Wyden Continues Investigation Into Trump Administration Interference in Turkish Bank Scandal

Wyden demands answers from Barr, Bolton on Trump political interference into criminal prosecution, sanctions enforcement of Halkbank

Washington, D.C. – Senate Finance Committee Ranking Member Ron Wyden, D-Ore., today demanded answers from Attorney General William Barr and former National Security Advisor John Bolton on interference by Donald Trump into the criminal prosecution of Turkish state-owned Halkbank for the largest ever sanctions evasion scheme, and sanctions enforcement against Turkish government officials. Trump reportedly promised Turkish officials in the Oval Office that he would use his authority to halt any further enforcement actions against the bank.

To date, Wyden’s investigation has secured an admission from the Treasury Department that Trump referred Halkbank matters to the Treasury and Justice Departments, as well as an acknowledgement from Treasury Secretary Steven Mnuchin that he discussed sanctions with Turkish officials.

Wyden wrote to Attorney General Barr, “According to Treasury officials in a November 20, 2019 letter to me, President Trump assigned you to assist with President Erdogan’s requests involving Halkbank, and that he relayed this to Erdogan during an April 2019 phone call. Around June of 2019, you also reportedly had a phone call with your Turkish counterpart, Abdulhamit Gul, where you discussed Turkey accepting a deferred prosecution agreement, and that a deal would need to be made with the U.S. attorney in Manhattan. Although Halkbank was eventually charged in the Southern District of New York in a six-count indictment related to the bank’s participation in a multibillion-dollar scheme to evade U.S. sanction on Iran on October 15, 2019, these charges came just days after the Turkish invasion of northern Syria and the resulting political backlash. I am concerned that absent these unrelated actions by the Turkish government, the Administration’s interference in favor of Turkey’s Halkbank requests could have undermined years of effort by U.S. law enforcement, and may still do so.”

Wyden wrote to former National Security Advisor John Bolton via his attorney, “Amb. Bolton asserts in his recent book that he was concerned that President Trump was granting personal favors to the Turkish President Recep Tayyip Erdogan. In particular, Amb. Bolton asserts that President Trump promised Erdogan he would use his authority to halt any further enforcement actions against the bank, and that President Trump consequently instructed Treasury Secretary Mnuchin to interfere in the matter. Further, Amb. Bolton asserts that on more than one occasion the Department of Justice was aware of Secretary Mnuchin’s efforts to halt the investigation and prosecution of Halkbank. Halkbank has been accused of one of the largest sanctions evasion schemes in history, and these Executive Branch actions may have affected the integrity of that U.S. investigation and related trade and tariff policies. In connection with this investigation, I request that Amb. Bolton provide all relevant records—including, but not limited to, notes, documents, and electronic communications—related to these matters and the allegations made in his book concerning them.”

Text of the letter to Attorney General Barr follows:

Dear Attorney General Barr,

As the Ranking Member of the Senate Finance Committee, I am writing to you concerning my ongoing investigation of the integrity of correspondent banking services and the application of U.S. economic sanctions, including the Department of Justice’s prosecution of Turkish state-owned bank Halkbank and potential improper interference by President Trump in this matter. Halkbank has been indicted in the United States as part of the largest ever scheme utilizing correspondent bank accounts to aid Iran in circumventing U.S. sanctions. Halkbank officials have admitted to conspiring to evade sanctions, and funnel Iranian oil profits back to the country through complex gold purchases disguised as money transfers.

On February 3, 2020, I wrote to you requesting your assistance with my investigation. My request included specific questions about the troubling actions the Trump administration has taken with respect to Halkbank. On February 7, your Chief of Staff assured me that the Department of Justice would “work to respond to [my] letter in a timely manner.” In the intervening five months, I have not received any response to the specific requests for assistance in my letter or any update on the Department’s work to respond to my requests. The Department’s failure to cooperate with these reasonable requests for information related to ongoing investigations raises serious concerns about the Department’s independence and willingness to engage with Congress in good faith in a manner that facilitates effective oversight.

