Legal experts predicted last week that “Erdogan’s gold trader,” Turkish-Iranian Reza Zarrab, would cooperate with American investigations into Iranian sanctions evasion. This week, he indeed turned state’s evidence against a Turkish banker, another of Turkish President Erdogan’s closest associates. In riveting testimony, he claimed under oath that Erdogan gave personal approval for the sanctions evasion scheme.
Zarrab testified that the Minister told him that President Erdogan personally approved the project.
Zarrab testified that he and Mehmet Hakan Atilla, deputy CEO of Halkbank, ran a money laundering project from 2010 to 2015 that helped Iran evade international economic sanctions. He admitted to paying $60 million in bribes to the Turkish Economy Minister as part of the scheme. He testified that the Minister told him that President Erdogan personally approved the project.
Charges of Coup Plot to Cover Charges of Corruption
Zarrab originally came to world attention in 2013, when he was arrested by Turkish police on charges of smuggling gold as part of a plan to help Iran avoid sanctions. The Turkish indictment included charges of bribery and corruption involving senior officials, including three government ministers. Erdogan and the three ministers were caught in secretly recorded conversations with their respective sons, talking about the money they received. The resulting outcry threatened the stability of the Turkish government.
President Recep Tayyip Erdogan claimed at the time that the arrest was part of a coup plot, and that all the charges and evidence were manufactured. He said it was hatched by forces loyal to Fethullah Gulen, a cleric who has received political asylum in the United States and lives in Pennsylvania. Erdogan’s response to the arrest included mass arrests of tens of thousands of military officers, law enforcement officials, and other civil servants. They all were accused of being “Gulenists” and plotting a coup; about 200,000 more were sacked.
Zarrab was arrested by U.S. authorities in 2016, likely on evidence supplied by the Turkish prosecutors before they were arrested. He hired one of the largest and most expensive legal teams since the O.J. Simpson trial. In spite of initial signs that he planned to challenge the constitutionality of the U.S. law under which he was prosecuted, he eventually decided to cooperate with federal authorities.
Reza Zarrab Assets Seized
Erdogan has reacted to Zarrab’s testimony with swift fury. Istanbul’s chief prosecutor announced just hours ago that Mr. Zarrab’s assets and those of his family had been seized by the government. State-run media carried a statement by Turkey’s Prime Minister expressing hope that Zarrab will “turn back from his mistake” of cooperating with the U.S. government.
Also today, Turkey issued an arrest warrant for a retired CIA officer, Graham Fuller, charging him with attempting to overthrow the government. The warrant charged him with having links to Fethullah Gulen. Fuller, the former vice chairman of the National Intelligence Council, dismissed the accusations as ludicrous.
The two actions by Turkish law enforcement point to Erdogan’s strategy. Turks have been spellbound by the matter, and Erdogan needs leverage, a way to discredit the U.S. investigation, and a scapegoat. Seizing the assets of Zarrab and his family is a brute force action to try to silence him. The Prime Minister’s call for him to turn back from his mistake was a threat and a potential promise of forgiveness. That’s the leverage.
Reliable Scapegoat: The CIA
The explanation to discredit the investigation reverts to the old reliable scapegoat, the CIA – in cooperation with Gulen, of course. The basis on which the government alleges Mr. Fuller’s participation in coup planning is that Fuller and an academic colleague were in Istanbul before the 2013 arrest of Zarrab. That is flimsy, yes, but when caught in flagrante delicto even the sheerest fabric offers some semblance of modesty.
A flimsy explanation, but when caught in flagrante delicto even the sheerest fabric offers some semblance of modesty.
It is not likely that Erdogan’s attempts to influence Mr. Zarrab will succeed. Zarrab clearly has assets outside the country sufficient to pay for the legal dream team. He would not have entered a plea agreement without a careful cost-benefit analysis. He is 34 years old and has a wife and a young daughter to care for, and he would not jeopardize their well-being.
Erdogan is likely to have slightly greater success with his public. The Gulen bogeyman is tried and true, and continues to work with the president’s supporters. Adding in a large dose of CIA conspiracy may win over some fence straddling voters. It at least gives Erdogan the semblance of a story to tell: that the U.S. trial, Zarrab’s testimony, and all the supporting evidence have been manufactured by the CIA in order to attack Turkish sovereignty. It remains to be seen whether Turks will see through the negligee of his defense.
