Turkey’s government kicked into full defensive gear today as Reza Zarrab, an Iranian-Turkish gold trader, prepared to stand witness before a New York jury for a second day, continuing his account of a billion-dollar scam to smuggle gold for oil in violation of US sanctions on Iran and in collusion with top Turkish officials. The trial continued at the Federal District Court in Manhattan with allegations of further government malfeasance. The proceedings took a further sensational turn when Zarrab said Turkey's President Recep Tayyip Erdogan and former Economy Minister Ali Babacan had signed off on the scheme. “The prime minister at that time, Recep Tayyip Erdogan, … had given instructions, had given an order, for [Ziraat and Vakif banks] to start doing the trade,” Zarrab testified. He dropped this bombshell as allegations of further government corruption swirled at home.
Turkey’s deputy prime minister, Bekir Bozdag, told the state-run Anadolu news agency he did not expect justice from the federal court in New York. Zarrab is a star witness for the prosecution against Mehmet Hakan Atilla, the jailed deputy manager of the state-owned Halkbank, which figures prominently at the Turkish end of a multi-billion-dollar sanctions-busting scheme. Zarrab had become “a false witness under duress,” Bozdag claimed. “A theater is being staged in New York by the courts.”