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U.S. Indicts Turkey’s Halkbank for Illegal Transfer of Billions of Dollars to Iran

By Harut Sassounian

Halkbank, whose majority shareholder is the Turkish government, pleaded not guilty in New York on March 31, 2020, to criminal charges that it helped Iran illicitly transfer tens of billions in dollars and gold, wrote Aykan Erdemir and Philip Kowalski in an essay published on April 3 by the Foundation for Defense of Democracies, a policy institute based in Washington, D.C.

On October 15, 2019, the Federal Southern District Court of New York accused Halkbank of “fraud, money-laundering and sanctions offenses,” alleging that Halkbank and its executives aided Iranian-Turkish gold trader Reza Zarrab in a “multi-billion dollar scheme to circumvent U.S. sanctions on Iran.”

Initially, Halkbank refused to appear in court “claiming that the criminal charges are beyond the U.S. court’s jurisdiction,” Erdemir and Kowalski wrote. However, when “prosecutors proposed escalating contempt fines which could have totaled $1.8 billion after eight weeks,” the bank agreed to respond to the court charges.

Originally, the Turkish and Iranian officials had concocted a scheme to exchange gas for gold to circumvent the U.S. sanctions, by claiming that the gold was headed not to Iranian government entities but to Iran’s “private sector.” Erdemir and Kowalski stated that “the scheme ultimately yielded the Iranian regime some $13 billion in Turkish gold between 2012 and 2013. Once the U.S. Congress introduced legislation to close the ‘golden loophole’ in 2013, Iran used Turkish front companies to issue invoices for fake transactions of food and medicine that fall under the humanitarian exception to U.S. sanctions. In one infamous case of over-invoicing, a Turkey-based luxury yacht company used Halkbank to sell nearly 5.2 tons of brown sugar to Iran’s Bank Pasargad at the price of approximately $240 per pound.”

This scheme was first exposed in December 2013 by Turkish investigators who implicated then Prime Minister Recep Tayyip Erdogan, several of his ministers and other senior officials, including Halkbank’s managers. Erdogan shut down the probe by firing the police officials, prosecutors and judges!

The scandal resurfaced in March 2016 when Iranian-Turkish ring-leader Reza Zarrab was arrested in Miami after he flew to Florida to visit Disney World with his family.

In March 2017, U.S. authorities arrested Halkbank Deputy CEO Mehmet Hakan Atilla upon his arrival in New York. Zarrab pleaded guilty and agreed to testify in court against Atilla. Zarrab confessed that he had bribed senior Turkish ministers and top Halkbank executives. He even implicated Erdogan in the corruption scheme, stating that Erdogan had personally approved the illegal actions.

“Halkbank’s Atilla received a 32-month prison sentence in May 2018, a significantly shorter one than prosecutors had originally sought,” according to Erdemir and Kowalsky. “After Atilla’s return to Turkey, Erdogan rewarded the convicted sanctions buster by appointing him CEO of the Istanbul stock exchange, following the president’s established pattern of rewarding other senior accomplices of Zarrab with cushy appointments.”

Erdogan personally appealed to Pres. Trump and other senior officials to block the court case of Halkbank, claiming that US courts have no right to try Turkish citizens. The Courthouse News Service reported that “One of Zarrab’s shell companies, Royal Holding A.S., listed its address as a 35th floor unit in Trump Towers Istanbul. Before pleading guilty to money laundering, sanctions evasions and bribery, Zarrab retained Trump’s personal attorney Rudy Giuliani to lead a campaign of shadow diplomacy that echoed the one in Ukraine. Shuttling between Turkey’s capital of Ankara and the White House, Giuliani met with Erdogan, Trump, former Secretary of State Rex Tillerson, and other senior U.S. and Turkish officials in an attempt to negotiate a prisoner swap. The New York Times reported that Tillerson resisted the White House pressure for a deal that would have effectively killed the Zarrab case.”

Erdogan’s and Giuliani’s efforts succeeded in stalling the prosecution for almost two years, but ultimately failed when the U.S. Attorney’s Office for the Southern District of New York went forward with the charges last October.”

Senator Ron Wyden, the Senate Finance Committee’s top Democrat, told Courthouse News Service: “It sure looked like Donald Trump was doing the bidding of Erdogan and Giuliani, and there were real questions about whether this was about getting Halkbank off the hook, even though there were allegations that they were orchestrating the largest sanctions evasion scheme in history.”

