Posts

Turkey’s Erdogan: Purges Police, Stymies Corruption Investigation and Prepares to visit Iran

Turkish Premier Erdogan has aggressively pursued a purge of police involved with public prosecutors corruption investigation in a desperate move to stave off potential losses for the AKP in the March 2014 municipal elections.   His actions reflect the internecine battle between two former Islamist allies, Erdogan of the AKP and Sheikh Mohammad Fethullah Gulen and his followers who have penetrated both police and the judiciary in Turkey. At the top of the Turkish government in the largely ceremonial post is co-founder of the AKP and current Turkish President, Abdullah Gul, a Gulenist. Gulen is being urged to exercise his powers under Turkey’s constitution that might include an independent comprehensive investigation of corruption and perhaps a call for new elections.  Despite calls for Gul to act, he remains sphinx-like on the sidelines keeping a watching brief on the swirl of the corruption charges until evidence of wrongdoing by the inner circle of Premier Erdogan surfaces.  We had reported on the alleged involvement of Erodan’s son, Bilal in a money laundering scheme benefitting Al Qaeda affiliates in Syria.  There are reports from the New York Times  and the Washington Post in the US and from Today’s Zaman and Hurriyet Daily News in Turkey on overnight developments and comments from Turkish secular political opponents of the Islamist AKP regime of Premier Erdogan.

More than 600 police were involved in the overnight purge; 350 were removed from Ankara posts, while 250 were “brought in from elsewhere”. Hurriyet Daily News (HDN)reported the removal of 16 police chiefs from provincial posts:

Police chiefs of 15 provinces across Turkey, including Ankara and Izmir, and the deputy head of the national police department were dismissed overnight by the Interior Ministry.

The dismissal of the Ankara police chief, Kadir Ay, comes only a day after 350 officers working in key operational units were relocated in one sweep. The head of the Izmir forces, Ali Bilkay, has also been relocated.

Erdogan used intimidation in personally threatening the Istanbul prosecutor. Note what the prosecutor’s remarks in this HDN article:

A prosecutor who has supervised a recent corruption probe claimed Jan. 8, 2014  he was “threatened” by two people sent by Prime Minister Recep Tayyip Erdogan to stop the investigation.

“Two people who were former members of the high judiciary were sent to me by Prime Minister Recep Tayyip Erdo?an,” Zekeriya Öz, who was removed from his post as deputy Istanbul chief prosecutor following a graft investigation that included the sons of three former Cabinet members, told reporters Jan. 8. 

“Those two people I met at a hotel in Bursa told me that the prime minister was angry with me, I should write a letter of apology and stop the probe immediately, or I would be harmed.”

In the midst of this were new allegations of corruption in the port of Izmir involving the Turkish National Railways. HDN reported:

Elsewhere, three senior Izmir officers were dismissed after launching fraud investigations into transactions at commercial harbors operated by the Turkish State Railways (TCDD) in which 25 people were detained.

The suspects, including eight TCDD officials, were taken into custody on charges of bribery, corruption, conspiring to rig tenders and leaking information about tenders as part of a fraud investigation launched by the Izmir Public Prosecutor.

They included senior officials such as the director of the Izmir port and his two deputies, while reports also claimed that an arrest warrant had been issued for the brother-in-law of former Transport and Urban Planning Minister Binali Yildirim, who works in the company of a CEO taken into custody during the raids.

Then the Judiciary weighed in on developments in Istanbul, HDN noted:

… the Supreme Council of Judges and Prosecutors (HSYK) launched an investigation yesterday into newly appointed Istanbul Police Chief Selami Alt?nok, who replaced Huseyin Capk?n after the latter was reassigned as part of the probe.

Today’s Zaman  noted HSYK’s authority to conduct such an investigation, unusual given the unraveling corruption charges and questionable Erdogan moves:

The HSYK has the authority to launch investigations into police chiefs based on a law adopted in 2005. This is the first time the HSYK has exercised its authority to launch an investigation into a police chief.

