Former US Attorney General Bill Barr and former acting Attorney General Matthew Whitaker pressured then-US Attorney for the Southern District of New York (SDNY) Geoffrey Berman to halt a federal investigation into Turkish state-owned Halkbank, apparently on the orders of former president Donald Trump, the Raw Story news website reported, citing a newly released book authored by Berman.
Former US National Security Adviser John Bolton had previously claimed in a book that Trump agreed to intervene in the investigation at the request of Turkish President Recep Tayyip Erdoğan.
Halkbank, one of Turkey’s biggest banks, has been under investigation by US prosecutors since 2018, when it was accused of using its currency businesses and front companies to transfer $20 billion in oil revenue to Iran — which was restricted by Washington’s sanctions against the Islamic Republic.
Federal investigators in the SDNY brought charges against Halkbank in 2019.
Two men with close ties to Erdoğan’s inner circle — Turkish-Iranian businessman Reza Zarrab and Halkbank’s former deputy chief executive, Mehmet Hakan Atilla — were charged with conspiring to violate US sanctions against Iran and other offenses.
Zarrab was the star witness in the trial where he, Atilla, an executive at Turkey’s state-owned Halkbank, and seven other people, including Turkey’s former economy minister and two additional Halkbank executives, were charged with engaging in transactions worth hundreds of millions of dollars for Iran’s government and Iranian entities from 2010 to 2015 in a scheme to evade US sanctions.
Zarrab, who previously had avoided justice in Turkey despite being the prime suspect in a massive corruption investigation implicating then-prime minister Erdoğan’s cabinet and family, gave a detailed account of the scheme during his seven-day testimony.
As a result, Atilla was convicted of the charges.
Describing the Halkbank case, Berman said in his book “Holding the Line” that Barr leaned on him to drop the charges against the bank, in a move that appeared to be on Trump’s orders.
“What normally happens in these kinds of sanctions or money laundering cases is that a conviction of top executives sets off negotiations between the bank and the Department of Justice on how to resolve the financial institution’s criminal liability,” Raw Story quoted Berman’s book as saying.
Halkbank didn’t take the SDNY seriously and resisted when it came to making any sort of acknowledgment of guilt or paying fines.
“It acted as if it had an ace in the hole, or two aces: a friend in the White House, and a back channel to Main Justice,” Raw Story quoted Berman’s book as saying.
Halkbank went over their heads and began talking to key Justice Department staff.
“It soon became clear that Halkbank and its counsel were talking directly to Main Justice. It also looked like whatever pressure Whitaker had felt from Trump to go easy on Turkey was now being exerted on Barr,” Berman wrote.
In an interview with NPR on Tuesday, Berman explained that after Atilla’s trial, the SDNY wanted to bring a case against Halkbank.
“And Barr was impeding that effort. And there was one meeting in particular where Barr was pushing for us to enter into secret non-prosecution agreements with officers of the bank and officers of the Turkish government,” Berman said.
“And these are agreements that he said, well, we wouldn’t really need to tell the court that they exist. And I said, actually, that would be a fraud on the court,” he added, summarizing the episode he wrote about in the book.
The Halkbank issue eventually faded away after Trump and Erdoğan fell out over Turkey’s cross-border military operation against the US-allied Kurdish militia in Syria.
“There was a falling out apparently and reportedly between Trump and Erdogan,” Berman said in the NPR interview.
“And at that point, we were given the green light to indict Halkbank. And we did it within 24 hours.”
A US court on October 23, 2021 denied an appeal from Turkish state-owned Halkbank, which had asked the court to block the trial and argued it had sovereign immunity under US law. The judge said the charges “fall under the commercial activity exception” to the Foreign Sovereign Immunities Act.
In January 2022, a US appeals court put Halkbank’s prosecution by the federal government on hold while the bank appealed to the US Supreme Court.