March 22

Halkbank and the Struggles of the 2010s

Halkbank, one of Turkey’s largest state-controlled financial institutions, gained notoriety during the 2010s as it was implicated in a scheme to evade Iranian sanctions. The bank, the scandal, and the US prosecution of a Halkbank manager illustrate how struggles between the AKP and the Gülen movement have reverberated–and often taken on a significance of their own–in the United States.

Turkey’s current Central Bank president, Şahap Kavcıoğlu, worked for over a decade at Halkbank. After starting as Istanbul Regional Coordinator, he moved on to a variety of assistant general manager posts including Retail Banking (2005-2007), Merchant, Small, and Medium Firm Banking (2007-2010), Credit Policy (2010-2014), and finally Human Resources and Organization (2014-2015). In these positions, he was in regular contact with the businesses and organizations that form the backbone of the AKP; he would have gained valuable contacts and a sense of what core AKP constituencies desired from their political representatives. At the same time, his contact with the international banking arm of Halkbank would have been relatively minimal, meaning that he remained uninvolved in the scandals that rocked the bank during the 2010s. Nonetheless, these scandals have caused serious tensions between Turkey and the US, which makes them worth considering for what they reveal about banking and political influence in both Turkey and the US.

I)         The Origins of Halkbank

Halkbank ad from Cumhuriyet October 20, 1967

Halkbank was Turkey’s second-largest state-owned bank at the beginning of the 2000s. Whereas the largest, Ziraat Bankası, had originally been focused on agricultural credit, Halkbank had been designed to support small traders and artisans. Legislation had been passed to enable it in the early 1930s, but the institution itself was not created until 1938, during the administration of Prime Minister Celal Bayar. For its first decade, it was concerned only with loaning out money to various “People’s Funds” (Halk Sandıkları) in major cities. After Bayar’s Democrat Party came to office in 1950, it was allowed to open branches and receive deposits. It expanded steadily from the 1960s onward, accelerating in the 1990s by absorbing several smaller banks.[1] As it issued loans for various government priorities and numerous well-connected businessmen, it became insolvent. By early 2000, its operating loses had reached TL4.1 quadrillion ($7.3 billion).[2]

Ads for Halkbank in Cumhuriyet on the eve of its seizure (April 15, 2000 [left] and May 23, 1999 [right])

During the financial rescue operations of 2001-2003, there was talk of privatizing Halkbank and Ziraat Bankası (as well as many other state-owned institutions). In preparation for reorganizing and selling them off, the banks’ executive boards were merged, hundreds of branches were closed, and thousands of employees were either laid off or eased out through early retirements.[3] Between 2001 and 2005, Halkbank cycled through six general directors. The debates surrounding the bank, however, remained constant: whether or not to combine it with the larger Ziraat Bankası, and/or whether or not to sell off all of it or just a portion of it. Opposition to either a merger or full privatization came from organizations representing small and medium-sized companies, which remained the primary recipients of credit from Halkbank. These organizations included the Union of Chambers and Commodity Exchanges of Turkey (TOBB), whose president, Rifat Hisarcıklıoğlu, declared that rolling up Halkbank into some other institution was “tantamount to treason.” Similarly, Zafer Çağlayan, the influential president of the Ankara Chamber of Industry (ASO) opposed a block sale of the bank to private interests.[4]

Ultimately, the Justice and Development Party (AKP) government sided with the representatives of small and medium-sized businesses.[5] Rather than being merged with some larger entity, Halkbank was expanded through combination with Pamukbank in 2004. The merger made Halkbank the third-largest Turkish bank in terms of accounts (previously it was fifth) and the fourth in terms of assets (previously it was sixth).[6] Moreover, despite giving lip service to privatization, the AKP government did not sell off the entire bank; instead, it made an initial public offering of 24.98% on the Istanbul Stock Exchange in May 2007. High demand for the stock caused temporary difficulties with the Exchange’s computer system.[7]

The government continued to promise full privatization—and, indeed, offered an additional 24% in 2012—but Halkbank remained too important to fully give up. In the first place, controlling the bank enabled the government direct credit toward important constituencies such as small and medium-sized businesses. More controversially, control of the bank enabled the government to direct money to pet projects: Halkbank was among the seven banks that provided a combined $2.3 billion in financing for a third Bosporus bridge. It also supported the construction of the new Istanbul Airport by providing $1.1 billion (of a total $5.1 billion) to the consortium of government-allied firms overseeing the project.[8]Loans could even be directed towards business activities with no clear public benefit: for example, in 2007, Halkbank and Vakifbank (another state-owned bank) provided a combined $750 million in loans to Çalık Holding so that it could purchase ATV-Sabah, an insolvent media firm that had been seized in the early 2000s. At the time, and for several years after the deal, Erdoğan’s son-in-law, Berat Albayrak, was a general director at Çalık Holding. His brother was placed in charge of ATV-Sabah’s parent company, Turkuaz Medya.

The July 2007 elections, which came just two months after the initial public offering for Halkbank, cemented the AKP’s control of the government and enabled it to further assert itself over economic institutions. Up until this point, the AKP’s influence had been checked by the president, Ahmet Necdet Sezer, who had been appointed by the AKP’s predecessors. From the beginning of his presidency, Sezer had taken an active role, rejecting cabinet decrees and appointments by both the AKP and previous governments. On February 19, 2001, for example, a spat between Sezer and the center-left prime minister Bülent Ecevit had frightened investors and led them to pull around $5 billion in foreign currency out of the Turkish economy in a matter of days. The value of the lira fell from around TL687,000/$ a few days before to around TL908,000/$ a week later.[9] That dispute had been related to the Ecevit government’s insufficient efforts to deal with corruption. With the AKP, the disputes were centered on “secularism.”

Gazi Erçel (Financial Times, February 26, 2001) and Süreyya Serdengeçti (Haberler, February 26, 2008)

One of the AKP’s many battles with Sezer concerned the nomination for Central Bank president. In 2006, the term of President Süreyya Serdengeçti ended. Serdengeçti was the first Bank president in over a decade to serve out even a single term. He had been appointed in 2001, following the aforementioned financial crisis and in the shadow of a particularly ugly moment for the bank: his predecessor, Gazi Erçel, had been prosecuted for misusing his position, exchanging TL52 billion ($76,000) for dollars even as he was assuring citizens that there would be no devaluation.[10] By comparison, Serdengeçti was the model of a bank president. AKP leaders, however, wanted their own man (and also to play up the brute-secularism of their opponents). The government proposed Adnan Büyükdeniz, a leading figure in Turkey’s “participant banking” system—i.e. “Islamic,” interest-free banking. Before announcing this pick, however, the AKP allowed rumors to spread that it had nominated Erdem Başçı, a well-qualified vice-president at the Bank whose wife wore a head scarf. Though Başçı was not actually a candidate, the rumor allowed various factions in the media to offer heated opinions. When Büyükdeniz, who was even less acceptable in the eyes of the financial sector, was rejected, the government nominated Durmuş Yılmaz, an uncontroversial Bank bureaucrat.[11] After the election, the AKP had a sufficient majority in parliament to appoint one of its own, Abdullah Gül, as president. With Gül in place, positions throughout the state could now be filled by the AKP and its allies.

Left:Adnan Büyükdeniz (Milliyet, October 20, 2009)

Right: Erdem Başçı (left) shaking hands with Durmuş Yılmaz (right) (Cumhuriyet, April 19, 2006)

The subsequent four years of AKP rule (2007-2011) were, perhaps, its golden age. The government passed legislation that ended restrictions on headscarves in public institutions, revised portions of the penal code that had criminalized “insults to Turkishness,” championed constitutional reforms that allowed prosecution of former coup leaders (while also strengthening the AKP’s grip on the judiciary), and pursued a “Kurdish Opening” initiative. A particular dark-spot during this period, however, was the leeway given to officials connected with Hizmet, the Islamic religious movement led by Fethullah Gülen. Gülen-linked prosecutors oversaw sprawling investigations like “Ergenekon” and “Sledgehammer,” which indicted a variety of leading figures in the military and bureaucracy, often using flimsy—and potentially fabricated—evidence.[12] Initially, the investigations weakened opponents of the AKP, but soon the AKP leaders and members of the Gülen movement found themselves increasingly at odds. As they parted ways, Gülen-linked investigators turned their attention to the AKP and to Halkbank.

