The Golden Loophole
Chapter 6 — The Worm Turns and Final Conclusions
Throughout the summer and into the early fall of 2017 Reza Zarrab remained a virtually unknown entity in US national news despite his vast criminal offenses against the very same country. However, in early November questions began to be raised in the Manhattan court where his trial was scheduled. Zarrab had not appeared at several pretrial hearings and he was rumored to be cooperating with Special Prosecutor Robert Mueller. Lawyers for the other defendants in the trial demanded to know what was happening.
A few days later, on November 8, a preliminary court docket revealed that Zarrab had been “released”. When the trial began a few weeks later Zarrab’s name had been removed from the proceedings. This observation led many to believe that Zarrab had become a witness for the prosecution. When he finally did appear in court, dressed casually in slacks and a sports jacket, corroboration of his new role as a government witness was complete. His co-conspirator Mehmet Hakan Atilla was now the sole defendant.
In the coming weeks the former deputy general manager of Halkbank would stand trial for money laundering, violating Iranian oil sanctions, bank fraud and conspiracy. They were the same charges once leveled against Zarrab before he entered into a plea bargain with the Special Prosecutor. In early January, 2018 Atilla was convicted on all counts. His motion to dismiss was denied. He was sentenced to 32 months in prison in May, 2018.
Atilla may appeal his conviction but the odds of his success are slim. He is the least powerful player in this multi-faceted conspiracy and his role as patsy has essentially been preordained. It’s unlikely that anyone in the private banking sector or the U.S. government wants to dig any deeper.
I may be going out on a limb here but Atilla’s inability or failure to implicate anyone other than Zarrab points to a back room deal that may have traded a reduced sentence for continued silence on the depth of the scandal. In essence the problem goes away without exposing the bigger picture at play and the people involved. Such a result suggests that the political diplomacy counseled by Giuliani and Mukasey ultimately prevailed. Atilla was thrown under the proverbial bus for the sake of good relations with our Turkish partners.
Zarrab, on the other hand, has played his cards well despite the failings of several rescue efforts. Sometimes simply being first to tell your story can have significant influence on who gets to cut a plea deal and who must suffer the consequences.
In light of Mueller’s continuing probe into the activities of the Trump administration it’s likely that Zarrab eventually came to the conclusion that it was time to eat or be eaten. He would not be traded for Erdogan’s coveted cleric Fethullah Gulen, nor would the Turkish President, two high profile lawyers or anyone else be coming to his rescue. Zarrab’s only chance for survival, or redemption as some might see it, depended upon talking to Special Counselor Robert Mueller.
Thus the day after Zarrab testified in US Federal District Court, the Turkish government seized his assets and of those of his family, including his wife Ebru Gundes. The retaliatory nature of the action surprised many in Turkey, especially when it came to the seizure of his wife’s assets. Gundes was a major Turkish pop star, actress and television personality. Such a public retribution was unprecedented and it reflected just how far those in Turkey would go to silence Zarrab. This time Gundes would not be afforded the opportunity to make a tearful plea for her husband’s release.
The act also spoke to the extreme moral depravity of the Erdogan regime and the absolute corruption of it’s leader, Recep Erdogan. According to testimony given by Zarrab during his trial in Manhattan the Turkish government was treating him as if he had leaked state secrets. “What I’m doing here is being assessed as espionage,” he said.
Turkey was not alone in their efforts to make Zarrab uncomfortable. In the US there were similar efforts to silence him. During Atilla’s trial Zarrab claimed, while under oath, that he decided to plead guilty and work out a deal because he had been threatened with a knife by another inmate. According to Zarrab’s testimony the man asserted that he had been acting on orders to silence Zarrab. Who may have ordered the attack remains unclear but, if true, the incident provides compelling evidence of a concerted effort to prevent him from testifying.
