Iranian gold stars in Turkish corruption scandal


Date posted: December 20, 2013

FEHİM TAŞTEKİN

It is difficult to predict how the bribery/corruption investigation into several Turkish ministers will end. Although there are those who frame the event as a power struggle between the Fethullah Gulen movement and the government, conspiracy theories expand its dimensions to include the United States and Iran. With the detentions of Suleyman Aslan, CEO of Halkbank, and Riza Sarraf, an Iranian businessman who deals with gold and was originally named Reza Zarrab, the focus is now on the Iran-Halkbank-gold triangle.

The government is looking for US and Israeli hands in the operation because of the use of Halkbank to circumvent the sanctions imposed on Iran. Prosecution sources stress that the investigation is aimed not at Halkbank but its CEO, after a search of his house yielded $4.5 million hidden in shoeboxes. But the arrival in Turkey of David Cohen, the US Treasury’s undersecretary of terrorism and financial intelligence, shows the importance of the Sarraf-Halkbank file in the affair.

Since Iran was banned from using the international money-transfer system SWIFT as of March 2012 as stipulated by US-EU embargoes, there have been many media reports that Tehran has been using Turkey’s Halkbank to evade the restriction.

According to reports the police have delivered to prosecutors, this is how the plan worked: A system was hatched to bypass SWIFT queries by setting up front companies in China. Then, money was transferred from Iran with falsified documents to bank accounts opened in the names of those companies in the guise of reimbursements for imports from China. The money was immediately transferred to the accounts of real or front companies in Turkey as payment for exports, and used to purchase gold. The gold was then sent via couriers to Iran, or to Dubai to be forwarded to Iran.

According to economist Ugur Gurses, this complex system arose to address Turkey’s inability to pay Iran through routine channels for the oil and natural gas it was buying.

This is why Turkey opened an account for Iran at Halkbank. Iran converted the deposits in these accounts to gold. Gold procured from international markets was first brought to Turkey and then sent to Iran. As the intermediary company was registered in Turkey, Turkey’s gold imports and exports rose steadily as Turkey paid its debts to Iran. In three years, $8 billion worth of gold was sent to Iran.

To counter this scheme, the United States banned gold exports to Iran in July 2013. This resulted in the accumulation of nearly $13 billion in imported gold in Turkey.

Gurses’ narrative found its way to the investigation files, along with reports from wiretapping and other surveillance. The government, trying to defend itself, opted to label the operation as an anti-Halkbank campaign.

Star, which acts as a mouthpiece for the Justice and Development Party (AKP) government, had this comment: “Attacks against Halkbank are generally originating from the United States. Last year’s $6.5 billion worth of gold exports to Iran had also upset the US government, which had asked the bank to cease gold trade with Iran. Also, India’s decision to use Halkbank to transfer its reimbursements bothered Western countries, as India now owes Iran $5.3 billion in oil debt. India is planning to pay Iran $1 billion per month — that is $12 billion annually — also through Halkbank.”

Percentage to the minister

Ostensibly, it was the bribery case that prompted the investigation into the scheme with Iran. According to police findings, Zarrab, who assumed the name of Riza Sarraf after becoming a Turkish citizen, has close links to Iran. After developing a web of relationships with ministers and their sons, he designed a system to funnel billions of dollars. Sarraf’s father had connections with former Iranian President Mahmoud Ahmedinejad. Sarraf was paying thousands in “commission” — bribes — to Minister of Economy Zafer Caglayan. Caglayan was paid 103 million lira ($49 million), and Aslan 16 million lira ($7.7 million), over two years. Caglayan, who wanted to inflate national export figures, wanted Sarraf to make the transfers in gold. At their Oct. 3 meeting, Caglayan told Sarraf, “You have to export at least $4 billion of gold before the end of the year.” The police investigation file says, “It was understood that Sarraf was trying to boost export figures in line with the demands of [Prime Minister Recep] Tayyip Erdogan, Zafer Caglayan and Suleyman Aslan,” noting that exports were also made to Dubai.

Not easy without the prime minister’s approval

Oktay Ozdabakoglu, Radikal’s finance and capital market expert, made this assessment to Al-Monitor: “At the core of the operation are the transactions made by Sarraf. It is claimed that Sarraf and his team, in a system they developed to circumvent black money and SWIFT queries asked in banking transactions as required by the embargo applied to Iran, were transferring the money of certain Iranians from Iranian banks and sending it back to Iran as gold. In this complicated process, they were actually killing three birds with one stone. While Sarraf and his cohorts were collecting their cuts, Turkey’s exports were increasing. Iran, supposedly under embargo, was continuing its trading, and meeting its hot money needs. A public bank was playing the key role in finalizing these transactions. It appears impossible that this operation could have been conducted with the permission or information of the government or quarters close to the government.”