II) Halkbank in the Era of AKP-Gülen Conflict

Halkbank General Director Süleyman Aslan arrested (from Al-Jazeera Turk, December 26, 2013)

Over decades, Fethullah Gülen and his followers had established schools and business networks in Turkey and around the world. Often, these were mutually reinforcing: the members of the Gülen community would set up a school in a Central Asian or African country, gain a reputation for academic excellence, and make connections that more business-minded members of the community could later turn to their advantage.[13] Nor were the schools limited to poor countries: Gülen-affiliated organizations constitute one of the largest operators of private schools in the United States.[14]

Because Gülen emphasized science, anti-communism, capitalism, and “interfaith dialogue,” he and his movement were popular with US officials seeking to promote “moderate Islam.” Gülen-linked organizations sponsored junkets to Turkey for US officials.[15] Businessmen with connections to the community donated to US politicians. For most US officials, a free trip to Turkey, an honorarium to speak at an event, or an award from some obscure civic association were simply perks of being in office. Even those officials who did have an understanding of the organization would not have seen the danger to their reputations in associating with Gülen-linked organizations. Former US Ambassador to Turkey Marc Grossman, for example, became a consultant for the Gülen-linked İhlas Holding in 2005.[16] But, by that same token, Erdoğan himself was appearing at the Gülen movement-run Turkish Language Olympics as late as 2013.[17] The consequence of all these connections was that, when the AKP and Gülen movement dramatically parted ways in December 2013, officials in Turkey, the US, and around the world were left implicated in the movement’s activities.[18]

Many people in Turkey had been skeptical of the Gülen movement for decades. Consequently, while the stream of corruption accusations that Gülen-linked prosecutors, police, and online accounts leveled at the government starting on December 17, 2013, offered schadenfreude to critics of the AKP, it did not further endear the Gülen movement itself. In America, the reactions tended to be different. Media coverage of the AKP had soured by 2013 (especially after the Gezi Park protests in the summer) and even US officials with only a marginal interest in Turkey were now receptive to hearing criticism of the government. Meanwhile, those officials who had attended a Gülen-affiliated conference or traveled on a junket were incredulous at the suggestion that the pleasant event organizers, businessmen, and teachers they had once met were, in fact, “terrorists” to be distrusted.

This divergence in perspectives between the AKP leaders and officials in the US has been particularly apparent in the case of Halkbank. A central accusation that Gülen-linked journalists and prosecutors made against the government was that a number of ministers had colluded with executives at Halkbank and an Iranian businessman named Reza Zarrab to flout US-imposed sanctions. The ministers’ sons and the general director of Halkbank, Süleyman Aslan, were arrested. In the raid on Aslan’s house, police found shoeboxes containing millions of dollars.[19]

Reza Zarrab, before his legal troubles began in 2013 (from Courthouse News, September 20, 2020)

Although the AKP government ultimately halted the investigations and cleared those involved of wrongdoing, the investigation continued in the United States. There, the demands of a strong network of hawkish think tanks and pressure groups, which advocated for aggressive action against Iran, overlapped with those of AKP critics and (distinct from those critics) supporters of the Gülen movement, which was only now using its connections to lobby against the AKP.

On March 19, 2016, Reza Zarrab was arrested in Miami as part of a larger investigation into the sanctions evasion scheme, which was being conducted by the U.S. Attorney’s Office for the Southern District of New York (SDNY). In arguing against bail for Zarrab, the SDNY explained that the accusations against him stemmed from a January 2011 transaction in which his companies used the US banking system to transfer $950,000 to a Canadian company. In doing so, Zarrab’s companies had not acknowledged that this was done on behalf of the MAPNA Group, which had been identified by the Canadian government as being involved in Iran’s nuclear development program.[20] Furthermore, in justifying the need to deny bail for this specific crime, the SDNY explained in detail Zarrab’s larger context, including a recapitulation of the various accusations made by Gülen-linked prosecutors against Halkbank and AKP government ministers. As supporting detail, the SDNY provided the court with a full translation of a report that Gülen-linked prosecutors had written. The judge, Richard Berman, was convinced and denied bail. 

Coverage of the US government’s Halkbank investigation in the major Turkish paper Sabah. Translation read at top: “A Scandalous [Tweet] Shared by [US Prosecutor Preet] Bharara.” And at bottom: “Not a Prosecutor, A Fethullah Gülen Terrorist Organization Militant” (from Sabah, November 17, 2017)

Pro-AKP newspapers were soon suggesting that Preet Bharara, the federal prosecutor for the SDNY, was doing the bidding of the “Fethullah Gülen Terrorist Organization” (FETÖ). Moreover, these same papers reported, Judge Berman had attended a conference in Istanbul sponsored by Gülen-linked lawyers in 2014. When Zarrab’s attorneys asked Judge Berman to recuse himself, the judge rejected the appeal.[21] Erdoğan personally asked US Vice President Joe Biden on two occasions if the Obama administration could remove the judge and prosecutor, but Biden demurred.[22]

In March 2017, tensions between the US and Turkey escalated when Hakan Atilla, Halkbank’s Deputy General Manager for International Banking, was arrested upon arrival in the US. He was accused by the SDNY of assisting Zarrab in his efforts to violate US sanctions. The complaint drew its evidence from phone recordings made by Gülen-linked investigators and posted to YouTube.[23] In response, a pair of pro-AKP lawyers petitioned the Istanbul Prosecutor’s Office to investigate Bharara and sixteen others whom they accused of consorting with both FETÖ and the “Parallel State Structure.”[24] Meanwhile, Reza Zarrab added former US Attorney General Michael Mukasey and former New York Mayor Rudy Giuliani to his legal team. Giuliani in particular was on close terms with newly-elected US president Donald Trump.[25]

Hakan Atilla (Hürriyet, March 29, 2017)

III) The Halkbank Trial in the Trump Era

From Daily Sabah, August 27, 2020

The election of Donald Trump muddled the politics and the media coverage of the Halkbank case. The shock of Trump’s success led his critics in the US media and government to focus on conspiratorial explanations for his victory and predict fundamental shifts in governance and foreign policy. Still, for all the concern, the primary difference between Trump’s policies and those of his predecessors was his direct—some might say amoral—intensification of ongoing US commitments. In the Middle East, for example, the Trump administration gave close allies such as Saudi Arabia and Israel free rein to such an extent that the Saudi regime’s brutal bombardment of Yemen and the Israeli military’s killing of fifty-nine protesters in a single day received little official criticism. Meanwhile, perceived adversaries like Iran faced increased pressure by means of renewed sanctions and the drone-assassination of a top general.[26] Although policies towards Turkey were more erratic, even this unpredictability can be understood as a part of a longer trend in which Turkey’s relationship to the US has become purely transactional and, therefore, dependent on immediate circumstances.[27] The Halkbank prosecution became just one more bargaining chip in these transactions.

What obscured the consistency of Trump’s policies in the Middle East was the myriad of scandals that swirled around him and his administration. His decades of shady business connections made it easy for reporters to spin elaborate tales suggesting conflicts of interest. How, reporters implied, could Trump be trusted to deal correctly with a country like Turkey when one of his closest legal advisors was also working on Reza Zarrab’s legal defense, and Trump himself had a building with his name on it in the center of the Istanbul?[28] Such questions, however, assumed that previous administrations have been less swayed by special interests. Moreover, critiques of Trump were often contradictory, using his past connections to suggest an openness to influence-peddling while forgetting to mention his history of taking people’s money and giving them nothing in return.[29]

In practice, what distinguished Trump’s administration from that of his predecessors was its reliance on advisors with a blatant disregard for maintaining even the appearance of propriety. In part, this was a function of the conditions that brought them into government. Few of these people had expected to find themselves working in the White House again. Even those with previous government experience were now focused on their activities as lobbyists, monetizing what remained of their influence. Many had not prepared themselves for the increased scrutiny that comes with public office.[30] Two Trump advisors who became involved in Turkey-related scandals provide clear examples of the administration’s crass tendencies: Michael Flynn and James Woolsey. 

