Desperate search for a scapegoat in the Halkbank case

It was on April 12 that Halkbank’s application, regarding the bank's claim for being not suitable to be tried in the United States due to having sovereign immunity, was heard at an appeals court in New York. Judge Jose Cabranes stated, at the end of the session, that they would not ask for new documents or information from Halkbank’s lawyers or the prosecutor’s office implying that the court was now in a position to make a final decision.

If the court finds Halkbank’s application justifiable, the judicial process in the lower court, the Federal Court for the Southern District of New York (SDNY), will cease. However when one puts together all the available data, it seems unlikely that the appeals court will decide in favor of Halkbank.

According to a number of lawyers I have talked to, the fact that the judge asked the prosecutor’s team on April 12 whether they were ready for the hearings might be taken as a signal that the court is prepared to reject Halkbank's appeal clearing the way for the SDNY to move forward with the Halkbank trial as planned, which is scheduled to begin on May 3.

At the April 12 hearing, Halkbank’s lawyer Simon Latcovich argued that Halkbank had immunity “equivalent to Turkey” under the Foreign Sovereign Immunities Act of the United States. The judge’s response to this argument could be interpreted as it being unconvincing to the court. Judge Jose Cabranes, refuted Latcovich’s argument by saying, “When Hakan Atilla was arrested as the Deputy General Manager of Halkbank, the Turkish government did not request immunity.”

As a journalist who closely followed these proceedings, Hakan Atilla, who was arrested at New York’s JFK Airport on March 29, 2017 while returning from a business trip, was left out to dry by Ankara during the following days, both legally and psychologically. There was little to no meaningful effort from Ankara aside from hiring lawyers for him and sending bunch of diplomats from the Turkish Embassy in Washington to follow the trial. Attila’s probable witnesses were not even allowed to testify. In fact, there was talk that games were played to prevent Atilla’s family from coming to New York.

It felt like Hakan Atilla was being subject to a covert emotional blackmailing campaign from the Turkish government while he was defending himself at the New York court. Despite this, we heard nothing in the courtroom from Hakan Atilla targeting the responsible political actors for his morally unfair detention. It was almost a perfect example of  how ants get squashed when elephants fight. 

During those moments that Reza Zarrab took the stand as a ‘witness,’ I tried to catch on Hakan Atilla’s face, ten feet away from me. Zarrab, taking on the airs of a spoiled genius, almost bragged about the system he created to launder Iran's money in the international market. During those moments the expression on Atilla's face read like ‘How the hell I ended up here while it is so obvious who was calling the shots.’ You could have cut his incredulity with a knife.

During the 2017 court hearing, which started as the ‘Zarrab case’ and ended as the ‘Atilla case,’ in 2018 it became obvious that Hakan Atilla had no position beyond obeying the orders of a system established by the instructions of the ruling Justice and Development Party (AKP) government which allowed Halkbank to bypass U.S. sanctions. Judge Richard Berman referred to this dynamic several times while announcing the verdict on Hakan Atilla.  

Letters sent to the court by family, friends, and some Halkbank employees in support of Atilla were instrumental in the court’s decision, Berman said. He also underlined that he welcomed the tone in those letters, as it differed from that of the AKP government which had been openly targeting the court from day one. 

It is obvious the FBI and prosecutor’s office went ahead and arrested Hakan Atilla in order to prove the system in which Halkbank was a part although he was neither a mastermind nor a key executive. They did so because they had nobody else in hand to prosecute the bank. Consequently, the court sentenced him simply for holding a senior position at the bank during the breach of U.S. sanctions. However, Attila was sentenced to the lowest limit - 32 months. He was released in July 2019 after his prison sentence was reduced and he received time off for good behavior.

When he arrived at Istanbul Airport, he was greeted by then-Treasury and Finance Minister Berat Albayrak. Some journalists close to the Albayrak family celebrated on social media saying, “Hakan Atilla was a good banker and he proved to be a good patriot.” One of the same pro-government columnists at Sabah daily immediately after the appeal session in New York last week, changed her mind and declared that Hakan Atilla was indeed shady. 

Soon after that article was published Hakan Atilla, who has remained silent for years, posted on Instagram the text of the disclaimer he sent to the Sabah columnist. She claimed that Atilla prevented Halkbank from intervening in his defense and that some sessions took place behind the closed doors. She said that “what has happened at those closed sessions was a question mark.”

First of all, Atilla denied the allegations that his recent resignation from his position at Borsa İstanbul because of the case: “The decision is entirely mine. No one and no authority asked, demanded, or forced me to step down due to this case or any other reason.” He added that, “If anyone wants to know how hard my lawyers are trying to exchange views with the bank, they can speak to them.”

When I called him last weekend, he didn’t want to say anything beyond the statement he issued because the case was ongoing. However, upon my insistence, he gave me two very key sentences: “There is no question of me giving information or documents regarding the bank to the U.S. government or anyone else. During my defense, I was not provided any information or documents related to the bank.”

The two sentences above, which may seem like a standard statement at first glance, in fact encapsulate an outbreak of a loaded reproach. With his second sentence, Atilla reveals, for the first time, how he was abandoned by Beştepe, the presidential palace in Ankara, during the court process.

His first sentence is a reminder to those who do not know the legal system in the United States: It is not possible for Hakan Atilla to give any information during closed sessions, contrary from what he told the court, without signing an agreement first, which the office of the prosecutor is obliged to make public.

If such an opportunity was available, Zarrab would have likely been the first to take it. Attila had already closed this path before the trial hearings began, which took place in public view, and accepted the risks of prosecution and its consequences.

At this point, the question remains why the Albayrak clique which surprisingly still maintains its influence in and around Beştepe, suddenly elected to make Atilla a scapegoat. Obviously, they know more than anyone else what allegations were likely to be spilled at the Halkbank hearings, which will start on May 3 if not postponed. Most likely, they are trying to make a pre-emptive strike and launch a smear campaign before possible bombshell revelations of Zarrab shake the political agenda.

As soon as the trial begins, Reza Zarrab, the prosecution’s star witness,’ will once again take the stand and make allegations in front of the world. Most likely the key question to be asked to him will be, “Who gave the political orders for Halkbank to be used in this business?” Thus, it is understandable that Ankara would be in a state of panic regarding which names Zarrab will mention.

It is rumored that the office of the prosecutor is preparing to subpoena a number of people, including Rudy Giuliani, who is former U.S. President Donald Trump’s lawyer. Giuliani was hired by Beştepe to lobby for Zarrab’s extradition to Turkey in 2017, to former National Security Adviser John Bolton, who claimed that Erdoğan repeatedly asked for favoritism regarding the Halkbank case in meetings with Trump.

I have heard that the AKP government has made quite a few overtures asking Washington to help deferral of the Halkbank hearings in New York. Due to the COVID-19 pandemic, the court schedules in the U.S. have already been subject to delays. Thus, if the Biden administration desires, it can use this as an opportunity to move the trial date back to the fall.

However, it is not difficult to predict what they might demand of Ankara in return. It is difficult to say whether they will put the Ukraine crisis first or the S-400s.

Of course, there is still the option for Ankara to accept the crime it has categorically denied up until now and pay a possible fine. In which case, all allegations which would be made public via hearings would be avoided.  Halkbank would simply pay the fine just like BNP Paribas or Deutsche Bank or HSBC did in the past and the case would be closed. 

Although it is theoretically possible, whether the Erdoğan government is poised to make such a huge political U-turn at the last minute remains to be the billion dollar question.