Free At Last, Free At Last, Thank God Almighty, Andrew Brunson Is Free At Last…

‘Free at last, Free at last, Thank God almighty Brunson is free at last.’

After a truly absurd saga that at one point in late July threatened to push Turkey to the brink of calamity following the imposition of U.S. sanctions, Pastor Andrew Brunson has been freed on time served.

Brunson’s plight was just another episode in the long running reality show that is Recep Tayyip Erdogan’s never-ending quest to get his hands on Fethullah Gulen, who the Turkish autocrat blames for everything under the sun including, of course, the failed coup attempt in 2016. For good measure, Erdogan also claimed Brunson was allied with the PKK, which is second only to the Gulenist “movement” when it comes to people Erdogan hates.

In short, Pastor Brunson was just the latest pawn in Erdogan’s one-sided chess match with Gulen, where “checkmate” would be securing Gulen’s extradition. When it became abundantly clear that a Brunson-for-Gulen exchange was not in the cards, Erdogan defaulted to using Brunson as leverage in negotiations with the U.S. Treasury over prospective fines against Halkbank.

In August, a delegation dispatched to Washington ostensibly to mend diplomatic ties refused to negotiate for Brunson and instead used the meeting to talk about the bank, which has been living under the cloud of the Reza Zarrab drama for months on end.

According to reports, there was a deal in place over the summer that would have called for jailed banker Mehmet Atilla to be shipped back to Turkey from a U.S. prison in exchange for Brunson’s release. Atilla was convicted earlier this year for his role in a plot to avoid American sanctions on Iran and was sentenced to 32 months in May. As part of that rumored deal, Halkbank would get off with a “lenient fine” for its role in the oil-for-gold scheme.

Long story short, that fell apart, but since August, the general consensus has been that Turkey would ultimately release Brunson and, in the process, secure some kind of deal that would mitigate whatever the U.S. was planning to do in terms of punishing the state-run lender. Speculation around the assumed the deal led directly to a short squeeze and a rally in the bank’s shares earlier this week.

Brunson’s court date was Friday and ultimately, Turkey lifted judicial controls on the pastor. Brunson was convicted and sentenced to three years, 1 month and 15 days in jail, but since he’s already been in prison for two years, he was freed on time served and reduced sentencing.

“We’re working very hard on Pastor Brunson”, Trump said, following the news.

Clearly, there’s a behind-the-scenes deal here with Washington. Erdogan has refused to release Brunson on all manner of occasions over the past several months and he would have never acquiesced to this without some kind of concessions, probably involving Halkbank.

That said, Erdogan was holding the weaker hand thanks to the collapse of the lira and the fact that the market was clearly prepared to send the currency careening lower still if Brunson wasn’t released today.

Traders largely overlooked terrible September inflation data and have demonstrated a willingness to give Erdogan the benefit of the doubt on Brunson. It looks like that faith was, for once, not misplaced.

There looks to be a bit of “sell the news” action going on in the lira and Turkish banks at the moment, but you should note that Halkbank’s beaten down shares are up more than 26% since the September lows:


Turkey’s decision will probably win Erdogan plaudits from Trump, and this potentially opens the door to sanctions relief and perhaps even trade talks.

It’s also worth noting that the Jamal Khashoggi drama likely added to pressure on Turkey to free Brunson, as the optics around keeping him in jail on absurd charges just as Ankara accuses the Saudis of murdering a dissident would be rather challenging.

Asked if Brunson would now return to the U.S., his lawyer said this:

He will probably leave [Turkey].

Good idea.


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