COLUMN: Sanctions and Corruption: The Halkbank Case as a Test of Justice in US–Türkiye Relations – HSToday
The evolving relationship between the United States and Türkiye continues to be shaped by a complex mix of strategic interests, political maneuvering, and unresolved legal disputes. On September 25, 2025, Turkish President Recep Tayyip Erdoğan visited the White House for the first time since his November 2019 meeting with then-President Donald Trump. Following years of diplomatic estrangement, during which Erdoğan was not received at the White House, the visit marked a significant shift, made possible by a renewed invitation from President Trump. This high-profile engagement was widely interpreted as a pivotal moment in US–Türkiye relations, as both leaders sought to advance divergent political agendas amid an increasingly volatile international and regional landscape.
For the Erdoğan administration, the main goals included lifting US sanctions related to Türkiye’s purchase of the Russian S-400 missile defense system, resolving the ongoing US investigation into Halkbank, and rejoining the F-35 fighter jet program. Ankara also sought to alleviate US pressure to reduce its energy reliance on Russia.
The visit took place amid significant diplomatic tensions and heightened domestic political conflicts. Just a week earlier, Türkiye’s main opposition leader, Özgür Özel, publicly accused President Erdoğan of engaging in transactional diplomacy aimed at securing political favors from the United States. Özel alleged that Erdoğan had a secret meeting with President Trump’s son and had promised to purchase 300 Boeing aircraft in exchange for an invitation to the White House and, more broadly, political concessions. These accusations, widely circulated in secular and opposition-aligned Turkish media, intensified broader criticisms of Erdoğan’s economic management during a period marked by soaring inflation, sharp currency devaluation, and rising social hardship.
Strategic Legitimacy and Domestic Authoritarianism
In a public statement issued ahead of the trip, US Ambassador to Ankara, Tom Barrack, acknowledged the underlying tensions in US–Türkiye relations. He referenced ongoing disputes related to Türkiye’s purchase of Russian defense systems, the implementation of US sanctions, and the politically sensitive Halkbank case. Barrack also noted that President Trump was keenly aware of President Erdoğan’s urgent need for international legitimacy, especially given the rising international and domestic concerns about Türkiye’s democratic backsliding. These remarks drew strong criticism from Turkish opposition parties, who saw them as a covert endorsement of Erdoğan’s increasingly authoritarian rule.
Indeed, under the rule of the Justice and Development Party (AKP), Türkiye’s foreign and domestic policies have become more unpredictable and confrontational. The government’s strategic shift toward Russia and Iran—most notably seen in the controversial purchase of the Russian S-400 missile defense system—and its increasing anti-American rhetoric have seriously damaged Ankara’s standing within NATO and strained relationships with Western allies. At home, Türkiye’s democratic institutions have experienced significant erosion. Following the failed coup attempt in July 2016—which the AKP government blamed, without solid evidence, on Fethullah Gülen and actors in the United Arab Emirates and the United States—more than 200,000 civil servants were purged, often without proper legal process or judicial oversight.
While the government described the purges as a necessary response to a national security threat, opposition figures, including former Republican People’s Party (CHP) leader Kemal Kılıçdaroğlu, have argued that the coup was a “controlled event,” implying that President Erdoğan may have had prior knowledge and allowed the events to happen to strengthen his grip on power. Although these claims are still contested and politically sensitive, they have fueled widespread public skepticism about the government’s account, further increasing political polarization in the country.
Human rights organizations have consistently documented widespread and systematic abuses in Türkiye, including arbitrary detentions, torture and ill-treatment in police custody, and the mass incarceration of journalists—placing Türkiye among the world’s leading jailers of media professionals. In recent years, political repression has intensified, especially targeting the main opposition party, the Republican People’s Party (CHP). The government has launched several corruption investigations against CHP-led municipalities, widely seen as politically motivated efforts to weaken local democratic authorities. Multiple CHP mayors have been arrested, most notably Ekrem İmamoğlu, the mayor of Istanbul and President Erdoğan’s most prominent political rival. İmamoğlu’s detention has significantly increased domestic tensions and strengthened accusations that the ruling AKP is systematically using the judiciary as a weapon to eliminate electoral competition—particularly as national polls increasingly show the CHP’s presidential candidate leading Erdoğan by a large margin.
