Contents:         

Erdogan is in Trouble: Efraim Inbar, Besa Center, Dec. 29, 2013— Recep Tayyip Erdoğan, the charismatic leader of the Islamist Justice and Development Party (AKP) and Prime Minister of Turkey, is embroiled in a significant graft scandal that might precipitate the end of his rule.

Turkey: Are Erdoğan's Days Numbered?: Harold Rhode, Gatestone Institute, Dec. 26, 2013 — Major political events have rocked the political scene in Turkey the past two weeks. Turkey's once seemingly-invincible prime minister, Recep Tayyip Erdoğan, seems in a tailspin.

Iran’s Turkish Goldrush: Jonathan Schanzer & Mark Dubowitz, Foreign Policy, Dec. 26, 2013 — Turkey's Islamist government is being rocked by the most sweeping corruption scandal of its tenure.

On Topic Links

Islamist Turkey Replaces Iran as Hamas’ Sugar Daddy: Daniel Greenfield, Frontpage, Dec. 31, 2013

Turkey Stocks are Biggest Loser as Erdogan Crisis Persists: Ye Xie & Katia Porzecanski, Bloomberg, Dec. 30, 2013

The End of Erdogan’s Cave of Wonders: An I-Told-You-So: David P. Goldman, Spengler, Dec. 27., 2013

Erdogan in the Headlights: Crimes, Corruption and Conspiracies: Louis Fishman, Ha’aretz, Dec. 29, 2013

Why Erdogan Will Survive The Corruption Scandal Rocking Turkey's Government: Humeyra Pamuk & Orhan Coskun, Business Insider, Dec. 29, 2013

ERDOGAN IS IN TROUBLE

Efraim Inbar                                                                             

Besa Center, Dec. 29, 2013

Recep Tayyip Erdoğan, the charismatic leader of the Islamist Justice and Development Party (AKP) and Prime Minister of Turkey, is embroiled in a significant graft scandal that might precipitate the end of his rule. Erdoğan has won three consecutive national elections since 2002, serving as Turkey’s Prime Minister since 2003. He was catapulted to power largely because of widespread disgust with the corruption of the old Kemalist elites. It is therefore ironic that graft may bring Erdoğan down.

AKP ascendance to a pivotal role in Turkey’s political system came about as a result of several factors: rejection of discredited politicians and their blatant Kemalist secularism, an economic crisis, demographic trends bringing to the fore traditional elements in Turkish society, and the ascendance of an attractive political leader in Erdoğan. Erdoğan’s governments stabilized the economy and, for a while, demonstrated a cautious approach with regard to enhancing the role of Islam in the public sphere. This was accompanied by continuity in Turkish foreign policy: attempts to join the EU, membership in the Western alliance, and good relations with Israel.

But under Erdoğan, Turkey gradually adopted policies that amounted to a wholesale attempt to Islamize the country:  putting restrictions on the sale of alcohol, enhancing the status of religious schools, encouraging the establishment of Muslim-oriented institutions of learning, and nominating Islamists to sensitive positions in the public sector. Many Turks started complaining about growing authoritarianism at home. This was particularly felt in the Turkish media that was subject to intimidation and takeover attempts. Journalists were sent to jail under a variety of charges. The business community felt informal pressure to conform to Muslim mores. More recently, the banking system was similarly subject to infiltration by government-sponsored Islamists.

Changes were also introduced in the foreign policy area. Fueled by Islamist and Ottoman impulses, Turkey devised a so-called “Zero Problems Policy” toward its Middle Eastern neighbors. Instead of the Kemalist hands-off policy toward the Middle East, the new approach emphasized good relations with Muslim neighbors in order to attain a leading role for Turkey in the Muslim world. As part of this attempt to gain hegemony in the Arab and Muslim worlds, Israel-bashing became an important tool of Erdoğan’s foreign policy, causing deterioration in relations between Ankara and Jerusalem. This policy also reflected a Turkish distancing from the West, basically giving up the long-cherished Turkish goal of becoming part of Europe. (The Europeans are partly at fault for that). The apex of this foreign re-orientation was the September 2013 decision to purchase an air defense weapons system from China, which is clearly and blatantly at odds with Turkey’s NATO membership. The Zero Problems policy backfired as its neighbors went into turmoil and Turkish hegemonic overtures were rebuffed. The political and economic crisis called the “Arab Spring” provided an opportunity for Turkey to sell itself as a model, as a successful bridge between Islam and modernity. But the Islamist zeal emanating from Ankara could not transcend the historic ethnic enmity between Turks and Arabs.

