How the Corruption Investigations of 2013 Still Shape Turkey’s Bleak Future

Photograph: Adem Altan/AFP/Getty Images

Vocal Europe

It has been the four years since corruption scandals implicating President Recep Tayyip Erdogan, his family members and prominent high-level politicians and bureaucrats were revealed to the country on December 17 and 25, 2013. Prospects for the country’s future remain bleak.

Angered by the revelations, the Justice and Development Party (AKP) transformed itself into a strong-arm authoritarian regime bent on suppressing its perceived enemies and caring little about destroying nearly 100 years of democratic gains. Fearful of losing his position and the prospect that he and his family members could be imprisoned, Erdogan purged thousands of public servants and replaced them with people loyal to his leadership. A democratic regime turned into more dictatorial and repressive regime.

What Happened in the December 17 Scandal?

While investigating a money laundering case related to a drug trafficking case in 2008, the police inadvertently came across Reza Zarrab [link by CB ed.], an Iranian money launderer. Investigators found that drug traffickers used the money exchange office co-owned by Reza Zarrab in Istanbul’s Grand Bazaar. After putting lens on Zarrab and those linked to him, investigators uncovered shocking details.

Zarrab played a leading role in three money laundering schemes in Turkey. First, he transferred cash to Russian banks, an activity confirmed by the arrests of some of Zarrab’s couriers in the process of shuttling the laundered cash through a Russian airport in 2011. On two other occasions, Zarrab appeared in devising schemes to circumvent the embargoes the United States had imposed on Iran for that country’s steadfast pursuit of enriched nuclear materials.

Zarrab was accused of selling gold to Iran in return for oil. When U.S. authorities warned Turkey in July 2013 to stop gold transfers linked to Iran, Zarrab contacted high-level politicians, bribing them with large sums of money in exchange for directing Turkish bank officials to allow oil-for-food transactions. Zarrab then opened fake accounts, established front companies, and began fictitious trade deals between Turkey and Dubai and Iran.

The Zarrab investigation lasted almost 15 months and yielded solid evidence of the Iranian money launderer’s crimes and links to corrupt Turkish bureaucrats and politicians. Based on that evidence, the police raided the homes of suspects in the early hours of December 17 and found huge amount of cash, including almost $3.5 million in shoe boxes in the house of Suleyman Aslan, the director of Turkish state bank, and almost $1 million in the house of the Minister of Interior’s son. Zarrab, the sons of three AKP government ministers, the director of Turkey’s state bank and other bureaucrats were arrested.

According to wiretappings leaked on YouTube, then Prime Minister Erdogan allegedly called his son in the early hours of December 17 and gave instructions to transfer huge amount of cash from his house in Istanbul. The leaks show that Erdogan called his son four times that day to find out how much money had been transferred. One of the recorded calls gave clues about the estimated amount of money transferred. When Erdogan asked his son how much money was left in the house, his son said, “We still have 30 million euros that we could not dissolve it.”

Immediately after the December 17 police raids, one of the ministers whose son was arrested said on a television program, “Whatever I have done is under the command of Erdogan. I am resigning, but Prime Minister Erdogan should resign, too.”

Erdogan, however, tried to close the case rather than allow the police to continue the investigation. Erdogan began describing Zarrab as a philanthropic businessman and named Efgan Ala, who frequently violated Turkey’s constitution and laws, to the position of Minister of Interior. In his new role, Ala was in charge of illegally reassigning and firing the officials involved in the investigation. It was not clear until December 25, 2013, why the government recklessly attempted to interfere with the December 17 investigation. On the latter date in December, the police shared with the public the results of another investigation—this time of a criminal group that included Erdogan’s son.

What Happened in the December 25 Scandal?

Turkish citizens woke up on December 25 to news about another serious allegation involving Erdogan and his son. Despite a court decision ordering the police to arrest those individuals tied to the allegations, the newly assigned Istanbul police officials (Erdogan loyalists) refused to comply with the court decision and openly violated the law. The Istanbul prosecutor instructed to arrest the suspects, including Erdogan’s son and other businessmen who systematically received government contracts in return for bribes. The investigation revealed a long-standing corruption scheme in the Erdogan government. The scheme was a money pool system in which government officials would receive commissions from contracts awarded by the government.

The December 25 investigation found solid evidence in five cases. First, the police obtained evidence in a sale of an expensive state property. In return for getting bribes, Bosphorus 360, an investment management and consulting company allegedly co-owned by Erdogan’s son, became involved in this sale. One of the purchasers was the son of Yasin al Qadi. The elder al Qadi, who had been affiliated with the al Qaeda terrorist organization and faced an international travel ban, was able to travel to Turkey to meet with Erdogan.