Beyond domestic repression, Türkiye’s alleged connections to non-state actors such as the Islamic Revolutionary Guard Corps (IRGC), Hamas, Hezbollah, and various jihadist groups in Syria have drawn increasing international attention. The IRGC, labeled a terrorist organization by the United States, reportedly maintains operational networks within Türkiye, including the ability to target regime opponents. Meanwhile, leaders linked to Hamas and the Muslim Brotherhood are allowed to live and operate freely in Türkiye, with some reports suggesting that Turkish territory is being used for fundraising activities in support of Hamas. During the peak of regional conflict from 2014 to 2018, Türkiye’s southern borders were widely used by foreign fighters affiliated with ISIS and al-Qaeda to enter Syria—raising longstanding concerns about Ankara’s role in enabling the cross-border movement of jihadist militants.
Western law enforcement is increasingly concerned about Türkiye’s rising role in transnational organized crime. Recent intelligence and investigations suggest that Türkiye has become a key transit point for cocaine trafficking connected to Latin American cartels. More recently, Türkiye has also been identified as a conduit for shipping precursor chemicals used in fentanyl production, fueling the North American opioid crisis and raising alarm among US and Canadian security agencies.
The Trump–Erdoğan Encounter: Symbolism Over Substance
During the 2025 White House visit, President Trump drew significant attention by publicly praising President Erdoğan’s leadership and claiming that Erdoğan had achieved Türkiye’s “2,000-year goal of controlling Syria,” referencing the December 2024 takeover of parts of Syria by the former al-Qaeda affiliate, Hay’at Tahrir al-Sham (HTS), following the weakening of the Assad regime. In reality, Syria was under Ottoman Turkish control for about 400 years, from the early 16th century until the empire’s dissolution in the early 20th century. Nevertheless, pro-government Turkish media outlets framed Trump’s remarks as a symbolic endorsement of Erdoğan’s regional leadership, using the statement to portray him as a respected global statesman and a key player in Middle Eastern geopolitics.
State-controlled media outlets in Türkiye amplified the symbolic significance of the visit, going so far as to interpret President Trump’s act of assisting Erdoğan as he rose from his chair after signing the White House guestbook as a gesture of deference and respect. This kind of symbolic framing serves a crucial domestic function for Erdoğan, reinforcing his image as a globally respected leader at a time when his administration faces mounting political and economic challenges. By presenting moments of diplomatic protocol as signs of reverence, the government seeks to bolster Erdoğan’s legitimacy and authority in the eyes of a domestic audience increasingly affected by inflation, governance concerns, and declining public trust.
The December 17 Scandal and the Origins of the Halkbank Case
During the visit, President Erdoğan placed significant emphasis on the ongoing Halkbank case, which has remained a central concern in both legal and diplomatic circles. Turkish daily Sözcü notably described the case as one “that keeps Erdoğan awake at night,” underscoring its political and personal sensitivity for the Turkish president. The roots of the US Halkbank investigation trace back to a major corruption and money laundering scandal in Türkiye that emerged in December 2013. Turkish police, initially investigating a drug trafficking network in 2008, uncovered financial ties to Reza Zarrab, an Iranian-Turkish gold trader. Zarrab’s Istanbul-based currency exchange office was used to launder illegal funds, prompting a broader investigation into his network.
Over time, Zarrab emerged as a key facilitator of multiple money laundering and sanctions-evasion operations. Most notably, he orchestrated gold-for-oil transactions between Türkiye and Iran, circumventing US sanctions through fictitious trade deals and front companies. When US officials urged Türkiye to halt these transactions in mid-2013, Zarrab paid bribes to high-level Turkish officials to keep them running—using the state-owned Halkbank as a primary channel.