Foreign policy failures paralleled growing domestic discontent. The events around Gezi Park in Istanbul this past summer were a spark that galvanized popular opposition. Erdoğan seemed to have lost his touch and reacted aggressively to the demonstrators. Eliciting criticism even from allies, Erdoğan had to shelve the plan to hold a referendum to make the presidency a stronger political institution for which he could run in the future. Most important, a rift developed between the AKP and the Fetullah Gülen movement. The Gülens are seemingly modern Islamists and an important component of the AKP. They have become increasingly uncomfortable with Erdoğan’s policies. For example, they were not happy with Turkey’s new foreign policy, with Israeli-Turkish tensions, and with Turkish support for the Muslim Brotherhood in Egypt. They also criticized Erdoğan’s clumsy treatment of the Gezi Park affair. In November, the prime minister announced that he would close down the country’s private exam prep schools, or dershanes, roughly a quarter of which are run by Gülen’s followers. This further estranged the Gülenists, weakening Erdoğan’s domestic support. Gülen’s media outlet, Zaman, the largest newspaper in Turkey, has become openly critical of Erdoğan. The police and the judiciary, largely under the influence of Gülen, were responsible for the recent arrests of several Erdoğan’s protégés under charges of corruption. The prime minister executed a major reshuffling of his cabinet in an attempt to distance itself from the corruption scandal.

Erdoğan’s leadership is contested these days as never before. It is not clear yet how he and his party, the AKP, will come out of the current political crisis. The secularists in Turkey now have a chance to further erode Erdoğan’s popularity. Their own standing in Turkish politics has not improved much despite Erdoğan’s excesses. However, the more conservative secular elements on the Turkish political spectrum might build an alliance with the influential Gülens to remove Erdoğan. Municipal elections scheduled for March 2014 will be the first serious test of the extent of the political damage to Erdoğan, followed by presidential elections in June. Erdoğan’s authoritarian streak and strains on the economy will be issues in the campaign. It remains to be seen whether Erdoğan’s attempt to blame his domestic problems on foreigners is successful. The results of the municipal and presidential elections will not just be a popularity contest for Erdoğan, but a struggle for Turkey’s soul.

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TURKEY: ARE ERDOĞAN'S DAYS NUMBERED?                                     Harold Rhode                                                                                       Gatestone Institute, Dec. 26, 2013

Major political events have rocked the political scene in Turkey the past two weeks. Turkey's once seemingly-invincible prime minister, Recep Tayyip Erdoğan, seems in a tailspin. A few days ago, he lashed out at U.S. Ambassador Frank Ricciardone and threatened to expel him from Turkey. Erdoğan claimed the Ambassador told other Western diplomats that the "empire [Erdoğan and his associates] is about to fall."

Clearly, Erdoğan and Foreign Minister Ahmet Davutoğlu's policy of "Zero Problems With Our Neighbors" — meaning the alliance with Turkey's Sunni-ruled Arab neighbors — has failed. Turkey now has problems with almost all its neighbors. It appears that the Gülenists and the Atatürkists — not friends in the past — are now ascendant. It is unlikely that they, or whoever might take over in Turkey, would want to continue this failed approach.

Long-brewing political struggles within the ruling AK party have also surfaced. They boil down to two radically different views of Islam. In the first, Erdoğan's faction identifies and allies itself with the [Arab] Muslim Brotherhood. This faction was strongly supportive of the ousted Egyptian Muslim Brotherhood President Muhammad Morsi, and also of Syria's fundamentalists. In the second view, supporters of the Fethullah Gülen look down upon "Arab Islam." To them, "real" Islam is "the Islam of the Turks – meaning the people who live in Turkey, Central Asia, and Western China." To the outsider, these differences might seem to be distinctions without differences: supporters of both views understandably want Islam to be a major part of the political order. But for Turks, these differences are seismic: the question is, do they belong to the Middle Eastern Arab and Muslim political camp, or do they belong to the wider Turkish world?