Left: Michael Flynn (from Guardian, April 27, 2017); Right: James Wolsey (from his page at Yale University)

Of the two men, Flynn was more typical of Trump’s initial, less-savvy advisors. While highly effective in his roles overseeing intelligence operations in Iraq and Afghanistan in the 2000s, Flynn had proved less adroit at bureaucratic politics in the 2010s. In Washington, he formed close connections with think tanks hostile to Iran while frustrating his colleagues in the Obama administration who were attempting to ease tensions with the Iranian regime. He was pushed into retirement in 2014. Out of office, he started a consulting firm, Flynn Intel Group, and became a fixture on conservative news outlets like Fox News, which brought him to the attention of the Trump campaign around February 2016.[31] Trump secured the Republican nomination in late July. In early August, Flynn signed a $600,000 consulting deal with Ekim Alptekin, a Turkish businessman who arranged a meeting between Flynn, Turkey’s foreign minister, and Minister of Energy Berat Albayrak (i.e., the son-in-law of President Erdoğan). Flynn invited along former CIA Director James Woolsey, who was participating in Flynn Intel Group’s advisory board.[32]

Unlike Flynn, Woolsey was a well-connected figure in Washington. He had become politically active in the 1970s, supporting anti-Vietnam War Democratic candidates, but later grew hawkish on foreign policy issues. He served for two years as CIA director in the Clinton administration before resigning and endorsing the Republican candidate in the 1996 election. Similar to Flynn, Woolsey now moved farther rightward in his foreign policy views. In 1998, for example, he joined Dick Cheney, Donald Rumsfeld, and others in calling for the United States to make a “willingness to undertake military action . . .removing Saddam Hussein and his regime from power . . .the aim of American foreign policy.” (Or, as he put it in December 2001: “Give war a chance.”[33]) Unlike many of his associates, Woolsey did not re-enter government in 2000. Instead, he pursued lucrative work as vice-president of Booz Allen Hamilton Holding and, after 2008, a partner in a venture capital firm.[34] He also served in on the boards of numerous organizations including the Foundation for Defense of DemocraciesWashington Institute, and the far-right Center for Security Policy, contributing to its book Shariah: The Threat To America.[35] These organizations shared Trump’s hawkish attitude toward Iran. In early September 2016, Woolsey announced that would be joining the Trump campaign as an advisor.[36]

A week later, on September 19, according to Woolsey, he found himself sitting and watching as Alptekin, Flynn, Albayrak, and the foreign minister brainstormed various ways to get Gülen out of the US—including raiding his Pennsylvania compound and kidnapping him. Woolsey, sensing that the conversations were heading into inappropriate territory, kept out of the discussion and declined Flynn’s offer of a consulting fee. At this point, Flynn had not declared himself to be a lobbyist for a foreign government. Though reports of his connections with Alptekin were public, he did not admit his status as a representative for a foreign government until March 2017, after he had already been fired as National Security Advisor.[37]

Woolsey parted ways with the Trump transition team in January 2017, but only after Flynn’s March disclosure did he speak to the Wall Street Journal about the September meeting. He emphasized that he was not financially connected to Flynn’s group, minimized the seriousness of the discussion, and noted that he had reported the conversation to Vice President Biden via a “mutual friend.” Woolsey also told the Journal that he “later cautioned some attendees that trying to remove Mr. Gulen was a bad idea that might violate U.S. law.”[38] What Woolsey did not mention in this interview—or, at least, what the Journal did not see fit to include, was that “later” referred to a meeting on the following day with Flynn’s client, Ekim Alptekin, and another businessman, Sezgin Baran Korkmaz. During this meeting, Woolsey and his wife attempted to poach Alptekin from Flynn, emphasizing that their Washington connections would enable them to conduct a more professional, effective lobbying effort than Flynn could offer.[39]

Left: Ekim Alptekin (The Business Year, September 3, 2013) ; Right: Sezgin Baran Korkmaz (DuvarEnglish, December 29, 2020)

Alptekin would be indicted in 2018 on charges of acting as an agent of a foreign government without properly notifying the US government. By then, however, he had already left the country. Safely outside the United States, he continued to maintain his relationships with well-connected figures. In 2019, for example, not long after his indictment, he claims to have hosted Joe Biden’s brother on a visit to Turkey.[40]

Ekim Alptekin in 2021, talking with journalist Cüneyt Özdemir about his relationships with the Biden family (see HERE)

While the Biden family’s associations with Turkish businessmen fleeing federal charges have flown under the radar, Michael Flynn’s unreported lobbying efforts for the Turkish government—much like Rudy Giuliani’s activities as Reza Zarrab’s lawyer—has fed into a larger narrative in the American media that the Trump administration was uniquely corrupt and open to influence on issues relating to Turkey. As the examples of Flynn and Woolsey suggest, however, the reality is more of style than substance. Flynn, a more marginal figure in Washington, is taken to be indicative of Trump-era corruption; Woolsey, with his more established connections, is quoted respectfully despite courting the same questionable clients; and Biden’s connections with those same clients goes largely unreported.

As the Halkbank case illustrates, it was often the crassness with which Trump and his allies like Flynn flaunted their relationships and peddled their influence that encouraged the disparate media coverage. Soon after being hired by Reza Zarrab, Trump advisor Rudy Giuliani and former US Attorney General Mukasey traveled to Turkey and met with President Erdoğan. Two weeks later, one of Erdoğan’s frequent demands was met: SDNY Federal Prosecutor Preet Bharara was removed from office. Given that he was among forty-six attorneys that were removed on the same day, any direct connection with the Halkbank case seems tenuous, but the activities of Trump allies made it easy to draw such a connection.[41]

Despite the perception of Trump as uniquely corrupt—and despite the ways in which his advisors embraced their venality—the Trump administration’s policies toward Turkey remained transactional in comparison with its treatment of close US allies. The Trump administration generally prioritized allies’ interests at the expense of Turkey’s. For example, early in his administration, Trump allowed a coalition of Gulf States to cut trade with Qatar, a close ally of Turkey.[42] In 2018, amid escalating tensions over Turkey’s detention of Pastor Andrew Brunson on charges of Gülenist-connections, Trump imposed tariffs on Turkish steel and aluminum, causing the lira to lose around 17% of its value.[43] Even Trump’s largest concession to Erdoğan, withdrawing US military support from Kurdish forces in Northern Syria and allowing Turkey to occupy territory, was in keeping with the US tendency to support regional autonomy movements only so long as they serve immediate US interests—and, in any event, the withdrawal was quickly revised, leaving a small contingent of US soldiers in place.[44] Moreover, despite Trump’s repeated assurances to Erdoğan, the prosecution of Halkbank went ahead.

IV)      Halkbank on the Stand

Trial of Hakan Atilla (from Evrensel, January 4, 2018)

In late October 2017, with only weeks to go before the trial of Reza Zarrab and Hakan Atilla was set to start, Zarrab opted to plead guilty and cooperate with prosecutors. As a result, Halkbank’s deputy general manager for international banking was the lone defendant when the trial began at the end of November.

There were relatively few witnesses over the three weeks of the trial. Zarrab’s testimony took up the majority of the time. Expert witnesses included Mark Dubowitz, founder of the Foundation for Defense of Democracies, who testified as an expert on sanctions.[45] Hüseyin Korkmaz, a police officer from the Istanbul Financial Crimes Division who had fled Turkey after serving seventeen months in jail for his involvement in the 2013 investigations, testified regarding how they had been conducted.[46] Finally, Atilla himself spoke in his own defense.

In the media and on Twitter, excitement for the trial centered on how deeply President Erdoğan and his family would be implicated in the testimony. Yet the results were rather anticlimactic in this regard. According to the New York Times, for example, on his second day of testimony, Zarrab stated that “[Minister of Trade and Industry Zafer Çağlayan] told him that Mr. Erdogan . . .and a second official, the treasury minister, had given orders for the banks ‘to start doing this trade.’” This second-hand evidence of a connection earned the headline “Erdogan Helped Turks Evade Iran Sanctions, Reza Zarrab Says,” but that was the end of the matter. Nonetheless, Zarrab’s testimony did corroborate many of the accusations leveled against government ministers and the head of Halkbank by Gülen-linked prosecutors in December 2013—and these charges were far from flattering. 

