Tom Regan, a columnist at, previously worked for the Christian Science Monitor, National Public Radio, the Boston Globe and the Canadian Broadcasting Corporation. He is the former executive director of the Online News Association and was a Nieman Fellow at Harvard in 1992.

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  • US-Turkey ties under further strain after conviction of Turkish banker

    There is speculation that Zarrab’s gold transactions helped Turkey’s export figures at a politically sensitive time.

    2018/01/14 Issue: 139 Page: 18

    Political junkies and others in much of the world may have spent the first week of 2018 consuming details of a salacious new book about the Trump administra­tion but Turkey’s attention was elsewhere. Its public and media were focused on a courtroom in New York where Turkish banker Mehmet Hakan Atilla was found guilty of helping Iran evade US sanctions. It was the latest in a se­ries of blows to Turkish-American relations.

    Atilla, an executive at Turkey’s majority state-owned Halkbank, was found guilty on five of six counts, including bank fraud. The verdict had Turkish President Recep Tayyip Erdogan railing at what he called “new coup attempts” orchestrated by the CIA, FBI and the Gulenist move­ment, which the Justice and Development Party (AKP) government classified as a terrorist organisation even before the attempted July 2016 coup.

    Atilla’s 4-week trial generated few headlines in the United States, with only one prominent US publication running a full-length feature on the trial, which it called “the biggest sanctions-evasion scheme in recent mem­ory.” However, it was closely watched in Turkey. Even though Turkey’s pro-government media did their best to avoid covering the details of the trial, many Turks followed tweets and Facebook postings by American journalists. For Turkey it was, by any measure, the kind of trial that would generate controversy.

    US prosecutors accused Atilla of conspiring with Turkish gold trader Reza Zarrab to concoct a scheme to evade sanctions by using gold and food transactions. Zarrab, who had been arrested by US authorities a few months earlier when he and his family were on their way to Disneyland, pleaded guilty and agreed to testify against Atilla.

    On the witness stand, Zarrab described an elaborate scheme that included bribes to top Turkish government officials but the real showstopper was his testimony that Erdogan knew about the plan and had given it his blessing.

    There is speculation that Zarrab’s gold transactions helped Turkey’s export figures at a politi­cally sensitive time.

    Zarrab’s testimony was strengthened by former Turkish police officer Huseyin Korkmaz’s statement that he was impris­oned for investigating Zarrab and Turkish government officials in 2012 and 2013. He said he fled to the United States after his release and carried much of the evidence from that investigation with him. This was introduced at Atilla’s trial.

    Turkey’s pro-government media and government officials reacted as one might have expected. The Daily Sabah described Atilla’s trial as “scan­dalous” and the guilty verdict as “based on illegal evidence.” Turkish officials said the verdict was “void” under international law and they doubled down on the usual view from Ankara that the US judge, prosecutor and everyone else were under the sway of Turkish cleric Fethullah Gulen, Erdogan’s political rival who lives in self-exile in Pennsyl­vania.

    In his first public comments on the verdict, Erdogan lambasted America’s “understanding of justice” and alleged it was “carrying out… a chain of plots and these are not just legal but also economic plots.”

    US prosecutors were unapolo­getic. After the trial, Joon Kim, then acting US attorney in New York, said foreign banks and bankers had a choice: “You can choose willfully to help Iran and other sanctioned nations evade US law or you can choose to be part of the international banking community transacting in US dollars but you can’t do both.”

    The verdict is about more than geopolitics, however. It has real-world consequences, particularly for Halkbank. There is a very real chance it will face sanctions, which could severely limit its ability to do business in the United States and elsewhere internationally.

    Zarrab’s request that he and his family be put into the US govern­ment’s federal witness protection programme has also raised eyebrows. The request was an indication that Zarrab feared retaliation from well-connected people in Turkey.

    Though the Atilla verdict will go down as another blow to Turkish-American relations, it is important because it introduces an element of unpredictability in the equation.

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