Islamist Split Latest Threat To Erdoğan

[Valin]

The Feed:

12/20/13

 

The Economist calls it one of the most audacious challenges ever to the rule of Recep Tayyip Erdoğan, the Turkish prime minister. In a police operation, a mayor, a construction tycoon, and the sons of three of Erdoğans cabinet ministers were arrested as part of a corruption probe. The juicy details were leaked to the press: $4.5 million in cash packed in shoe boxes found in the home of the chief executive of a state-run bank; a money-counting machine and piles of bank notes discovered in the bedroom of a government ministers son.

 

In retaliation, the government dismissed Istanbuls police chief and at least 30 other top police officials, saying the corruption probe was a nefarious plot to undermine Erdoğan. Now Turkeys stock exchange is slipping, and so is the lira.

 

The turmoil comes in the wake of a fallout between Erdogan and Fethullah Gülen, a mysterious but extremely popular cleric who lives, strangely enough, in Saylorsburg, Pennsylvania. But dont mistake his distance for a lack of influence. Gulen runs a number of media outlets and a network of hundreds of charities and schools in Turkey and beyond.

 

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[Valin]

Turkey's bosses issue probe warning as government widens police purge

12/20/13

 

Turkey’s largest business organization has urged the government to avoid any acts that may impact the independence of the judicial process in an ongoing graft investigation as the government continues to press for the purge of the police command.

 

“With regard to these [corruption and bribery] claims, all actions and remarks that may cast a shadow on the process should be avoided and the principles of judicial independence and the state of the rule of law should be maintained,” the Turkish Industrialists’ and Businessmen’s Association (TÜSİAD) said in a written statement on Dec. 20, stressing that the fraud claims presented a “worrying” picture.

 

TÜSİAD, which encompasses many of Turkey’s most prominent businesspeople, warned the authorities “not to repeat previous mistakes of past cases, which led to the victimization of people.”

 

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[Valin]

Construction tycoon released, demand for the arrest of ministers' sons in Turkey’s corruption probe

12/20/13

 

Turkey's well-known construction tycoon Ali Ağaoğlu was released Dec. 20 by an Istanbul court in a massive corruption probe, along with five others, after giving their testimonies, while the prosecutor requested the arrest of 21 suspects, including two ministers' sons.

 

Interior Minister Muammer Güler's son Barış Güler and Economy Minister Zafer Çağlayan's son Kaan Çağlayan were sent to court with the demand of arrest, along with the Azeri businessman Reza Zarrab, Fatih Mayor Mustafa Demir and Halkbank General Manager Süleyman Aslan.

 

Meanwhile, six people have been released after hearing their testimony.

 

The operations were made up of three separate investigations.

 

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[Valin]

CNN: Inside the power struggle in Turkey

Soner Cagaptay, author of "The Rise of Turkey," talks to CNN's Jonathan Mann about the politics inside the country.

[Valin]

16 More Arrested as Corruption Inquiry in Turkey Widens

CEYLAN YEGINSU

December 21, 2013

 

ISTANBUL — A fast-moving corruption inquiry into the government of Prime Minister Recep Tayyip Erdogan widened Saturday with the arrests of two sons of ministers, the general manager of state-owned Halkbank, and 13 others in connection with allegations of corruption and bribery.

The arrests came a day after 49 people, including the mayor of an Istanbul district, were referred to court for arrest. The suspects are accused of various corruption charges including bribery, gold smuggling and violating zoning laws.

The government has responded with its own counterstroke, dismissing 14 more high-ranking police officials as it continues to purge the state of those it believes are pushing the investigation, which Mr. Erdogan and his top party officials consider a plot.

 

The investigation is widely regarded as being controlled by followers of Fethullah Gulen, a powerful Muslim preacher who lives in Pennsylvania and commands a network of businessmen, media outlets and schools as well as officials within Turkey’s police and judiciary.

The case, which has riveted the country and dominated the newspaper headlines and television talk shows all week, also played out in smaller ways on Friday: Turkish Airlines, which is partly owned by the state, reportedly removed from its flights newspapers that are affiliated with Mr. Gulen.

Mr. Gulen has denied having involvement in the case and has strongly criticized the removal of police officers that participated in the investigation.

 

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[Valin]

Turkey's Erdogan says "dark alliances" behind graft inquiry

Humeyra Pamuk and Ece Toksabay

12/21/13

 

ANKARA, Dec 21 (Reuters) - Prime Minister Tayyip Erdogan denounced "international groups" and "dark alliances" on Saturday for entangling Turkey in a corruption scandal that has exposed deep rifts between him and a U.S.-based Muslim cleric who helped him rise to power.

