Dangerously close

On June 24, the Turkish dai­ly Cumhuriyet pub­lished the images of six Turkish cit­i­zens whose names appeared in the Panama Papers. With this sim­ple announce­ment, the news­pa­per launched a series of reports on the “Panama’cı Türkler“. All six of the peo­ple men­tioned were busi­ness­men, and five of them ­­had close or dis­tant ties to Turkey’s pres­i­dent, Recep Tayyip Erdoğan.

Shortly after the pic­tures were pub­lished, the phone rang in the Cumhuriyet news­room. Apparently, the man on the line was Mehmet Cengiz – one of the six busi­ness­men who had appeared in the paper. Cengiz’s com­pa­ny is part of the con­glom­er­ate that is build­ing Istanbul’s new air­port. The Turkish pres­i­dent him­self has been push­ing the high­ly con­tro­ver­sial, high pro­file project for­ward. Cengiz’s name also appeared in con­nec­tion with a 2013 cor­rup­tion scan­dal that forced sev­er­al min­is­ters to resign.

According to Cumhuriyet, the man on the phone was very clear: ““You put my face on the front page, have you no shame? I will fight you (…) You sons of bitch­es, don’t make a killer out of me.“ This could be, and per­haps should be, inter­pret­ed as a death threat – espe­cial­ly in Turkey, where crit­i­cal jour­nal­ists have faced sack­ings, law­suits, or per­son­al threats for years.

Shortly before Turkey’s par­lia­men­tary elec­tion in 2015, Cumhuriyet report­ed on the Turkish secret service’s arms deliv­er­ies to Syria. Since then, the dai­ly has become a sym­bol in the fight for free­dom of the press. At the time, the Turkish pres­i­dent per­son­al­ly pressed charges against the paper. A short time lat­er, Can Dündar, the edi­tor-in-chief, and Erdem Gül, the Ankara bureau chief, were tak­en into custody.

At his hear­ing on May 6 of this year, Can Dündar nar­row­ly escaped an assas­si­na­tion: a man called him a trai­tor and shot at him, but missed. Shortly after, the court in Istanbul sen­tenced both Dündar and Gül to sev­er­al years in prison for acts of trea­son. Both men have appealed the con­vic­tion, and will remain free until the tri­al begins. Their news team con­tin­ues to work in this dif­fi­cult climate.

Publishing this information in Turkey appears to be a dangerous endeavor 

Cumhuriyet is now the only Turkish medi­um to have gained access to the Panama Papers, the leaked doc­u­ments of the off­shore ser­vices provider Mossack Fonseca. In coop­er­a­tion with the International Consortium of Investigative Journalists (ICIJ), the Organized Crime and Corruption Reporting Project (OCCRP) research net­work, and the Süddeutsche Zeitung, Cumhuriyet reporters have spent recent weeks comb­ing through the 2.6 ter­abytes of data to find tracks lead­ing to Turkey.

Until now, the names of 13 cur­rent or for­mer heads of state have appeared in the Panama Papers, as have count­less rel­a­tives and friends of dozens of oth­ers. Iceland’s prime min­is­ter has already resigned, and rev­e­la­tions have weighed heav­i­ly on the prime min­is­ter of Pakistan and the pres­i­dent of Argentina.

In Turkey, direct hits have not been as close to the top: nei­ther Turkish President Erdoğan nor Prime Minister Binali Yıldırım has appeared in the leaked Panama Papers doc­u­ments. However, sev­er­al pow­er­ful busi­ness lead­ers with close links to the AKP have. The par­ty has been in pow­er since 2002, and Erdoğan was par­ty leader until 2014, when he moved from the prime minister’s to the president’s office. The Panama Papers show that pro-gov­ern­ment busi­ness lead­ers hid their mon­ey in shell com­pa­nies. Publishing this infor­ma­tion in Turkey appears to be a dan­ger­ous endeavor.

According to the leaked doc­u­ments, Mehmet Cengiz, the man who alleged­ly called Cumhuriyet, is at the cen­ter of a net­work com­pris­ing at least 20 shell com­pa­nies. In some instances, the infor­ma­tion in the Mossack Fonseca doc­u­ments can­not be used to deci­pher the pur­pose of these com­pa­nies. Apparently, Cengiz went to great lengths to cov­er up his activ­i­ties. However, sev­er­al sus­pi­cious pay­ments worth mil­lions appear in the doc­u­ments that the busi­ness­man does not wish to pub­licly dis­cuss. Cengiz nei­ther respond­ed to the SZ’s requests for com­ment on the mat­ter, nor on his threat.