Reza Zarrab testifies (from Voice of America News, December 29, 2017)

Zarrab had been well-positioned to manage the sanctions evasion scheme. His family had businesses (and bank accounts) in Iran, Dubai, and Turkey. They also had good relations with the government of Mahmoud Ahmadinejad in Iran, which had no interest in abiding by sanctions. As American and European Union sanctions became more severe following Ahmadinejad’s highly-contested reelection in 2009, the incentives for evasion grew.[47] US legislation passed on December 11, 2011, gave countries six months to limit their purchases of Iranian oil and transactions with the Iranian Central Bank.[48] Exceptions were allowed for allies like Turkey with limited oil resources, but even in these cases, dealings with Iran’s Central Bank were still strictly limited. Since there were few goods that Iran was allowed to purchase from Turkey in order to balance out its oil sales, Iranian earnings were effectively stuck in Turkish banks. Two days after the legislation was announced, Reza Zarrab contacted the Iranian Central Bank with an offer to help. 

According to Zarrab’s scheme, the National Oil Company of Iran would sell oil to Turkish companies. Proceeds from the sales would be placed in an account at Halkbank, which would then transfer the funds to an account controlled by Zarrab. This account would be used to purchase gold, which was then shipped to companies owned by Zarrab in countries like Dubai. From there, the gold could be converted into cash and make its way back to Iran. Halkbank could report these gold transactions to US officials as being conducted by private individuals rather than Iranian authorities.[49]

With the Iranian government supportive of these efforts, Zarrab needed to find Turkish partners. He broached the subject to Süleyman Aslan, the general director of Halkbank, who was skeptical (in part because Zarrab’s marriage to pop star Ebru Gündeş seemed likely to draw undue public attention). At this point, Zarrab approached Minister of Trade and Industry Zafer Çağlayan, who agreed to arrange matters with Halkbank in return for 50% of Zarrab’s profits. Ultimately Zarrab would pay him upwards of $70 million. When Aslan continued to grumble about the risks he was taking, Zarrab began sending him kickbacks as well. These amounted to some $8.5 million. But these payoffs were just the costs of doing business, and business was good: in 2011, Turkey exported $55 million of gold to Iran and $280 million to Dubai; after 2012, these figures were $6.5 billion and $4.6 billion, respectively.[50] While Zarrab and his associates were not solely responsible for these numbers, oil sales to Turkey did generate billions of dollars annually for Iran.[51]

Though the Gülen movement was only interested in potential corruption to the extent that it discredited the AKP government, and US officials were only interested in so far as these intrigues undermined their attempts to squeeze the Iranian regime, Zarrab’s sanctions evasion scheme did have real victims. The percentage he took for his efforts and the exorbitant bribes that ministers like Çağlayan were accused of receiving came from the sales of Iranian natural resources that (at least in theory) should be spent in the interests of the Iranian public.

The uptick in gold exports from Turkey to Iran and other destinations was no secret. Quickly, it became a point of contention between the US and Turkey. In August 2012 and January 2013, the US passed additional legislation that limited trade with Iran to bilateral transactions including food, medicine, and other essentials but excluded minerals such as gold. Under these new restrictions, Zarrab’s scheme was no longer tenable.[52] Zarrab, Aslan, and their associates now shifted their activities. Gold was now shipped to Dubai, where it was used to “purchase” fictitious food and other items from Iran. All told, these amounted to some $900 million in transactions during 2013. After the disruption caused by the 2013/14 investigation by Gülen-linked prosecutors, these transactions resumed. All told, prosecutors claimed, around $1 billion related to these deals passed through US institutions under false pretenses, amounting to “the largest known scheme to evade Iranian financial sanctions.”[53]

A Chart Explaining Zarrab’s Scheme (from a report by The Wisconsin Project on Nuclear Arms Control, March 31, 2020)

The most hapless figure in this whole process seemed to be Atilla, the lone defendant. At the request of his superiors at Halkbank and in the government, he had provided guidance to Zarrab regarding how to submit false documentation, and he had given false information to US officials. Yet—at least according to Zarrab and Atilla—he did not receive bribes like his superiors did.[54] Unfortunately, this detail was of no importance to American prosecutors or jurors. He was found guilty at the beginning of January 2018 and sentenced in May to thirty-two months (including the fourteen already served since his initial arrest). He was released in August 2019 and greeted upon his return by Erdoğan’s son-in-law Berat Albayrak. To further emphasize its confidence in Atilla and contempt for the investigation, the government named him general director of the Istanbul Stock Exchange. He served until March 2021.[55]

Zarrab, on the other hand, was secretly released on bail of $5 million in July 2018, pending a sentencing date that remains unspecified. His release remained secret until October 2021, when a Gülen-linked news outlet revealed that he has been dividing his time between New York and southern Florida, where he lives under the name “Aaron Goldsmith” and runs a horse farm and dressage school.[56]

“Aaron Goldsmith” at the Next Level Horsemanship (from Serbestiyet, October 22, 2021

A primary reason for the delay in Zarrab’s sentencing is that the US government may still want him to testify in an additional Halkbank prosecution. Following Atilla’s conviction, the SDNY pushed to prosecute Halkbank itself rather than just particular individuals. Erdoğan and other Turkish officials repeatedly complained to Trump and members of his administration about the case, asking for it to be dismissed, but it continued. Trump officials at the Department of Justice temporarily restrained the SDNY, apparently on the grounds that angering the Turkish government might place American soldiers in Northern Syria at risk of reprisals. However, on October 15, 2019, just days after the Trump administration announced that US soldiers would be withdrawn, charges were announced against Halkbank.[57]

Since then, the case has dragged on. In the intervening two years, a new administration has been elected in the US that seems uninterested in quickly improving relations with Iran or Turkey. A potential prosecution of Halkbank, Turkey’s third largest bank, remains a powerful bargaining chip for any US administration. Moreover, even if President Erdoğan or his family members are not further implicated in the investigation, a ruling against the bank might be more directly embarrassing than it would have been a few years earlier. Since 2016, the Erdoğan administration has assumed more powers over the state and its institutions, further blurring the already thin lines between the presidency and state economic institutions.

Şahap Kavcıoğlu, the current president of Turkey’s Central Bank, entered national politics as Erdoğan was concentrating political power in a narrow circle around himself. As we will see, this process did not assure greater coordination or stability in policymaking; nor did it end factionalism within the party and state institutions like the Central Bank.

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[1] Akgüç, 100 Soruda, 35-36; Resmi Gazete, June 18, 1933; Resmi Gazete, January 27, 1938. In 1964, the various People’s Funds were merged into Halkbank (Resmi Gazete, January 2, 1964). Halkbank bought Töbank (Türkiye Öğretmenler Bankası) in 1992, Sümerbank in 1993, and some Etibank assets and liabilities in 1998 (Halkbank 2014 Annual Report [2014], 14).

[2] “Bütçe gibi zarar,” Cumhuriyet, February 2, 2000, 12.

[3] “Ziraat ve Halkbankası Memur Atacak,” Hürriyet, May 19, 2001; “Halkbank Genel Müdürü …” Hürriyet, October 21, 2002.

[4] “TOBB: Halkbank’ı kapatmak …,” Hürriyet, June 30, 2003; “Çağlayan: Halkbank 16 milyar …,” Hürriyet, April 25, 2007. From 2001 to 2005, Halkbank had six general directors: Emel Çabukoğlu (2001-2002) was the first woman to head a major Turkish bank. She oversaw much of the initial reorganization of the bank, but stepped down in late 2002, in advance of elections that promised to bring a new government (i.e., the AKP) to power. Necdet Şenkal (2002-2003) served for several months until being replaced by Tevfik Bilgin (2003), an American-educated official with experience in the private sector working for Anadolu Group. At year’s end, Bilgin was appointed head of the Banking Regulation and Supervisory Agency (BDDK). His replacement, Hasan Cebeci (2003-2005), had spent his career working at the Central Bank and Vakif Bank (another state bank); after retirement, he joined the board of Halkbank; when Zeki Sayın, the president of the combined Ziraat Bankası-Halkbank board stepped down in 2005, Cebeci replaced him. Adnan Büyükdeniz (2005), a leading figure in “participant banking” (i.e., Islamic Banking) was brought in to take Cebeci’s post, but stepped down the same month due to unspecified health reasons. Thereafter, Hüseyin Aydın (2005-2011), an executive at Ziraat Bankası, was appointed (Çiğdem Toker, “İstifamla yeni hükümete …” Hürriyet, October 23, 2002; “TÜSİAD Başkanı’ndan Halkbank’a …” Hürriyet, March 29, 2003; “Halkbank Genel Müdürü … Hürriyet, December 9, 2003; “Zeki Sayın görevinden ayrıldı,” Hürriyet, April 12, 2005; “Halkbank’a Albaraka Türk’ten genel müdür,” Hürriyet, April 14, 2005; “Halkbank Genel Müdürü …” Hürriyet, April 29, 2005; “Aydın, Halkbank’ta …” Hürriyet, June 6, 2005).

