Trump-Turkey Huddle Puts Spotlight on Gold Trader’s Prosecution

Ahead of a May 16 meeting with U.S. President Donald Trump at the White House, Turkish President Recep Tayyip Erdogan and his wife Emine disembark from a plane after arriving in Washington, on May 15, 2017. (Presidency Press Service/Pool photo via AP)

MANHATTAN (CN) — President Donald Trump has a golden chip stashed up his sleeve as he welcomes Recep Tayyip Erdogan, the budding authoritarian leader of Turkey, to the White House on Tuesday. Unlike in past casino ventures, however, the stakes here involve U.S. national-security goals in the Middle East.

At their center is Reza Zarrab, a Turkish gold trader facing federal charges in New York City of laundering tens of millions of dollars for Iran and for banks whose involvement in the country’s nuclear program ended in sanctions.

After Zarrab’s arrest last year, then-Vice President Joe Biden and Attorney General Loretta Lynch both rebuffed lobbying for his release by Erdogan. The Turkish president is tied to the same 2013 corruption scandal in Turkey that sparked Zarrab’s pending U.S. prosecution.

When Erdogan cemented his autocratic rule in an April referendum on Turkey’s constitution, however, the White House reported that Trump called to offer congratulations. Erdogan is likely hoping, as he settles in for Tuesday’s meeting, that Trump’s real estate interests in Istanbul will make for a more receptive audience.

Trump also has a number of high-profile allies in Turkey’s pocket. Just this year, Zarrab drafted to his legal team former New York City Mayor Rudy Giuliani and former U.S. Attorney General Michael Mukasey.

Giuliani had been a surrogate for Trump on the campaign trail, and his new employer, the law firm Greenberg Traurig, is registered as an agent for the Turkish government.

Discussing the case in a phone interview, David Phillips, a former adviser to the United Nations Secretariat and the U.S. State Department, said Erdogan’s strategy to spring Zarrab from federal prosecution hinges on influence peddling. 

[blockquote author=” David Phillips, director of the Peace-Building and Human Rights Program at Columbia University” style=”1″]Everyone has a price in Trump’s world, including the president himself. Let’s see if U.S. foreign policy can be bought.”[/blockquote]“Everyone has a price in Trump’s world, including the president himself,” said Phillips, who leads the Peace-Building and Human Rights Program at Columbia University. “Let’s see if U.S. foreign policy can be bought.”

In addition to negotiating on Zarrab, Erdogan has bargained for U.S. extradition of Fethullah Gulen, a Pennsylvania-based cleric accused of trying to topple the Turkish leader last year in a failed coup.

Both prosecutions are seen as bargaining chips for Turkey’s broader gambit of shaping U.S. diplomacy in Raqqa, a city just over the Syrian border that the Islamic State group has made its capital.

As part of its effort to liberate the city, the United States has been arming Kurdish militants. Turkey meanwhile has faced a separatist insurgency spearheaded by ethnic Kurds for the past several decades. Though the Pentagon has committed to monitor all the weapons it sends the Kurds, Turkey wants the artillery aid shut off.

Phillips, the Columbia program director, predicted in an editorial for the Boston Globe that Trump will ultimately reject all three of Erdogan’s demands, despite the allies in his corner who may be pushing the other way.

Speaking only in generalities about strengthening U.S.-Turkish ties and anti-terrorism efforts, White House press secretary Sean Spicer did not release any details about Trump and Erdogan’s agenda for their meeting, nor did he reveal whether they would be joined by any third parties.

The meeting comes nearly three months after Giuliani and Mukasey met with Erdogan in Turkey to discuss Zarrab’s case. Columbia’s Phillips called it suspicious that Giuliani was reportedly sighted last week at Trump International Hotel in Washington.

“What’s he going to do, sit in a coffee shop on K Street?” Phillips asked, referring to Washington’s lobbying hub.

Giuliani and Mukasey’s potential for conflicts-of-interests in the Zarrab case have faced the scrutiny of a federal judge in New York since February.

Turkish President Recep Tayyip Erdogan speaks on May 14, 2017, during the Belt and Road Forum at the China National Convention Center in Beijing, China. (Presidency Press Service, Pool photo via AP)

Quoting reports about the Turkish government allowing the Islamic State group to sell oil inside Turkey, Phillips offered a theory about Erdogan’s efforts to free the Turkish tycoon.

“It’s not because of Iran sanctions,” he said. “It’s because Zarrab has all sorts of dirty laundry on Erdogan.”

Some accounts say Erdogan’s own relatives are even involved in the trade. A plea deal by Zarrab with the U.S. government could lay such connections bare.

Given Giuliani’s ties to the Turkish government, U.S. District Judge Berman has questioned whether his work with Zarrab would make the defendant less likely to pursue such options.

The former mayor failed to put such concerns to rest at a recent hearing when he insisted that he is seeking a deal to “promote the national-security interests of the United States and redound to the benefit of Mr. Zarrab.”

Berman noted that the language makes it sound as though Giuliani’s legal work for his client “would, by the way, work to Mr. Zarrab’s benefit.”

[blockquote author=”” style=”null”]Given Rudy Giuliani’s ties to the Turkish government, U.S. District Judge Berman has questioned whether the former New York City mayor’s involvement in the case would make Reza Zarrab less likely to pursue a plea that could have political fallout for Turkey’s autocratic leader.[/blockquote]

Expanding his probe on Monday, Berman signed a two-page order demanding that Giuliani and Mukasey produce any “work performed for President Trump’s administration, including participation on United States commissions, such as those relating to the so-called ‘Muslim ban’ executive order.”

Any links between Giuliani, Mukasey and the “Muslim ban” executive orders are certain to aggravate Erdogan, whose country is 99 percent Muslim. In response to what Ankara views as a discriminatory policy, Erdogan threatened to remove Trump’s name from his tower in Istanbul.

Among other allies in Trump’s orbit who have pushed for a softer line on Turkey is his former national-security adviser Michael Flynn. Before being ousted over exposure of his ties to Russia, Flynn was a campaign surrogate for Trump last year when he participated in a meeting on an extrajudicial rendition of Gulen that, according to a Wall Street Journal report, would amount to an end run on the formal extradition process.

“I think the influence peddling is going on in plain sight,” Phillips said, crediting the Foreign Agent Registration Act.

While the new administration has softened its rhetorical line on human-rights abuses in Turkey, Phillips predicts that Tuesday’s meeting will offer little compromise.

“Even Donald Trump doesn’t want to be influenced by Iran-sanctions violators and rogue regimes,” he said.

Hours after giving this interview, Phillips led a Monday evening discussion at Columbia titled “The Trump-Erdogan Summit: Defining Moment in U.S.-Turkey Relations.”

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