Of an immigrant who violated u. S. Sanctions against iran. This Panel Discussion is an hour. Good morning. Thank you for joining us. Im the director of National Security here at the bipartisan policy center. Im please to some people are still hungry for turkey. That was my only thanksgiving joke. I am sorry. I will leave it at that. Were here to discuss the case, where in the world is today was supposed to be the start of the trial in new york in the case of a businessman, who has seemingly disappeared. And the question of why in this ase which in bobs allegations he helped iran evade u. S. Sanctions against iran. Why is that a Sticking Point for u. S. Turkish relations . Im pleased to have an expert panel to discuss that. I wanted to announce a couple of products the bpc is putting out today. We have an explainer to explain what the case is and we are launching a Broad Initiative looking at power and corruption in erdogans turkey. E are launching an interactive feature on our website which is focused on the case and allows you to explain the links between his review people. Libby go to our panel. Now writing for a new panel, the Central Asia Caucasus Institute and member of the turkey task force. Bpcs very own nick danforth, expert on all things turkish. With that, let me start with you. Can you give us a summary of hat the case is about . Sure. Thank you. Thank you for the invitation. He got arrested in 2016. He became very famous in turkey. I think he stayed in jail in turkey a couple of months. Then, he was forgotten in turkey but he still is married to a popstar in turkey. More or less he has been on the turkish agenda since 2013. He got arrested. It was a shock to everyone. He has been in jail since then. We do not know if he is still in jail but we know for sure he is under u. S. Federal custody now. There are lots of speculations they are using a hotel or somewhere else. That has been 4 indictments. The first came after reza zarrab was arrested. The second one came a year ago before the u. S. Elections expanded included his brother. And the third, when the second person got arrested. E is also in jail. Nd the fourth just came up early september, the most expanded one, and included a finance minister, plus the general manager of a bank, a turkish public bank. And the International Deputy general manager who was taking care of the international banking. A total of nine people. T really hit turkey. What is he charged with . There are six counts and charges. It is one of them, conspiracy against the United States. Basically the United States. The second is banking. Defrauding u. S. Banking. The other is moneylaundering. The fourth is it will come back to me. There are experts say if the judge counts every transaction, it could be really long. Which is how these things go. We are looking at more than a century of jail sentence. All of this are allegations of ourse. The police and prosecutors launched those investigations also dismissed them. Here, 20 months later we have seen dozens of trials, conferences and hearings but we have not so far had a committed person. These are allegations. He alluded to the back story of this and reza zarrabs arrest in turkey. Can you talk about the concept of that . The case of reza zarrab is if you are in turkey or the United States you are living on different planets in many ways. What you interpret when you see the case, the details, they are different. It is an issue of trust at the end of the day and the complete lack of trust, and deep suspicion that exists mainly from turkey. That you cant understand the case without understanding the movement and conflict between president erdogan and the movement in turkey. From the superficial American Perspective this is an issue of corruption and sanctions. Therefore, this is a legal case that has its judicial process. Im not saying anyone is purely out of politics but it is mainly a legal case. This is not only manipulating political things but we have to remember the way the whole case came out was by the december 2013 raid targeted at president erdogan and his proxies. Family members and close ssociates. Built up in turkey but, the allegations focus particularly on those issues that were the most damaging from an American Perspective. We had the cases of Al Qaeda Linked saudi financiers. We also had the issues of the iran sanctions. The fact that these raids target those things, not just ordinary corruption, but things that would be damaging internationally for erdogan are important. The prosecutors involved were affiliated with the movement. This is why it was understood by supporters as a judicial coup. This is the background to how they see it. Obviously following this we have weve had elections. We had a coup last year that erdogan was strong evidence the movement he says it was all about the golan movement. It was much broader than that and complicated than that but, in any case, from the perspective of him and his supporters when reza zarrab gets arrested in the United States and indicted, this is not just an ordinary legal procedure. This is about a continuation of the coup against him. But we have to understand, and may most people may not need formally internalizing, from erdogan and his supporters perspective he is not an economist actor. Autonomous actor. How Conspiracy Theory pervades hinking. This is about a continuation of the coup against him. But we have to understand, and may most people may not need formally internalizing, from erdogan and his supporters perspective he is not an economist actor. Autonomous actor. How Conspiracy Theory pervades thinking. The interesting part about his book, the arab and iranian world, there was an appendix about turkey that said its not relevant for turkey now but it may be in the future. Everything in the book is about conspiracy theories. Whether we agree or disagree we have to understand for erdogan and his supporters, it is an american controlled operation and it is an american coup against him. From that perspective what