Learning of the politically charged criminal proceedings before a New York court surely came as no surprise to German readers. The article said that charges had been brought against a Turkish bank manager. An industrious gold dealer who had also originally been indicted had pled guilty and then turned state's evidence.
The reason usually proffered for why this particular criminal case is so politically fraught is that it is about corruption in Erdogan's administration. Ministers, cronies and the family of the Turkish president are suspected of making money from the shady business dealings. And because the purchase of billions of dollars' worth of oil and gas is at stake here, the "commissions" represented a windfall of several million for each individual involved. "Erdogan under pressure" is the headline often seen in Germany in reaction to the machinations uncovered by the American justice system.
Nor did Recep Tayyip Erdogan's vehement response go unnoticed. He denounced the American lawsuit as "a plot against Turkey." Washington was "conspiring" with the Gulen movement against the Turkish government and the country as a whole. His statements were widely interpreted as merely the typical posturing of a dictator. Whenever an authoritarian ruler's own errors are uncovered, he naturally tries to rally his people behind him by representing the case as a malicious attack from abroad.
But as interesting and accurate as the revelations about self-enrichment in Erdogan's system are and though we may find his heavy-handed attempts to brush them off quite entertaining, media reports of this sort miss the real heart of the story.
The true crux is the political drama that is unfolding here. More specifically, this story represents the United States' efforts to impose economic sanctions on its enemy Iran, with all of the unintended consequences this policy could have.
An Iranian-Turkish network
The facts in brief: In January 2013, a plane from Ghana lands at the airport in Istanbul. Turkish customs officials find gold on board. The corresponding paperwork raises the question of whether the cargo is legal. Turkish investigators take up the case. They uncover a network of Turkish and Iranian businessmen, companies, banks and politicians.
The spider at the centre of the web is the gold dealer Reza Zarrab from Tabriz in north-western Iran. In that historic trade hub, many people speak both Persian as Turkish, just like the 29-year-old Zarrab. He has created a complex system of exchange. Turkey paid for oil and gas supplied by Iran with pure gold and Zarrab's couriers then carried the gold bars over the border to Iran. Regular money transfers to Iran have been impossible since 2011, because the sanctions imposed by the United States cut off Iranian banks from international transactions.
The Turkish investigators take action on 17 December 2013, arresting Zarrab and further suspects. In the meantime, it is clear that this day marks a turning point in Turkish history. Many of the police officers and public prosecutors involved in the investigation are supporters of the Gulen movement.
These law enforcement officers now accuse Erdogan and his associates of corruption because they allegedly took a personal cut of these transactions. Erdogan sees this as an attack on his power. He puts a stop to the investigations. The accused are released, including Zarrab, who promptly resumes operations. By contrast, the police and prosecutors are now sitting in prison, unless they have fled abroad.
In March 2016, Zarrab incautiously travels with his wife and daughter to Disneyland in Florida. He is apprehended at the airport in Miami. One year later, the FBI arrests Mehmet Hakan Atilla as well, a manager at the Turkish Halkbank, where Zarrab has accounts. The Americans catch Atilla at a New York airport. The Turkish banker apparently planned to attend a congress.
The indictment by the New York district attorney against Zarrab and Atilla, as well as the trial at the end of 2017, cast the case in a new light. It is now evident how deeply the government of the United States was involved in the matter from the outset.
American authorities were already on the trail of Zarrab and his network long before the Turkish investigators caught wind of the affair. The New York prosecutors quote an email Zarrab wrote to the Iranian Central Bank asking the Iranian leadership for its help in maintaining Iran's trade relations with other countries despite the hostile sanctions.
Zarrab refers in his email to the Supreme Leader Ayatollah Ali Khamenei and his talk of "economic jihad." He presents himself as a loyal citizen of the Islamic Republic who naturally must regard this slogan as a mandate to counteract the sanctions.
This email is dated 3 December 2011. The U.S. prosecutors also cite emails from Iranian bank employees and representatives from the national oil company that were sent during 2011. The Iranians express therein their alarm that money transfers can no longer be made for oil delivered abroad. As mentioned above, the Turkish investigation didn't begin until January 2013.
So where did the Americans get their information? From the Turks? Surely not, but from their own well-equipped intelligence services instead! Two former top officials in the U.S. Treasury Department testify before the court in New York: Adam Szubin and David S. Cohen. Both were responsible for the fight against "terrorist financing".
Halkbank targeted by U.S. investigators
Cohen, who was promoted to deputy chief of the CIA in 2015, testified that he had warned Atilla several times about doing business with Iran through the Halkbank. Szubin was cross-examined in court by the defence counsel for Atilla. The lawyer asked him when he had heard of Reza Zarrab for the first time. The former top civil servant replied: "I learned of his actions through information channels I am not at liberty to name."