Subsequent to my first letter, former National Security Adviser John R. Bolton detailed concerns that President Trump was granting personal favors to the autocratic leader of Turkey, and Bolton reports that you shared his concerns about the appearance that President Trump’s actions created. In particular, Bolton asserts that President Trump promised Turkish President Recep Tayyip Erdogan that Trump would use his authority to halt any further enforcement actions against the bank, and that Trump consequently instructed Treasury Secretary Mnuchin to interfere in the matter. Further, Bolton asserts that on more than one occasion the Department of Justice was aware of Secretary Mnuchin’s efforts to halt the investigation and prosecution of Halkbank. Finally, Bolton asserts that instead of “insulting” Turkish cabinet officials with individual sanctions, Trump misused the 1962 Trade Expansion Act to raise tariffs on Turkish steel and aluminum.

A spokeswoman for you refuted early reports of these Administration interactions as “gross mischaracterizations,” noting in particularly that you never stated that you felt the “President’s conversations with foreign leaders (were) improper.” However, reports of interference by President Trump are corroborated by the facts uncovered in my own investigation. In a November 20, 2019 letter to me, Treasury Department officials confirmed the following:

As was publicly reported, when Prime Minister Erdogan raised concerns directly with President Trump in April 2019, the President referred the issue to the Executive Branch departments responsible by law for the investigation and enforcement of economic sanctions-the Treasury and DOJ.

Treasury officials went on to identify seven meetings held between Secretary Mnuchin and senior Turkish officials, despite the Secretary’s admitted “integral” role in the enforcement of U.S. sanctions generally, and the prosecution of Halkbank specifically. Most concerning was an April 15, 2019 Oval Office meeting with President Trump, Turkish Finance Minister Berat Albayrak, President Erdogan’s son-in-law, as well as President Trump’s own son-in-law Jared Kushner, and Secretary Mnuchin. This was the second meeting Secretary Mnuchin held with Albayrak in 3 days, and appears to coincide with the admitted interference in the Halkbank prosecution by President Trump. Even more troubling, President Trump, Secretary Mnuchin, and Jared Kushner held this White House meeting despite the fact that Albayrak, along with President Erdogan, appear to be personally implicated in the Halkbank scheme. These reports are part of a larger story highlighting President Trump’s efforts to accommodate the intense pressure campaign by the Turkish government to get investigations into Halkbank dropped, including a high-priced lobbying effort by Ballard Partners on Turkey’s behalf. In 2017, President Trump reportedly asked Secretary of State Tillerson to pressure the Justice Department to drop the case against a co-conspirator in the Halkbank-assisted sanctions evasion schemes, Reza Zarrab, who was reported to have an office in Trump Tower Istanbul and was a client at the time of the President’s attorney Rudy Giuliani. In a 2015 interview, President Trump stated about Turkey, “I have a little conflict of interest because I have a major, major building in Istanbul.”

According to Treasury officials in a November 20, 2019 letter to me, President Trump assigned you to assist with President Erdogan’s requests involving Halkbank, and that he relayed this to Erdogan during an April 2019 phone call. Around June of 2019, you also reportedly had a phone call with your Turkish counterpart, Abdulhamit Gul, where you discussed Turkey accepting a deferred prosecution agreement, and that a deal would need to be made with the U.S. attorney in Manhattan.

Although Halkbank was eventually charged in the Southern District of New York in a six-count indictment related to the bank’s participation in a multibillion-dollar scheme to evade U.S. sanction on Iran on October 15, 2019, these charges came just days after the Turkish invasion of northern Syria and the resulting political backlash. I am concerned that absent these unrelated actions by the Turkish government, the Administration’s interference in favor of Turkey’s Halkbank requests could have undermined years of effort by U.S. law enforcement, and may still do so.

My investigation seeks to ensure that the Trump Administration is properly enforcing our U.S. sanctions and trade laws. To assist this investigation, I once again ask that you respond to the following:

Did President Trump, or did anyone at his direction, ever instruct or suggest you to take any action with regard to Halkbank, or any co-conspirators such as Reza Zarrab? If so, when and what were you asked to do? Did any such request raise any concerns about undue influence by President Trump in the investigation of the matter?

Did President Trump, or did anyone at his direction, attempt to interfere, intervene, or otherwise engage with the Justice Department’s independent inquiry of the Halkbank scheme, or of any co-conspirators such as Reza Zarrab? If so, when and in what manner?