[5] “Erdoğan: Halkbank’ı kapatmayacağız,” Hürriyet, June 24, 2003.

[6] “Pamukbank Halkbank’la birleşti,” Hürriyet, November 17, 2004.

[7] “Halkbank’a yoğun talep …” Hürriyet, May 10, 2007. According to Murat Kışlalı, one factor driving investor demand for Halkbank shares was the low price that the government was charging—between 10% and 22% less, he claimed, than market value. Indeed, the stock rose from its offering price of TL8 to TL8.90 by the end of trading, an 11% rise (Murat Kışlalı, “Uçuz hisseye hücüm,” Cumhuriyet, May 9, 2007, 12).

[8] “International Financing Award …” Yavuz Sultan Selim Bridge, August 2014; “Loans allocated …” Construction Week, October 12, 2015. For a discussion of the connections between the five holding companies (Limak, Cengiz, Kolin, Kalyon ve MNG/Mapa) building the Istanbul Airport, see the section “Pool Party” in my previous piece “Some of the President’s Men: Yıldırım, Davutoglu, and the “Palace Coup” Before the Coup.” For an extensive discussion of the tendering process in the AKP-era (as opposed to the financing process), see Esra Çeviker Gürakar, Politics of Favoritism in Public Procurement in Turkey (Palgrave MacMillan, 2016).

[9] Mathieu Dufour and Özgür Orhangazi, “The 2000–2001 Financial Crisis in Turkey: A Crisis for Whom?” Review of Political Economy 21, no. 1 (2009), 105.

[10] “Gazi Erçel sekreterine …” Hürriyet, June 3, 2003.

[11] “Merkez bilmecesi,” Cumhuriyet, March 22, 2006, 1, 13; “Başçı kullandı,” Cumhuriyet, March 23, 2006, 1, 8; “Merkez’de orta yol …” Cumhuriyet, April 19, 2006, 13.

[12] For an account of the Ergenekon investigations, see Gareth Jenkins, Between Fact And Fantasy: Turkey’s Ergenekon Investigation (The Central Asia-Caucasus Institute , 2009). For an account of the “Kurdish Opening,” see Halil Karaveli, Reconciling Statism with Freedom Turkey’s Kurdish Opening (The Central Asia-Caucasus Institute, 2010).

[13] Joshua Hendrick, Gülen: The Ambiguous Politics of Market Islam in Turkey and the World (2013), 164-173.

[14] Even before the break between the Gülen movement and the AKP, some journalists were reporting on examples of its fraudulent use of public funds in the United States (e.g., Stephanie Saul, “Charter Schools Tied …” The New York Times [NYT], June 6, 2011).  There were also anti-charter activists that became focused on it (e.g., Charter School Watchdog’s “map” of Gülen schools HERE). After the split, Gülen schools came in for greater scrutiny (e.g., Scott Beauchamp, “120 American Charter Schools …” The Atlantic, August 12, 2014; George Joseph, “Education, Inc.” Jacobin, November 4, 2014). Diane Ravitch, always worth reading, has also written on Gülen schools HERE.

[15] I used the term “Gülen-linked” frequently in this article. Often, however, the term can beg the question of how one establishes such linkages. In some cases (such as US-based organizations), the “link” is still stated directly on the website; in other cases, especially charter schools, it may be evident from such details as the conspicuous number of Turkish teachers on the staff. In Turkey, business and media connections are well-known (or were prior to government crackdowns that forced the movement underground after 2014-2016). The Gülen movement was closely associated with banks (i.e., Bank Asya), newspapers (e.g., Bügun and Zaman), and holdings (e.g., İhlas Holding). The only linkage I make that might be a bit of a leap is the notion of “Gülen-linked” prosecutors. Yet, even here, the term is not used casually. For example, the prosecutor Zekeriya Öz oversaw both the Ergenekon and Sledgehammer cases and the investigations of Halkbank. In March 2011, Öz also ordered the detention of journalist Ahmet Şık, who reported on the movement’s efforts to seize control of the state. Likewse, in September 2010, soon after publishing a book making similar claims, Hanefi Avcı, a conservative former police chief had been charged by the Istanbul prosecutor Kadir Altınışık with (counter-intuitively) aiding a left-wing organization. At the time of his arrest, Avcı accused police intelligence officers Erol Demirhan and Ali Fuat Yılmazer of tapping the phones of high-level bureaucrats. Avcı was prosecuted and jailed until 2014. The prosecutor and two intelligence officers were arrested and prosecuted after 2013 for their participation in “FETÖ.” Zekeriya Öz fled Turkey (“Hanefi Avcı …” Radikal, September 28, 2010; “Uzun kulakları …” Cumhuriyet, September 30, 2010, 9; “Hedefte gazeteciler vardı,” Cumhuriyet, March 4, 2011, 6).

[16] “28 Şubat’ın büyükelçisi … Sabah, September 1, 2005; “100 bin dolarlık …” Patronlar Dünyası, October 12, 2005.

[17] “11.Türkçe Olimpiyatları’nda …” Hürriyet, June 17, 2013. To get some sense of the wealth and extent of the Gülen movement in its heyday, it is helpful to watch videos of the Turkish Language Olympics (Türkçe Olimpiyatları). See HERE and HERE.

[18] Examples of US politicians and academics becoming associated with the Gülen movement via innocuous sounding organizations are too numerous to count. But two examples should nicely illustrate the point. 

First, in researching this section of the article, I looked over a book titled Hizmet Means Service: Perspectives on an Alternative Path within Islam published by the University of California Press and containing numerous informative articles about the movement, its leader, and his ideas—often by well-regarded scholars. However, aspects of the movement like its vast financial and business network or its efforts to dominate and manipulate the state in Turkey are not mentioned. Nor is there much discussion of aspects of Gülen’s views (such as opposition to communism and Kurdish nationalism), which might turn off readers with sympathy for left-wing movements. In other words, while very informative, the book would seriously mislead a reader who relied on it for a well-rounded depiction of the movement. Curious, I looked in the acknowledgements and saw that the book had been developed in co-operation with the Chicago-based Niagara Foundation, which was “founded in 2004 by a group of Turkish-American businessmen and educators in order to realize the vision of their spiritual leader, Fethullah Gulen.” In its Chicago branch alone, its Advisory Board includes leading administrators from DePaul University, Northwestern University, Loyola University, and major corporations like Comcast. In addition, over the years, it has invited speakers such as Illinois Senator Dick Durbin and given out awards to education officials such as Arne Duncan (then CEO of Chicago Public Schools, later secretary of education in the Obama administration). 

Second, in my part of the US (i.e. San Diego), the main Gülen-linked organization is the Pacifica Institute and the main Gülen-connected school is Magnolia Science Academy. As with other such foundations, Pacifica is a pillar of the community, organizing various charitable activities and interfaith dialogues. At the same time, it also spends its funds on influencing public officials: for example, in 2008 and 2011, Pacifica paid for Congressman Bob Filner to travel to Turkey and Northern Iraq. Filner would go on to become mayor of San Diego (until he resigned amid sexual harassment allegations for which he was later convicted). In 2017, for its efforts creating dialogue between San Diego’s Muslim community and law enforcement, Pacifica has received the FBI’s Director’s Community Leadership Award—alongside other organizations and individuals including actor Gary Sinise. (Pictures of FBI Director James Comey shaking hands with representatives from each of these organizations are posted on the FBI website with the unfortunate exception of Pacifica, for which the picture is not included.) As for the school, while the San Diego branch does not seem to have had any issues of note, its larger Magnolia Public Schools charter network has had scandals typical of Gülen movement schools—in particular, hiring teachers from Turkey on H-1B visas to teach courses that could easily be taught by US citizens, ultimately US costing taxpayers over $929,000. Amsterdam & Partners LLP, the law firm hired by the government of Turkey to lead the campaign against Gülen-linked schools in the US, also claims that the Magnolia network has been engaged in practices common to other Gülen-linked schools in the US, such as “large contracts with affiliated vendors and numerous overlapping connections between Magnolia’s employees and board of directors. Nepotistic awarding of contracts.”