The Panama Papers show that Mehmet Cengiz and his broth­er Ekrem hold pow­er of attor­ney for a com­pa­ny named Bonito International Inc., which is reg­is­tered on Niue Island in the South Pacific. Via this com­pa­ny, the broth­ers hold shares in MEC Metal Equipment Consultancy Co., a com­pa­ny reg­is­tered in Great Britain. Until now, MEC was a com­plete mys­tery – it wasn’t clear which pur­pose it served, or what type of busi­ness it did. A doc­u­ment found in the Panama Papers con­tains an MEC Metal Equipment & Consultancy Co. con­tract for, among oth­er things, “mar­ket stud­ies and analy­sis relat­ed to the met­als, min­ing and con­struc­tion sec­tors in Russia and China.” The con­tract part­ner is “Vremax Properties Limited”, anoth­er unknown com­pa­ny reg­is­tered in the British Virgin Islands. The two-page con­tract bare­ly includes any men­tion of actu­al con­sult­ing ser­vices, but lists a pay­ment of USD 3.07 mil­lion. The trans­ac­tion was appar­ent­ly made at the end of June 2008, when the mon­ey was wired to a Vremax Properties account at a pri­vate bank in Switzerland. Whether or not con­sult­ing ser­vices were pro­vid­ed remains unclear. However, the set-up could be a means of using a com­pa­ny to divert pub­lic funds into one’s own pock­ets. In Turkey, it is said that no one has been award­ed as many pub­lic con­tracts in the past 14 years as Mehmet Cengiz.

Cengiz is a mem­ber of a rel­a­tive­ly new class of con­ser­v­a­tive Muslim busi­ness peo­ple who have gained a great deal of mon­ey, pow­er, and influ­ence since the AKP came to pow­er in 2002. The peo­ple in this group are referred to as the “Anatolian Tigers”. Today, many of them are among Turkey’s eco­nom­ic heavy­weights. In some sec­tors, they have pushed out the old, Kemalist elite that dom­i­nat­ed the country’s econ­o­my for decades.

Members of the Cengiz fam­i­ly reg­u­lar­ly appear in the Forbes rank­ing of Turkey’s wealth­i­est. They have good rela­tions with the gov­ern­ing AKP, and with Erdoğan him­self. Like the pres­i­dent, the fam­i­ly is from Rize, a city on the Black Sea coast. Erdoğan University is locat­ed there, and Bilal Erdoğan, one of the president’s sons, sits on the advi­so­ry board of a char­i­ta­ble orga­ni­za­tion with Mehmet Cengiz.

In recent years, the scale of corruption has worsened

When the AKP came to pow­er 14 years ago, it was elect­ed because peo­ple hoped it would rid Turkey of cor­rup­tion. In Turkish, AK means “white” or “pure”. It was no coin­ci­dence that Adalet ve Kalkınma Partisi – the par­ty of jus­tice and devel­op­ment – was abbre­vi­at­ed with these two let­ters. The AKP par­ty used a light bulb as its logo, and promised its vot­ers trans­paren­cy. It pledged to oblige politi­cians to dis­close their per­son­al wealth on a reg­u­lar basis.

This promise appears to have been long since for­got­ten. Today, the AKP is at the cen­ter of a clien­telis­tic net­work that sees politi­cians and busi­ness peo­ple form­ing lucra­tive alliances. The jour­nal­ist Şükrü Küçükşahın of the Al-Monitor analy­sis por­tal has argued that the new prime min­is­ter, Binali Yıldırım, will go down in his­to­ry as the politi­cian who failed to men­tion anti-cor­rup­tion mea­sures at his swear­ing in cer­e­mo­ny. Shortly after he entered office, Yıldırım dis­solved an anti-cor­rup­tion com­mis­sion that his pre­de­ces­sor had found­ed. At the same time, hard­ly any­one expect­ed the body to have any seri­ous impact on corruption.

And yet cor­rup­tion was ram­pant in Turkey long before the AKP. But in recent years, the scale of it has wors­ened, as the Turkish pub­lic became aware in 2013. At the time, deter­mined pub­lic pros­e­cu­tors launched a large-scale oper­a­tion that saw dozens of peo­ple arrest­ed, among them influ­en­tial busi­ness peo­ple and three sons of min­is­ters. It addressed ille­gal gold trad­ing with Iran, bribery, and manip­u­lat­ed pub­lic tenders.