Since Erdoğan and his fellow Islamic fundamentalists took power in 2002, Gülen and his forces have been in the background, building prep-schools and propagating their version of Islam — in Turkey, in the Turkic world, and also in America. It is not surprising that when Gülen faced legal difficulties in Turkey in 1999, he fled to the U.S., ostensibly for medical treatment, apparently still ongoing. On May 31, 2010, Erdoğan's government backed and encouraged a flotilla of Turkish ships supposedly to bring needed supplies to the Gaza Strip, ruled by their fellow Muslim Brotherhood fundamentalists, Hamas. Gülen may have seen this as an opportunity indirectly publicly to chastise Erdoğan. In an op-ed for the Wall Street Journal, Gülen argued that as Israel legitimately controlled the waters off Gaza, the flotilla should have asked for Israel's permission to land there. Gülen did not criticize Erdoğan directly; people rarely criticize others directly in Turkey. But culturally, his choice of words indicated to Turks that he was blamed Erdoğan for creating the crisis.

Gülen has not been known to be supportive of the Jews, nor for that matter of the U.S. or the West. But now his battle is evidently to ensure that Turkish Islam defeats the so-called Arab-Muslim Brotherhood type of Islam supported by Erdoğan, the Jews and the West might well seem useful allies. As many Middle Easterners say, "The enemy of my enemy is my friend." A friendship, or alliance, might be temporary, but may continue as long as required. Earlier this year, the enmity between Erdoğan and Gülen broke out into the open, evidently ignited by Turkey's Gezi Park protests — weeks of riots and demonstrations against the Turkish prime minister. Erdoğan encountered enormous difficulty putting them down; in so doing, he alienated large sections of Turkey's population. Gülenists, active in this uprising, possibly discerning political weakness, may well have used that crisis as an opportunity to try to defeat their opponents. Perhaps in revenge, Erdoğan — often quick to respond emotionally — proposed laws to ban dershane [prep-schools], the bread and butter of the Gülen movement, and where Gülen recruits followers, who later become the political and financial backbone of his movement. For the Gülenists, Erdogan's proposed ban appears to have been the decisive provocation. Since Gülen's self-imposed exile, his supporters, well-placed throughout the Turkish bureaucracy, have continued to provide him with extensive influence inside the Turkish police and judiciary, and are believed also to have infiltrated the secret services, law enforcement offices and even the AK party itself. Gülen's supporters responded to this proposed ban by arresting 52 members of Erdoğan's closest associates, including sons of two of his cabinet ministers, and charging them with corruption. According to rumors circulating in Turkey, some of Erdoğan's relatives are also involved in the plot ; the facts are still unclear. The central figure in this corruption scandal is an Iranian Azeri, Reza Zarrab — married to a popular Turkish singer — who was illegally trading with Iran. Zarrab is charged with bribing the sons of the Turkish ministers — some of Erdoğan's closest associates.

At the same time, the Israeli national airline, El Al, announced that, after a six-year hiatus, it would resume flights to Turkey. Apparently the Turkish government had been refusing to let Israel observe the flight security procedures it follows everywhere else in the world, but out of nowhere, Turkey seems suddenly to have acceded to Israel's security demands. Further, the judiciary released from jail the retired General Çevik Bir, who had been a strong advocate of U.S.-Turkish-NATO relations. Bir had been the central figure in the "February 28 Plot" — evidently dreamed up by Erdoğan and his associates as a means of finding some legal ground for which to prosecute opponents. Bir, it was claimed, was the central figure of this alleged plot, allegedly hatched by the Generals of National Security Council, to overthrow the Islamist government of Erdoğan's mentor, Turkish Prime Minister Necmettin Erbakan. Bir was also one of the major architects of the Turkish-Israeli rapprochement in the 1990s, and a strong opponent of Fethullah Gülen, whom he apparently saw as an Islamic fundamentalist and a long-term danger to Turkey's secular and democratic Atatürkist Republic. Because of Bir's outspoken animosity against the Islamists, which included the powerful Gülen, Bir seems to have been an important factor in Gülen's decision to flee the country. So why was Bir — an opponent of Gülen — released by a heavily Gülenist judiciary? Although the reasons behind Bir's release are not yet clear, as an opponent of the Erdoğan government, however, he could now be an ally of Gülen.

