This is an archived article that was published on sltrib.com in 2017, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Washington • A high-flying Turkish-Iranian businessman is busted in Miami, accused of laundering money for Iran. Turkey accuses the prominent American prosecutor of ties to a shadowy group it blames for a failed coup attempt. President Donald Trump fires the prosecutor. Then the businessman hires a former New York mayor close to Trump to help him avoid conviction.
And the case becomes a bitter distraction for two allies that are supposed to be focused on fighting the Islamic State group.
In the year since Reza Zarrab was arrested, his case has grown ever more complex and far-reaching. As Turkey presses the Trump administration to get the charges tossed, an increasingly messy web of connections has come into view, prompting questions about conflicts of interest, Turkish corruption and pro-Turkey lobbying by individuals near the center of Trump's orbit.
On Friday, federal prosecutors raised fresh concerns about a recent trip that former New York Mayor Rudy Giuliani made to Turkey to consult with President Recep Tayyip Erdogan about the case. Joining Giuliani was former Attorney General Michael Mukasey.
Both were hired by Zarrab's defense. But oddly, neither is involved in pleading the case in U.S. District Court, leading prosecutors to wonder if the defense is trying to circumvent the regular judicial process by going above prosecutors' heads.
In a letter to the judge, Zarrab's attorneys said what Giuliani and Mukasey are up to "quite frankly is none of the government's business."
Zarrab, a 33-year-old gold-trader married to a Turkish pop star, was arrested in Florida last year. He and several others are accused of conspiring to evade U.S. sanctions against Iran, using a network of companies to mask the true nature of transactions and defraud multiple banks. Prosecutors say they processed hundreds of millions of dollars for Iran and claim to have thousands of pages of bank, email and phone records to prove it. Zarrab pleaded not guilty.
It's not surprising the involvement of Giuliani and Mukasey would raise red flags.
Giuliani, one of candidate Trump's staunchest supporters, advises the president, in an unofficial capacity, on cybersecurity. Both his and Mukasey's law firms have represented bank victims in Zarrab's case, which prosecutors say may be a conflict of interest.
Giuliani's company has also registered as a foreign agent for Turkey, a trait shared with another of Trump's advisers: Michael Flynn. The former Trump national security adviser had to register retroactively for work he performed in 2016 that could have benefited Turkey's government. At the time, Flynn was a Trump campaign adviser.
There have been no indications Flynn ever lobbied on Zarrab's case. Flynn's foreign agent filing says his intelligence firm was hired by a company owned by a Turkish businessman close to Erdogan, and conducted research into a Muslim cleric and Erdogan foe who also emerges in Zarrab's case.
If there's intrigue about the defense team, it extends to the prosecution.
Last month Trump fired Preet Bharara, the U.S. attorney who launched the case against Zarrab, as part of a purge of Obama-era prosecutors. Bharara was dismissed even though Trump made a point during the presidential transition of asking him to stay.
Bharara's possible replacement: Mukasey's son, Marc Mukasey, who is frequently mentioned as a contender. That could put the younger Mukasey in charge of prosecuting the man his father has been trying to set free.
For Turkey, the saga is bigger than Zarrab's case. It has its origins in a massive 2013 corruption scandal in Turkey involving allegations of bribery, fraud and smuggling. Zarrab and Turkish state-owned bank Halkbank were at the center of the storm.
Homes linked to several top Erdogan lieutenants were raided and three sons of Turkish ministers detained. Erdogan dismissed the allegations as a conspiracy by Fetullah Gulen, the Muslim cleric who lives in Pennsylvania and leads a global movement of schools and charities.
The corruption scandal eventually subsided. Yet it contributed to a dramatic falling out between Erdogan then Turkey's prime minister and Gulen, whose movement had long been allied with Erdogan's party.
The rivalry has only grown worse. Turkey has been feverishly seeking Gulen's extradition from the U.S. after blaming him for a failed coup attempt last July that killed more than 270 people. Gulen denies involvement in the coup, and the U.S. has said Turkey's evidence is unconvincing.
Although the Turkish charges against Zarrab were ultimately dropped, his subsequent arrest in the U.S. has brought fresh attention to concerns about corruption in Turkey. Worsening matters for Erdogan, the deputy CEO of Halkbank, Mehmet Hakan Atilla, was arrested in New York this week on charges of conspiring with Zarrab.
Turkey's response has been forceful. Erdogan's government has argued that Atilla's prosecution is politically motivated. And at a meeting this week with Secretary of State Rex Tillerson, Turkish Foreign Minister Mevlut Cavusoglu offered another explanation: Bharara, the former Manhattan prosecutor, is loyal to Gulen.
"He retweets or likes everything that is anti-Turkey," Cavusoglu said.
Bharara says he's never been to Turkey and had to Google "Gulen" to learn who he was. But the "Gulenist" charge from Erdogan's government isn't surprising.
Erdogan has regularly used Gulen as a foil, appealing to post-coup anxieties to turn Turks against his opponents. His government arrested tens of thousands after the coup over suspicions they played a role or were tied to Gulen. Democracy and rights advocates see it as an effort to consolidate power.
Aykan Erdemir, a former opposition member of Turkish parliament, said Turkey's leaders know they face risks if Zarrab's case prompts a fresh examination of corruption.
"What's the best defense? It's spinning an embarrassing sanctions-busting case into a global conspiracy," said Erdemir, a senior fellow at the Washington-based Foundation for Defense of Democracies. "And what's the best conspiracy theory that would sell at home? It's that this is a Gulenist conspiracy."