were seeing happening in new york is part and parcel of an american effort to overthrow him. Im not saying i agree, but we have to understand that this is not just propaganda thing for erdogan and his media. They use poppa granda phase pop they use propaganda effectively. Could you talk about how this turkish view of what the case is about has played out . Sort of where it might go from here . I will followup on what he as saying. Right now were in a situation where people in turkey, not just people reading the papers, but people in the note states are living in different realities in regards to this case in the context of the u. S. Turkish elationship. This case is worth looking at both how this helps perpetuate those different realities and exacerbate many of the deep divides in u. S. Turkish relations. But also to show be on this issue, how the incipient divergent opinions about turkeys role in the world, going back to 2012, 2013 when this case came into being, how this case and the crisis we find ourselves in now was the result of a growing divergence that predates it. In that regard i would say from the knighted states perspective people look at this as a simple legal matter. They violated u. S. Law, now they are being tried in u. S. Court. The turkish response has been what right does america have two make it against the law for us to do business with iran . This was a bilateral trade between two sovereign countries. Why is this in violation of u. S. Law . I think it is worth acknowledging where this argument is coming from. Certainly the United States does have the unique ability to make our National Interests into a matter of universally enforceable law. If this was paraguay and i ron iran, he would not be facing trial now. That only goes so far. The point is also worth mentioning, a problem goes back o how they approach this issue in 2012. They may not have agreed with United States laws, at the time they made it clear they did have concerns about u. S. Sanctions. At the point when the sanctions were put in place where people in the turkish government and Banking Sector new the laws were in place, they were aware of the consequences of breaking hem. At that point the decision to go ahead with this scheme, to support reza zarrab, was taken with the knowledge that this was against u. S. Laws. That is why they try to hide these actions. There is in this context something problematic about presenting the consequences turkey not just individual citizens but the entire turkish economy is now facing as result of these actions as a conspiracy against turkey. Im sure they genuinely believe they were doing it for turkish National Interests. Whether or not they agree with them some of they should realize were going to have onsequences. I would make a similar point about the broader geopolitical context in which this has happened. Turkey has had a complicated relationship with iran. They have been rivals for centuries. At the time the scheme was taking place turkey was in considerable tension with iran visavis their divergent positions in the syrian civil war. Turkey solve the geopolitical benefits of maintaining a functional relationship and helping iran evade u. S. Sanctions. This has been a matter of considerable outrage for many in the United States to which people in turkey pointed out they are not the worst or only country to maintain relationships with a nasty regime. Turkey is not the first country to maintain good relations with oppressive states with a long history of promoting islamic extremism. However, this happened in the context of turkey being a nato ally. In the context of turkey being irans neighbor, turkey, had it not been for their membership, they would have had every reason to be terrified. O country would be excited about a neighbor developing a nuclear weapon. The reason they were not as concerned, it was a nato member. It had nato protecting it from nuclear weapons. The fact that it had a time when they were relying on turkey protection, for it to take action than that undermined nato country efforts to stop Irans Nuclear program, it seems like a deep file asian of the spirit of the alliance. I think that is an interesting issue. Maybe we can look at this uestion and how that shifted. It also gets us to events of the last couple of days. Erdogan going to so chan. The phone call friday, what that might be about. We can bracket those issues and talk about the case itself and what it means. Lets start with this. You mentioned one issue. For much of the last year, when urkey has talked about concerns, it has been talking about the extradition. It hasnt talked about the reza zarrab issue until recently. Why is that . Is there a greater emphasis, more concern about google and gulen reza zarrab then . There is an exception and up session. Erdogan was the person who enabled the goal line ovement. What turned out was that there was a power struggle between these two elements. That struggle has almost destroyed the turkish state. That is damaging because everybody understands he was the person who enabled. The rise of Gulen Movement started in the 1980s. It suited his interests at the time. A lot of people, i talked to every good friend last week. A secularist to said we need rdogan because hes the only person who can get rid of Gulen Movement. It is very strange. The assumption is that he hasnt done that yet . Yes. A lot of state groups have been purged. What im trying to get to is that maintaining the pressure on he issue is for the regime stability a necessity but also something that unites him with is new coalition partners. His earlier coalition was based on conservatives, liberals and kurds. It has now been turned into a Tactical Alliance with eonationalist forces. Deeply nationalists. They are highly skeptical if not hostile to the United States and the west. This focus unites them. I would say tensions with United States and the suspicion this case generates strengthens the power of these neonationalist forces in the turkish overnment. If