News Column

Erdogan risks the wrath of the US

February 1, 2014

ISTANBUL (CIHAN)- This may come as a shock to you, but Turkey has never had a single successful legal case concerning a money laundering scheme with terrorist financing in its long and bloody history of battles with homegrown and regional terrorist networks, mostly financed by its not-so-good neighbors. When I was told about this by a senior official in the Finance Ministry's Financial Crimes Investigation Board (MASAK), I could not believe what I heard. Even with a three-decade-long fight against the terrorist Kurdistan Workers' Party (PKK), the government has never used the money laundering and terrorist financing laws to come after suspected terrorists, be it raising illegal taxes from businesses under coercion in Turkey and Europe or proceeds from illegal drug and human trafficking. It was so much easier to dump all these cases in anti-terror laws as opposed to months and even years-long painstaking investigations to track the money trail. Two investigations that were made public on Dec. 17 and 25 as part of probes into massive corruption and money laundering schemes have sparked hopes that Turkey may be finally making use of laws on financial crimes including the February 2012 law on the prevention of financing of terrorism -- a law that had been stalled by the ruling Justice and Development Party ( AK Party ) government since 2005. Turkish Prime Minister Recep Tayyip Erdogan felt compelled to act on the draft bill when the US-led Financial Action Task Force (FATF), a unit of the Organization of Economic Cooperation and Development (OECD), had to issue a final warning and gave a deadline for Turkey to avoid being listed in a group of countries that have serious shortcomings in counterterrorism financing. Faced with the worrying prospect of higher risk premiums, loss of competitiveness and possible scaring away foreign investment, Erdogan finally acted. However, the existing laws and adoption of new legislations have been rendered meaningless now that Erdogan's government has immediately moved in to suspend the rule of law in Turkey in order to derail two key investigations that implicated people close to the government. For the first time in Turkey , we are witnessing an elected government committing a constitutional crime by blatantly interfering into judicial processes, reshuffling thousands of police officers, prosecutors and judges who have accumulated wealth of experience in crimes such as money laundering, organized crime, terrorism and financial irregularities. In other words, the Erdogan government has deliberately upset the balance of powers between the executive and judicial branches, effectively taking over the judiciary in the country. If these investigations, halted now with the removal of lead prosecutors from the case after a government-orchestrated move, were hushed up, the first-ever real test on money laundering and terrorism financing laws will fail as well. Judging from the leaks on the first investigation that involves a key suspect, Iranian national Reza Zarrab, who lavished bribes worth $66 million on government ministers and showed up in front-row protocol with the Turkish prime minister, there seem to be a massive money laundering network to bypass sanctions imposed on the Iranian Mullah regime. Even the general manager of state-lender Halkbank was detained in the probe. Zarrab, most likely one of hundreds of contractors employed by Iran to circumvent restrictions, has set up an international network of companies from Russia to China , from the United Arab Emirates to Ghana . The 29-year-old Iranian operated out of Turkey in close cooperation with Babak Zanjani , a businessman who is Zarrab's partner in Iran . It is not just a money laundering scheme that Zarrab has been involved in. He is also claimed to have transferred money for an assassination plot revealed three years ago that was to have been carried out by an Iranian-American against the Saudi ambassador to the US and of possibly being a member of the Iranian al-Quds Force, a branch of the Iranian Islamic Revolutionary Guard Corps (IRGC). Manssour Arbabsiar, a dual US-Iranian citizen, was arrested in September of 2011 in the US for conspiring to murder Adel al-Jubeir , the Saudi ambassador to the US. Arbabsiar, who was sentenced in May last year to 25 years in prison, pleaded guilty in court in October of 2012, acknowledging that he had hired an apparent drug dealer in Mexico in 2011 for the assassination plot. According to a report by Turkey's National Intelligence Organization (MIT) dated Oct. 21, 2011 , Zarrab sent $1.5 million to Arbabsiar for the assassination and that the US Federal Bureau of Investigation (FBI) had detected the move. Erdogan described Zarrab as a charitable businessperson and admitted his knowledge of Zarrab's gold trade. "Zarrab exports gold and I know that he is involved in charity activities as well," Erdogan said, addressing reporters aboard his plane during his return from Pakistan . Surprisingly, his remarks came after Zarrab, who is also a naturalized Turkish citizen, was arrested in connection with a corruption probe. Reports indicate that he allegedly secured citizenship for his relatives as well as three company managers, in a very short time -- between May- November 2013 -- on exceptional grounds. In exchange, Zarrab gave a $5 million bribe to resigned Interior Minister Muammer GÜler to acquire citizenships. If Zarrab financed the plot to kill