As Turkish President Recep Tayyip Erdogan prepares for a trip to Washington to attend the Nuclear Security Summit and to get some face time with President Obama, it appears that a corruption related scandal will also be traveling along with him.
Although not spotlighted in the forefront of media outlets, the roots of the scandal go much deeper, having developed in Turkey over a five-year period.
Only a few weeks ago, the FBI arrested Reza Zarrab, a dual Iranian/Turkish national in Miami. Zarrab, 33, owner and operator of Royal Holding A.S., and two others, are accused of using a web of companies over five years to induce U.S. banks to unwittingly process transactions that violated international sanctions against Iran, according to an indictment unsealed
According to published reports, Zarrab, who is also a gold trader is under suspicion of being a central broker in behemoth-like deals between the rogue regime of the Islamic Republic of Iran when it was still under the vehemently anti-Western leadership of Mahmoud Ahmadinejad and a bevy of international corporations.
Using access to Turkish banks, according to published reports, Zarrab transferred the monies in question and even created a “gold route” which also facilitated in the transfer from Turkey to Iran of precious metal in exchange for oil and gas reserves from Iran. This scheme was ostensibly devised to sidestep sanctions imposed by the United States that specifically pertained to cash and not gold. The US became wise to the nefarious ploy and thusly, closed off this route of transfer and communication.
According to a Ha’Aretz report, “Zarrab was arrested in Turkey in 2013 on suspicion of bribing senior government officials, among them the sons of three top ministers. Erdogan’s son Bilal was also involved in the affair. The bribery was apparently necessary to allow money transfers via Turkey’s Halk Bank, whose general manager was arrested after millions of dollars stuffed in shoe boxes were discovered in his home.”
Zarrab’s apprehension by law enforcement officials sent shock waves through Turkey as it ignited a political firestorm. In his intense promulgations of paranoia Erdogan has pointed a finger of blame and culpability to both prosecutors and police commissioner in Istanbul, as well as hundreds of judges and police officers with uniting in some kind of murky cabal in the hopes of organizing an insurrection of the present government in Istanbul. As a result of Erdogan’s arbitrary accusations that lack merit, the vast majority of the aforementioned officials in Turkey were either terminated from their positions or transferred to other less weighty posts .
In the interim Zarrab was released and even received an award for export performance.
Ha’Aretz has reported that Zarrab had an Iranian handler by the name of Babak Zanjani, who was sentenced to death in Iran for money laundering and other crimes in early March. He was the owner of the Sorinet conglomerate, which was on the American blacklist because of sanctions violations.
Accused with absconding with hundreds of millions of dollars from state coffers, Zanjani allegedly pocketed gargantuan sums of money that the rogue regime should have been the recipient of in the varied deals he made in its name and with its money.
To give a case in point, Ha’Aretz reported that “Zanjani sold oil and gas worth three billion dollars, depositing the money in banks in Malaysia and Turkey on behalf of the Iranian government. For its part, Turkey, when it could not transfer the money to Iran, used the said gold route, allowing Tehran to keep its head above water during the sanctions regime.”
As Hassan Rouhani ascended to power and replaced the bellicose Ahmadinejad, he severely clamped down on corruption related matters, declaring a zero tolerance policy for such gross illegalities. As such, Rouhani immediately went after Zanjani who had been treated with kid gloves by Ahmadinejad. Zanjani was given full immunity by him as well as letters of recommendation for Iran’s central bank.
For his part, Zarrab claims he was unaware of any indictment against him the US, but reports indicate that if convicted on the charges leveled against him, he is looking at almost a life sentence behind bars.
Ha’Aretz opined that the genesis of fear that grips Erdogan is predicated in the possibility that always looms above, about “the involvement of his government in these corruption scandals. In particular, he is worried about whether a connection will be revealed between senior members of his ruling party and/or his relatives, and the arrested billionaires.”
The paper noted that two years ago, supporters of Erdogan initiated a character assassination style campaign in which they portrayed Manhattan DA Preet Bharara of maintaining a close alliance with Fethullah Gulan, Erdogan’s political nemesis. They then asserted that Zarrab’s arrest was representative of the effort to overthrow the Ankara regime.
Erdogan is quite cognizant of the fact that his sphere of power and dictatorial conduct don’t stretch as far as the US and thusly, he is unable to fire Bharara for his alleged transgressions against his government. He is also quaking in his boots, according to a Ha’Aretz report about a possible scenario in which the court system in Iran “does not decide to publish the protocols of Zanjani’s investigation, which could include embarrassing details about Turkish complicity in the sanctions-evasion affair.”