Mustafa Kemal Ataturk, the founder of modern Turkey, founded Halkbank in 1933 to provide cheap credit easily to small business owners and large industrial entrepreneurs. Fast forward 80 years, and they police are raiding the home of the bank’s general manager.
They found $4.5 million stashed in shoeboxes.
And today, Turkey's state-run bank dealings are ensnaring U.S. President Donald Trump and his attorney, Rudy Giuliani, the U.S. Justice Department, and Iran…
Halkbank has been accused of corruption and mismanagement quite few times in the last three decades; but it’s more or less managed to survive the allegations. Under investigation since the early 1990s, Halkbank management has consistently succeeded in dodging accusations thanks to high-level government connections.
In 2013, a massive corruption investigation launched by Turkish law enforcement officials at the behest of U.S.-based Islamic cleric Fethullah Gulen, Erdogan’s ally-turned-enemy, was summarily suppressed by the government. Erdogan saw to it that the case was closed. He declared the Gulen movement a terrorist organization and fired or imprisoned those Gulenists who didn’t manage to flee the country.
However, in the past few years, the bank’s dealings have garnered so much international attention that even Erdogan can’t shove them under the rug.
Earlier this week, U.S. prosecutors filed criminal charges against Halkbank for allegedly taking part in a multibillion-dollar scheme to evade sanctions on Iran.
"High-ranking government officials in Iran and Turkey participated in and protected this scheme," which was set up to move some $20 billion of Iranian oil revenue illegally, prosecutors of the Southern District of New York said in an indictment.
The indictment is the latest development in a years-long criminal case that began with the arrest of Reza Zarrab, a Turkish-Iranian gold trader accused of playing a key role in the sanctions evasion scheme.
Zarrab was arrested in 2016 while visiting the US. He is accused of being a member of an international criminal organization and has been charged with evading sanctions on Iran and money-laundering. [
In 2017, Zarrab pleaded guilty and testified at the trial of a Halkbank deputy general manager Hakan Atilla, who was sentenced to 32 months in prison. Zarrab, who had once been a close Erdogan ally, testified that Erdogan had ordered the sanctions-busting trades and said he bribed multiple high-ranking ministers to make it happen. Related: Space Crime And Scandal Overshadow SpaceX Failure
But Zarrab knew he was going to be arrested in the U.S. He was gunning for protection as a witness. Erdogan knew, too. That’s why he had Zarrab’s Istanbul estate ransacked in a very public message as to what would happen were he to return home.
Babak Zanjani, another Iranian tycoon and Zarrab’s alleged partner, was sentenced to death in Iran for embezzling $2.8 billion.
In a dramatic turn, Bloomberg reported earlier this month that that in 2017, President Trump unsuccessfully pressed former Secretary of State Rex Tillerson to help convince the Justice Department to drop the sanctions evasion case against Zarrab.
As it turns out, Zarrab was a client of none other than Rudy Giuliani.
This tangled web of corruption and entanglement with foreign leaders and state-sponsored businessmen is about to get even more complex as Turkey invades Syria after having been green-lighted to do so by Trump. Trump has since rethought that move, prompted by high-level criticism within his own party, and now finds himself in a position of threatening the Turks with economic destruction.
In the meantime, amid impeachment processes, Giuliani is turning out to be a major liability for Trump, and if we add sanctions busters to his client list, Trump’s case against Biden in Ukraine starts to lose its luster.
By Fred Dunkley for Safehaven.com