July 27, 2020 | Defense One

Trump Should Teach Erdogan a Lesson in Law, Not Corruption

The president offered to help Turkey’s strongman beat U.S. courts, John Bolton has revealed. It only helps Iran.
July 27, 2020 | Defense One

Trump Should Teach Erdogan a Lesson in Law, Not Corruption

The president offered to help Turkey’s strongman beat U.S. courts, John Bolton has revealed. It only helps Iran.

Donald Trump’s puzzling relationship with Turkish President Recep Tayyip Erdogan has long perplexed policy watchers. Things have become much clearer after the release of The Room Where It Happened, the new book from former National Security Advisor John Bolton, which reveals new details about Trump, Erdogan, and Iran that should worry the public even more.

The most perplexing detail, less well-known to the public but frequently mentioned in Bolton’s book, is Trump’s soft spot for Halkbank — Turkey’s second-largest state bank, which federal prosecutors in October charged with helping Iran evade sanctions. Trump’s acquiescence in Erdogan’s tireless efforts to shield the Turkish bank and its accomplices from legal action remains sharply at odds with the U.S. president’s “maximum pressure” campaign against Iran.

The Halkbank saga goes back to Obama-era sanctions against Iran and the Turkish lender’s role — with Erdogan’s approval — in helping Tehran illicitly transfer tens of billions of dollars, as part of one of the biggest sanctions-evasion schemes in history. U.S. authorities arrested Reza Zarrab, the Iranian-Turkish ringleader of the conspiracy in March 2016, along with Mehmet Hakan Atilla, Halkbank’s deputy general manager, in March 2017, for their respective roles in the scheme.

Zarrab then turned state’s witness in the high-profile Manhattan case that led to Atilla’s conviction in January 2018 for his participation in a “scheme to violate U.S. economic sanctions imposed on the Islamic Republic of Iran.” Attila received 32 months in prison, a ruling a federal appeals panel upheld on July 20. Halkbank, charged for the same scheme in October 2019, pleaded not guilty in a court in the Southern District of New York on March 31 and has moved for the recusal of the judge overseeing the case.

Bolton’s book paints the Halkbank case as Erdogan’s obsession, a “favorite subject, frequently discussed with Trump.” According to Bolton, Erdogan even brought Trump a “memo by the law firm representing Halkbank, which Trump did nothing more than flip through before declaring he believed Halkbank was totally innocent of violating U.S. Iran sanctions.”

Erdogan and Zarrab used other channels to meddle in the case as well. In the fall of 2017, Rudolph W. Giuliani and former Attorney General Michael Mukasey reportedly pressed Trump and then-Secretary of State Rex Tillerson to arrange a prisoner swap with Turkey. Retained by Zarrab, Giuliani and Mukasey had met with Erdogan in February 2017, but told the court two months later that they were seeking a “diplomatic solution.” This turned out to be a proposal to exchange Zarrab for U.S. Pastor Andrew Brunson, who was detained by Turkey in October 2016 on trumped-up charges of terrorism, espionage, and coup plotting.

For Erdogan, the case is personal. A 2013 Turkish graft probe into Halkbank’s sanctions evasion network revealed that key Erdogan aides, including his ministers of the interior and economy, were on Zarrab’s payroll. Zarrab had earlier pledged to then-Iranian President Mahmoud Ahmadinejad his “national and moral duty” to contribute to the “economic jihad.”

This was not only a corruption-cum-national security scandal — the economy minister alone received payments totaling some $50 million for serving Iranian interests — but also a political one. The case showed that despite Erdogan’s self-righteous rhetoric surrounding Syria’s civil war, including criticism of the West for inaction in the face of mass atrocities, Turkey — a NATO ally — was bankrolling the Iranian regime, the key military and financial patron for Syria’s Bashar al-Assad. Erdogan was saving both Tehran and Damascus from economic ruin at the height of U.S. sanctions, while shedding crocodile tears over Syrian victims.

Trump should have offered the Turkish president a much-needed lesson in the rule of law, separation of powers, and checks and balances — all in short supply in Erdogan’s Turkey. The U.S. president could have informed Erdogan about the BNP Paribas case, in which the U.S. Justice Department fined the French bank $8.9 billion for violating U.S. sanctions on Sudan, Cuba, and Iran. Many other U.S. and European banks have similarly accepted responsibility along with multi-billion fines.

Instead, according to Bolton, Trump told Erdogan, “he would take care of things,” and that “the Southern District prosecutors were not his people, but were Obama people, a problem that would be fixed.” For Turkey’s strongman, who routinely purges judges and prosecutors and makes cases magically disappear, this must have sounded like a done deal.

To Erdogan’s shock, U.S. prosecutors went forward with charges against Halkbank. The bank refused to recognize the court’s jurisdiction at first, but changed its mind when the prosecution asked for contempt fines, which could have totaled $1.8 billion after eight weeks.

More recently, following the release of Bolton’s book, Democratic Senator Ron Wyden, ranking member of the Senate Finance Committee, accused Trump of “interfer[ing] in a criminal investigation into the largest sanctions violations scheme in U.S. history as a favor to Turkish President Erdogan,” calling on Bolton to provide more information.

Erdogan must be watching in horror as a free press, independent courts, and effective legislative oversight click into gear. Erdogan remains a weak link in Trump’s Iran policy. The impunity Erdogan and Halkbank continue to enjoy will only embolden other sanctions-evasion networks, as well as their corrupt accomplices willing to bankroll Tehran’s nefarious activities in Syria and beyond.

Aykan Erdemir is a former member of the Turkish parliament and senior director of the Turkey Program at the Foundation for Defense of Democracies. John A. Lechner is a former financial analyst with Lazard and Deutsche Bank, who is currently a graduate student at Georgetown University’s School of Foreign Service. Follow Aykan and John on Twitter @aykan_erdemir and @JohnLechner1.

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Issues:

Iran Iran Sanctions Sanctions and Illicit Finance Turkey