During President Trump’s Senate impeachment inquiry earlier in 2020, Senators Wyden, Robert Menendez and Sherrod Brown asked a joint question which was read aloud in the Senate by Chief Justice John Roberts: “Has the president engaged in a pattern of conduct in which he places his personal and political interests on top of the national security interests of the United States?”

Wyden told Courthouse News Service: “Donald Trump has significant financial interest in Turkey,” referring to Trump Towers Istanbul. “We read regularly that his family has forged personal relationships with important Turkish officials. And so, you have to ask — which is what is part of our inquiry — whether the Trump policy toward Turkey is in a significant way colored by his personal and political interests and not the national security of the country.” If Halkbank is found guilty of violating U.S. sanctions, the court could impose a hefty penalty, regardless of Tump’s wishes.

Florida Congressman Ted Deutch, 35 House Members Call to Substantially Increase Aid for Armenia and Artsakh

Armenian Assembly Boosts Congressional Call for $100 million Democracy-Building and Economic Assistance Package

WASHINGTON, D.C. – Today, Congressman Ted Deutch (D-FL) joined 35 of his House colleagues in a letter that urges the House Appropriations Subcommittee on State, Foreign Operations, and Related Programs to significantly increase prior aid requests to strengthen United States-Armenia relations and outlines key priorities for Fiscal Year (FY) 2020, the Armenian Assembly of America announced. The letter was spearheaded by Armenian Caucus Founder and Co-Chair Rep. Frank Pallone, Jr. (D-NJ), Caucus Co-Chair Rep. Jackie Speier (D-CA), and Caucus Vice Chair Rep. Adam Schiff (D-CA).

Ted Deutch

Rep. Ted Deutch (D-FL)

With sweeping cuts across the State Department’s budget, the Administration proposed $6.75 million for Armenia. A prior congressional effort requested $70 million, but today’s action increases the request to a total of $100 million for Armenia and Artsakh. The Armenian Assembly said that it “truly appreciates today’s action, and will continue working for further increases to Artsakh and Armenia.”

Four Members of Congress from Florida sit on the House Appropriations Committee: Rep. Charlie Crist (D-FL), Rep. Mario Diaz-Bolart (R-FL), Rep. Lois Frankel (D-FL), and Rep. Debbie Wasserman-Schultz (D-FL). Reps. Deutch and Crist are Members of the Congressional Caucus on Armenian Issues.

The Armenian Caucus initiative requests:

  • $60 million for economic governance and rule of law assistance to Armenia through State Department and USAID accounts;
  • $10 million for military aid for Armenia through Foreign Military Financing (FMF) and International Military and Education Training (IMET) programs;
  • $20 million for Armenia to be a regional “safe haven” for refugees;
  • $6 million for Artsakh de-mining, rehabilitation programs, and water supply systems;
  • $4 million for implementation of the Royce-Engel peace proposals, including placement of OSCE-monitored, advanced gunfire locator systems;
  • That the State Department and USAID lift any official or unofficial restrictions on U.S. travel, communication, or contacts with Artsakh government officials; and
  • The suspension of U.S. military aid to Azerbaijan until it has been verified to have ceased all attacks against Armenia and Artsakh.

The letter states in part: “In the wake of the Republic of Armenia’s remarkable Velvet Revolution, we are writing to thank the Subcommittee for its longstanding leadership in support of both Armenia and the Republic of Artsakh (Nagorno Karabakh). As you prepare the Fiscal Year 2020 State, Foreign Operations, and Related Programs Appropriations bill, we ask you to include… provisions supporting a broad-based strategic upgrade of a U.S.-Armenia partnership based upon shared interests and common values.”

The Members of Congress also called for stricter provisions of Section 907 of the FREEDOM Support Act to ensure that Azerbaijan does not take hostile actions against Armenia or Artsakh, as it did in the 2016 4-Day War, and pledge to demonstrate its commitment to pursuing lasting peace through solely non-violent means.

The letter concludes: “Taking these steps will continue to build on the U.S.-Armenia strategic relationship and help to grow the seeds of pro-democratic and civil society institutions in Armenia. We urge the Subcommittee to invest in peace and assist Armenia and Artsakh at this exciting time of continued development.”

“The Armenian Assembly welcomes this increased request in funding to Armenia. Given the remarkable democratic transformation last year in Armenia, we know that the community expects even more,” Assembly Executive Director Bryan Ardouny said. “Moreover, the OSCE’s Election Observation Mission Report stated that the elections ‘were held with respect for fundamental freedoms and enjoyed broad public trust that needs to be preserved through further electoral reforms.'”