the Saudi ambassador in Washington as the FBI and its Turkish counterpart MIT seem to have suggested, and was involved in a money laundering scheme to circumvent US laws, then the investigations are no longer a national matter but are of concern for the US authorities as well. Several announcements made by State Department officials including Secretary of State John Kerry on the latest developments underlining that the US does not want to involve itself in the domestic matters of Turkey cover only political aspects. If there is strong evidence indicating that US laws were also violated by Zarrab and his accomplices, then the Erdogan government's efforts to hush up the investigation will complicate matters further for Turkey . Zarrab is not the only one who ruffled feathers in Washington . The second graft probe, thwarted by the government, alleges that Saudi businessman Yasin al-Qadi , whom the US Treasury lists as a "specially designated global terrorist" and was on the UN Security Council al-Qaida Sanctions Committee until Oct. 5, 2012 , made frequent trips to Turkey under the prime minister's protection. According to the investigation, al-Qadi attended some meetings with boards of directors from certain companies, including Bosphorus 360, and allegedly met with Mustafa Latif Topbas, a businessman close to Erdogan and partner in the Turkish discount retailer BIM. Erdogan vouched for Qadi by saying that " Yasin al-Qadi is a Saudi businessman who loves Turkey and wants to invest in this country. He has no connection with al-Qaeda . He has been acquitted of all accusations made against him. Is it a crime to meet with this person who wants to make a huge investment in Turkey ?" Erdogan has also been quoted as saying: "I know al-Qadi. I believe in him as I believe in myself." According to the opposition, al-Qadi appears to have a very close and special business relationship with the prime minister's son, Bilal Erdogan, and Prime Minister Erdogan seems to be informed about this relationship even at a time when al-Qadi was under United Nations sanctions seeking to freeze his assets around the world. Therefore, the Erdogan government may be in hot water with its key partner and ally, the US, if it tries to sweep the dirt under the rug by blocking these investigations. The US has an impressive track record of coming after suspected terror financiers using federal grand jury indictments for conspiring to violate US laws. It identified and disrupted many front companies that were simply hiding capital investments made by designated terrorists and fund-raising entities that funneled money to terrorist and criminal organizations. If the US charges Zarrab on several counts including being an accomplice in a foiled assassination attempt against the Saudi ambassador in Washington and breaking US sanctions on Iran , this will spark an extradition brawl between Turkey and the US. Since Zarrab obtained Turkish citizenship, it will be more difficult to handle the case, making it difficult to apply terms of the US-Turkish treaty on extradition and mutual assistance in criminal matters signed in Ankara on June 7, 1979 , which entered into force on Jan. 1, 1981 . According to Article 7 of this treaty, the US should submit a detailed request explaining the offense committed, charges leveled against him, arrest warrant, facts of the case and relevant laws. Article 10 of the treaty also requires that the US furnish this information within two months from the date of arrest or detention. Otherwise, Turkish authorities may decide to let the suspect go. Perhaps the visit of US Department of the Treasury Undersecretary David Cohen , who is in charge of terrorism and financial intelligence, to Turkey on Jan. 27 is the harbinger of US interest in the activities of Zarrab and al-Qadi in Turkey . Cohen's visit, touted as part of the regional tour to discuss implementing existing sanctions against Iran in the light of an interim nuclear deal between the West and Iran , may in fact be related to the activities of Zarrab and al-Qadi in Turkey . The extradition deadline will run out on Feb. 17 according to treaty provisions. If Zarrab escapes Turkey , just like Zanjani, then this will be somebody else's problem, of course. It appears the grip on the detained Zarrab is already getting looser every day as the government-orchestrated reshuffle in the judiciary and removal of lead graft prosecutors resulted in the lifting of a court decision to seize his assets. He was referred to the hospital on Friday, raising suspicions that he may be out soon on health concerns. Zarrab and al-Qadi's unhindered access to top leadership in Turkey has already tainted Turkey's reputation as a reliable partner. If Erdogan becomes successful in burying these investigations and saving the culprits from prosecution in the court of law, then our allies and partners will start questioning Turkey's very credentials in democracy, rule of law and fundamental rights. A New York Times editorial on Jan. 27 claimed that Erdogan, if he failed to endorse the rule of law, would contradict NATO "ground rules," and regional stability could become critical for NATO , its allies and the Turkish people. This must one of many warnings we are yet to see as Erdogan is skating dangerously close to getting Turkey named a pariah. ( ABDULLAH BOZKURT /Cihan/Today's Zaman) CIHAN

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Source: Cihan News Agency (Turkey)

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