There is a separate development arising from calls for a possible retrial of secular senior Turkish military officers convicted in alleged plots to overthrow the Islamist AKP government, see our most recent Iconoclast post.  This was a meeting today with the head of the Turkish Bar Association and the Erdogan Justice Minister.  Today’s Zaman reported that:

Turkish Bar Association (TBB) President Metin Feyzioglu [met] with Justice Minister Bekir Bozdag, Wednesday.

During their meeting, Feyzioglu and Bozdag discussed possible legal avenues for the retrial of military officers convicted of coup plotting. On Thursday, Feyzioglu is scheduled to hold separate meetings with Parliament Speaker Cemil Cicek, Republican People’s Party (CHP) leader Kemal Kilicdaroglu and Nationalist Movement Party (MHP) leader Devlet Bahceli to discuss the issue.

Scores of Turkish Armed Forces (TSK) members — both retired and on active duty — were imprisoned as a result of the Sledgehammer and Ergenekon coup trials. These cases were concluded in 2012 and 2013, respectively. The Supreme Court of Appeals recently upheld a lower court’s verdict in the Sledgehammer case, while the appeals court is currently reviewing the Ergenekon case.

On Jan. 3, 2014 Feyzioglu visited President Abdullah Gul at the Cankaya presidential palace to discuss the situation of the convicted officers. In a press conference after the meeting, Feyzioglu said the TBB had outlined a proposal that included nullifying decisions made by specially authorized courts; retrying cases heard by those courts at high criminal courts; abolishing regional high criminal courts that replaced specially authorized courts; and paying compensation for improper arrests and convictions.

Meanwhile the main secular opposition, the People’s Republican Party (CHP) lead by Kemal Kilicdaroglu in Turkey’s parliament has kept up a stream of constant criticism of Erdogan endeavoring to place him at the center of the corruption probe. Yesterday, he questioned the Turkish Intelligence (MIT) report on the illegal gold trading submitted in April 2013 involving Azeri Iranian businessman Reza Zarrab. Today’s Zaman reported Kilicdaroglu saying:

In a weekly meeting of his party’s parliamentary group on Tuesday, Kilicdaroglu addressed reports published Monday in a number of media outlets claiming that the National Intelligence Organization (MIT) submitted a report to Erdogan on April 18, 2013 detailing the shady relations – involving bribery and influence-peddling – of certain ministers with Iranian businessman Reza Zarrab, who is under arrest. “I would like to ask the prime minister about what he did upon receiving this report. Did you call these ministers and talk to them? Did you talk to your children? He didn’t. He is the one who gave these orders,” Kilicdaroglu said.

Erdogan is busy preparing for a trip to Iran later in January. According to Press TV,  the purpose of the visit is to “upgrade relations” with the Islamic regime.  Iranian Foreign Minister Mohammad Javad Zarif took time out from his conduct of negotiations with the P5+1 last weekend to confer with Premier Erdogan and  Turkey’s Foreign Minister, Ahmet Davutoglu.  The purpose of those meetings and the upcoming one late this month is to focus on trade, now that the P5+1 sanctions regime has allegedly been lifted. This despite Turkey’s membership in  NATO and as a US ally.  Press TV noted:new US Senate

During the Zarif-Erdogan meeting, Iran and Turkey underlined their determination to boost the value of bilateral trade volume.

During a visit to Tehran in November, Davutoglu said his country can become an energy corridor for its eastern oil- and gas-rich neighbor, Iran.

In October, the Turkish minister of energy and natural resources said Turkey will raise its gas imports from Iran – currently standing at 10 billion cubic meters a year – if possible.

Iran is Turkey’s second biggest gas supplier after Russia. Turkey uses a significant portion of its imported Iranian natural gas to generate electricity.

But why should Turkey be any different from British parliamentary  and French delegations, the latter seeking to exploit minerals, steel and auto investment projects and other opportunities given the lifting of sanctions?