In fact, just two days before Zarrab was to appear in court he was served with a charge of anal rape from a convicted Ivorian arms dealer who had been serving time in the same prison as Zarrab. Zarrab vigorously denies the allegations and his lawyer has argued that the older man accusing Zarrab of rape sought to take advantage of Zarrab’s wealth and extort him. A counter claim asserted that Zarrab did whatever he wanted while in prison, often bribing officers to receive preferential treatment and cellphones, which are banned by the prison. This claim seems to undermine the cause for rape more than it supports it. Why would a powerful 34 year old man take advantage of a frail 62 year old when he can get whatever he wants by bribing the guards? Of further concern was the delayed filing of the charges against Zarrab some 8 months after the alleged offense. The outcome of the case remains unknown as of this printing. Today Zarrab receives 24 hour protection at an undisclosed government facility in New York.
There is a curious footnote to this story. According to Turkish reporters, Zarrab has been spotted twice outside of prison since testifying against Atilla. Once while dining at Nobu and another time outside of the Four Seasons in New York. In both instances Zarrab left the scene quickly and avoided positive identification. A photograph allegedly taken by a fellow diner at Nobu does appear to show Zarrab sitting with a woman identified as a friend of his wife, Ebru Gundes, but confirmation remains elusive.
Photo credit: Hurriyet Daily News
Mueller’s unannounced but widely believed decision to accept Zarrab’s plea has sent a powerful message to the Trump administration. Flynn’s dual role as a member of Trump’s cabinet and his work for the corrupt Turkish government places him in the precarious position of being a verifiable link between the White House and Zarrab’s money laundering activities. Flynn’s decision to flip so shortly after Zarrab ostensibly agreed to assist Mueller is, in my opinion, one of the most significant developments of the entire Mueller investigation. As outlined throughout this essay Zarrab’s plea deal will likely serve to expose US banks, government officials and private citizens to charges of fraud and money laundering. The Trump administration will be hard pressed to explain its relationship to Retired General Michael Flynn in the context of such a possibility. Make no mistake about it, Flynn is the centerpiece of the Mueller investigation. His 19 appearances before the Special Prosecutor’s Office present a compelling argument for the possibility of US involvement in a massive Turkish money laundering scheme that may also involve the Russian government.
Turkish newspapers not controlled by the government claim nervous AKP party members are watching the advancing case against the Trump administration with great trepidation. Many claim the Erdogan government is near to or suffering cardiac arrest. Zarrab’s extensive knowledge of the corrupt inner workings of the Turkish government and the fall out from a thorough U.S. investigation could spell the end of Erdogan’s rule and tear the roof off a wide ranging scheme to evade U.S. sanctions. Public relations between both countries have cooled significantly since Zarrab entered the U.S. witness protection program. Jared Kushner’s recent trip to Turkey speaks volumes to the possibility that damage control is still a major priority.
The main stream media in the US has been really slow to pick up Flynn’s role as a paid adviser to the Turkish government but the truth of the matter suggests that his role advising Erdogan’s failing state is of far greater concern than his outreach to the Russian ambassador Sergei Kislyak. The official U.S. government complaint against Reza Zarrab alleges that from 2010 through 2015 Zarrab laundered money and gold through 35 different companies using 4 Turkish banks and several international banking institutions located in the United States. The money laundered is estimated to be in the range of 70–100 billion dollars.
Stop and think about that for a moment. A fib addressed to Vice President Pence pales in comparison. Instead imagine that the widely reported incident involving Kislyak was actively promoted by the White House to serve as a strategic fire break between itself and the Turkish lobbying story. Could Flynn’s abrupt resignation for lying to Vice President Pence have served to create an intentional firestorm featuring allegations of Russian collusion when the real story should have focused on Flynn’s association with a bunch of Turkish goons and crooks ripping off the United States? Did Flynn, prior to his appointment to the position of National Security Advisor in the Trump administration, provide lobbying and PR advice to senior members of the Turkish government who were actively circumventing US sanctions and laundering money through US banking institutions?
Let’s be frank, Flynn’s association and lobbying efforts on behalf of corrupt Turkish politicians rendered him vulnerable to black mail. The Russians are masters of using “kompromat” and they take advantage of its power dynamics better than any group of people on the planet. When Flynn agreed to lobby on behalf of Erdogan’s corrupt regime, going so far as to suggest clandestinely rendering a US green card holder to a certain prison term and possibly death, he essentially exposed himself to the coercive techniques of extortion. In other words, he transformed himself into an actionable marionette in the eyes of the Russians.