Sixteen people, including the sons of two ministers and the head of state-owned Halkbank, were formally arrested on Saturday, local media said, in a corruption inquiry that Erdogan has called a "dirty operation" to underminine his rule.

 

The Turkish leader raised the stakes by accusing unnamed foreign ambassadors of "provocative actions". Some pro-government newspapers had accused the U.S. envoy of encouraging the move against Halkbank - a charge denied by the embassy.

"There are extremely dirty alliances in this set-up, dark alliances that can't tolerate the new Turkey, the big Turkey," Erdogan in a speech in the northern town of Fatsa. "Turkey has never been subjected to such an immoral attack."

 

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[Valin]

Turkish PM warns he could expel some foreign ambassadors

12/21/13

 

Turkish Prime Minister Recep Tayyip Erdogan Saturday warned he may expel some foreign ambassadors over "provocative actions", amid mounting tensions over an anti-graft probe that has ensnared government allies.

"Some ambassadors are engaged in provocative actions... Do your job," Erdogan said in televised remarks in the Black Sea city of Samsun. "We don't have to keep you in our country."

Erdogan's remarks were considered a veiled threat to US Ambassador Francis Ricciardone, after he was reported to have commented on the unfolding bribery scandal.

 

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According to some pro-government media outlets, Ricciardone said Washington had warned the state-owned Halkbank to cut its ties with sanctions-hit Iran.

The bank is at the centre of a high-profile graft probe that has touched the heart of Erdogan's Justice and Development Party (AKP) government.

Halkbank's chief executive, Suleyman Aslan, was one of scores of people, including the sons of cabinet ministers, arrested in the case.

 

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Ricciardone has had an uneasy relationship with the AKP government since his appointment in January 2011.

Erdogan called him a "rookie" after Ricciardone raised the issue of jailed journalists in Turkey.

In February, the government warned him to stop meddling in Turkey's domestic affairs after he criticised "flaws" in the justice system, highlighting "lengthy pre-trial detentions, lack of clarity in presenting charges, lack of transparency".

[Valin]

Lira Hits All-Time Low

 

The Turkish lira took a tumble on Friday, hitting an all-time low against the dollar amidst rising concerns about the latest political turmoil to hit Erdoğans government. The FT:

 

 

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[The] deepening turmoil in Turkey is not just political, Strobe Talbott, head of the Brookings Institution, said via Twitter. [The] stakes are geopolitical. Stable, secular, moderate state is crucial to region and world.

Turkey is losing its margin for error. The politics and the economics are both going wrong in a country that not all that long ago was seen as a model for the Middle East.

[Valin]

The End of Erdogan’s Cave of Wonders: An I-Told-You-So

David P. Goldman

December 27th, 2013

 

Turkey is coming apart. The Islamist coalition that crushed the secular military and political establishment–between Tayip Erdogan’s ruling AK Party and the Islamist movement around Fethullah Gulen–has cracked. The Gulenists, who predominate in the security forces, have arrested the sons of top government ministers for helping Iran to launder money and circumvent sanctions, and ten members of Erdogan’s cabinet have resigned. Turkey’s currency is in free fall, and that’s just the beginning of the country’s troubles: about two-fifths of corporate debt is in foreign currencies, so the cost of servicing it jumps whenever the Turkish lira declines. Turkish stocks have crashed (and were down another 5% in dollar terms in early trading Friday). As the charts below illustrate, so much for Turkey’s miracle economy.

 

Two years ago I predicted a Turkish economic crash. Erdogan’s much-vaunted economic miracle stemmed mainly from vast credit expansion to fuel an import boom, leaving the country with a current account deficit of 7 % of GDP (about the same as Greece before it went bankrupt) and a mushrooming pile of short-term foreign debt. The Gulf states kept financing Erdogan’s import bill, evidently because they wanted to keep a Sunni power in business as a counterweight to Iran; perhaps they have tired of Turkey’s double-dealing with the Persians. And credulous investors kept piling into Turkish stocks.

 

 

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No more. Turkey is a mediocre economy at best with a poorly educated workforce, no high-tech capacity, and shrinking markets in depressed Europe and the unstable Arab world. Its future might well be as an economic tributary of China, as the “New Silk Road” extends high-speed rail lines to the Bosporus.

 

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