Additionally, the Organization for Security and Co-Operation in Europe’s (OSCE) Office for Democratic Institutions and Human Rights (ODIHR) reported that “election day proceeded calmly, peacefully, free of pressure on or intimidation of voters” and “the constitutionally guaranteed freedom of expression was respected.”

Armenian Assembly Co-Chair Van Krikorian Testifying Before the House Appropriations Committee (Pictured Members: Appropriations Chairwoman Rep. Nita Lowey (D-NY), and Rep. Lois Frankel (D-FL).

Earlier this month, Assembly Co-Chair Van Krikorian, in testimony before the House Appropriations Subcommittee, requested $100 million in democracy and economic assistance, at least $10 million in Foreign Military Financing (FMF) and International Military Education Training (IMET) to Armenia for Fiscal Year (FY) 2020, and $20 million to help resettle and provide a safe haven for Christians at risk in Syria and throughout the Middle East, with at least $25 million in assistance to Artsakh. Krikorian cited Armenia’s remarkable year as more than a reason to significantly increase humanitarian aid, suggesting to the Subcommittee that the United States should “reward people who have made progress towards democracy.”

Krikorian applauded the Subcommittee for holding the important hearing, and greatly appreciated “Chairwoman Nita Lowey’s leadership and steadfast support for Armenia and Artsakh.”

Given Turkey and Azerbaijan’s ongoing blockades, the Assembly’s written testimony also shed light on the importance of aid to Armenia and Artsakh, the need to fully enforce Section 907 of the FREEDOM Support Act, and targeted assistance for economic development and job-creation programs in the Samtskhe-Javakheti region of the Republic of Georgia.

The Armenian Assembly’s submitted testimony for FY 2020 is available online.

Bilirakis, Schiff Rally Support for Sustained U.S. Policy of Official Armenian Genocide Recognition

Community-Backed Bipartisan Resolution Affirms that the United States Rejects Efforts to Associate the U.S. Government with Armenian Genocide Denial

WASHINGTON, DC — Armenian Caucus Co-Chair Rep. Gus Bilirakis (R-FL) and Rep. Adam Schiff (D-CA) are calling on their House colleagues to join them in introducing an Armenian Genocide recognition resolution, bipartisan legislation aimed at establishing, as a matter of U.S. policy, 1) the rejection of Armenian Genocide denial, 2) ongoing official U.S. government recognition and remembrance of this crime, and 3) the importance of Armenian Genocide education in preventing modern-day atrocities.

The resolution’s authors are currently collecting original cosponsors for the legislation and are expected to introduce the bill in April.

“Genocide must not be denied. It must be acknowledged for what it is—a scourge on humanity,” Congressman Bilirakis told FLARMENIANS.com. “Official recognition of the Armenian Genocide would represent a courageous new chapter in American foreign policy. With the bold leadership of the current Administration, it is time for the United States to take a stand against Turkish genocide denial,” stated Bilirakis.

In a “Dear Colleague” letter sent to U.S. Representatives by Congressmen Schiff and Bilirakis, they asked their House colleagues to “join us as a cosponsor of a resolution affirming the United States record on the Armenian Genocide, which recognizes and memorializes the historical fact of the Ottoman Empire’s genocidal campaign against the Armenian people, as well as the Greeks, Assyrians, Chaldeans, Syriacs, and other religious minorities, from 1915 to 1923.” The letter acknowledges the life-saving U.S. humanitarian efforts during the Armenian Genocide, reminding colleagues that “Congress passed first of its kind legislation to establish the Near East Relief effort which provided millions of dollars in food and aid to survivors, including tens of thousands of orphans.”

Congressmen Bilirakis and Schiff took on Ankara’s anticipated opposition to an honest U.S. remembrance of the Armenian Genocide head-on, writing: “Let us be direct. Genocide recognition is opposed by a single entity: The government of Turkey. For decades, Turkey has deployed threats and an intense campaign of lobbying to intimidate the Congress from recognizing the genocide carried out by the Ottoman Empire.” They went on to argue that: “Turkey’s denial of the Armenian Genocide is also a source of continued regional tension, undermining the foundations of a durable peace that would be in the best interests of the United States and our national security. Official recognition of the Armenian Genocide can help open a new chapter in United States foreign policy. It is time for the United States to take a stand for the truth, and against genocide denial.”

