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‘This Is Not How We Do Things in the Southern District’: NYT Directly Ties Prosecution of Turkish State-Owned Bank to SDNY U.S. Attorney’s Firing

Geoffrey Berman 

The extraordinary Friday night standoff between former U.S. Attorney Geoffrey Berman and Attorney General Bill Barr last June led many to wonder whether the Southern District of New York’s then-top prosecutor’s cases upset the powerful in Washington. The New York Times provided the backstory in a deeply sourced investigation on Thursday, a report amplifying alarm about President Donald Trump’s relationship with Turkey’s authoritarian ruler Recep Tayyip Erdoğan.

Interviewing more than two dozen current and former U.S. and Turkish officials, the report focused on Berman’s refusal to give soft treatment to Turkey’s state-run Halkbank, which allegedly facilitated a massive money laundering scheme that federal prosecutors call the biggest Iran sanctions-bust ever prosecuted.

According to the story, Barr pressured Berman to drop charges against Turkish officials tied to Erdoğan’s ruling Justice and Development Party during a meeting in Washington in June 2019. Among the cases Barr pushed to terminate were those of Halkbank’s former general manager, Suleyman Aslan, and Turkey’s former economy minister, Mehmet Zafer Çağlayan, both of whom have been accused of accepting massive bribes in connection with the country’s corruption scandal.

“This is not how we do things at the Southern District,” Berman reportedly replied when Barr tried to persuade him that the move would mend U.S. foreign relations with a critical ally while effectively enforcing U.S. sanctions.

Berman specifically balked at the notion of granting immunity to Turkish officials without their agreement to assist in the department’s investigation, telling DOJ attorneys it would be unethical.

“This is completely wrong,” Berman reportedly said. “You don’t grant immunity to individuals unless you are getting something from them — and we wouldn’t be here.”

At least some prosecutors were under the impression, however, that the Turkish bank officials felt they were in a position to leverage President Donald Trump’s relationship with Erdoğan rather than cooperate with the department.

The case against Halkbank traces its origins to the prosecution of Reza Zarrab, a gold trader known as the “Turkish Gatsby.” He turned state’s witness after pleading guilty three years ago to spearheading the sanctions bust that he characterized as “economic jihad” in a message to Iran’s former hardline leader Mahmoud Ahmadinejad.

Zarrab, a former ally of Turkey’s current president, testified that Erdoğan ordered sanctions-busting trades on a New York witness stand in testimony that electrified Turkey and sparked fury in Ankara.

Long before that testimony, Erdoğan pushed for the ouster of ex-U.S. Attorney Preet Bharara, who brought the original charges against Zarrab and was fired by Trump.

The Turkish government had developed relationships with several Trump insiders, including his personal attorney Rudy Giuliani and Brian Ballard, a powerful lobbyist who previously served as vice chairman of Trump’s inaugural committee, to engage in an elaborate effort to influence the administration in backing off Halkbank.

Foreign lobbying records show that Turkey had paid Ballard’s lobbying firm $4.6 million for work related to Halkbank and building relationships with others close to the president.

Giuliani, who prior to becoming New York City mayor was the U.S. Attorney for SDNY, also represented Zarrab against charges that he helped Iran launder billions of dollars through Turkish banks.

Weeks after Erdoğan deployed troops to Syria last October, Berman announced the charges against the bank, saying its “audacious conduct was supported and protected by high-ranking Turkish government officials, some of whom received millions of dollars in bribes to promote and protect the scheme.”

After botched attempts to oust the U.S. Attorney spilled out into public view, Trump fired Berman in July. The Times, citing DOJ officials, reported that Berman’s handling of the Halkbank case—specifically blocking a proposed settlement agreement–was a major factor in his firing.

The Justice Department did not respond to a request for comment.

The Southern District is now run by Berman’s former deputy Audrey Strauss. Halkbank’s trial is scheduled for May 2021.

[image via JOHANNES EISELE/AFP via Getty Images]

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