said. "They asked, but I wouldn't do it."

Milchan contacted The Times once again last Thursday. In that interview, he categorically denied "any involvement in any organization in South Africa." Evidence of his convictions, he said, is his next film, "The Power of One," which takes a strong stand against the country's separatist policies.

"I will fight the rest of my life against racism and apartheid," Milchan said.

Whatever the reality, Milchan's new business partners evidently find his past less important than their collective future.

"I know about things, but I also know there's a load of bull---- out there," Scriba & Deyhle partner Bodo Scriba said. Canal Plus' Chief Executive Officer Rene Bonnell said: "My only problem is with whether Milchan is a good producer. . . . His personal history I do not know."

Terry Semel, president of Warner Bros., acknowledges reading about Milchan's krytron involvement in the mid-1980s, but said he was unaware of a South African connection.

"There was a common rumble having to do with Arnon's arms dealing, but, frankly, we didn't look into it," he said. "We were making a movie deal with him, not buying a piece of his company. We didn't do any research into how he made his money. But, then, why should we? He's never been charged with any illegal activities, as far as we know, and we won't indict him on the basis of what might have been."

Milchan turned his attention to Hollywood in 1975 after producing films in Israel and England in the early part of the decade.

"Part of it was my love of movies," he said. "Part was that, since I was Jewish and living in a small country, making a movie seemed so intimidating. I've always been attracted to things a little scary."

His early years in the movie industry, Milchan recalls, were spent overcoming deep-rooted insecurity. The 1981 TV mini-series "Masada," which he produced with then-partner Pollack, provided a foothold. But the big screen still loomed large.

"In the beginning, I couldn't believe they were letting me make a movie. . . . If only they knew how much I didn't know," Milchan said. "Then I realized no one really knows. Nine out of 10 decisions made in this town are wrong."

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