Second, Bosphorus 360 became involved in the licensing of a coal mine in Istanbul in return for bribes.

Third, the police found robust evidence in the purchase of a media company operated by businessmen who earned money from public tenders. On orders from Erdogan, the businessmen were forced to raise funds to purchase Sabah-ATV Media Group. Fourth, the police proved how one of Erdogan’s friends received a license for unlicensed construction in Izmir in return for bribes.

Fifth, the police found evidence that the Service for Youth and Education Foundation of Turnkey (Turkiye Genclik ve Egitime Hizmet Vakfi – TURGEV), a nongovernmental organization run by Erdogan’s son, was bribed. Foundation officials accepted bribes from businessmen who handed over money under the guise of making donations to TURGEV.

Erdogan was successful in ending the December 17 and 25 scandals by convincing his constituents that a group of allegedly Gulenist police officers infiltrated and tried to overthrow the government. It was not difficult for Erdogan to do so. Backed by a massive government-controlled media effort, the Turkish people came to believe that investigators had fabricated evidence to justify the imprisonment of Erdogan.

Everything went well for Erdogan until Zarrab was arrested by the FBI in Miami on March 19, 2016. The United States Attorney’s Office for the Southern District of New York indicted Zarrab on charges similar to those filed by Turkish investigators in the December 17 investigation. As part of their case the U.S. attorneys used Turkish evidence and wiretappings to accuse Zarrab. Erdogan meddled in the case, even meeting with the governments of former President Barack Obama and now President Donald Trump. Erdogan apparently failed in his attempts to influence the investigation because Zarrab made a cooperation deal with the U.S. attorney and testified before a jury between December 5 and 11, 2017.

In his testimony, Zarrab confessed that he bribed to Turkish ministers, set up a money laundering system, opened fake accounts in Turkish state banks and established front companies. Zarrab also said that he bribed Turkish police officials to close the Turkish investigation. More important, Zarrab explained that he continued the money laundering operation after the December 17 and 25 scandals, pointing out that President Erdogan gave his approval to do so in June 2014.

What Happened after These Scandals?

In the wake of the Turkish corruption scandals, several prime ministers around the world have resigned. For example, the Pakistani and New Zealand prime ministers resigned after Panama Papers were leaked, while the Romanian prime minister resigned as a result of corruption investigations in his country. Turkey’s leader, however, stunned the world. Rather than resigning as recommended by one of his ministers immediately after the December 17 investigation was made public, Erdogan steadfastly has protected his position, purging more than 150,000 public servants and declaring them terrorists. Nonetheless, even though these servants have lost all of their gains, they have not engaged in any violent acts.

Erdogan has maintained his position in government at the expense of pushing Turkey into the darkness of an authoritarian and dictatorial regime. All of the government’s institutions are fully under the control of Erdogan, who used a referendum to toss out Turkey’s secular constitution based on separation of power and replace it with one that abolished the office of prime minister and creates an executive presidency with sweeping powers over the country and its citizens. A comparison of statistics from 2013 (before the purges) and 2016 (after the purges) paints a dismal picture, with the number of public servants arrested in anticorruption investigations decreasing 91.9% in 2016.[*] No prosecutor dares to indict any official in the government without getting approval from the government.

The December 17 and 25 investigations were a chance for Turkey to rid the government of corruption. Instead, these investigations proved that the AKP government, under Erdogan’s leadership since 2002, simply swept their crimes and corruption linkages under the rug. Police officers found themselves under a small piece of that rug as a result of their randomly launched investigations in December 17 and 25. The extensive dust under that rug suffocated the investigators who wrongly lost their jobs, their good reputations, and their freedoms. That suffocation, however, lent credence to Zarrab’s statements before the jury in the U.S. investigation of Zarrab.

The future will tell whether polarized Turkish citizens will tolerate a corrupt government that has destroyed 100-year-old democratic gains. Gone, perhaps forever, are the democracy that has differentiated Turkey from authoritarian and terror-linked states in the region and the country’s reputation as a sanctuary for freedom of speech and human rights and a catalyst for economic development. Much is lost when government corruption is allowed to destroy democracy.

[*]2013 Anti-Smuggling and Organized Crime Report, p. 41, and 2016 Anti-Smuggling and Organized Crime Report, p. 5. The number of arrests from anti-corruption investigations decreased from 2,314 in 2013 to 189 in 2016.

*Dr. Mahmut Cengiz is a research scholar at Terrorism, Transnational Crime and Corruption Center (TraCCC). He is a leading expert on transnational crime, corruption, terrorism, money laundering, and terrorist financing as well as human trafficking and smuggling of nuclear materials with a particular focus on the Middle East.