Now, the point to be taken for all this connection-drawing is not that the writers of the book Hizmet, the board members of the Niagara organization, Secretary of Education Duncan, or former FBI Director Comey were all “Gülenists”—in fact, even assuming that all people who have gone to a school run by the movement or worked for its banks, publishing houses, stores, etc. are “Gülenists” in some pejorative sense is also wrong. Rather (1) the movement’s organizational tactics enmeshed large numbers of people in relationships that would later prove compromising—and, sure enough, pro-AKP papers like Daily Sabah have cynically used these details to smear US officials. (2) By establishing these relationships, the movement increased the chance that it’s side of the story would be listened to sympathetically by US officials who have little experience of the movement in its domestic context.

 (“History,” The Niagara Foundation; “Advisory Board,” The Niagara Foundation; Matt Potter, “‘60 Minutes’ to Air Report …” San Diego Reader, May 11, 2008; Christopher Lowery, “Durbin Talks Student Loans …” Daily Illini, October 25, 2011 [posted on Senator Durbin’s official page]); Elliot Spagat, “Ex-San Diego mayor …” USA Today, December 9, 2013; “Arne Duncan,” Obama White House; Hizmet Means Service: Perspectives on an Alternative Path within Islam, ed. Martin Marty (University of California Press, 2015), vii-viii;  James Pilcher, “Charter schools use Turkish ties …” Cincinnati Enquirer, October 5, 2014; Ragip Soylu, “Departing US secretary …” Daily Sabah, October 7, 2015; “Republic of Turkey Retains  …” Amsterdam & Partners LLP, January 26, 2016; Douglas Belkin and Tawnell Hobbs, “Texas Opens Probe …” WSJ, July 29, 2016;  Howard Blume, “Three L.A. charter schools …” LA Times, October 2016; “FBI San Diego Presents …” FBI, March 9, 2017; “Gülen Charters in California …” Gülen Schools, July 3, 2020)

[19] For an extensive discussion of the investigations and government efforts to quash the investigations, see my earlier pieces, “Saving the AKP,” and “The Shoebox is on the Other Foot: Turkey’s Year of Retaliation.”

[20] United States of America vs Reza Zarrab, S1 15 Cr.867 (RMB), May 25, 2016, 6; Emanuele Ottolenghi, “The Iran Nuclear Deal and its Impact on Iran’s Islamic Revolutionary Guards Corps,” Hearing before the House Committee on Foreign Affairs Middle East and North Africa Subcommittee, September 7, 2015, 9fn41. As Kevan Harris explains, MAPNA is one of many large Iranian conglomerates that has developed in close relation with the state. According to Eric Lob, MAPNA is a product of the close relationship between engineering students, revolutionary politics, and the creation of a post-revolutionary oligarchic business environment in Iran (Kevan Harris, “Iran’s Commanding Heights” in Crony Capitalism in the Middle East: Business and Politics from Liberalization to the Arab Spring, eds. Ishac Diwan, Adeel Malik, and İzak Atiyas [Oxford University Press, 2019], 382; Eric Lob, Iran’s Reconstruction Jihad-Rural Development and Regime Consolidation after 1979 [Oxford University Press, 2020], 200-201, 212-213).

[21] “Öz gitti Bharara geldi,” Yeni Şafak, August 14, 2016; Nate Raymond, “Turkish gold trader loses …” Reuters, September 30, 2016; “FETÖ connections of actors …” Daily Sabah, November 17, 2017; “Amerikalı yargıç FETÖ tarafından … Yeni Şafak, January 6, 2018. 

The primary accusation against Preet Bharara made by pro-AKP papers and activists is that he was following the directives of New York Senator Chuck Schumer, who received “$2.5 million annually” from the law firm Steptoe & Johnson, which represented Fethullah Gülen. Perhaps this is true, but no amount of searching on the firm’s Open Secrets page can account for such numbers. However, if you truly wish to lose your mind in conspiracies, consider that Gülen’s lawyers in 2016, Reid Weingarten and Michael Miller, were also among the lawyers for Jeffrey Epstein after his 2019 arrest. And the judge who rejected Epstein’s plea for bail? Zarrab trial judge Richard Berman (“Media Cover Steptoe’s …” Steptoe, July 8, 2016; Michael Sisak and Jim Mustian, “Wealthy financier charged …” ABC News, July 8, 2019; Josh Russel, “Epstein Victims Recount …” Courthouse News, August 27, 2019).

As for Judge Berman’s alleged links to the Gülen movement: the firm that sponsored his trip to Istanbul and the conference he spoke at, Yüksel-Karkın-Küçük, was raided a week after the July 15 coup attempt. Karkın and Yüksel have since relocated their firm to London. Even before the raid, however, the pro-AKP paper Sabah was accusing the firm of close dealings with the Gülen movement. Sabah attached particular significance to the fact that the firm was the local associate for the international law firm DLA Piper since 2010. A year earlier, in 2009, DLA Piper had hired former US Ambassador to Turkey Marc Grossman as its head advisor. (Before and after this job, Grossman had worked for the Cohen Group, a consultancy founded by former US Secretary of Defense William Cohen, who was, as Sabah observed, close to the “Jewish community.”) As noted earlier in the body of this article, Grossman had earlier worked as a consultant for the Gülen-linked İhlas Holding. What Sabah did not bother to mention was that Yüksel-Karkın-Küçük had also served as counsel to Sabah’s parent company, Turkuaz Media, in its purchase of ATV-Sabah (“DLA and YKK Form Association in Turkey,” Global Law Experts, February 23, 2010; “İşte Paralel’in kozmik hukuk bürosu,” Sabah, May 2, 2016; “Paralel hukuk bürosu …” Sabah, July 23, 2016).

[22] Eric Lipton and Benjamin Weiser, “Turkish Bank Case Showed …” NYT, October 29, 2020.

[23] See United States of America vs Mehmet Hakan Atilla Complaint, November 7, 2016.

[24] “ABD’deki FETÖ çetesine dava,” Yeni Şafak, April 15, 2017; “FETÖ destekçisi ABD’lilere …” Anadolu Ajansi, April 17, 2017. The two lawyers, Mehmet Sarı and Rıza Saka, are both accomplished Istanbul lawyers associated with the “Sovereignty of Law” (Hukukun Üstünlüğü) faction in the Turkish Bar Association. Saka ran as the faction’s candidate for the Istanbul Bar in 2012 and Sarı in 2016 (“Avukat Dr. Mehmet Sarı,” Mehmet Sarı; “Av. Arb. Rıza Saka,” Rıza Saka).

[25] Jonathan Stempel, “Turkish gold trader hires …” Reuters, March 27, 2017.

[26] “Jerusalem Celebrates …” Haaretz, May 15, 2018; “In Extraordinary Statement …” NYT, November 20, 2018; Mike Stone, “Trump stands by Saudi …” Reuters, November 20, 2018; “Trump Vetoes Measure to Force …” NYT, April 16, 2019; “Qasem Soleimani: US kills …” BBC, January 3, 2020. Since coming into office, the Biden administration has maintained the policies of the Trump administration: continuing relations and arms sales to Saudi Arabia despite its killing of journalist Jamal Khashoggi and ongoing military operations in Yemen; shielding Israel from UN criticism during its May 2021 bombing campaign in Gaza; and refusing to return to the nuclear deal made by the Obama administration, instead pushing for stricter terms (Alex War, “Don’t expect Biden …” Vox, January 21, 2021; Nahal Toosi, “Biden aides debate how …” Politico, February 18, 2021; David Sanger, “Biden Won’t Penalize …” NYT, February 27, 2021; Mehul Srivastava, Katrina Manson, and Chloe Cornish, “Israel strikes Gaza …” FT, May 18, 2021; Andrew Desiderio, “Senate backs Biden …” Politico, December 7, 2021).