Where Turkey's once highly influential military stands is unclear. So far, it has been silent. It has historically been — and its senior officers still are — steeped in the Atatürkist secular and pro-Western tradition. At least for the moment, the Islamist Gülenists seem to have forged an alliance of convenience with Turkey's secularists. The beneficiaries of this political upheaval could well be the West, the U.S., NATO, and Israel. Stay tuned.

[To Read the Full Article With Footnotes Click the Link –ed.]

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IRAN’S TURKISH GOLDRUSH

Jonathan Schanzer & Mark Dubowitz                        

Foreign Policy, Dec. 26, 2013

Turkey's Islamist government is being rocked by the most sweeping corruption scandal of its tenure. Roughly two dozen figures, including well-connected business tycoons and the sons of top government ministers, have been charged with a wide range of financial crimes. The charges ballooned into a full-blown crisis on Dec. 25 when three ministers implicated in the scandal resigned, with one making a dramatic call for Prime Minister Recep Tayyip Erdogan to step down as well. An exhausted-looking Erdogan subsequently appeared on television in the evening to announce a Cabinet reshuffle that replaced a total of 10 ministers. The drama surrounding two personalities are particularly eye-popping: Police reportedly discovered shoeboxes containing $4.5 million in the home of Suleyman Aslan, the CEO of state-owned Halkbank, and also arrested Reza Zarrab, an Iranian businessman who primarily deals in the gold trade, and who allegedly oversaw deals worth almost $10 billion last year alone. 

The gold trade has long been at the center of controversial financial ties between Halkbank and Iran. Research conducted in May 2013 by the Foundation for Defense of Democracies and Roubini Global Economics revealed the bank exploited a "golden loophole" in the U.S.-led financial sanctions regime designed to curb Iran's nuclear ambitions. Here's how it worked: The Turks exported some $13 billion of gold to Tehran directly, or through the UAE, between March 2012 and July 2013. In return, the Turks received Iranian natural gas and oil. But because sanctions prevented Iran from getting paid in dollars or euros, the Turks allowed Tehran to buy gold with their Turkish lira — and that gold found its way back to Iranian coffers. This "gas-for-gold" scheme allowed the Iranians to replenish their dwindling foreign exchange reserves, which had been hit hard by the international sanctions placed on their banking system. It was puzzling that Ankara allowed this to continue: The Turks — NATO allies who have assured Washington that they oppose Iran's military-nuclear program — brazenly conducted these massive gold transactions even after the Obama administration tightened sanctions on Iran's precious metals trade in July 2012. Turkey, however, chose to exploit a loophole that technically permitted the transfer of billions of dollars of gold to so-called "private" entities in Iran. Iranian Ambassador to Turkey Ali Reza Bikdeli recently praised Halkbank for its "smart management decisions in recent years [that] have played an important role in Iranian-Turkish relations." Halkbank insists that its role in these transactions was entirely legal.

The U.S. Congress and President Obama closed this "golden loophole" in January 2013. At the time, the Obama administration could have taken action against state-owned Halkbank, which processed these sanctions-busting transactions, using the sanctions already in place to cut the bank off from the U.S. financial system. Instead, the administration lobbied to make sure the legislation that closed this loophole did not take effect for six months — effectively ensuring that the gold transactions continued apace until July 1. That helped Iran accrue billions of dollars more in gold, further undermining the sanctions regime. In defending its decision not to enforce its own sanctions, the Obama administration insisted that Turkey only transferred gold to private Iranian citizens. The administration argued that, as a result, this wasn't an explicit violation of its executive order. It's possible that the Obama administration didn't have compelling evidence of the role of the Iranian government in the gold trade. However, the president may have also simply sought to protect his relationship with Ankara and didn't want to get into a diplomatic spat with Erdogan, who he considers a key regional ally.