Erdogan, as we noted earlier, is desperate to stifle the corruption investigations, and maintain calm in the roiling foreign exchange markets for the Turkish Lira amidst concerns raised by the EU, and more importantly credit rating agencies like Fitch.

Meanwhile Iran’s wrecking crew  in the US is beavering  away trying to sabotage new sanctions legislation pending in the US Senate that appears to have majority bi-partisan support for passage of the bill co-sponsored by Senate Foreign Relations Chair Robert Menendez (D-NJ) and Mark Kirk (R-IL).  A Washington Free Beacon report,“Pro-Iran Shadow Lobby Launches Bid to Kill Iran Sanctions” drew attention to a letter from the Iran Project and its relations with Iranian lobbyists in Washington, DC:

Ploughshares has touted the Iran Project’s work on multiple occasions, referring to it “as a group of highly respected national security experts and former U.S. government officials.”

“The reports released by the Iran Project are very influential among decision makers in Washington,” NIAC wrote of the group in April.

“These are many of the same foreign policy experts who opposed the toughest Iran sanctions that got us to this point,” Mark Dubowitz, executive director of the Foundation for Defense of Democracies (FDD) tweeted on Monday.

Others cautioned against taking seriously this latest anti-sanctions lobbying bid. “This is a group run by people who support Iran, are celebrated by the Iranian media, and are deeply embedded in a network of organizations that have consistently sought to weaken the U.S.’s leverage in attempting to denuclearize Iran,” said one senior official at a Washington-based pro-Israel group.

Erdogan’s Turkey cozying up to Iran, while filtering arms and funds to the latter’s opponents in Syria would appear to be opportunistic. Is it to secure natural gas for Turkish domestic and manufacturing needs in exchange for machinery sales that just might find their way to assist in making a new generation of centrifuges for uranium enrichment?  In the meantime Erdogan might be in danger politically given the latest round of corruption investigations and possible retrials of jailed secular senior military officials.  Either way, the Obama Administration has its hands full dealing with the metastasizing Al Qaeda in Syria and Iraq making hollow his 2012 campaign theme that ”Bin Laden is dead and Al Qaeda is on the run”.

EDITORS NOTE: This column originally appeared on The New English Review.

Turkey’s Illegal Gold Trade with Iran

In our Iconoclast post on Harold Rhode’s speculations regarding a possible alliance of convenience between the Gulenists and Secularists that might topple Premier Erdogan, he drew attention to the illicit gold trading conducted by the state-owned Halkbank.  Suleyman  Aslan, the head of Halkbank at the center of the illicit  gold trading  had been prominent among the 52  arrested in the swirl of events in the current Turkish corruption  scandal.  Jonathan Schanzer and  Mark Dubowitz of the Washington, DC-based Foundation for Defense of Democracy published an article in Foreign Policy Magazine  (FPM) covering  research into the “gas for gold ” scheme that the Obama Administration failed to stop, “Iran’s Turkish Gold Rush”.

Messrs. Schanzer and Dubowitz drew attention to the two principals at the center of the gas for gold trade between Turkey and Iran:

The drama surrounding two personalities are particularly eye-popping: Police reportedly discovered shoe boxes containing $4.5 million in the home of Suleyman Aslan, the CEO of state-owned Halkbank, and also arrested Reza Zarrab, an [Azeri] Iranian businessman who primarily deals in the gold trade, and who allegedly oversaw deals worth almost $10 billion last year alone.

The FPM article on the Turkey Iran  ‘gas for gold” trade  described  how it worked:

The Turks exported some $13 billion of gold to Tehran directly, or through the UAE, between March 2012 and July 2013. In return, the Turks received Iranian natural gas and oil. But because sanctions prevented Iran from getting paid in dollars or euros, the Turks allowed Tehran to buy gold with their Turkish lira — and that gold found its way back to Iranian coffers.

