The Zarrab case and its consequences

The Zarrab case and its consequences

This week’s latest excitement has given us yet another so-called “grand conspiracy” against Turkey.

“It is not just [President Recep Tayyip] Erdoğan,” said ruling Justice and Development Party (AKP) spokesman Bekir Bozdağ, a former justice minister. It is a grand plot against Turkey, he claimed.

This time the subject is Turkey’s erstwhile poster boy of international trade and export. “I personally closed the current account deficit,” Turkish-Iranian businessman Reza Zarrab once boasted. Now he appears to be the cause of a new deficit.

The AKP has a depressing policy towards issues it cannot solve: “If you cannot make it better, make it worse.” The same rule applies to everything, whether the collapsing education system, agricultural price hikes, or the construction boom. The motto is simple: Make it so bad and so big that everyone freaks out and jumps into your ship. This was the tactic thawt financial giants also used during the 2009 crisis. “Too big to fail” was the mistaken belief. Sadly this no longer applies to Turkish politics.

Let’s be clear, no player is too big to fail at the international level. If the Zarrab case is so political, then why are presidential surrogates running around foreign media outlets attempting to make their case and not going to the court themselves? And if the case was not political, why did the Istanbul chief prosecutor feel the need to open an investigation on Preet Bharara?

All the signs concerning the Zarrab case coming from Ankara and Istanbul spell out deep fear and panic. The Turkish government thinks the Turkish people will accept their argument: “It-is-you-they-are-trying-in-court!-They-are-going-after-your-banks!-Your-president-and-your-money!” But not this time.

The Zarrab case has been incredibly badly handled by the AKP, Erdoğan and the Justice Ministry. Now it is so bad they want everyone to fall with them into the mud. Banks can negotiate a deal and pay penalties if need be. Look at HSBC, Commerzbank, ING. Their executives did not go to jail despite sidestepping Iranian sanctions. Yet systematic shady money deals could prove more problematic.

Turkey still has a chance. First, its top politicians should stop talking. The pro-AKP newspaper and TV outlets should calm down, return to journalism, and read the indictment. With expert legal advice and indirect defense presence in the courtroom, Turkey could still steer clear of this case. For the ordinary U.S. citizen who sits on the juror bench, the Erdoğan versus Fetullah Gülen (the U.S.-based cleric believed to be behind last year’s coup attempt) affair is not a legal matter. They could not care less. Turkey could win this case if it treads carefully. If Zarrab can make a deal, why not Turkey?

But for that to happen, President Erdoğan and his surrogates should appreciate the independence of the U.S. court system. Judges are never under political pressure and pro-AKP propaganda is a joke for them. The U.S. Justice Department has zero impact on cases that are before juries and judges. Unlike your “call-the-prosecutor” system in Ankara or Istanbul, they do not accept telephone calls from politicians.

With more panic come more mistakes. And the lira takes more hits.

AKP; Justice and Development, gold trader, gold trade,