In a 2015 interview, President Trump stated about Turkey, “I have a little conflict of interest because I have a major, major building in Istanbul.” Given his admitted conflict of interest, and the direct ties between Halkbank executives and Trump Towers Istanbul, do you feel it is appropriate for President to be communicating with the Department of Justice about this matter?

Did you ever discuss Halkbank with Abdulhamit Gul? If so, when did those conversations take place? Did you ever discuss the topic of a deferred prosecution agreement for Halkbank with Abdulhamit Gul? If so, when did those conversations take place? Did you ever mention or suggest to Abdulhamit Gul that Turkey discuss such an agreement with the U.S. Attorney for the Southern District of New York, or SDNY staff? Did you ever suggest or in any way offer the idea, to anyone, that Turkey take a deferred prosecution agreement for Halkbank?

Have you ever had meetings or conversations related to Halkbank with anyone at the Justice Department? If so, when did those take place? Have you been, in any way, involved with the Halkbank investigation? If so, describe the nature of your involvement.

Identify any meetings or conversations you or any other senior Justice Department officials have held with President Erdogan, Finance Minister Berat Albayrak, or any other senior Turkish officials since your confirmation, identify the participants in those conversations and meetings, and the nature of those discussions including whether or not they included Halkbank.

Identify any meetings or conversations you or any other senior Justice Department officials have held with Ballard Partners or any other lobbyists on behalf of the Turkish government since your confirmation, identify the participants in those conversations and meetings, and the nature of those discussions including whether or not they included Halkbank.

Did you or any other senior Justice Department officials ever appeal directly to the Treasury Department, at any level, on behalf of President Trump concerning Turkey or the Turkish government?

According to a statement by the Department of Justice about the conversation between you and former National Security Advisor Bolton, "There was no discussion of 'personal favors' or 'undue influence' on investigations, nor did Attorney General Barr state that the President’s conversations with foreign leaders (were) improper." Do you feel it was improper for President Trump to meet Turkish President Erdogan to the Oval Office or to meet with other senior Turkish officials there, after they had been implicated by the prosecutors in Halkbank’s sanctions evasion scheme?

Given the serious nature of the disclosures in the Treasury Department’s response to my investigation and in recent reporting, will you commit to recusing yourself from any further involvement in the investigation and prosecution of Halkbank?

Please provide answers to these questions no later than September 14, 2020. Thank you for your attention to this matter.

Text of the letter to former National Security Advisor Bolton follows:

Dear Mr. Cooper,

As the Ranking Member of the Senate Finance Committee, I am investigating matters related to U.S. Government policy towards Turkey, in particular the prosecution of the Turkish state-owned bank Halkbank related to its assistance to Iran in evading U.S. sanctions. In his recent book, former National Security Advisor John Bolton has asserted that he has personal knowledge of information relevant to these matters. I am therefore writing to request that Amb. Bolton provide assistance in my ongoing Finance Committee investigation of allegations that President Trump improperly obstructed the U.S. Department of Justice’s prosecution of Halkbank. It is my understanding that you represent former National Security Advisor John Bolton with regard to these matters.

Amb. Bolton asserts in his recent book that he was concerned that President Trump was granting personal favors to the Turkish President Recep Tayyip Erdogan. In particular, Amb. Bolton asserts that President Trump promised Erdogan he would use his authority to halt any further enforcement actions against the bank, and that President Trump consequently instructed Treasury Secretary Mnuchin to interfere in the matter. Further, Amb. Bolton asserts that on more than one occasion the Department of Justice was aware of Secretary Mnuchin’s efforts to halt the investigation and prosecution of Halkbank. Halkbank has been accused of one of the largest sanctions evasion schemes in history, and these Executive Branch actions may have affected the integrity of that U.S. investigation and related trade and tariff policies.

In connection with this investigation, I request that Amb. Bolton provide all relevant records—including, but not limited to, notes, documents, and electronic communications—related to these matters and the allegations made in his book concerning them. I also request that he participate in a voluntary, transcribed, staff interview at a mutually convenient date and time.

If you have any questions about this request, please contact my Finance Committee staff. Thank you for your attention to this important matter.

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