Earlier this year in May 2013 the FDD teamed with Roubini Global Economics and conducted an investigation into the dynamics of the gold trade and its significant alleviation of currency restrictions under sanctions against Iran’s nuclear program. The FDD report, “Iran’s Golden Loophole” indicated the scope and impact of the gas for gold scheme:

These foreign exchange reserves are Iran’s principal hedge against a severe balance of payments crisis, and help Iran withstand international pressure over its nuclear program. Since July 30, 2012, when the Obama administration issued an executive order prohibiting gold exports to the government of Iran, Iran has received over $6 billion in payment in gold for its energy exports—the value of the lack of enforcement of the golden loophole—mainly as gold payments to the Central Bank of Iran. These gold exports to the Central Bank of Iran already are a sanctionable activity under existing U.S. law; gold exports to any entity in Iran will become sanction able as of July 1, 2013. This report estimates that, unless gold sanctions are enforced, Iran could receive up to $20 billion a year, representing around thirty percent of Iran’s projected 2013 energy exports.

Schanzer and Dubowitz questioned why Turkey, a NATO ally of the US, had engaged in the Gold trade with Iran, and why the Obama Administration hadn’t closed it:

The Turks — NATO allies who have assured Washington that they oppose Iran’s military-nuclear program — brazenly conducted these massive gold transactions even after the Obama administration tightened sanctions on Iran’s precious metals trade in July 2012.

Turkey, however, chose to exploit a loophole that technically permitted the transfer of billions of dollars of gold to so-called “private” entities in Iran. Iranian Ambassador to Turkey Ali Reza Bikdeli recently praised Halkbank for its “smart management decisions in recent years [that] have played an important role in Iranian-Turkish relations.” Halkbank insists that its role in these transactions was entirely legal.

The U.S. Congress and President Obama closed this “golden loophole” in January 2013. At the time, the Obama administration could have taken action against state-owned Halkbank, which processed these sanctions-busting transactions, using the sanctions already in place to cut the bank off from the U.S. financial system. Instead, the administration lobbied to make sure the legislation that closed this loophole did not take effect for six months — effectively ensuring that the gold transactions continued apace until July 1. That helped Iran accrue billions of dollars more in gold, further undermining the sanctions regime.

In defending its decision not to enforce its own sanctions, the Obama administration insisted that Turkey only transferred gold to private Iranian citizens. The administration argued that, as a result, this wasn’t an explicit violation of its executive order.

Perhaps as the authors point out, the Administration had other concerns  not disturbing the relations with the Erdogan regime regarding  the latter’s role in the regional  alliance contending with the 33 month Syrian civil war . There was Turkey’s support for rebel factions and the safe haven it provided the massive stream of 1.5 million refugees.  However could  it have been  the  nearly $6 billion “they estimate the golden loophole” could have provided  Iran in the way of an ”olive branch” used during the secret negotiations  by the Obama Administration that led up to the November 24, 2013 P5+1  interim agreement?

According to a Zaman Today article, cited by the authors,  the illicit “gas for gold” trade between Iran could be vastly more  significant: “The  suspicious transactions between Iran and Turkey could exceed $119 billion — nine times the total of gas-for-gold transactions reported. “

There are suspicions about whether the “gas for gold” scheme enabled Iran to pay for machinery used in the production a new class of centrifuges announced by AEOI head Ali Akbar Salehi this week. Then there is the question of payments for Russian contractors and personnel engaged in projects like the Arak heavy water reactor that would enable Iran to produce plutonium.  And lest we also not forget  could have been used  to fund payments in the  waivers granted  by the US  for the Iranian  oil trade with China and others.  Clearly, the current corruption probe in Turkey may lift the veil on a vast underworld of transactions with Turkey  that may have enabled Iran to continue, if not accelerate, achievement of their nuclear weapons program objective: nuclear hegemony destabilizing the Middle East and the World.

EDITORS NOTE: This column originally appeared on The New English Review.