It gets even worse if Russian intelligence perceived him to be working as a seeing eye dog for the Turkish government. Testing the waters and lobbying on behalf of Turkey, especially in light of Zarrab’s fraudulent behavior would make Flynn extremely vulnerable. Even peripheral knowledge of Zarrab’s activities, which is hard not to fathom in light of Zarrab’s national fame, would place Flynn in even greater trouble. If such a situation existed the Russians would have much to exploit.
Turkey is an important NATO ally and a critical chess piece in the great game of countering Russian aggression. Its strategic position at the crossroads of European, Middle Eastern and Russian land masses makes it a valuable partner. Michael Flynn’s clandestine and highly irregular form of unsecured diplomacy has ultimately served to diminish that partnership. The Russians are playing a long game and the ignorance of this historical reality reflects a Trump administration woefully unprepared to engage in geopolitical gamesmanship.
There is much that still needs to be addressed with regard to Flynn’s activity in Turkey, and his contact with Russian officials, but the simple fact that Trump posed for pictures in the White House with Kislyak and the Russian Minister of Foreign Affairs Sergey Lavrov just a few months after the Flynn story broke serves as clear sign that Trump was either working with the Russians or being played by them.
What seems most plausible is the suggestion that the Russians showed up at the White House to make sure that Trump was exercising damage control. Trump had asked FBI Director James Comey for leniency when it came to investigating Flynn’s actions, a most curious request for the President of the United States, and then fired Comey just a day before meeting with Kislyak and Lavrov. Trump’s jovial play acting, in front of a singular Russian camera crew, seems to reflect an obsequious deference to a mysterious third party. Was the camera crew there to record video proof of Trump’s allegiance to his Russian handlers? It may explain why everybody was smiling. Firing Comey sent a clear signal to President Putin that Trump would do anything to cling to power. It was a purely Machiavellian decision, aimed at survival, and the unannounced presence — to the press at least — of Henry Kissinger, President Nixon’s Secretary of State, during an Oval Office briefing immediately following the private meeting leaves no doubt that this type of thinking was in effect. The entire charade had been scripted in advance to protect the office of the Presidency and advance Putin’s influence over a sitting U.S. President.
Returning to Michael Flynn, it is clear that his first effort to seek immunity from House and Senate investigators was a calculated ploy to exchange limited information for protection from prosecution. There is also speculation that his overture was prompted by Atilla’s arrest. Atilla was detained and arrested on March 27, 2017. Flynn offered to be interviewed by House and Senate investigators three days later, on March 30, 2017.
Prosecutors refused the deal because they hadn’t near enough information to base meaningful questions to Flynn about his activities. It wasn’t until month’s later, when it became evident that Zarrab was talking to the Special Prosecutor’s office, that Flynn suddenly decided to make a second, more concentrated effort to get the attention of the Special Prosecutor. This time around he telegraphed his seriousness by terminating an information-sharing agreement with the President’s legal team. This act, as reported by the New York Times on November 23, 2017 came two weeks after a November 8 Manhattan court docket revealed that Zarrab had been “released” from the trial charging him with fraud and money laundering.
Without wishing to belabor the point, it’s likely that Flynn flipped immediately following Zarrab’s initial contact with Mueller. News of Zarrab’s release and possible cooperation with the Mueller investigation was a highly guarded secret and it would have taken some time to filter out to the Flynn defense team. As the NY Times story reports, Flynn’s lawyers had moved to terminate their information-sharing agreement several days before the news was published. Coordination of both timelines places Flynn’s decision to flip within a one week window of Zarrab’s move to seek immunity.
Flynn’s action is unsurprising and clearly motivated by the indisputable fact that he had contact with many of the same individuals as Reza Zarrab. Berat Albayrak, Erdogan’s son-in-law, stands out as a prime example. Zarrab testified in Manhattan court that Albayrak advised him to begin trading again at Halkbank in 2014. Zarrab began and continued his illegal humanitarian aid scheme up until the time he was arrested on March 19, 2016. Flynn met with Albayrak, exactly 6 months later on September 19, to discuss kidnapping Gulen. If Flynn didn’t immediately reach out to Mueller it’s highly likely that he would have lost a critical opportunity to make a deal and define his story. Footnote: Jared Kushner’s recent trip to Turkey in late February of 2019, and his contact with Albayrak and Erdogan, raises similar concerns about the motives and the visual messaging of meeting with individuals who are part of such a corrupt administration.
