Adam Klassfeld (30:18)
It is one of the many interesting wrinkles of this case, let's say, and there are people who have theories about the real reason, but the, the reason officially on paper paper that he was going there with his wife there. He was also an avid scuba diver. Absolutely did have plans to scuba dive in Florida. But I digress. What makes this geopolitically such a combustible case is that Reza Zara masterminded a money laundering scheme that has been roiling Turkish politics since 2013. It is linked to a corruption scandal implicating Erdogan's government back when he was Prime Minister before he became President and established essentially authoritarian rule in Turkey, largely in his efforts to cover up the corruption scheme that grew out of this $20 billion money laundering conspiracy. What Rez Zarab was charged with and ultimately pleaded guilty to doing was funneling money from Iran's national oil company to Hawk Bank, a Turkish state run bank. He would have couriers deliver those assets which were essentially taken over international borders in gold bars that were couriered over international borders, melted down and converted into a way that could go remove the taint of Iranian oil sanctions in the international economy. Prosecutors estimated that the scheme was $20 billion. And then lo and behold, very shortly after Zarab's arrest, we find out among his many attorneys are Rudy Giuliani and Michael Mukase. Now this is a shock to much of the legal community because Rudy Giuliani, you know, who burnished his reputation after the 911 attacks on the World Trade center, was an anti Iran hawk. And here he is representing someone who spearheaded a record breaking money laundering scheme that benefited the Iranian government and his role in it. I was covering the Southern District of New York. You mentioned the Southern District of New York's reputation of independence. Those who covered the beat knew that the prosecutors in that office considered themselves the sovereign district of New York. And what Rudy Giuliani did in that case, he never set foot in the court. What he did was worked behind the scenes in what became a very familiar pattern of shadow diplomacy. He would shuttle between Washington and Ankara trying to engineer a prisoner swap that would have freed Zerab from prison and essentially torpedoed the case. But that failed. Zarab turned state's witness and testified against a manager at Hawk bank named Hakan Attila. Now while he was testifying Zarab in Attila's case, he implicated Erdogan himself in sanctions busting trades. You had people who were high ranking in Erdogan's government who were co defendants in the criminal conspiracy and that there were who were named in corruption scandals. This was something that caused intense attention from Turkey, which at the time was being decimated by. By prosecutions against journalists. It was the leading jailer of journalists at the time of that prosecution. And so there was intense interest from Turkey and what was transpiring in the U.S. courtroom. And it seemed that people close to Trump were invested in making it disappear. Now, flash forward. We find out that that Preet Bharara, who brought the case, was pressured out for reasons undisclosed. He has never confirmed that hulkbank was one of the reasons that Trump wanted him out. But there has been speculation to that effect. After Hakanatila was convicted by a jury, the predecessor of the. Excuse me, one of the successors of Preet Bharara, Jeffrey Berman, took over the investigation and indicted Halt bank itself. And that was a key action because one, that's when the estimate of the $20 billion conspiracy came to light. If that estimate were accurate, that's a number that could have severe ramifications for the tur economy and Erdogan's hold to power. And Erdogan intensely lobbied the US Government to make this case go away. That that effort tried and failed with Reza Zarab. And as things were coming to a head under Jeffrey Berman's stewardship, he had. He was forced out by Bill Barr. Bill Barr. It had come out due to reporting subsequent to that that Bill Barr was upset because he had pressured Jeffrey Berman to try to dismiss the case, settle it before an indictment went through. He pushed the case forward. He refused. And there was, there was congressional testimony on this. This is where it gets very interesting. During that testimony, he said that that Bill Barr wanted to replace him with a former securities and Exchange Commission chairman named Jay Clayton. And Berman's reaction to that was, Jay Clayton is an unqualified choice. That was the word that he used. He was someone with no criminal experience that if you want me out, you're going to have to replace me with my trusted deputy, Audrey Strauss. Berman, and ultimately allowed that to happen, folded. He was replaced with Audrey Strauss. The prosecution of hulkbank survives. Flash forward till today. Now, I'll mention in passing in the intervening years when Biden was elected president, during his tenure, the case was about to proceed to trial. But Hawkbank appealed a ruling that refused to dismiss the case on sovereign immunity grounds. It goes all the way up to the Supreme Court at a glacial pace. By the time the Supreme Court resolves that appeal, the new person in charge of the Southern District of New York is, guess who? Jay Clayton, who is now currently the US Attorney for the Southern District of New York. And so now the the outcome that Trump wanted this case is going to go away. I've read the copy of the deferred prosecution agreement. There doesn't appear to any financial penalty to Turkey's state run Hawk bank, let alone a $20 billion criminal conspiracy, the kind of penalty that one would expect that would relate to something like that. They agreed to certain to certain monitoring by an outside expert. It's a little vague as to who that expert will be, how the expert will be selected, and it is justified on the grounds that apparently the Trump administration used the Hulkbank case to that they said that we can help make this case go away if you participate in the negotiations to release the hostages. So they are claiming that this case essentially became the bargaining channel in those negotiations. Now this is going to go before a federal judge who has presided over this entire saga. Judge Richard Berman, no relation to Jeffrey berman, the former U.S. attorney. He's the one who has called for a hearing on Wednesday to find out more about this deal. And he is someone who has been on record dealing with the kind of politics that have underlied this case very skeptically. So we'll see how much he challenges the government about the reasons for this sudden deferred prosecution agreement.
