It was after 5 o'clock in New York's lower Manhattan. The weather was freezing, rush hour traffic was already underway and Turks who had left the court room where a Turkish banker was standing trial for violating U.S.-imposed Iranian sanctions were perplexed. "It is a circus, indeed," said a member of the Turkish press corps. Another one, Cüneyt Özdemir, a prominent TV journalist known for his criticism of the Turkish government went even further. "I haven't seen such a play in my professional life. He flawlessly drew that complex scheme on this big board. He must have been practicing it for a while," he said, talking about Turkish-Iranian gold trader Reza Zarrab, the former defendant in the case turned government witness.
The overwhelming feeling in the courtroom was that Zarrab was a corrupt, egocentric kid who became rich by facilitating Iranian international money orders that were banned by the U.S. Treasury. The Turkish government and society already knew that Zarrab was accused of bribing high-level Turkish officials; the whole setup was brought up by Gülenist police officers and judicial authorities in December 2013 as an official investigation. Fetullah Gülen's followers conducted this politically motivated operation to push then-Prime Minister Recep Tayyip Erdoğan, to resign less than three months before the local elections. The government didn't tolerate the Gülen-led inquiry and rightfully cracked down on the Gülenist deep state that took over state institutions by establishing a separate Gülenist chain of command. The ruling Justice and Development Party (AK Party) also dismissed four Turkish cabinet level ministers following the accusations of bribery.
Now, the so-called Dec. 17, 2013 operation box has been reopened in Manhattan by U.S. prosecutors in the hope that they can put Mehmet Hakan Atilla, the former deputy general manager of state-owned Halkbank, behind bars. Prosecutors decided to use stolen evidence, such as a disgraceful summary of the proceedings and illegal wiretaps in the case against the defendant. A Gülenist police officer delivered them.
The irony is that the mastermind and the leader of this alleged scheme, Zarrab, is no longer a defendant, but Atilla, a subordinate, is now being portrayed as a brilliant facilitator of sanctions busting by U.S. attorneys. The Turkish press corps, which hates Zarrab, also feels sorry for Atilla, who seemingly just followed orders. Even Zarrab himself confesses that he never bribed him. Gülenists police officers also never arrested or charged him.One of the oddest things in this case is that from 2012 to 2016, the U.S. Treasury didn't blacklist Zarrab as a sanction violator. Even after the Gülenists revelations in 2013, U.S. authorities only decided to open a criminal investigation, and the Treasury didn't follow up by sanctioning Zarrab.
David Cohen, the former undersecretary for the U.S. Treasury, openly told the court that he never warned Halkbank or its officials that they were violating the Iran sanctions or that they were probably about to get sanctioned. He also never told Halkbank officials that there might be criminal proceedings against them. On one occasion, in fall 2014, Atilla basically asked Cohen to blacklist Zarrab, but he didn't give a definite answer.
Likewise, Adam Szubin, the former director of the Office of Foreign Assets Control (OFAC), told the court that he never issued a warning that Halkbank was believed to be violating sanctions. OFAC also never sanctioned Zarrab until today.
The defense team argues that the U.S. Treasury didn't do a good job in educating Halkbank on primary and secondary sanctions against Iran. Atilla's lawyers say bringing criminal charges against Atilla due to the alleged violation of the sanctions are very unique because until this case, the U.S. government just followed the usual practice: sanction the facilitators and block their access to the U.S. financial system. But criminal proceedings against facilitators are very rarely seen.
U.S. authorities have already touched a nerve by associating a Gülenist police officer and stolen evidence to this case. The oddities in the case are also likely to solidify the view in Ankara that the U.S. has another end game with this case.