The affair shook the gov­ern­ment to its core. On December 25, 2013, the prime min­is­ter ordered three min­is­ters to step down, among them the min­is­ter of urban devel­op­ment. According to inves­ti­ga­tors, his son received bribes in exchange for build­ing licens­es and the award­ing of pub­lic con­tracts. A few days lat­er, Erdoğan dis­missed anoth­er sev­en min­is­ters, many of whom lat­er faced accu­sa­tions. One of them was Binali Yıldırım, the cur­rent AKP par­ty leader and Turkey’s prime min­is­ter. According to inves­ti­ga­tors, Yıldırım, who was Turkey’s trans­port min­is­ter for many years, engaged in shady deal­ings when award­ing con­tracts for the state rail­way. The accused denied any wrongdoing.

The scan­dal that unfold­ed in the pub­lic eye was not lim­it­ed to a sin­gle com­pa­ny or politi­cian. Rather, it rep­re­sent­ed the dis­man­tling of the country’s polit­i­cal and eco­nom­ic lead­er­ship. Even Erdoğan came under fire. His son Bilal’s name appeared on an inves­ti­ga­tors’ list that was made pub­lic. The for­mer prime minister’s son sits on the board of a foun­da­tion that alleged­ly acquired pub­lic prop­er­ties in Istanbul at a sus­pi­cious­ly low price. At the time, phone record­ings appeared on the inter­net in which Erdoğan could appar­ent­ly be heard telling his son to make mil­lions dis­ap­pear. The authen­tic­i­ty of the record­ings has been ques­tioned, and Erdoğan has dis­missed them as a shame­less smear campaign.

The real-life polit­i­cal thriller cli­maxed and end­ed at the very same time. There were no fur­ther arrests. Within a few months, the gov­ern­ment had thou­sands of police offi­cers, court employ­ees, and pub­lic pros­e­cu­tors either trans­ferred or dis­missed. Erdoğan equat­ed the inves­ti­ga­tions to an attempt­ed coup by his rival Fethullah Gülen, an Islamic preach­er who lives in exile in the United States and has mil­lions of sup­port­ers in Turkey, many of whom work for the police and judi­cia­ry. Ultimately, inves­ti­ga­tions were closed and no charges were pressed.

More often than not, friends of the government have done good business

Several build­ing con­trac­tors were among the men under inves­ti­ga­tion, includ­ing Mehmet Cengiz. It was not sur­pris­ing that the ille­gal award­ing prac­tices were at the cen­ter of the inves­ti­ga­tions. In Turkey, the con­struc­tion and ener­gy sec­tors are noto­ri­ous­ly cor­rupt. The gov­ern­ment has changed award­ing pro­ce­dures for pub­lic con­tracts so many times that there are now almost as many excep­tions as rules. The EU progress report reg­u­lar­ly com­plains of sus­cep­ti­bil­i­ty to cor­rup­tion in the Turkish award­ing sys­tem. In 2015, the report stat­ed: “Due to numer­ous excep­tions allowed by the pub­lic pro­cure­ment law, pub­lic ten­ders remain par­tic­u­lar­ly vul­ner­a­ble to cor­rup­tion.” The most recent changes have moved even fur­ther away from EU standards.

For years, the AKP won elec­tions on the promise of a brighter future. Erdoğan want­ed to build a “new Turkey”: he was going to make the coun­try one of the world’s ten biggest economies by 2023, the year of the republic’s 100th anniver­sary. To achieve this aim, he ini­ti­at­ed major infra­struc­ture projects. The gov­ern­ment has com­mis­sioned the build­ing of dams, bridges, motor­ways and sky­scrap­ers, air­ports and pow­er plants. More often than not, friends of the gov­ern­ment have done good business.

