Erdogan Was Target in Bribery Inquiry, Turkish Officer Says

Turkish president Recep Tayyip Erdogan was among the targets of a bribery and money laundering probe in that country related to illicit flows of Iranian oil proceeds, a former Istanbul police officer testified in New York.

The officer, Huseyin Korkmaz, said the investigation initially focused on the organization run by gold trader Reza Zarrab, but later grew to include dozens of others. He called Erdogan the “number one” target in a group that also included Mehmet Zafer Caglayan, the former economy minister, and Suleyman Aslan, ex-chief executive of Turkiye Bank Halkasi AS, a large Turkish state-owned bank, which was central to the scheme.

A former Turkish police investigator told jurors in the trial of a Turkish bank executive charged with evading U.S. sanctions against Iran that he found shoeboxes full of cash in the home of another high-ranking Turkish banker. The investigator’s testimony implicated Turkish President Recep Tayyip Erdogan, the then prime minister and finance minister.

Zarrab, a Turkish and Iranian national, has pleaded guilty and testified against Atilla for the prosecutors. Atilla has pleaded not guilty.

The case has strained ties between the United States and Turkey, both members of the NATO military alliance. President Recep Tayyip Erdogan has cast the trial as an attempt to undermine his country and its economy.

On Monday, Korkmaz told the jury that he began investigating Zarrab in 2012 for smuggling gold and money laundering. He said the probe quickly expanded to encompass government officials, including Erdogan, then prime minister, and Zafer Caglayan, then finance minister, as well as former Halkbank general manager Suleyman Aslan.

Erdogan has called the 2012-2013 investigation a “judicial coup” orchestrated by his political enemies, and has claimed the current U.S. case is politically motivated as well.

Reuters was unable to reach Caglayan or Aslan for comment. Halkbank has denied involvement with any illegal transactions. Korkmaz testified that a search of Aslan’s home had turned up shoeboxes full of cash, which Korkmaz said were bribes from Zarrab.

The gold trader previously testified that he bribed Aslan. Zarrab’s influence with Turkish officials was such that he was able to have a police chief whom he did not like exiled, Korkmaz said.

U.S. prosecutors have charged a total of nine people in the case with conspiring to help Iran evade sanctions. Only Zarrab, 34, and Atilla, 47, have been arrested by U.S. authorities.

After jurors left the courtroom for lunch, U.S. District Judge Richard Berman said that Atilla’s lawyers had told him they planned to move for a mistrial at the end of Korkmaz’s testimony, on the grounds that it was irrelevant to Atilla.

Berman said he had concerns about the testimony’s relevance as well. Assistant U.S. Attorney Michael Lockard, one of the prosecutors, said further questions for Korkmaz would address those concerns.