by Abdullah Bozkurt
Levent Balkan, a former executive of Turkey’s state lender Halkbank, has been the key operative in assembling a team and setting up clandestine schemes on behalf of Iran’s Islamic Revolutionary Guard Corps (IRGC) in moving funds through Turkey. The confidential investigations reveal he was also involved in orchestrating plans to move Iranian funds from Greece in the botched plan while running international banking operations for Halkbank.
This banker’s name is not only mentioned in a major corruption case involving US-indicted gold trader Reza Zarrab’s graft network but also in the probe of Tevhid-Selam, the Turkish affiliate of the IRGC Quds Force. Both these criminal probes were hushed up by Turkish President Recep Tayyip Erdoğan, who was secretly taking his cut from IRGC funds transfers and enriching himself and his family enterprises.
Balkan was charged in September 2017 by US federal prosecutors with participating in a major conspiracy to violate US sanctions on Iran. He was also named as a suspect in the IRGC Quds Force investigation that uncovered the network of Iran’s intelligence and other covert operations in Turkey. According to a series of wiretaps, obtained by the prosecutors with court orders, Balkan is intimately involved with Seyed Ali Ekber Mir Vakili, an IRGC general and pointman who was responsible for covert operations in Turkey.
According to transcripts of wiretaps that were recorded on June 18, 2013 as part of investigation No. 2011/762 and under a warrant issued by the Istanbul 2nd Criminal Court, Balkan met with Mir Vakili and his deputy Hakkı Selçuk Şanlı, a convicted felon and Turkish national who helped set up Quds Force operations in Turkey in the ’90s. They decided to talk in a car rather than moving elsewhere and started discussing how they could set up new schemes using several Turkish banks to continue moving IRGC funds through Turkey after the US imposed further restrictions on Iran, especially on companies affiliated with the IRGC.
Thinking that they were secure in the car and that nobody was eavesdropping on their conversation, they were speaking quite openly about the IRGC, the Grand Ayatollah and Iranian political leaders. Balkan confessed that he was quite sympathetic to the Iranian revolution of 1979 when he was a senior in high school. “Khomanei was a great man… He was philosopher,” he said, stressing that he was strongly and emotionally attached to him. He recalled how he was known as “pro-Iranian” by his schoolmates in his university years. He admits to Mir Vakili that “I’m not an outsider, but rather an inside man,” prompting Mir Vakili to respond by saying, “We believe that 100 percent.”
Turkish banker Balkan’s career background is quite interesting. He has a degree from a faculty of theology yet decided to work in the banking industry by starting a job at Islamic bank Albaraka Turk in 1989. He was transferred to state bank Halkbank in 2005, two years after Erdoğan came to power. He was then sent to Bahrain to work in Halkbank’s branch there. Three years later, he was promoted to run the foreign operations of Halkbank at the headquarters and served there until 2013. He was the man who set up a team of bankers and financial experts in Halkbank to run the IRGC financial transactions after he got a green light from his political master Erdoğan and bank general manager Süleyman Aslan, also indicted by US federal prosecutors in New York.
In the wiretapped conversations Balkan explained how he set up the businesses in Aktif Bank, another Turkish bank that came under scrutiny for involvement in Iranian funds transfer in violation of US financial sanctions. The bank was effectively controlled by Erdoğan’s son-in-law Berat Albayrak, who is now energy minister. Balkan says he personally approved sending funds from Halkbank to Aktif Bank on behalf of Iran, but the people at Aktif messed up the operations, drawing the attention of US Treasury officials. “Erdoğan intervened in saving the bank when the Americans were about to put Aktif Bank on a black list,” he recalled. Mir Vakili told Balkan the Iranians believed they were ripped off by the scheme set up at Aktif Bank and that they were not happy about it.
The Turkish banker also counseled Mir Vakili on whether the IRGC could utilize other state banks such as Ziraat Bank and Vakif Bank in circumventing the US laws and regulations that blocked Halkbank from processing payments for third countries such as India in exchange of the purchase of Iranian oil. Lamenting that he was quite upset about stricter regulations imposed by the US on funds transfers, Balkan said the funds could be hidden in several places before being brought back to Turkey, but he said Huseyin Aydin, the general manager of Ziraat Bank, must be brought aboard for the plan to work. He said he had already talked to people at Vakif Bank. He suggested that he could join Vakif or Ziraat and assemble his own team by bringing people from Halkbank to run this new operation in these banks. He claimed Aydin would be quite sympathetic to such an offer. Hakkı Selçuk Şanlı urged him to work as a counselor and said he could pay him an advisor’s fee for services rendered, a disguise for bribes.
The wiretaps also reveal how Balkan set up a scheme for the IRGC in Greece by opening an account at the Halkbank branch in Athens while he was running foreign operations for the bank. The topic came up when Mir Vakili said IRGC oil money was tied up in Greece and asked whether Ziraat could help in moving those funds out of Greece. Balkan said this would be up to Greek authorities, recalling how they refused to transfer funds to an account he opened in Halkbank before. He said he had brought Greek and Iranian officials together in secret negotiations at which he was also present around 2011. “The Greeks dropped the ball,” he lamented about funds that amounted to almost a billion US dollars. There was no problem for Greece to transfer funds to Halkbank at the time, but they decided to not do it due to financial difficulties Greece was going through.
Mir Vakili said Greece had a waiver for funds transfer for the amount of the oil it purchased from Iran but did not want to use that waiver to pay the bill and instead wanted to keep the money while Iran was under sanctions. He said the Iranian government could have brought a legal suit against Greece and cashed in on letters of credit extended by the banks on behalf of Greece. But he said Tehran considered that keeping a country like Greece indebted to Iran would be beneficial for political reasons. I guess that made sense when Prime Minister Alexis Tsipras’s government defied the EU and the US in 2016 when it blocked EU sanctions on Iranian Bank Saderat, which the US accuses of financing terrorism. Perhaps Athens reciprocated with political favors in exchange for not collecting the accumulated debt.
The evidence in the Tevhid Selam case file is pretty clear in confirming the extent and the depth of the Erdoğan government’s involvement in this sanction-busting regime that violated not only US laws but several Turkish laws, from threatening Turkish national security to committing a series of financial crimes. It is amazing to see how Mir Vakili was assuring the Turkish banker that the Iranians saw no problem in overcoming political problems in Turkey. He tells Balkan to not worry about any political difficulties at all and rather focus on the technical aspects of the business he would be running to circumvent sanctions after gold trade was also placed under the sanctions regime by the US. No wonder why IRGC general Mir Vakili had secretly met with Erdoğan, former foreign minister Ahmet Davutoğlu and other Turkish officials although the Quds Force’s Turkish affiliate is listed as a terrorist organization in Turkey and he was the prime suspect in a major espionage case.