[27] One indication that the Trump administration’s transactional attitude toward Turkey is actually in keeping with the current consensus in Washington can be seen by looking at assessments of US-Turkey relations published by various influential DC think tanks. In November 2018, for example, Steven Cook at the Council on Foreign Relations argued that “Ankara has determined that partnership with the United States is no longer in Turkey’s interests” and that “U.S. policymakers should recognize that the United States and Turkey have gone from ambivalent allies to antagonists.” This dire framing by one of the most prominent Middle East experts set the tone for many of the assessments published in 2021 at the outset of the Biden Administration. Nicholas Danforth at the Brookings Institute writes that “limited cooperation will only be possible on subjects where clear and common interests are already present,” absent those situations, “containment” of Turkey will likely be the preferred policy aim. Likewise, Aykan Erdemir, Sinan Ciddi, and John Hardie at the Foundation for Defense of Democracies advocate “containment” of Turkey particularly in terms of its relations with Russia. Though skeptical of such policies, Sinan Ülgen at the Carnegie Endowment for International Peace similarly predicts that the Biden administration will “transpose to Turkey the conceptual framework that initially was designed to undergird the relationship with adversaries like China and Russia” attempting “to collaborate with these countries in other areas where a convergence of policies can be secured” (Cook, “Neither Friend nor Foe: The Future of U.S.-Turkey Relations,” Council on Foreign Relations, November 2018, 10, 18; Danforth, “Between Cooperation and Containment: New US Policies for a New Turkey,” The Brookings Institute, February 2021, 7; Sinan Ülgen, “Redefining the U.S.-Turkey Relationship,” Carnegie Endowment for International Peace, July 26, 2021; Erdemir, Ciddi, and Hardie, “Collusion or Collision? Turkey-Russia Relations Under Erdogan and Putin,” Foundation for the Defense of Democracies, December 2021).

[28] Borzou Daragahi, “Trump’s Deals in Turkey …” Buzzfeed News, December 11, 2016; Patrick Kingsley, “In Istanbul, Surprise …” NYT, February 8, 2017; Daniela Sirtori-Cortina, “How Trump’s Name …” Forbes, March 27, 2017;  Jeremy Venook, “Trump’s Financial Ties …” The Atlantic, April 18, 2017; Eric Levitz, “Trump’s (Insane) Conflict of Interest …” New York Magazine, October 8, 2019; Heidi Przybyla and Anna Schecter, “Donald Trump’s longtime …” NBC News, October 19, 2019; David Kirkpatrick and Eric Lipton, “Behind Trump’s Dealings …” NYT, November 12, 2019.

[29] Emily Flitter, “Trump’s art of the deal …” Reuters, November 13, 2015; John Cassidy, “Trump University …” The New Yorker, June 2, 2016.

[30] As a contrast to the sloppy money-grabs of Trump advisors, consider the examples of WestExec Advisors and Pine Island Capital Partners. WestExec was founded by former Obama administration officials Tony Blinken and Michele Flournoy in 2017; it advises companies seeking to do business with the US government but does not directly lobby on their behalf. In other words, WestExec can advise (and receive money from) a company selling drone technology to the US government or a firm representing the Saudi Arabian government, but its employees are not considered “lobbyists” or “representatives of a foreign state.” As for Pine Island Capital Partners (est. 2018): it is a private equity firm that invests in companies involved in military industrial production. In addition to previously employing Blinken (and still employing Flournoy), it also includes former military leaders and the leaders of the congressional Democratic Party in the 2000s, Dick Gebhardt and Tom Daschle (Lee Fang, “Former Obama Officials …” The Intercept, July 22, 2018; Eric Lipton and Kenneth Vogel, “Biden Aides’ Ties …” NYT, November 28, 2020; Brian Bender and Theodoric Meyer, “The secretive consulting …” Politico, November 23, 2020; Karl Evers-Hillstrom, “Consultants repping Saudi, UAE …” Open Secrets, March 2, 2021; Jonathan Guyer and Ryan Grim, “Meet the Consulting Firm …” The Intercept, July 6, 2021; “Our Team,” Pine Island Capital Partners).

[31] Mark Hosenball and Steve Holland, “Trump being advised …” Reuters, February 26, 2016; Nicholas Schmidle, “Michael Flynn, General Chaos,” The New Yorker, February 18, 2017. In particular, Michael Flyann became close with Michael Ledeen at The Foundation for Defense of Democracies. You can get a better sense of the organization as a whole from articles such as John Judis, “The Little Think Tank …” Slate, August 18, 2015; Indira Lakshmanan, “Inside the Plot …” Politico, July 15, 2016; Gardiner Harris, “He Was a Tireless Critic …” NYT, May 13, 2018; Kathy Gilsinan, “Iran’s Enemy du Jour …” The Atlantic, August 29, 2019; “Foundation for Defense of Democracies,” Militarist Monitor, January 18, 2020.

[32] James Grimaldi, Dion Nissenbaum, and Margaret Coker, “Ex-CIA Director: Mike Flynn …” WSJ, March 24, 2017; Gordon Lubold, Paul Sonne, and Del Quentin Wilber, “FBI Probe Scrutinizing Flynn’s Work …” WSJ, May 19, 2017. For a profile of Ekim Alptekin, see Borzou Daragahi, “The Man at the Center …” Buzzfeed News, June 20, 2017.

[33] “Letter to President Clinton on Iraq,” Project for a New American Century, January 26, 1998; Nina Easton, “The Hawk …” The Washington Post, December 27, 2001, C1; David Halberstam, War in a Time of Peace: Bush, Clinton, and the Generals (Schribner, 2002), 299; Tim Weiner, Legacy of Ashes: The History of the CIA (Doubleday, 2007), 439-454.

[34] Booz Allen Hamilton Holding is an information-technology firm involved in activities such as helping the United Arab Emirates establish its own national security agency and providing the US government’s own National Security Agency with contract workers (the most famous being Edward Snowden). The venture capital firm that James Woolsey worked for was VantagePoint Venture Partners, which was an early investor in Tesla (“James Woolsey and Richard Foster  …” Business Wire, April 26, 2011; David Sanger and Nicole Perlroth, “After Profits, Defense …,” NYT, June 15, 2013).

[35] “Advisory Board,” Center for Security Policy. For a clear sense of the Center for Security Policy and its founder Frank Gaffney Jr., see “Center for Security Policy,” SPLC Southern Poverty Law Center; “America’s first Muslim president?” The Washington Times, June 9, 2009; Jon Schwarz, “Muslim-Hating Conspiracy Theorist …” The Intercept, November 16, 2016.

[36] In his appearance on CNN to promote his participation in the Trump campaign, former CIA Director Woolsey explained that Trump favored a strong national defense and, in his estimation, “seems willing to keep a secret and not to blab everything to the public and our opponents” (Brianna Ehley, “Clinton’s former CIA director …” Politico, September 12, 2016).

[37] Chuck Ross, “Trump’s Top Military …” The Daily Caller, November 11, 2016; Theodoric Meyer, “Flynn lobbied for Turkish-linked …” Politico, March 8, 2017.

[38] Cristiano Lima, “Former CIA director …” Politico, January 5, 2017; Grimaldi, Nissenbaum, and Coker, “Ex-CIA Director: Mike Flynn …” WSJ, March 24, 2017. In November 2017, there were reports of an investigation into a second meeting between Flynn and Turkish representatives, held in November 2016, after Flynn had been announced as National Security Advisor. At the meeting, Flynn was allegedly offered upwards of $15 million to remove Gülen from the country. However, the reporting and the sources are presented in an elliptical manner, which is frustratingly typical of much reporting on the Trump administration. The article reports that “Special Counsel Robert Mueller is investigating” the alleged offer “according to people with knowledge of discussions Mr. Flynn had with Turkish representatives.” However, “The people who described the alleged proposal said they didn’t attend the December meeting and didn’t have direct knowledge from Mr. Flynn or his associates about its purported details.” The implication would seem to be that it is the investigators themselves (who would certainly have “knowledge of discussions”) that are leaking details of their own investigations to reporters (James Grimaldi,  Shane Harris, and  Aruna Viswanatha, “Mueller Probes Flynn’s …” WSJ, November 10, 2017).