If the administration didn't feel that the sanctions in place at the time were sufficient to take action against Halkbank, after all, it could have easily shut down the gold trade by amending its executive order. But at the time, Turkey was also playing a pivotal role in U.S. policy in Syria, which included efforts to strengthen the more moderate opposition factions fighting President Bashar al-Assad's regime. It's also possible, however, that the Obama administration's decision had less to do with Turkey, and more to do with coaxing Iran into signing a nuclear deal. In the one-year period between July 2012, when the executive order was issued, and July 2013, when the "golden loophole" was closed, the Obama administration's non-enforcement of its own sanctions reportedly provided Iran with $6 billion worth of gold. That windfall may have been an American olive branch to Iran — extended via Turkey — to persuade its leaders to continue backchannel negotiations with the United States, which reportedly began as early as July 2012. It could also have been a significant sweetener to the interim nuclear deal eventually reached at Geneva, which provided Iran with another $7 billion in sanctions relief. Indeed, why else would the administration have allowed the Turkish gold trade to continue for an extra six months, when Congress made clear its intent to shut it down?

This brings us back to the current corruption drama in Turkey. The ruling Justice and Development Party (AKP) has been claiming that it is a victim of a vast conspiracy, blaming everyone from Washington to Israel to U.S.-based Islamic cleric Fethullah Gulen for its woes. Some Turkish media have pointed a finger at David Cohen, the Treasury Department's undersecretary for terrorism and financial intelligence, who happened to be in Turkey as the news began to break. Erdogan even raised the possibility of expelling the U.S ambassador to Ankara, Francis Ricciardone. But if the charges stand against the panoply of well-connected figures fingered, the AKP will have only itself to blame. While the gas-for-gold scheme may have been technically legal before Congress finally shut it down in July, it appears to have exposed the Turkish political elite to a vast Iranian underworld. According to Today's Zaman, suspicious transactions between Iran and Turkey could exceed $119 billion — nine times the total of gas-for-gold transactions reported.

Even if the Turkish-Iranian gold trade represents only a small part of the wider corruption probe, the ongoing investigation could provide a window into some nagging questions about the relationship between Ankara and Tehran. Perhaps we will finally learn why the Turkish government allowed Iran to stock up on gold while it was defiantly pursuing its illicit nuclear program — and whether the Obama administration could have done more to prevent it.

CIJR wishes all our readers a happy 2014!

The Isranet Daily Briefing will not be published Wednesday, Jan. 1, 2014

Islamist Turkey Replaces Iran as Hamas’ Sugar Daddy: Daniel Greenfield, Frontpage, Dec. 31, 2013 — If any of the police investigators in Turkey who still haven’t been fired by the Erdogan regime are looking to track down where some of the stolen money went, they might want to look at the same place the Egyptian cops are looking; Gaza.

Turkey Stocks are Biggest Loser as Erdogan Crisis Persists: Ye Xie & Katia Porzecanski, Bloomberg, Dec. 30, 2013 — The mounting power struggle between Turkish Prime Minister Recep Tayyip Erdogan and the judiciary is turning the country’s stock market into the world’s worst performer and driving the currency to unprecedented lows.

The End of Erdogan’s Cave of Wonders: An I-Told-You-So: David P. Goldman, Spengler, Dec. 27., 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.

Erdogan in the Headlights: Crimes, Corruption and Conspiracies: Louis Fishman, Ha’aretz, Dec. 29, 2013 — The uncovering of a slew of financial scandals in Turkey shocked the country and exposed what appears to be a government corrupt to its bones.

Why Erdogan Will Survive The Corruption Scandal Rocking Turkey's Government: Humeyra Pamuk & Orhan Coskun, Business Insider, Dec. 29, 2013 — Turkish Prime Minister Tayyip Erdogan still enjoys the fierce loyalty of pious voters and wealthy elites, which should be enough to keep him in power in the face of a corruption scandal that has rocked his government and reached his family.

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