The police raids on December 17, 2013, uncovered shocking evidence of widespread corruption, including $3.5 million in cash hidden in shoeboxes at Halkbank Director Süleyman Aslan’s house and over $1 million found at the home of the Interior Minister’s son. Reza Zarrab and the sons of three cabinet ministers were later arrested. Leaked wiretap recordings implicated then-Prime Minister Recep Tayyip Erdoğan, with one conversation allegedly instructing his son to remove large sums of money from his residence. Reports also claimed that about €1.5 billion in bribe money was physically taken from Erdoğan’s home in Istanbul on December 17. In a dramatic turn, a cabinet minister publicly resigned, stating, “Whatever I did was on Erdoğan’s orders. I resign, and so should he,” highlighting the scandal’s direct link to the highest levels of government.
Instead of allowing the investigation to proceed, Erdoğan dismissed the scandal as a political coup. Zarrab was portrayed in pro-AKP media as a philanthropist, and Erdoğan appointed Efkan Ala, known for bypassing legal norms, as Interior Minister. The entire investigative team was dismissed, and a second wave of raids scheduled for December 25, reportedly targeting Erdoğan’s inner circle, was suppressed. Domestic accountability broke down, but the international implications were just beginning.
The US Investigation and Legal Fallout
Although President Erdoğan succeeded in preventing domestic investigations and imprisoning the Turkish prosecutors and police officers involved in the 2013 corruption probe, the legal landscape changed significantly when Reza Zarrab voluntarily traveled to the United States on March 19, 2016. His unexpected arrival marked a new phase in the case, beyond the Turkish government’s control. Zarrab was quickly arrested by US authorities, and key evidence—originally collected by Turkish investigators before their political purge—became crucial in building the US prosecution’s case. One of the Turkish investigators, Huseyin Korkmaz, who had fled the country under pressure, handed over this evidence to US prosecutors, seeking justice for himself and his colleagues who had been imprisoned on politically motivated charges. In Türkiye, Korkmaz was labeled a traitor and a spy working with the FBI; however, in US court proceedings, the material he provided became a vital part of the prosecution.
Faced with extensive and verified documents, Zarrab ultimately agreed to cooperate with US authorities, pleading guilty and providing detailed testimony about the scope and methods of the sanctions-evasion scheme. He explained how the system persisted even after his politically motivated release from Turkish custody. According to Zarrab, Turkish officials, encouraged by the collapse of the domestic investigation, restarted and expanded their sanctions-busting activities with greater impunity. Zarrab’s cooperation not only implicated high-level officials but also cast doubt on members of Erdoğan’s inner circle, including family members, significantly raising the political stakes.
The US investigation grew more intense when Hakan Atilla, Deputy General Manager of Halkbank, was arrested during a visit to New York in November 2017. Atilla was charged and later convicted in the Southern District of New York (SDNY), serving 32 months in federal prison. Zarrab’s testimony during the trial played a key role, offering insider details on the financial methods used to bypass US sanctions and move billions of dollars in Iranian oil revenues through front companies, illegal gold trades, and fake humanitarian shipments—mainly routed through Türkiye and the United Arab Emirates. Zarrab also named the beneficiaries of the scheme, including Iranian entities linked to the Islamic Revolutionary Guard Corps (IRGC), a U.S.-designated terrorist organization.
In 2019, the US Attorney’s SDNY formally charged Türkiye Halk Bankası A.Ş. (Halkbank) with multiple offenses, including conspiracy to violate the International Emergency Economic Powers Act (IEEPA), bank fraud, and money laundering. The case, based on a substantial body of evidence including wiretaps, financial records, and sworn testimonies, represents one of the most comprehensive legal efforts by the United States to hold a state-owned financial institution accountable for large-scale violations of international sanctions. It also underscores the extraterritorial reach of U.S. financial law and its significant implications for global banking compliance.