The New York trial also revealed that an FBI "case manager" named Jennifer McReynolds had been in charge of investigating the Turkish banker Atilla. McReynolds was present at Atilla's arrest at the New York airport. Atilla's defence attorneys requested the questioning of the FBI agent in court to find out more about the approach being taken by the U.S. government to the case. Their request was denied. Worthy of note here is that Atilla was never charged with an offence by the Turkish investigators.
The agenda pursued by the United States in this case has been consistently different from that of the Turkish authorities with their intermittent investigations. The USA is not interested in uncovering corruption amongst Erdogan's cronies, but in Turkey's undermining of the sanctions against Iran.
Atilla and Zarrab have been charged and convicted with violating the Iran sanctions imposed by the U.S. Congress. Sentencing is scheduled for April. This case is meant to set a precedent. The U.S. justice system has never before brought a criminal case like this one against a businessman from a third country.
Up to now, the USA has in fact been content to take lenient action for any breaches of the Iran embargo. U.S. authorities have for example demanded that foreign banks dismiss certain employees, as in the case of the Commerzbank and HypoVereinsbank. Or people who fell out of favour have been put on a Treasury blacklist, making it impossible for them to take part in international financial transactions, as happened to a German businessman from Bonn.
″The worst deal ever″
The U.S. authorities have imposed fines in the billions of dollars against banks found guilty of circumventing the sanctions. The Halkbank in Turkey can now expect the same.
The hard-line approach taken to Zarrab and Atilla stands in remarkable contrast to the international nuclear agreement with Iran, of which the United States is one of the signatories. On the basis of this agreement, the international sanctions against Iran were relaxed considerably in 2016. It is likely therefore that Zarrab and Atilla thought nothing would happen to them upon entering the USA.
In the United States, however, there is now substantial political resistance to any compromise with Iran. This is not merely the stance taken by President Trump, who never misses an opportunity to refer to the nuclear treaty as the "worst deal ever". Large parts of the military and intelligence establishment as well as many members of Congress likewise oppose the agreement and are calling for tougher economic sanctions against Iran.
This reflex is as old as the revolution against the Shah 40 years ago. And the policy gained additional momentum after 9/11 (which Iran had nothing to do with). In the years after the attacks on New York and Washington, the U.S. administration placed a new emphasis on fighting terrorist financing, a pursuit referred to these days simply as "financial intelligence".
This discipline was soon directed more against Iran than al-Qaida. Starting in 2007, Treasury officials increasingly managed to cut Iranian banks off from international payment transactions. Some observers say that only the pressure of the sanctions caused the Iranian regime to suspend uranium enrichment under the nuclear agreement of 2015.
There may be some truth in that observation. But the problem is the ambivalence of the American policy. The U.S. sanctions are namely aimed not only against Iran's nuclear programme but have another underlying target: the weakening of the Iranian economy as a whole and thus of the regime.
Sanctions logic integral to U.S. policy
"Regime change" is always implied in the logic of the American sanctions policy. Now that economic hardship has in recent weeks driven Iranians out onto the streets proclaiming "Death to the dictator", the endorsers of this logic think they are close to achieving their goal.
The sanctions logic is firmly anchored in U.S. policy on the Middle East. It is also applied to Lebanon. U.S. officials have been threatening since 2016 to cut off Lebanese banks from dollar transactions if they continue to hold accounts for members or sub-organisations of the pro-Iranian Hezbollah. Lebanese Prime Minister Saad al-Hariri, an opponent of Hezbollah, is thus trying to tread cautiously. In this respect, his forced temporary resignation last November has a lot to do with U.S. sanctions policy.
Nowhere are the unwanted side effects of the American sanctions as plain as in Turkey. The U.S. authorities got wind of the Turkish business dealings by the Iranian gold dealer Reza Zarrab back in 2011 and tried hard to persuade their Turkish counterparts to take action against the network.
This triggered fierce tensions in Turkish domestic politics, contributing to the rift between Erdogan and the Gulenists. The Americans surely didn't intend for their policies to anger their long-time ally Erdogan and ultimately cause them to lose him. The trial in New York has shown that Erdogan's turning against the USA is actually an inadvertent consequence of the policy of sanctions against Iran. It is but cold consolation for the USA that it can now score another blow against its newfound enemy Erdogan with maximally aggressive prosecution.
© Qantara.de 2018
The author works as a television journalist for the ARD political magazine "Panorama".