Mysterious Gold Dealer’s Testimony Puts Erdogan On Shaky Ground

Authored by M K Bhadrakumar via The Asia Times

As on the soccer field in his youth, so in a tumultuous political career spanning four decades: Turkey’s president Recep Tayyip Erdogan has consistently shown his mettle as a fighter who won’t be satisfied with anything short of total victory.

But in the battle that is now unfolding around him, and which is besieging him, there isn’t going to be a winner.

What is at stake is survival – the chance to live another day, even if in some ignominy. That much is clear from the opening testimony in a federal courtroom in New York on Wednesday from the Turkish-Iranian gold trader Reza Zarrab, who allegedly helped Tehran sidestep US sanctions to export oil with the connivance of corrupt Turkish high officials and then to launder the income.

When the principal accused becomes the star witness in a US court, he has possibly struck a deal with the authorities. The remaining ambiguity is with regard to when it was that Zarrab struck the deal – was it when he landed in Miami 18 months ago, ostensibly to show his young son around Disneyland, or before he was spirited out of Turkey to America on the express understanding that he’d get clemency for providing hard evidence to nail Erdogan.

Zarrab explained before the court the elaborate scheme he orchestrated to free “a few billion euros” of Iran’s sanctioned oil using funds deposited in the Turkish state-owned Halkbank which were used to buy gold that was subsequently smuggled to Dubai and sold for cash. (The FBI also nabbed a senior functionary of Halkbank, Hakan Atilla, who is on trial.)

Turkish gold trader Reza Zarrab is shown in a court room sketch as he appears in Manhattan federal court in New York. Photo: Reuters / Jane Rosenberg

Zarrab named a confidant of Erdogan, the former Turkish Economy Minister Zafer Caglayan, as having taken bribes amounting to over US$60 million and also implicated Turkey’s Aktif Bank, which is part of a holding company headed at the time by Erdogan’s son-in-law, Berat Albayrak (the current energy minister). Zarrab is due to testify again. We have only seen the tip of the iceberg.

Meanwhile, Turkey’s main opposition leader, Kemal K?l?çdaro?lu, revealed on Tuesday that Erdo?an’s close circle – including his brother, his son and his executive assistant – made transactions worth around US$15 million to an off-shore company called Bellway Limited in the Isle of Man (a tax haven) in late 2011 and early 2012. Kilicdaroglu produced documentary evidence and promised to revert with more such disclosures.

Top Turkish officials and senior leaders of the ruling party have made the counter-allegation that all of this is a political conspiracy orchestrated by Islamist preacher Fetullah Gulen, who lives in the US. They say Gulen and his American mentors are making a second attempt to remove Erdogan from power after the failed military coup two years ago. The Turks believe that CIA officials sponsored Gulen’s exile in Philadelphia.

Evidently, the US establishment has been preparing the case file for quite some time – and the effort predates the Trump presidency.

The Turkish side have kept President Trump personally out of the firing line.

There is, in fact, an eerie similarity here to what the Russians have been saying – namely, that Trump himself desires a good working relationship with Russia and President Vladimir Putin, but, alas, the Washington establishment is pursuing a contrarian agenda.

Erdogan’s strategic defiance of Washington seriously hurts US interests. Without Turkey’s cooperation, America’s military presence in northern Syria is unsustainable. Turkey’s entente with Russia and Iran undermines US regional strategies.

Add to that Turkey’s S-400 missile deal with Russia, Erdogan’s hostility toward Israel and support of Qatar in its rift with Saudi Arabia, the downhill slide in Turkey’s relations with major European countries and its lackadaisical attitude toward NATO, and it’s not hard to see how the West might view Erdogan as a hurdle that must somehow be overcome.

Zarrab can help irreparably damage Erdogan’s reputation, and even implicate his family members and close aides as criminals.

Worse still, heavy penalties of billions of dollars could be levied on the Turkish banks involved, crippling the country’s economy. And sanctions could be imposed.

Suffice to say, Erdogan has a choice between capitulation or the desecration of the house he has built in a long and hugely successful political career. Time is running out. Erdogan is circling the wagons. He may feel tempted to ride the wings of Turkish nationalism. There is still no credible political figure who can seriously challenge him in Turkish politics. He is daring and charismatic. The next elections are due only in 2019.

But that is to cast an eye at the horizon.

Significantly, US Secretary of State Rex Tillerson quietly digressed during a speech on trans-Atlantic relations in Washington on Tuesday to pose a riddle to no one in particular – whether Turkey would be better off partnering with Russia and Iran or aligning with the West.

On the eve of Zorrab’s testimony, Tillerson seemed to hint at a passage that Erdogan has not taken, toward a door that he has never opened – one that leads into the rose-garden.

This article (Mysterious Gold Dealer’s Testimony Puts Erdogan On Shaky Ground) was originally published on Asia Times and syndicated by The Event Chronicle. Found via Zero Hedge.

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