Surprise Washington visit on cards for Turkish Foreign Minister

Update: Three more sealed documents placed in vault for USA v. Zarrab et al, on Nov 15, 2018. Screen shot is at the end of piece. This makes at least 11 sealed documents are added to the case since Mehmet Hakan Atilla was convicted in early 2018.

Turkish Foreign Minister Mevlüt Çavuşoğlu will likely be dispatched to Washington D.C. next week tasked with convincing U.S. authorities to drop or diminish the impending fine and highly anticipated new indictment facing the Turkish state-owned Halkbank.

Halkbank’s former deputy chief executive Mehmet Hakan Atilla was arrested in the United States in March 2017 for breaking sanctions on Iran while working for the bank. He was sentenced earlier this year, and Halkbank is still awaiting a fine that could amount to tens of billions of dollars.

President Recep Tayyip Erdoğan has repeatedly called for Atilla’s release, and the Halkbank matter is expected to be a priority for Çavuşoğlu’s rumoured visit, which has not yet been officially announced by either nation.

On Wednesday, Çavuşoğlu criticized the new round of U.S. sanctions on Iran, which reached its second phase this month. “We are working with all sides to lessen the inevitable negative effects of the sanctions on the Iranian people and our bilateral financial and economic relations,” he said. Çavuşoğlu will be in New York City for several meetings on Monday, Nov 19, then expected to visit Washington.

Returning from Paris, Erdoğan said he had spoken with U.S. President Donald Trump about the Halkbank case, and added that Turkish Finance and Treasury Minister Berat Albayrak and the U.S. Finance and Treasury Minister had also discussed the issue by telephone. The ministers also spoke with U.S. Secretary of State Mike Pompeo, according to Erdoğan. 

But it is unclear who Erdoğan was referring to on the U.S. side. The United States does not have a “Treasury and Finance Minister,” the title Albayrak holds, but does have a treasury secretary. It is also highly unlikely the Trump administration would be able to sway the decision of the federal prosecutors in the Southern District of New York, which has been a thorn in Trump’s side, having launched several investigations into his business empire. 

In any case, signs indicate that new developments are on their way in the Halkbank investigation.

The star witness in Atilla’s trial, Turkish-Iranian gold trader Reza Zarrab, has still not been sentenced despite admitting the central role he played in the sanction-busting scheme. That most likely means that U.S. officials are still talking to Zarrab.

Investigators certainly seem to be turning up fresh information on his case, to which at least eight sealed files have been added since May – though one expert closely following proceedings has said there may be as many as a dozen.

While the contents of those files of course remain unknown, one highly probable scenario is that prosecutors are preparing charges against a new individual, whose identity will not be revealed until their arrest.

This was precisely what took place with Zarrab. Police were waiting to arrest the gold trader when he touched down at Miami Airport in March 2016, but before he was in custody there had been no sign of the charges against him.


court document
The court document listing the addition of sealed documents to the investigation

Meanwhile, several of Erdoğan’s statements on the Halkbank matter during his return from Paris on November 10 have left observers scratching their heads.

The Turkish president said Trump had given directions on Halkbank to the U.S. finance and treasury minister, who then discussed the matter with Albayrak. Yet the United States does not have such a ministry, the closest counterpart being Secretary of the Treasury Steven Mnuchin.

Erdoğan went on to say “a new development (had taken) place”, and U.S. Secretary of State Mike Pompeo intervened to discuss the issue with the ministers. Once again, details of what Erdoğan meant by the “new development” are unclear.

It is worth repeating that the Southern District New York attorney’s office dealing with Zarrab and Halkbank is one of the most respected and most independent in the country. We should also note that the U.S. Department of Justice’s influence on the office is strictly limited.

Moreover, this office is rumoured to be investigating Trump’s real estate activities, though this has so far remained undisclosed.

It was this same office that conducted night raids on the home and office of Trump’s lawyer, Michael Cohen, in April, and which has turned the heat up on Trump through Cohen’s testimony since then.

The U.S. president may, through the Department of Justice, hold some sway over Robert Mueller’s Special Counsel Investigation into the Trump campaign’s connections with Russia. The Southern District of New York, however, is a different story, as we have seen in Trump’s inability to influence the Cohen investigation.

Thus, when Erdoğan quoted Trump as saying he would ask Pompeo to intervene on the Halkbank investigation, we had to take the statement with a pinch of salt. Sure enough, the Turkish government-linked news channel A Haber has since quoted a U.S. official as saying the executive cannot intervene on the judiciary.

The Turkish Foreign Minister will therefore face an uphill struggle if he wishes to turn the Halkbank investigation in his country’s favour. Besides that, he will have several more significant topics to discuss with his U.S. counterparts on the trip.

High on the agenda will be a motion pushed through congress earlier this year that postponed the transfer of F-35 fighter jets to Turkey for three months in response to Turkey’s purchase of Russian S-400 defence systems and detention of U.S. citizens.

The 90-day freeze on the jets’ transfer will soon reach its end, and congress will decide on their next move after reviewing a report on the impact of removing Turkey from the programme. When Çavuşoğlu said he would strive to cancel drafts targeting Turkey during his visit, he likely referred to the F-35 programme.

Another major point of contention between Turkey and the United States this year has been Northern Syria, where Syrian Kurdish militias considered a grave threat by Turkey enjoy support from the United States.

Turkey has been vocal in its condemnation of the United States for supporting the groups due to their links to the Kurdistan Workers’ Party (PKK), a Kurdish group that has staged several armed uprisings for self-rule in Turkey since the 1980s and is classified as a terrorist organisation by both Turkey and the United States.

The U.S. decision to place three PKK leaders on its bounty list has been interpreted as an attempt to mend relations on this front with Turkey, though Çavuşoğlu has been dismissive of the move.

The Turkish foreign minister will be far more interested in discussing the situation on the ground in the north Syrian town of Manbij and east of the River Euphrates, areas held by the Kurdish militias that Turkey has threatened to attack.

One senior U.S. official was quoted in Turkish press this week as saying the United States understands Turkey’s concerns, but that this understanding should be reciprocal.

With so many issues still holding the two countries apart, the future for U.S.-Turkish relations continues to look bleak.

Here three more sealed documents placed in vault for USA v. Zarrab et al, on Nov 15, 2018:

three sealed docs

The opinions expressed in this column are those of the author and do not necessarily reflect those of Ahval.