New York courtroom drama fuels Turkish-US tensions

Zarrab said Erdogan and then-Finance Minister Ali Babacan ordered the start of the illicit trade with Iran that brought Tehran billions of dollars.

Ripple effects. A file photo shows Turkish- Iranian businessman Reza Zarrab arriving at a courthouse in Istanbul in a separate case against him. (AP)


2017/12/03 Issue: 134 Page: 16


The Arab Weekly
Thomas Seibert



Washington - Turkish anger over a US District Court trial impli­cating Turkish President Recep Tayyip Erdogan as a key figure in illicit transactions benefiting Iran and an escalating row about US military support for Kurds in Syria pushed ties between the United States and Turkey to a new crisis point.

The government in Ankara said the trial in New York is part of a con­spiracy aimed at stopping Turkey’s rise towards becoming a regional power. The court heard testimony from Turkish-Iranian businessman Reza Zarrab about corruption in the Turkish government related to illicit gold trade with Iran.

“Turkish officials continue to see the trial as a political effort by the United States,” said Howard Eissenstat, associate professor of history at St Lawrence University in Canton, New York, and non-resi­dent senior fellow at the Project on Middle East Democracy in Wash­ington.

“My concern is that Turkey will badly miscalculate its response and create a more explosive situation than already exists,” Eissenstat wrote via e-mail.

Relations between the United States and Turkey, putative NATO allies, went through a rocky patch marked by Turkish frustration with US policies in Syria and with Wash­ington’s reluctance to extradite Fethullah Gulen, a US-based Mus­lim cleric accused by Ankara of or­ganising last year’s coup attempt. In the United States, there have been growing calls for the Trump administration to take a tougher line with Turkey after Erdogan’s bodyguards were filmed beating protesters in Washington during a visit by the Turkish president in May.

Ties appeared to be on the mend after a phone conversation be­tween Erdogan and US President Donald Trump in November. Anka­ra said Trump promised to end US arms shipments to Syrian Kurds, a long-standing demand by Turkey. However, the trial in New York and a row over US weapons in Kurdish hands dampened hopes for a nor­malisation.

Zarrab, 34, testified in a federal trial against Mehmet Hakan Atil­la, a senior manager at Halkbank, a state-run bank in Turkey that prosecutors said was involved in illegal transactions in gold that circumvented US and UN sanc­tions against Iran. Before the trial opened November 28, the Turkish government tried to have Zarrab freed and returned to Turkey. He has been testifying as a witness for the prosecution after reaching a plea deal that he said was the most promising way to freedom since his arrest in Florida in March 2016.

In his most explosive testimony, Zarrab said Erdogan — then prime minister — and then-Finance Min­ister Ali Babacan ordered the start of the illicit trade with Iran that brought Tehran billions of dollars at a time the country was blocked from international financial trans­actions because of its nuclear pro­gramme. Zarrab said he paid more than $60 million in bribes to Zafer Caglayan, Turkey’s economy min­ister at the time.

Erdogan rejected the charges and said Turkey did not breach sanc­tions. “We did the right thing,” he said.

Accusations about Zarrab’s role in the illegal gold trade with Iran first appeared in Turkey in late 2013, leading to the resignation of four ministers from Erdogan’s cabi­net. At the time, Erdogan called the investigation a conspiracy by Gu­len and had the prosecutors fired.

Ankara said the New York trial is an attempt by the Gulen move­ment, called the Fethullah Terror Organisation (FETO) by the Turk­ish government, to mount pressure on Turkey through the US court system.

“It is clear FETO has hijacked the American justice system with the Zarrab case and they are trying to use it to create a smear campaign that they hope will eventually harm Erdogan,” Ilnur Cevik, an adviser to the Turkish president, wrote in the pro-government newspaper Daily Sabah. Turkish Prime Minister Bi­nali Yildirim also said the goal of the New York trial was to harm Turkey.

Meanwhile, Zarrab, long pre­sented by Ankara as an innocent man caught in the clutches of the US judiciary, is now portrayed as a potential traitor because of his will­ingness to testify. On December 1, Turkish prosecutors ordered the seizure of Zarrab’s assets in Turkey because of espionage charges.

Fresh accusations by the opposi­tion in Ankara put Erdogan further on the defensive. Opposition leader Kemal Kilicdaroglu said members of Erdogan’s family transferred millions of dollars to off-shore ac­counts to evade Turkish taxes. In response, Erdogan filed a lawsuit against Kilicdaroglu, seeking ap­proximately $385,000 in damages.

As far as the government is con­cerned, it is not a coincidence that Kilicdaroglu published his accusa­tions while Zarrab was testifying in New York. Cevik wrote that an “international slander campaign” was “launching a well-planned, two-pronged slander campaign at home and abroad.”

The heightened tension was re­flected in exchanges between Turk­ish and US officials about Wash­ington’s military support for the People’s Protection Units (YPG), a Syrian-Kurdish militia seen by the United States as an important ally in the fight against the Islamic State but regarded as a terrorist group by Turkey.

Following Trump’s phone call with Erdogan, the US Defence De­partment declined to confirm that all military support for the YPG would stop. The United States would “collect any arms that would threaten our ally Turkey,” Pentagon spokesman Eric Pahon told Tur­key’s state-run Anadolu Agency.

That statement drew an icy re­sponse from Erdogan’s spokesman Ibrahim Kalin. “Others do not de­cide who or what threatens our national security, the Turkish Re­public does,” Kalin said, Anadolu reported.


Thomas Seibert is an Arab Weekly contributor in Istanbul.


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