Since Flynn made his decision to engage Mueller in November of 2018 he has met with the Special Prosecutor’s office 19 times. Mueller has publicly praised Flynn’s extensive cooperation with the Feds and according to the Addendum to the Government’s Memorandum in Aid of Sentencing Flynn’s assistance to the government has been significant and substantial with regard to several ongoing criminal investigations. The first investigation, denoted by the letter A, is entirely blacked out. The second investigation, denoted by the letter B, refers to the much publicized Special Counsel’s Office (SCO) investigation into links or coordination between the Russian government and individuals associated with the Trump campaign. Could the criminal investigation denoted by the letter A in the government’s memorandum be Flynn’s Turkish connection?
Flynn’s alleged role in helping to rehabilitate Turkey’s image despite the country’s role in aiding Iran, a key Russian ally, is a clear red flag. So too is Flynn’s association with the notoriously corrupt governments of Turkey and Russia. According to the 2018 Corruption Perceptions Index (CPI), Turkey is listed 78th out of 180 countries and Russia’s rank is 138th. Since 2013 Turkey’s CPI has steadily declined, except for a minor, one point, improvement in their status in 2018. Erdogan’s repressive rule and his embrace of Turkey’s former enemy, the Russian state, underscores this writer’s firm belief that Putin’s illegitimate kleptocracy has had a corrosive effect on Turkey’s international reputation.
Flynn’s lobbying work on behalf of Turkey and his paid speaking engagements on Russia Today (RT), the Russian propaganda television network, affirms a shocking lack of moral and ethical judgment on the part of the former three star general. It also suggests a whole sub-set of questionable outcomes. Did Michael Flynn act knowingly, or unknowingly to serve and ultimately benefit these countries? Did his private lobbying, outside the reach of military and diplomatic oversight, make him vulnerable to foreign espionage? Did his actions rise to the level of treasonous offenses as suggested by his sentencing Judge, the honorable Emmet Sullivan?
At present the case for the achingly slow and deliberate actions of the Mueller investigation seems to reflect two distinct possibilities. One, there are so many leads and interlocking threads to be tracked down that an expeditious accounting of the facts is simply impossible to undertake in a finite and reasonable time frame. Number two, the fear of crippling moral turpitude and its corrosive effects on the country are acting as a third rail and reflexively limiting the scope of the investigation to protect the integrity of the country and the system of government in which millions of Americans have placed their deep trust and faith. In this second scenario Mueller may simply be acting like an oil well capping company brought into control a blowout of epic criminality. The public will learn as much about the case as the government wishes them to know. Kissinger’s presence in the White House’s Oval Office is an ominous sign of this type of Machiavellian damage control.
Now is the time to place into the record a case for recognizing Turkey’s long standing role in circumventing US sanctions against Iran. Sucked into the investigation’s ever widening gyre are dozens of Trump advisers and associates, Russian spies and computer hackers; should not Turkish politicians acting as a front for a criminal syndicate raising billions of dollars also be included? It is after all, a revenue stream that could have enormous implications if part of it was used to prop up and fund Russia’s efforts to destabilize their enemies. Turgut Harpani, Reza Zarrab’s chauffeur, is alleged to have smuggled 50 million dollars into Russia during the course of his criminal career. How many other times did he pass undetected? And how might Zarrab and Harpani have learned from their earlier missteps?
What we do know is that billions have disappeared into a web of deceit that makes use of fraud, money laundering and state sponsored computer hacking. Coupled with the coordinated collection and illegal use of social media data to simultaneously influence a targeted “base” and deny culpability these twin pillars of corruption fund and support each other in a political game of thrones that requires vast amounts of dark money to pay off co-conspirators, buy positive news cycle “spin” and keep victims isolated.
