Congress passed and former President Barack Obama signed the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010. It amended the previous law to give the president more power to punish companies adding to Iran's oil industry. Six years later it was extended until 2026.
Under Donald Trump's administration, however, the sanctions weren't always evenly applied. In one scandal, the Turkish bank, Halkbank, was exposed for violating sanctions against Iran. Just prior to the 2020 election, the New York Times revealed that Turkish President Recep Tayyip Erdoğan was controlling Trump, who dictated to the Justice Department that the investigation be quashed.
Geoffrey Berman wrote in his book "Holding the Line" that former Attorney General Bill Barr and former acting Attorney General Matthew Whitaker were both complicit in helping kill the probe into the sanctions violations. While Berman came forward about the incident in Oct. 2020, his book walks through the shocking way that Turkey was manipulating the U.S. government to protect Erdoğan and members of his family.
The transactions involved in buying and selling gold (much of it through Dubai) essentially created a slush fund for Iran, Berman explained.
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"His co-conspirators included Zafer Çağlayan, who at the time was Turkey’s economic minister, and Süleyman Aslan, the chief executive of Halkbank," Berman wrote. "He paid bribes to both of them—including regular deliveries of cash that came to Aslan’s house stuffed in shoeboxes. The nation of Turkey benefited from the conspiracy. The gold transfers out of the country were so large—about $20 billion—that they artificially inflated Turkey’s export statistics and made its economy look stronger than it really was."
It wasn't just about corruption on behalf of the president, it was a crime that could significantly impact the economy of Turkey.
Zarrab was arrested entering the US on a trip to Disney. Atilla, Halkbank’s deputy general manager, then came into the United States on bank business and was arrested.
"Zarrab testified over the course of six days at Atilla’s trial. He said the scheme reached to the top levels of Turkey’s government and that Erdoğan himself had given it his approval," the book reads. It put the SDNY in a difficult position because they had to figure out what to do with the bank.
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"What normally happens in these kinds of sanctions or money laundering cases is that a conviction of top executives sets off negotiations between the bank and the Department of Justice on how to resolve the financial institution’s criminal liability," Berman explained. Civil charges aren't a slap on the wrist. Halkbank didn't take the SDNY seriously and was stonewalled when it came to any kind of admission of guilt and paying fines associated.
"It acted as if it had an ace in the hole, or two aces: a friend in the White House, and a back channel to Main Justice," Berman said. A Turkish police detective made it to the United States with a trove of "evidence—wiretaps, searches, electronic surveillance. He had pictures of the cash in shoeboxes and other things that pointed directly to high-ranking people at the bank and in the Turkish government.
Halkbank went over their heads and started speaking with the main staff at the Justice Department. Under Whitaker, SDNY went nowhere fast in cooperation from the main DOJ. Whitaker told Berman to stand down.
Turkey was lobbying Trump and Trump was giving Barr orders. "It soon became clear that Halkbank and its counsel were talking directly to Main Justice. It also looked like whatever pressure Whitaker had felt from Trump to go easy on Turkey was now being exerted on Barr."
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Barr had his own issues that he said would violate Turkish law, but Berman explained it was several steps ahead, they hadn't even got the bank to admit they did something wrong. Small meetings took place about the bank at the White House in the months that followed and the SDNY wasn't included. Barr then suddenly said he was the new "point person" for the criminal case that was being run out of New York. It was a directive from the White House. Barr began meeting with the bank's lawyers without any of the prosecutors on the case.
SDNY still refused to drop their cases on the bank, despite Barr's demands.
"On June 17, one of his top advisers wrote to IlanGraff [in the national security unit] to relay that the 'AG thinks we need to give them [Halkbank] global resolution for the facts at issue.' He added, 'No need to cave immediately,' but emphasized that we would have to 'play ball.' No need to cave immediately?"
"The Trump administration killed the Iran nuclear deal and strengthened the sanctions," Berman explained. "Ostensibly, stopping the Iran nuclear program was an issue near and dear to the president. The sanctions were the law of the land, which I was sworn to enforce. Halkbank had schemed to illegally funnel billions of dollars to Iran at a time when the United States wanted to exert maximum economic pressure. So, on what basis were we going to give the bank a sweetheart deal and grant immunity to all bank and government officials involved in the scheme?"
Barr called him into DOJ for a dressing down, telling him that the case "implicates foreign policy" and that it had been discussed "by the leaders of the administration."
"Who do you think you are to interfere with this resolution?" Barr asked, according to Berman.
"Who do you think you are? When I heard that, my thought was, who the f*ck does he think he is? I’ve seen bullies work before. In fact, he had used the same words with me a little more than a year before when he got angry because he believed I had announced the appointment of Audrey Strauss as deputy without first getting his approval. It’s completely ineffective, or it is with me. I would describe Barr’s posture that morning as thuggish. He wanted to bludgeon me into submission."
He later revealed that there was an encounter between Trump and Erdoğan at the G-20 in late 2018 where Trump was handed a memo by the president written by Halkbank's lawyers making the argument the prosecution was misguided because it was about gold transactions and not US banks. It was a lie.
In former national security adviser John Bolton's book he described the incident, saying Trump flipped through the pages pretending to read it.
“Well, it looks convincing to me," Trump said according to Bolten.
"In an interview in Turkey, Erdoğan recounted his call with Trump and said the American president had promised to 'instruct the relevant ministers immediately' on how to shut down the Halkbank matter," he closed.