U.S. prosecutors determined that the laundered funds transferred to Tehran were used to support Iran’s nuclear program and were routed through IRGC-controlled Mahan Air to Syria and Lebanon, where they funded Hezbollah and other Iran-backed militant groups. The joint efforts by U.S. and former Turkish law enforcement agencies provide a strong example of how state-level corruption helps evade sanctions and how illegal financial flows can drive nuclear proliferation and finance terrorism.
The Turkish government, under the AKP, has responded with a multifaceted legal and diplomatic campaign to neutralize the case. It has reportedly spent millions of dollars on prominent American law firms to delay proceedings and challenge the jurisdiction of US courts. These efforts have temporarily stalled progress, and the case is currently under review by the US Supreme Court. A ruling is expected in the coming months and is widely anticipated to be a defining moment in U.S.–Türkiye legal relations.
President Erdoğan has made repeated efforts—both public and behind closed doors—to influence the outcome of the Halkbank case. During his 2025 visit to the White House, Erdoğan made no attempt to hide his concern, raising the issue directly in press statements. This was not his first intervention; according to former National Security Advisor John Bolton’s memoir, Erdoğan also lobbied President Trump during his first term. Furthermore, Erdoğan’s wife, Emine Erdoğan, is reported to have discussed the case with Jill Biden during Joe Biden’s tenure as Vice President—underscoring how deeply embedded the case is in Turkish political strategy at the highest levels.
The Halkbank Case: Justice or Geopolitical Leverage?
Contrary to pro-AKP narratives that frame the US prosecution as an assault on Turkish sovereignty, the Halkbank case is not a political weapon—it is a robust legal response to systemic corruption and sanctions violations. While US sanctions mandated reciprocal trade between Türkiye and Iran (e.g., Turkish goods for oil), senior Turkish officials instead engaged in opaque laundering schemes that diverted public wealth into private hands.
Tragically, Turkish law enforcement officers who initiated the original investigation continued to face persecution; many have been imprisoned since 2014, with some in solitary confinement, simply for fulfilling their legal duties. Even their families have had trouble; their wives and children were affected. The AKP’s targeting and control over the police intensified after the suspicious July 15 coup attempt, during which the AKP purged more than 40,000 police officers and 5,000 judges and prosecutors. It was revealing how the AKP prioritized purging 300 members of the Turkish National Police who earned their master’s and PhDs in the US. Meanwhile, corrupt actors remain free and powerful, lobbying US officials to derail the case. Despite Erdoğan’s successful efforts to suppress related inquiries in Europe, he has so far failed to dismantle the US case. He is unlikely to abandon efforts to gain strategic leverage—whether through energy diplomacy, deepening ties with Russia and Iran, exerting regional influence in Syria, or maintaining controversial alignments with groups such as Hamas. Erdoğan may also attempt to manufacture new geopolitical flashpoints that compel U.S. cooperation, believing such maneuvers could help shape or delay American policy decisions related to the Halkbank case.
The Halkbank case, therefore, tests the integrity of the US justice system. Will it uphold the rule of law and safeguard its investigators and prosecutors? Or will it succumb to political pressure from a corrupt foreign leader skilled at exploiting international divides?
To conclude, the Halkbank investigation reveals the dangerous intersection of corruption, authoritarianism, and geopolitical tactics at the core of US–Türkiye relations. It serves as a stark reminder of how political power can be leveraged to shield criminal activity, and how international financial systems are vulnerable to exploitation when judicial independence is compromised. For the United States, the case is more than just a legal challenge—it’s an opportunity to reaffirm its commitment to the rule of law and to promote accountability in a complex global environment. For Türkiye, it highlights the serious consequences of institutional decay and unchecked political power. The decisions each country makes in the coming months will not only influence their bilateral relationship but will also send a strong message about the global effort to fight corruption and uphold justice.