you want to speculate, do you think, erdogan really wants them back . Is it just this technical political ploy . I do believe you once and back. Threes and i believe that, the latest revelations on how he tried to get him if you are to believe the claims, they have not been confirmed yet but, i think the government has been wanting him back but at the same time, rather he wants more is he question. Again, we now know that in september of 2016 when the president spoke to President Biden after the coup, 65 days after the coup, the trauma was still being felt very much in turkey. In this meeting he talked about reza zarrab the reza zarrab case. I think he wants him back but more than happy to hear about this for you, but i guess would you agree with that assessment . Why would he want him more than gulen . Turkey was involved in undermining ally interest with iran, or is there something greater . This is one of the strange things that i think people in washington have wondered about. There has been in private meetings, he has been very focused on this. He is one of the case to go to way. Yet, why is not immediately understandable to people outside of turkey. This case could confirm the corruption allegations. One of the consequences is this could give a newfound legitimacy where has previously he has been able to dismiss them. Y something has been any revelations that would come out f this would be easy for erdogan, given his effective use f rhetoric to dismiss. It on seems like he is more concerned about the potential revelations than people from the outside think he needs to be. This is people trying to understand why this might be the case, that if a case proves that turkish banks are involved in sanction busting there could be heavy fines levied against turkish banks. It is still not clear to me, even worth the case to result in fines, it seems odd he would deal with that case making the case try to go way. Any fines that would come out of this would be ones that the state department could mitigate. So, i dont actually have a reat answer for why this has been as sensitive as it seems to be. I think the reason he has been worried is he might be talking to prosecutors. Which now every indication is he is talking to prosecutors. We dont know the deal. If he is talking to prosecutors he has to give up everything. Everything . Names, people who work with him in the scheme, so that probably is going to implicate a lot of key officials, key allies people like amandas loss. It might indicate implicate erdogans soninlaw. I think that is why he is sensitive to possible things he ight be talking. Maybe dozens of allies will have a lot of limitations inside or utside turkey. I think i agree. He appears to be very concerned. I think it is because he sees this as a gateway to something that will hit closer to home. Family members, something else. I dont know. I dont know what reza zarrab knows, but it is important to look at this in context. He should not need to be this concerned. He is weaker than he looks. He looks like an especially after the coup. If you scratch the surface a little, the dirty secret i keep talking about, he never had enough people to run the turkish state. He always had to rely on others. That was rationale for bringing in the Gulen Movement. When he speaks of them he did not have enough have enough filled. He had to lean on the nationalists to run various state agencies. That is one thing. The other thing is, in spite of the referendum, turkey is still not a president ial republic. It will only be after the next residential election. Everything he does is illegal. Every decision he takes him every time he calls up and undersecretary, that is illegal. That is the Prime Minister prerogative. Which is why he is worried about legal matters. We also know he almost lost power. He sensed he said his sons to live out of the country. I think his behavior suggests he actually has more reason to be concerned about these kind of things than what would appear to be the case. We have heard there might be some sort of deal brewing. I feel at we have been talking about this for a while. Why did reza zarrab come to the United States in the first place . He gets arrested for breaking u. S. Laws. He is released. Three years later he comes to miami to take his kids to disney world. We have been talking about a potential deal for a wild. Why do you think that might be happening now . Yes. There have been a lot of scenarios and speculation when he came here knowingly. I do not believe that scenario. I think he came not because i dont believe that scenario. I have seen messages published by the court that he was having fun talking until the last minute and we he was told about different ideas. That it has been months. If he came here to get a deal, expanding that much time in the jail. He would not be spending that much time in jail. He is on trial today. Yes. His lawyers have been battling fiercely. If it results against him that would weaken his defense because hes going to confirm much of the allegations against him. You raise the question of why he came to the u. S. Do you have an answer . I think he was 33, he got away with everything in turkey. Hes been rich all his life. He did not give good it get good advice from his lawyers. He came and told them these allegations and he told the u. S. According to some sources, he also checked his status. He got his visa and got on a plane. I think he thought that was no danger for him. Assuming there is a deal, what do you see as the legal consequences . Lots of unknowns. I have been talking to quite a few experts on that including financial crimes. It looks like if he got a deal, he would have to give up names and information. He needs to convince prosecutors he has good information. He needs to be qualified as substantial assistance that is either going to help u. S. Authorities, plus hes going to give intel information. Billions of money. Not only turkey, but people talking about malaysia, germany, he u. K. , dominica