Turkish Bank Case Showed Erdogan's Influence With Trump - The New York Times - 0 views
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a criminal investigation into Halkbank, a state-owned Turkish bank suspected of violating U.S. sanctions law by funneling billions of dollars of gold and cash to Iran
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For months, President Recep Tayyip Erdogan of Turkey had been pressing President Trump to quash the investigation, which threatened not only the bank but potentially members of Mr. Erdogan’s family and political party.
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Mr. Barr pressed Mr. Berman to allow the bank to avoid an indictment by paying a fine and acknowledging some wrongdoing. In addition, the Justice Department would agree to end investigations and criminal cases involving Turkish and bank officials who were allied with Mr. Erdogan and suspected of participating in the sanctions-busting scheme.
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“You don’t grant immunity to individuals unless you are getting something from them — and we wouldn’t be here.”
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Six months earlier, Matthew G. Whitaker, the acting attorney general who ran the department from November 2018 until Mr. Barr arrived in February 2019, rejected a request from Mr. Berman for permission to file criminal charges against the bank, two lawyers involved in the investigation said. Mr. Whitaker blocked the move shortly after Mr. Erdogan repeatedly pressed Mr. Trump in a series of conversations in November and December 2018 to resolve the Halkbank matter.
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Mr. Erdogan had a big political stake in the outcome, because the case had become a major embarrassment for him in Turkey.
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And Mr. Trump’s sympathetic response to Mr. Erdogan was especially jarring because it involved accusations that the bank had undercut Mr. Trump’s policy of economically isolating Iran, a centerpiece of his Middle East plan.
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Former White House officials said they came to fear that the president was open to swaying the criminal justice system to advance a transactional and ill-defined agenda of his own.
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the administration’s bitterness over Mr. Berman’s unwillingness to go along with Mr. Barr’s proposal would linger, and ultimately contribute to Mr. Berman’s dismissal.
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It predated Mr. Trump’s election but came to encompass a broad cast of players, including Rudolph W. Giuliani, the former New York mayor; Michael T. Flynn, Mr. Trump’s first national security adviser; and Brian D. Ballard, a lobbyist and fund-raiser for the president.
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he investigation of Halkbank, Mr. Erdogan claimed, was a “big conspiracy” instigated by his rival Fethullah Gulen, a charismatic Muslim cleric. Mr. Gulen left Turkey in the late 1990s and moved to Pennsylvania, where, in Mr. Erdogan’s telling, he plotted an unsuccessful coup attempt just a month earlier, according to a summary of the conversation provided to The Times by the Biden aide.
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“Top leadership in Turkey felt that Trump would be a tough-minded businessman, but a businessman they could work with,” Robert Amsterdam, a lobbyist for Turkey, recalled.
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Mr. Erdogan also wanted the Obama administration to remove the judge overseeing Mr. Zarrab’s case in Manhattan, the Biden aide said. And he wanted Mr. Zarrab released and allowed to return to Turkey.
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“If the president were to take this into his own hands, what would happen would be he would be impeached for violating the separation of powers,” Mr. Biden said
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Mr. Erdogan asked Mr. Biden to remove Preet Bharara, then the U.S. attorney for the Southern District of New York. That office was in the early stages of an investigation into Halkbank and had already indicted a Turkish-Iranian gold trader, Reza Zarrab, for helping to orchestrate the sanctions-evasion scheme.
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ust how idiosyncratic became more apparent last October, when Mr. Erdogan sent troops into Syria. Mr. Trump, who had initially given Mr. Erdogan the green light to do so, then faced an intense bipartisan backlash, leading him within days to take a tougher line with Turkey, threatening economic reprisals.
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But the investigation by the federal prosecutors in Manhattan ground ahead. By early 2018, it had led to the indictments of nine defendants, including Turkey’s former economy minister and three Halkbank officials, on charges such as bank fraud and money laundering related to the sanctions-evasion scheme.
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ut Mr. Mnuchin raised concerns about how large a fine might be imposed on Halkbank. The French banking giant Société Générale agreed that same year to pay U.S. authorities more than $2 billion to resolve charges that it had violated U.S. sanctions against Cuba and bribed officials in Libya, among other accusations
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A fine on that scale would threaten the future of Halkbank, lobbyists and lawyers for the bank argued, as did top Turkish officials in conversations with members of the Trump administration
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Mr. Erdogan made clear that he was frustrated with the continued pestering by Southern District prosecutors concerning Halkbank, and he wanted Mr. Trump to intervene to help wrap up the investigation, Mr. Bolton said in the interview
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Mr. Trump also told Mr. Erdogan that he wanted to replace the prosecutors in Mr. Berman’s office in Manhattan, whom Mr. Trump considered to be holdovers from the Obama era.
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Mr. Rosenstein was convinced that the evidence was compelling, perhaps even more so than in other sanctions-evasion cases in which the United States had charged banks, lawyers familiar with the investigation said. The memo from the prosecutors also noted that the actions Halkbank was accused of taking were helping to support Iran’s economy, which was antithetical to Mr. Trump’s foreign policy goal of tightening economic pressure on the country.
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Mr. Rosenstein urged Mr. Berman to come to Washington to present the Southern District’s argument to Mr. Whitaker. The goal was not to file charges immediately against the bank. Instead, the plan was to give the Southern District more leverage to squeeze Halkbank to accept a deferred prosecution agreement that included an admission of wrongdoing.
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Discussions between Halkbank and the Southern District continued, according to lawyers involved in the case. But the bank maintained its refusal to admit to wrongdoing and insisted on a deal that would end investigations and drop existing charges.
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At times, the prosecutors were left with the impression that bank officials felt they had all the leverage because of the relationship between Mr. Trump and Mr. Erdogan.
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The suggestion that the Justice Department would offer Turkish officials protection from criminal charges, even without their agreement to assist in the investigation, was unacceptable and unethical, Mr. Berman argued, according to lawyers close to the investigation.
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Mr. Barr sought to persuade Mr. Berman that the so-called global settlement would enforce U.S. sanctions law and avert a rift with an ally in a volatile part of the world.
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“That is the biggest prize that Erdogan could ever receive,” Mr. Erdemir said. “Erdogan was not trying to save the bank. He was trying to save his ministers and save himself.”
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The National Security Council asked the Education Department about a network of charter schools, partly funded with federal money, that were said to be linked to Mr. Gulen, the Erdogan rival who was living in Pennsylvania. The agency was then asked if the money could be blocked, one official involved in the conversations said. But Education Department officials resisted, saying they did not have the legal authority to stop the funding.
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On Oct. 15, the Justice Department gave the prosecutors in Manhattan approval to file charges against Halkbank, a direct slap at Mr. Erdogan.The prosecutors rushed to present evidence before a grand jury and secured a six-count indictment that same day charging Halkbank with money laundering, bank fraud and conspiracy to violate the Iran sanctions. So far, no additional individuals have been charged.