Mind-boggling rise

The rise of Sarraf, who worked for Al Nafees Exchange and Al Salam Center Exchange in Dubai before entering the Turkish market in 2008, boggles the mind. It is impossible to achieve such a stunning growth without political and bureaucratic backing. Sarraf, who set up Royal Maritime in 2008, went into the gold business in 2011, and in 2012 entered the market with Safir Gold Company. In 2012, that company broke all records by singlehandedly realizing 46% of all Turkish gold exports. Although his men were caught several times at airports with gold and nobody touched them, he came under the scrutiny of the Financial Crimes Investigation Board. The Sarraf file found its way to the judiciary when the government’s former partner, the Gulen movement, pressed the button in anger over the government’s decision to close down private tutoring halls it operated for students.

The file built by police and prosecutors believed to be affiliated with the Gulen movement, which constitutes the base of this kamikaze attack, will not only shake the government. It has the potential to cause major damage to Turkey’s relations with the United States, already shaken by divergences over Israel and Syria.

Source: Al Monitor , December 20, 2013


Related News

Ambassador says US having difficulty in seeing clear criterion in anti-Gülen operations

Speaking to a group of reporters in Istanbul on Friday, Bass said although the Turkish government insists that the anti-coup measures it has taken against followers of the Gülen movement are proportionate, it is difficult see that the Turkish government is taking its actions based on a clear criterion. Bass said the US was having difficulty in assessing whether the measures are proportionate and reasonable.

Islamic scholar gave Buddhist point to ponder

Sanitsuda Ekachai 21/06/2012 I have just returned from Turkey, one of the world’s most beautiful countries. What has stayed deeply in my mind, however, is not the country’s picture-perfect postcard beauty, but its people, its modern take on Islam and a host of questions for my own country. During the visit, we, a group of […]

Now it is time to answer

All Cemaat did was to oppose to the closing of test-preparation centers… The corruption investigation that erupted after, is billed to Cemaat by the PM himself.

A warning from and for a troubled land – how easily a democracy can be dismantled

Recently a messenger came to Colorado with dark warnings from a troubled land: Abdulhamit Bilici, the former editor-in-chief of Zaman, Turkey’s go-to newspaper before President Recep Tayyip Erdogan’s brutal crackdown. You don’t often meet people like Abdulhamit Bilici in the United States. You almost can’t believe that someone with his backstory sits before you.

EU denies claims of designating Gülen group as ‘terrorist org’ in report

The European Union has denied claims by the Turkish press that it has, for the first time, called the Gülen movement a ‘terrorist’ organization in its upcoming progress report slated to be published on Tuesday. A source who spoke to Ahvalnews on the condition of anonymity categorically denied claims made by Turkish media sources.

Minister says Pak-Turk schools won’t be closed down

Karachi—Sindh Education minister Jam Mehtab Dhahar has assured a Turkish team Tuesday that Pak-Turkish schools will not be closed down in Sindh or anywhere in Pakistan. They gave the assurance to the visiting Turkish team during meeting in Karachi, with the Turkish officials, here on a tour.

Latest News

Fethullah Gülen’s Condolence Message for South African Human Rights Defender Archbishop Desmond Tutu

Hizmet Movement Declares Core Values with Unified Voice

Ankara systematically tortures supporters of Gülen movement, Kurds, Turkey Tribunal rapporteurs say

Erdogan possessed by Pharaoh, Herod, Hitler spirits?

Devious Use of International Organizations to Persecute Dissidents Abroad: The Erdogan Case

A “Controlled Coup”: Erdogan’s Contribution to the Autocrats’ Playbook

Why is Turkey’s Erdogan persecuting the Gulen movement?

Purge-victim man sent back to prison over Gulen links despite stage 4 cancer diagnosis

University refuses admission to woman jailed over Gülen links

In Case You Missed It

Her mother was detained right after her birth, she is now growing up in Athens

Şifa University rector says gov’t move to shut down hospitals won’t affect education

McGill University Prof: Turkish President Erdogan Wrong To Blame Man Of Prayer For Coup

Pak-Turk school teachers to be deported as Erdogan visits Pakistan

US prosecutor denies any links to Gülen, says never set foot in Turkey

Fethullah Gulen’s “old friend” detained by İzmir police despite suffering from advanced Alzheimer’s disease

Fethullah Gülen’s legal journey

Copyright 2023 Hizmet News