Exactly two Fridays ago, we noted that the Turkish lira was under tremendous pressure for two reasons. Those two reasons were:
- an October CPI report that showed core inflation hitting its highest levels since 2004
- news that court documents in the Reza Zarrab case reveal conversations that mention Turkish President Recep Tayyip Erdogan by name
Here’s how the lira reacted to those two developments on November 3:
The Zarrab story is a long-running affair. Without getting into the ridiculous details, suffice to say he’s a former gold trader and is implicated in a truly absurd plot to evade U.S. sanctions on Iran. That effort apparently involved Erdogan, who has long sought to have the case dropped.
Erdogan variously (and vociferously) debated the issue in person with Joe Biden, had his wife beg Jill Biden to intervene, and in his last two phone calls with Obama, similarly appealed to have the matter resolved.
“Our operating assumption was that Erdogan’s obsession with the case was that if it moved forward, information would come out that would damage his family, and ultimately him,” one former senior Obama official told the Washington Post.
As with all things related to Erdogan, there’s a connection to his arch nemesis, Pennsylvania resident Fethullah Gulen. If you ask Erdogan, Gulen operates a vast network of conspirators who are engaged in a perpetual attempt to undermine the Turkish President’s rule. Gulen was, according to Erdogan, behind the failed 2016 coup and also behind the leaked evidence which implicated the above-mentioned Reza Zarrab.
Hilariously, Erdogan once told Joe Biden that Preet Bharara is “a Gulenist tool.” He also demanded that Joe Biden fire Bharara. Of course Bharara was ultimately fired – only not by Joe Biden. But rather by Donald Trump.
So given all of the above, it doesn’t take a leap of logic to figure out why it is that Zarrab was secretly removed from federal prison this month. Not to put too fine a point on it, but if you read the above and can’t connect the dots here, well then there’s no hope for you.
In short: it seems highly likely that Mueller has flipped Zarrab in an effort to get more details that can help implicate Michael Flynn in the plot to kidnap Gulen and deliver the cleric to a Turkish prison.
Following reports that Mueller is close to indicting Flynn and his son, the Wall Street Journal released the latest in a series of pieces detailing Flynn’s connections to Erdogan’s efforts to get Gulen out of the U.S. If you missed that story you can read our entire post on it here, but for the sake of brevity, here’s the gist of it excerpted from the Journal’s piece:
Special Counsel Robert Mueller is investigating an alleged plan involving former White House National Security Adviser Mike Flynn to forcibly remove a Muslim cleric living in the U.S. and deliver him to Turkey in return for millions of dollars, according to people familiar with the investigation.
Under the alleged proposal, Mr. Flynn and his son, Michael Flynn Jr., were to be paid as much as $15 million for delivering Fethullah Gulen to the Turkish government, according to people with knowledge of discussions Mr. Flynn had with Turkish representatives. President Recep Tayyip Erdogan, who has pressed the U.S. to extradite him, views the cleric as a political enemy.
Federal Bureau of Investigation agents have asked at least four individuals about a meeting in mid-December at the ‘21’ Club in New York City, where Mr. Flynn and representatives of the Turkish government discussed removing Mr. Gulen, according to people with knowledge of the FBI’s inquiries.The discussions allegedly involved the possibility of transporting Mr. Gulen on a private jet to the Turkish prison island of Imrali, according to one of the people who has spoken to the FBI.
You’re reminded that Flynn penned a hilariously hyperbolic Op-Ed for The Hill on election day blasting Gulen as a “shady mullah.” The Hill would later publish a disclaimer at the bottom of the article acknowledging the conflict of interest.
Again: it is abundantly clear what’s going on here. And in case it’s not, allow the Daily Beast to elaborate:
Mueller is reportedly looking at a December meeting blocks from Trump Tower where Michael Flynn—shortly before Trump became president and named him national security adviser—was reportedly offered upward of $15 million if he could help Turkey win the extradition of cleric Fethullah Gülen as well as the release of gold trader Reza Zarrab.
The Bureau of Prisons website shows that Zarrab was released from BOP custody on Nov. 8. He had been held at the Metropolitan Correctional Center, a federal administrative prison near the Southern District of New York courthouse, before then.
Zarrab has not filed any court documents in the last month. His attorney, Benjamin Brafman, told The Daily Beast he would not be at the final pre-trial conference on Thursday. Flynn’s lawyer did not return a request for comment Wednesday evening.
