Sezin Öney
Nov 20 2017

The Question: “How important is the Zarrab case in corroding U.S.–Turkey relations?”

“How important is the Zarrab case in corroding U.S.–Turkey relations, and how do you think this case will shape the future of relations?”


Gönül Tol (Director, Center For Turkish Studies, the Middle East Institute):

Reza Zarrab seems to be cooperating with federal prosecutors in a money-laundering case and prosecutors may be seeking information about any ties between the Turkish government and former National Security Adviser Mike Flynn.

Special Counsel Robert Mueller is investigating whether President (Recep Tayyip) Erdoğan offered Flynn $15 million during the presidential transition in December to use his position as national security adviser to return Fethullah Gülen and to see that Zarrab’s case was dropped.

All these things put Turkey at the heart of a heated domestic debate, making Erdoğan a household name in the U.S. The American public will be watching Turkey more closely. This will also force Congress, which is already quite critical of Turkey, to further dial up its criticism of Ankara and mount pressure on Donald Trump to play hardball with Turkey.


Howard Eissenstat (Associate Professor of History at St. Lawrence University and Senior Nonresident Fellow at the Project on Middle East Democracy):

President Erdoğan’s critics are probably more excited about the Zarrab case than they should be. No corruption scandal is going to unseat President Erdoğan at this point. He has weathered worse storms before and, whatever the revelations, it is too easy to brush them aside as either Gülenist conspiracies or Western attempts at destabilising Turkey. 

Erdoğan himself is clearly taking the threat seriously and has done all he can to derail the investigation. The truth is that, while the Trump Administration might have been sympathetic in the abstract, the costs of it intervening in the trial are very high, the benefits quite low. The case will go forward and there is good evidence that Zarrab has already made a deal. Embarrassing revelations are forthcoming.

What are the repercussions? It depends what information comes out in the trial. Certainly the investigation will result in further embarrassment for the Turkish government, but the costs of that are less to Erdoğan’s domestic standing than the possibility of further undermining Turkey’s economy: high fines on Turkish banks and an expanding investigation could weaken Turkey’s already unstable financial markets. The case also adds to a growing sense – on both sides of the U.S./Turkish relationship – that the countries are allies in name only. The distrust and displeasure is felt acutely both in DC and in Ankara. The Zarrab case will likely only escalate that reality.


Ömer Taşpınar (Foreign Policy Expert at the Brookings Institution, Professor at the National Defence University):

Mr. Zarrab's case is a major irritant for Ankara in its relations with Washington. President Erdoğan flagged the issue several times with the Obama and Trump administrations with the hope that the executive power in the American system could influence a matter that was clearly in the hands of the judiciary. That is obviously not how things work in the U.S. The fact that Zarrab's defense team reached out to Rudy Giuliani (a former New York City mayor very close to President Trump) is another indicator of how important the case is for Turkey's main decision maker. 

The New York Times reported on the strategy by Mr. Giuliani to turn the case into a matter of international diplomacy, to reach a deal between the two states centred on security issues. Giuliani met with President Erdoğan but there was no breakthrough in these efforts and there are now reports that Zarrab is ready to plead guilty and collaborate with U.S. prosecutors in return for a shorter sentence.

Such collaboration between Zarrab and U.S. authorities is bad news for Erdoğan for two main reasons. First, there will be major financial penalties for the Turkish banks involved in gold trading with Iran in defiance of U.N. and American sanctions. 

Second, Zarrab will probably name names that will involve a circle that gets very close to President Erdoğan himself and his family. I believe Erdoğan will easily weather the political fallout, but the financial penalties will exacerbate the economic situation in Turkey and hurt the country's already bad image among investors. In short, the Zarrab case will hurt Erdoğan by hurting the Turkish economy. The case will also worsen already tense relations between Ankara and Washington.


Richard Falk (Albert G. Milbank Professor Emeritus of International Law at Princeton University):

There are two major uncertainties associated with the Zarrab case. First, was there a political motivation surrounding the original indictment of Reza Zarrab, reflecting an underlying anti-Turkish, anti-Erdoğan attitude in the U.S. government? Once the indictment of Zarrab went forward, it is correct that judicial independence made it impossible for the executive branch, including President Trump, to interfere with the legal proceedings.

Yet if the motivation to open the case was political and accompanied by dubious methods of gathering evidence, as Ankara contends, then the Turkish suspicions and objections deserve serious consideration. It is impossible to resolve this uncertainty given the information presently available to the public.