In the UK there is a growing realization that Russia interfered in the British referendum to leave the EU using the same algorithmic modeling applied by the Trump campaign. Journalists and the politicians on both sides of the Atlantic are just beginning to come to terms with the toxic reciprocity and interdependence of both scandals. When viewed historically Brexit served as a live culture petri dish for the Trump campaign’s nascent efforts to sway the U.S. electorate away from Clinton and toward Trump.
Cambridge Analytica (CA), the London based company used to gather data surreptitiously and exploit it to the advantage of both campaigns deserves particular attention. Flynn served an advisory role in an agreement with CA during the 2016 Trump campaign. Trump’s former campaign manager Steve Bannon served as vice president and wealthy mega-donor and Trump supporter Robert Mercer was a major investor. A Time Magazine story published on May 8, 2017 alleges that CA may have played an instrumental role in helping the Russians advance their goal of destabilizing and influencing foreign countries. Did Flynn’s lobbying on behalf of Turkey help to preserve a money laundering operation that was funneling massive amounts of dark money to a Russian criminal syndicate using state of the art social engineering to influence and corrupt major elections in the U.K and the U.S.?
Flynn’s decision to flip and aid Mueller’s investigation suggests there is much more to this story than just a few meetings with Kislyak. Russia’s proximity to Turkey plays a significant role in shaping and influencing the malignantly corrupt Turkish government and Flynn’s unsupervised shuttling between these two countries is extremely troubling. Both countries are kleptocracies, hell bent on plundering every last bit of human decency and national treasure for personal profit. The explosive growth of Russia’s geopolitical influence under Putin’s leadership makes it abundantly clear that Michael Flynn was way out of his league when he sat next to Putin at a dinner hosted in Moscow on December 10, 2015.
If Americans, and British citizens for that matter, really wish to understand and confront the forces driving the twin collapse of their democracies they should look outward, toward each other and then toward the east. Look beyond the tweets and daily distractions of the Trump Presidency. Look beyond Theresa May’s unbending desire to ram through Brexit and instead turn to Russia. We are both victims of the same common devices and methods used to sow discord and destroy cooperation. It is well past time that the investigative, legal and diplomatic branches of the U.S. and the U.K. acknowledge this painful fact and address the job at hand.
The collapse of the Soviet Union in the early 1990s unleashed a virulent form of state sponsored capitalism that has overtaken the best intentions to restore the Russian state. Hot money flowed into the country, much as it does in Turkey today, without concern for how it was used and where it went. In essence, the remnants of the Russian government were ripped up and re-purposed to facilitate expansive economic growth without concern for the rule of law.
Over the ensuing three decades the Russian state, free from the fear of legitimate criminal prosecution, has significantly expanded its operations beyond its state and local borders. Outright wars in the Caucuses and Ukraine have been augmented by influence campaigns in Turkey and Hungary. Russia’s efforts to subvert democracy in the U.S. and the U.K. reflect a continuing and growing normalization of its operations. Refusal to come to terms with Russia’s methods and objectives is setting the stage for the dissolution of free and open societies throughout the world.
Those with alternative viewpoints are dismissed as untrustworthy malcontents and relentlessly attacked by political apparatchiks willing to exchange democratic ideals for the promise of protection. Russians call it “krysha” and it roughly translates into the English word for roof. Those without protection will be isolated and pressured to join the racket. Those without a roof are on their own. This collective action was on full display during Michael Cohen’s appearance before the US Congress recently. Those that do not play along receive death threats.
If lawmakers are to break open Zarrab’s wide ranging money laundering scheme they must adopt a vigorous cross-border investigation that emphasizes sharing resources. This case has the potential to implicate the Presidents of three countries and senior British party leaders. It may also cause lasting damage to the reputations of multiple international banking and finance operations world wide.
In the end we need a global task force to address an international crises. Zarrab’s arrest has exposed the fraudulent tip of a dark money reserve that is actively corrupting democratic institutions and societies throughout the world. It’s time to come to terms with this reality and reject leaders who promote nationalism at the expense of global accountability.
The End
Originally published at www.dailykos.com.