Additionally, the Beast notes that the idea prosecutors are just trying to extract information from Zarrab about his co-defendant (Mehmet Atilla) is patently absurd:
If Zarrab is only testifying against Atilla, prosecutors traded in a big fish for a smaller one: letting an ultra-wealthy gold trader with two homes on the banks of the Bosphorus, close ties to Erdoğan, and a pop-star wife off the hook to take down a middling bank manager. It’s hard to see the feds making that deal after alleging in court that top Turkish and Iranian officials were involved in the criminal scheme.
Mueller’s investigation into Flynn’s Turkish dealings offers an alternative explanation.
Why yes, it does offer “an alternative explanation.” And wouldn’t you know it, NBC is out with what amounts to confirmation of this. To wit:
A gold trader who is close to Turkish President Recep Erdogan is now cooperating with federal prosecutors in a money-laundering case, according to two sources with knowledge of the matter, and legal experts say prosecutors may be seeking information about any ties between the Turkish government and former National Security Advisor Mike Flynn.
“You can fill in the gaps that federal investigators are looking for any relation between Erdogan and Flynn,” said Cevallos. “So, to the extent that Zarrab has any connection or knowledge of that, it is very important that they’re flipping him.”
Meanwhile, Erdogan wants to know where the fuck Zarrab is. Here’s The Daily Sabah:
The Foreign Ministry issued a diplomatic note to the U.S. regarding Turkish-Iranian gold trader Reza Zarrab, also known as Rıza Sarraf, late on Wednesday, urging the U.S. to notify Turkish authorities before relocating Turkish detainees to different facilities.
The ministry noted that Zarrab was recently threatened in a federal holding facility, which necessitated moving him to a different facility.
It highlighted the importance of the U.S. State Department’s assistance in notifying the Turkish embassy and their attorneys as soon as possible when Turkish citizens are moved to a new location as well as the reasons for such a decision.
How amusing is that, right? Turkey is trying to pretend like they need to know why Zarrab was moved because they’re concerned for his safety.
But it gets better (or worse, if you’re the Trump administration). Consider this out on Friday from JustSecurity:
When President Donald Trump tried to stop the FBI investigation of his national security adviser, retired Lt. Gen. Michael Flynn, was Trump aware of Flynn’s meetings with Turkish officials? If so, it could significantly increase the president’s exposure to political liability and legal wrongdoing involving obstruction of justice.
On Valentine’s Day 2017, the president asked FBI Director James Comey if he could see his “way clear to letting this go, to letting Flynn go,” according to Comey’s congressional testimony (see also interview with Donald Trump Jr.).
What was Trump wanting Comey to let go exactly? So far the media has focused on federal investigators’ ongoing probe at the time into whether Flynn lied to the FBI, but at the same time there was also an ongoing federal investigation into Flynn’s work on behalf of Turkey–and the White House knew about it. We also now know that on Sept. 19, 2016, and in mid-December 2016, Flynn reportedly met with senior Turkish officials, and discussed the prospect of kidnapping and secretly removing a US resident, cleric Fethullah Gülen, from the United States into Turkey’s custody. If Trump knew about the Turkey meetings at the time of the Feb. 14 exchange with Comey, that would raise a “different order of problem for the President,” Ben Wittes exclaimed on Lawfare’s podcast. Ben’s right.
See where this is going?
This is the kind of thing that multiple former intelligence officials and legal experts very patiently tried to explain after Mueller was brought on as special counsel. This is not like the congressional investigations. This is a serious, rapidly evolving, all-encompassing probe that is going to be pursued aggressively, where “aggressively” means using any and all means to obtain leverage over anyone who has information that helps prove wrongdoing on the part of Trump and his associates.
Make no mistake, this is a huge deal. Just ask former FBI counterintelligence agent and burgeoning media star Asha Rangappa:
Big problem for POTUS and WH, because this means the obstruction case is based on facts unrelated to Russia, and bolsters the specific intent Mueller needs to prove for OoJ in firing Comey. https://t.co/ppPIpzWB9t
— Asha Rangappa (@AshaRangappa_) November 17, 2017
One final note: over the years, the Zarrab case has received all kinds of attention from multiple blogs who have since “mysteriously” morphed into defenders of all things Russia. It should come as no surprise that their recent coverage of this story has been … how should we put this? …. “lacking” in both enthusiasm and veracity.