AAA Action Alert-AG

As in year’s past, the resolution will be assigned to the House Foreign Affairs Committee (HFAC), now Chaired by Rep. Eliot Engel (D-NY), a member of the Armenian Caucus. It is not yet clear if Chairman Engel will bring up the measure for a vote this Congress. The last time an Armenian Genocide recognition resolution passed the HFAC committee was in 2010.

The new Armenian Genocide Resolution notes that the U.S. has, as early as 1951, officially recognized the Armenian Genocide through a filing with the International Court of Justice, followed by House legislation adopted in 1975, and 1984 and President Ronald Reagan’s Proclamation in 1984.

The resolution resolves that it is the policy of the United States to:

  1. Commemorate the Armenian Genocide through official recognition and remembrance;
  2. Reject efforts to enlist, engage, or otherwise associate the U.S. Government with denial of the Armenian Genocide or any other genocide; and
  3. Encourage education and public understanding of the facts of the Armenian Genocide, including the U.S. role in the humanitarian relief effort, and the relevance of the Armenian Genocide to modern-day crimes against humanity.

Text of the Schiff-Bilirakis “Dear Colleague” regarding the Armenian Genocide Resolution

Dear Colleague:

We ask that you join us as a cosponsor of a resolution affirming the United States record on the Armenian Genocide, which recognizes and memorializes the historical fact of the Ottoman Empire’s genocidal campaign against the Armenian people, as well as the Greeks, Assyrians, Chaldeans, Syriacs, and other religious minorities, from 1915 to 1923. Millions of men, women, and children were killed, shot, beaten, starved, and raped as they were marched through deserts and over mountains. When the killing finally ended, 1.5 million Armenians had been killed and millions more had been displaced from the land of their birth.

There is no debate among historians that the Ottoman Empire committed atrocities against the Armenians, or that it meets the definition of a “genocide.” Indeed, the facts of the genocide were recorded contemporaneously by American diplomats, including the Ambassador to the Ottoman Empire Henry Morgenthau, who transmitted a flood of cables and reports describing the wholesale slaughter of the Armenians. It was partially the study of the experience of the Armenians which inspired Raphael Lemkin, a Polish Jew whose family was killed in the Holocaust, to coin the word “genocide” to describe the crime of destroying an entire people and culture.

The campaign to destroy the Armenian people failed, in part thanks to the humanitarian assistance provided by the American people. Hearing reports of the wholesale killing and displacement of Armenians and other minorities in the Ottoman Empire, Americans responded with generosity and support. Congress passed first of its kind legislation to establish the Near East Relief effort which provided millions of dollars in food and aid to survivors, including tens of thousands of orphans.

For over 100 years, genocide survivors and their descendants have sought truth and justice. They have fought to have this horrific chapter in their history recognized by the international community and, for the sizeable Armenian-American diaspora, by their own government. Forty-eight U.S. states have recognized the Armenian Genocide, as have 28 foreign nations including some of our closest allies. Although the United States has made direct reference to the genocide in the past, including by proclamation of President Ronald Reagan in 1981 and through the passage of House Resolutions in 1975 and 1984, Congressional acceptance of the fact of the genocide is long overdue.

Let us be direct. Genocide recognition is opposed by a single entity: The government of Turkey. For decades, Turkey has deployed threats and an intense campaign of lobbying to intimidate the Congress from recognizing the genocide carried out by the Ottoman Empire.

Turkey’s denial of the Armenian Genocide is also a source of continued regional tension, undermining the foundations of a durable peace that would be in the best interests of the United States and our national security. Official recognition of the Armenian Genocide can help open a new chapter in United States foreign policy. It is time for the United States to take a stand for the truth, and against genocide denial.

The United States should never be complicit in genocide denial, what Elie Wiesel described as the final stage of genocide and a “double killing.” As we confront continuing mass atrocities around the world, including the genocide of religious minorities carried out by ISIS in Syria and Iraq or the extermination of the Rohingya in Burma, Congress’s silence about the Armenian Genocide of a century ago undermines our moral standing. It must end.

To join us as an original cosponsor of the Armenian Genocide resolution, please contact Caroline Nicholas in Rep. Schiff’s office or Shayne Woods in Rep. Bilirakis’s office.

Sincerely,
Adam B. Schiff
Member of Congress

Gus M. Bilirakis
Member of Congress