[39] Nathan Layne, “While advising Trump …” Reuters, October 26, 2017. Nothing came of Woolsey and his wife’s efforts to poach Flynn’s deep-pocketed client, but they would meet with Kormaz again in 2018 as part of back-channel negotiations to release an American pastor, Andrew Brunson, imprisoned in Turkey on charges of Gülen movement-connections. During the coming three years, Korkmaz would be charged with various crimes including colluding with a pair of polygamist Mormon brothers and an Armenian-American organized crime figure to defraud the US government of $500 million in bio-fuel tax rebates. Both Korkmaz and Alptekin would also be taken to court for attempting to extort the owner of Borajet, accusing him of Gülen-connections in order to drive down the value of his aviation company and force a sale. According to DuvarEnglish, the charges were dropped shortly after the Turkey’s ambassador to the US visited the firm’s former owner (Yalcin Ayasli vs Sezgin Baran Korkmaz, et al. Complaint, February 18, 2019;  Ahmet Şık, “A’dan Z’ye “Sezgin Baran Korkmaz” olayı,” T24, January 11, 2021; Aubrey Belford, Adam Klasfeld, and Kelly Bloss, “Turkish Tycoon, Trump Fundraiser …” Organized Crime and Corruption Reporting Project, March 24, 2021; Bahadır Özgür, “SBK saga: Perfect example …” DuvarEnglish, May 18, 2021; “Former Borajet owner withdraws …” DuvarEnglish, June 21, 2021).

[40] United States of America vs Bijan Rafiekian and Kamil Ekim Alptekin, No. 1:18-CR-457 (AJT); “Jury Convicts Flynn Intel Group  …” United States Department of Justice, July 23, 2019; “Turkish businessman hosted …” DuvarEnglish, February 25, 2021 at 1:02:30-1:05:30 (or 33:10-36:10). In the interview, Alptekin does not specify which Biden brother he hosted. Given that James Biden, one year after his brother became vice-president of the United States, became vice-president of a construction company that won a $1.5 billion contract to build houses in Iraq, he seems like the more probable visitor. However, Francis Biden has his own issues as well. For more details about Joe Biden’s brother James, see Ben Schreckinger, “Biden Inc.” Politico, August 2019; Daniel Golden, “The Benefits of Being …,” ProPublica, February 14, 2020; Ben Schreckinger, “James Biden’s health care …” Politico, March 9, 2020. For Biden’s brother Francis, see Lucien Bruggeman, “How Frank Biden leveraged …” ABC News, January 17, 2020; Ryan Parry, Alan Butterfield, and Josh Boswell, “Joe Biden’s brother Frank owes …” Daily Mail, January 6, 2020; Ryan Parry, Alan Butterfield, and Josh Boswell, “Meet Frank Biden …” Daily Mail, January 6, 2020; Brian Schwartz, “Biden brother linked …” CNBC, February 2, 2021.

[41] Maggie Haberman and Charlie Savage, “U.S. Attorney Preet Bharara …” NYT, March 11, 2017; Brendan Pierson, “U.S. judge to look …” Reuters, April 4, 2017; Miranda Green, “On podcast, Preet Bharara …” CNN, September 21, 2017.

[42] Amberin Zaman, “Ankara’s paranoia spikes …” Al-Monitor, June 5, 2017; Laura Rozen, “US urges dialogue …” Al-Monitor, June 6, 2017.

[43] Amberin Zaman, “Turkish lira plunges …” Al-Monitor, August 10, 2018.

[44] For a good overview of conditions in Northern Syria since 2018, see International Crisis Group, “Steadying the New Status Quo in Syria’s North East,” Middle East Briefing, no. 72 (November 27, 2019); International Crisis Group, “Syria: Shoring Up Raqqa’s Shaky Recovery,” Middle East Report, no. 229 (November 18, 2021).

[45] Benjamin Weiser  and Patrick Kingsley, “Signs of Possible Guilty …”, NYT, October 31, 2017; Benjamin Weiser, “Reza Zarrab, Turk at Center …,” NYT, November 28, 2017. During the first week of the trial, the Istanbul Prosecutor’s Office issued a warrant for Aykan Erdemir, a former CHP member of parliament, now at the Foundation for Defense of Democracies. The prosecutor alleged that Erdemir had conspired to “destroy,” “steal” and “misuse” documents that were also (confusingly) “fake”—in essence, that he had allegedly provided US attorneys with materials produced by Gülen-linked investigators. The following week, his assets in Turkey were seized (“‘Delil olarak kullanılmasını sağlayan…’” Bianet, November 28, 2017; “Opposition ex-deputy’s assets …Anadolu Ajans, December 6, 2017).

[46] “New York’taki davada …” BBC Türkçe, December 11, 2017; Benjamin Weiser, “Officer Said He Fled Turkey …” NYT, December 11, 2017; Betül Yürük, Övünç Kutlu and Sibel Uğurlu, “FETO fugitive admits receiving …” Anadolu Agency, December 15, 2017.

[47] For a nice overview of the disputed 2009 Iranian elections and the symbolic importance of the protests that followed, see Pouya Alimagham, Contesting the Iranian Revolution: The Green Uprisings (Cambridge University Press, 2020). Furthermore, you can listen to me interviewing the author for the New Books Network HERE.

[48] Public Law No: 112-81: National Defense Authorization Act for Fiscal Year 2012, section 1245; United States of America vs Reza Zarrab, S1 15 Cr.867 (RMB), May 25, 2016, 5.

[49] “Rıza Sarraf Ambargoyu Delmek İçin Kimlerle Çalıştığını Anlattı,” Bianet, November 29, 2017; United States of America vs Halkbank, S6 15 Cr. 867, October 15, 2019, 14-15.

[50] “Halkbank’tan KAP’a Açıklama,” Bianet, November 30, 2017; United States of America vs Halkbank, S6 15 Cr. 867, October 15, 2019, 16-20.

[51] Turkey’s oil purchases from Iran as a portion or total purchases fell from 49% in 2011 to 39% in 2012, which meant around 151,829 bpd. Based on the average price per barrel of $111 in 2012, this mean perhaps $5.5 billion in exports from Iran to Turkey which needed to be balanced out (“Turkey’s Iranian oil …” Hürriyet Daily News, February 14, 2013).

[52] Public Law No: 112-158: Iran Threat Reduction and Syria Human Rights Act of 2012, August 10, 2012; Ivan Watson and Gül Tuysuz, “Iran importing gold …” CNN, November 29, 2012; Public Law No: 112-239: National Defense Authorization Act for FY2013, January 2, 2013, section 1245.

[53] United States of America vs Halkbank, S6 15 Cr. 867, October 15, 2019, 27, 34; United States of America vs Turkiye Halk Bankasi, Docket No. 20-3499, March 3, 2021, 2.

[54] “Atilla Kendini Savunmak …” Bianet, December 15, 2017; “Hakan Atilla ‘Hiç Rüşvet Almadım’ Dedi,” Bianet, December 16, 2017.

[55] “Hakan Atilla’yı Berat … Bianet, July 24, 2019; “Hakan Atilla, Borsa İstanbul …” Bianet, October 22, 2019.

[56] Can Kamiloğlu, “Rıza Sarraf Kefaletle …” VOA, November 2, 2021; “Newly surfaced documents …” DuvarEnglish, November 2, 2021; Kelly Bloss, Tom Stocks, Kevin G. Hall, Daniela Castro, and Karina Shedrofsky, Adam Klasfeld, and Allie Pitchon, “Notorious Money Launderer …” Organized Crime and Corruption Reporting Project, December 7, 2021.

[57] United States of America vs Halkbank, S6 15 Cr. 867, October 15, 2019; Eric Lipton and Benjamin Weiser, “Turkish Bank Case Showed …” New York Times, October 29, 2020. According to Lipton and Weiser, in early 2019, after Trump had fired his first attorney general, Jeff Sessions, the interim replacement, Matthew Whittaker, rejected the SDNY’s request to file charges against Halkbank citing risk to soldiers, but according to the NYT, “Justice Department officials decided to ignore [his] edict, concluding that they most likely would outlast [him] in the department.” When William Barr, the new attorney general, also pushed the SDNY to settle the case with a fine and admission of guilt, Geoffrey Berman, the federal prosecutor overseeing the SDNY also resisted. Unlike Preet Bharara, Geoffrey Berman did not receive the same level of criticism from pro-AKP media. Perhaps this was because he was an unremarkable conservative lawyer, far less online than Bharara, whose tweets provided grist for the Turkish media mill. Nonetheless, Berman was also eventually removed from office by the Trump administration (Selim Algar, “NBA star tweets …” New York Post, March 24, 2016; “Savcı Bharara’dan FETÖ’nün …” Sabah, May 31, 2016; “Bharara spreads Gülenist propaganda …” Daily Sabah, November 23, 2017; Tuncay Şahin, “Contradictions in US vs Atilla case,” TRT World, December 6, 2017; Alan Feuer, “U.S. Attorneys Named …” NYT, January 3, 2018).