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What is the ‘gang of five’?

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A speech given by Kemal Kılıçdaroğlu, leader of the main opposition Republican People’s Party (CHP), on Dec. 7 during 2021 budget talks in parliament was the most “liked” political speech by Turkish viewers on YouTube in the last few years. What made Kılıçdaroğlu’s speech so popular was his promise to expropriate the properties of five businessmen.

The five businessmen, as well as their companies, who are referred to by opposition parties as the “gang of five” are figures who have won nearly all the large tenders during the rule of Turkish President Recep Tayyip Erdoğan. Those businessmen are Cengiz Holding Chair Mehmet Cengiz; Limak Holding CEO Nihat Özdemir; MNG Holding Chairman Mehmet Nazif Günal; Kolin Construction CEO Naci Koloğlu; and Kalyon Construction Chair Cemal Kalyoncu.

According to World Bank data, those five firms in Turkey are among the world’s top 10 private sponsors of public infrastructure projects by investment and region and by investment and primary sector for the years 1990 to 2020. Those companies are the ones that opposition figures in the country call the “gang of five.” The companies have won tenders valued at $30 billion for infrastructure projects in the last four years. This figure constitutes 30 percent of all tenders held for government projects. The rest of the public tenders have been shared among 20,851 companies.

The opposition parties accuse the five businessmen of tender-rigging and claim that they are Turkey’s biggest tax evaders.

Tenders with revenue guarantee by the Treasury

What attracts attention about the contracts the five firms have been awarded by the government is that their revenue is guaranteed by the Treasury. The government guarantees net income to the companies that win tenders for the construction of highways, bridges and airports. The best-known of those projects is the new İstanbul Airport. The construction and operating consortium for the airport has been guaranteed a growing number of passengers every year by the government, with the figure expected to reach 130 million in the 12th year of the contract. However, İstanbul Airport has not seen an annual number of more than 6 million passengers.

The tender for the third Bosporus bridge also had a revenue guarantee. The government guaranteed a daily number of 135,000 vehicle crossings. If the number of vehicles crossing the bridge is less than the guaranteed figure, the shortfall is paid from the Treasury. The government paid TL 1.6 billion ($210 million) to the firm that operates the bridge in 2019 because fewer vehicles crossed the bridge than the guaranteed number.

Mehmet Cengiz is the closest to Erdoğan

Among the five businessmen, Cengiz Holding Chairman Mehmet Cengiz is the closest to President Recep Tayyip Erdoğan. Once a local construction company, Cengiz İnşaat became a holding after Erdoğan came to power. The holding has won the third largest number of public tenders in the world, the data from the World Bank show.

Despite that, Cengiz Holding is not among Turkey’s top taxpayers. The opposition also claims that Erdoğan’s government has written off the holding’s tax indebtedness multiple times. According to data from the Finance Ministry, Cengiz Holding’s TL 2 billion ($256 million) in accrued taxes has been forgiven by Erdoğan’s government since 2006. The value of public tenders won by the company in the same period was TL 19 billion ($2.4 billion).

The five firms are accused of corruption

Kılıçdaroğlu claims that nearly all the large tenders have been awarded to these five businessmen for a long time and that it was known beforehand who would win them. Turkey’s largest conglomerates — Koç Holding, Sabancı Holding and Ülker Holding – have been unable to win large tenders during Erdoğan’s rule.

In 2013 a corruption investigation was launched into dozens of suspects including four out of the five businessmen close to Erdoğan, but all the police officers and prosecutors involved in the case were dismissed from their jobs due to Erdoğan’s interference. Most of those police officers are currently behind bars.

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