The second uncertainty, which is broader than the Zarrab case, is whether the United States is quietly supporting the intense anti-Turkish and anti-Erdoğan campaign that has joined together Turkey’s main adversaries: 'FETÖ', the Kurdish diaspora, Armenian overseas communities, hard-core Kemalists, and seemingly, Israeli and Zionist think tanks.

Turkey’s confidence in its relations with the West, especially the U.S., were badly shaken by events over the last 15 years, starting with the rebuff of Turkey’s effort to become an EU member, but climaxing with the ‘wait and see’ attitude toward the July 15th coup attempt that clearly conveyed an impression within Turkey that Europe and the U.S. were not supportive of a democratically elected government and ally when faced with a coup threat, and even hesitated to condemn the role of FETÖ despite overwhelming evidence of its involvement.

Beyond this, the reluctance to detain or extradite Fethullah Gülen reinforces this impression as does the U.S. military support for the Syrian YPG despite its links to the PKK. Washington’s suspension of visas for Turks in an overreaction to the Turkish arrest of a consular employee in Istanbul a few weeks ago was the latest blow to Turkish-U.S. relations.

In sum, it seems impossible to interpret this American criminal indictment of a major Turkish gold trader and an associated banker accused of evading U.S. sanctions law against Iran without taking account of the hostile background that has been poisoning relations between the two former allies in recent years.

Zarrab is one piece of a much larger disquieting geopolitical puzzle.


Paul Kubicek (Professor, Department of Political Science, Oakland University):

The Zarrab case is but one of many challenges to U.S.-Turkish relations. It is not, in my view, as central as the question of Gülen or U.S. support for Syrian Kurds. However, the Zarrab case may touch very directly on the AKP and on President Erdoğan.

Whether Zarrab himself is convicted or not is not very important. What is crucial is what he knows, if he tells this to U.S. investigators and, crucially, if this information is made public. These are a lot of "ifs". However, given the Turkish government's high degree of concern in the case, it seems likely that Zarrab has some politically sensitive information. If it is revealed that the Turkish government, and perhaps Erdoğan himself, organised efforts to evade the sanctions on Iran, this would be severely compromising, and give more support to those who believe that Turkey is an unreliable "ally." In this sense, it is quite serious, but for more what it might do, perhaps, to make the U.S. upset with Turkey, as opposed to making Turkey (more) upset at the U.S.


Dr. Lisel Hintz (Assistant Professor, International Relations and European Studies, Johns Hopkins University)

President Recep Tayyip Erdoğan and his AKP (Justice and Development Party) government are deeply concerned about the Reza Zarrab trial for several reasons, not all of which are immediately apparent. Firstly, and most obviously, Erdoğan is concerned about what information Zarrab might provide and whom he might implicate is he cooperates with U.S. prosecutors, as signs seem to indicate. Indeed, the diplomatic note was sent to inquire into his whereabouts, which suggests he may have turned U.S. government witness. This, in turn, may be fueled not just - or even in large part - by fear of reprisal by Turkey but rather by Iran. Tehran has assigned death penalty sentences based on corruption charges to those implicated in oil trading schemes before, such as Babak Zanjani and Mahafarid Amir-Khosravi. On the Turkish side, the concern is the implication of AKP officials within Erdoğan's party and even his family if Zarrab sings. On the other hand, Erdoğan has been successful in avoiding what seemed to be a massive fallout following the 2013 corruption scandal - in the March 2014 municipal elections, the AKP actually increased its vote share; this was partially due to electoral manipulation, but also to supporters' beliefs that their leader could do no wrong and supposedly "corrupt" measure might be good for the nation, as evidence in many post-election interviews.

The bigger concern for Erdoğan is the stability of Turkey's economy, which has been teetering for some time. Apparently, foreign investors do not react the same way to corruption allegations as AKP supporters. With the Turkish lira continuing to lose value, thus making paying off foreign debt increasingly difficult, and FDI pulling out, Erdoğan needs the economy to stabilise to continue to maintain electoral support ahead of the 2019 municipal, general, and presidential elections. The massive fines on six of Turkey's major banks that could result from a guilty verdict in U.S. courts could severely damage Turkey's ratings in international banking and trading indices, not to mention undercut the construction industry, which relies heavily on bank loans and has fueled much of Turkey's growth along with state-led investment.

The upcoming trial has already begun to affect U.S.–Turkey ties, being one of several elements including the perceived involvement of the U.S. in the 15 July coup attempt, Washington's refusal to extradite Fethullah Gülen without sufficient evidence, Erdoğan's suggestion that the U.S. "trade" Gülen for jailed American pastor Andrew Brunson, and the U.S. arming of the Syrian YPG – whom Turkey sees as equivalent to the PKK – in the fight against ISIS.