There is no short­age of exam­ples that illus­trate close ties between AKP lead­er­ship and Turkey’s con­ser­v­a­tive busi­ness elite. Fettah Tamince is one of the six “Panama Turks” that Cumhuriyet is cur­rent­ly report­ing on because they own off­shore com­pa­nies. Tamince has prof­it­ed direct­ly from his con­tacts in the state appa­ra­tus. The eccen­tric build­ing con­trac­tor and own­er of the Rixos hotel chain has alleged­ly failed to declare his rev­enues or pay cor­po­rate tax­es for almost a decade. The tax author­i­ties have appar­ent­ly grant­ed him this priv­i­lege. In the Panama Papers, his name appears as the man­ag­ing direc­tor and own­er of sev­er­al shell com­pa­nies. He did not respond to SZ’s requests for com­ment. Tamince is said to be a good friend of the president.

Cihan Kamer, who earned his for­tune with dia­mond trad­ing, is anoth­er friend of Erdoğan’s. When the gov­ern­ment exempt­ed the dia­mond trade from the goods and ser­vices tax in 2004, one of his com­pa­nies osten­si­bly ben­e­fit­ed the most. Via a Mossack Fonseca shell com­pa­ny and a Panamanian foun­da­tion, Kamer held shares in com­pa­nies and sev­er­al accounts at Swiss banks. He did not respond to SZ’s request for com­ment. Kamer also did busi­ness with Erdoğan’s son Burak and his wife Sema. The three of them were appar­ent­ly part­ners at the Atagolf company.

Remzi Gür, a busi­ness­man in the tex­tile sec­tor, also main­tains an excel­lent rela­tion­ship with the pres­i­dent. Turkish media have report­ed that he financed the uni­ver­si­ty edu­ca­tions of all Erdoğan’s chil­dren. In 2008, Gur was sen­tenced to ten years in prison after he was charged with brib­ing a politi­cian. He has denied this, stat­ing that he “hates cor­rup­tion”. The sen­tence was reduced to a mild fine in 2010. In the Panama Papers, his name appears as the own­er of a com­pa­ny called “Excel Energy Trading Limited”, and this could pro­vide a deci­sive hint. Gur did not respond to SZ’s request for comment.

As the 2013 cor­rup­tion scan­dal was com­ing to light, the influ­ence that AKP politi­cians and pro-gov­ern­ment busi­ness lead­ers have over Turkey’s media land­scape became clear.

Until 2013, Berat Albayrak – who also hap­pens to be Erdoğan’s son in law – was CEO of a con­glom­er­ate that owned con­struc­tion and ener­gy com­pa­nies, among oth­er things. In 2015, he was elect­ed to par­lia­ment with the AKP, and soon went on to become ener­gy min­is­ter. Like many oth­er com­pa­nies, Çalık Holding also entered the media busi­ness. In 2008, the con­glom­er­ate pur­chased the ATV tele­vi­sion net­work and Sabah, a Turkish news­pa­per. Within a very short time, the news­pa­per became the government’s mouth­piece. Sabah ATV was far from prof­itable, and Çalık gen­er­at­ed a loss worth mil­lions. But the net­work served a con­ve­nient pur­pose: out­lets that broad­cast pos­i­tive reports about the gov­ern­ment increase their chances of being award­ed lucra­tive contracts.

In 2013, Kaylon Group took over Sabah ATV. The net­work is owned by the Kalyoncu broth­ers, who are said to have close ties to Erdoğan. The con­glom­er­ate was award­ed the ten­der to turn Taksim plaza into a shop­ping par­adise – the project that the Gezi protests were against. Kalyon is also involved in the build­ing of Istanbul’s new airport.

In 2013, the pub­lic pros­e­cu­tors who tried to inves­ti­gate the cor­rup­tion scan­dal also had a close look at the sale of Sabah ATV. Police wire­tap tran­scripts that were even­tu­al­ly leaked appeared to doc­u­ment con­ver­sa­tions between Erdoğan, the Kayloncu broth­ers, and Çalık boss Albayrak. According to inves­ti­ga­tors, Erdoğan cre­at­ed a “pool” of sorts, into which allied busi­ness peo­ple paid to finance trou­bled pro-gov­ern­ment media. In exchange, they may have received favors in the form of pub­lic con­tracts. Since then, the term “pool media” has had neg­a­tive con­no­ta­tions in Turkey.

Mehmet Cengiz, the man who alleged­ly made a threat­en­ing phone call to Cumhuriyet, and whose name appears in the Panama Papers, appar­ent­ly also appears in the wire­tap tran­scripts. In one spot, he is talk­ing to a busi­ness part­ner about what would hap­pen if plans to finance such pool media were made public.

The answer is now well known: no one was prosecuted.

Collaborator: Pelin Ünker

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