Reza Zarrab watchers: We're less than an hour away from Day 2 of testimony. On Weds., we heard of a "45 to 50 million" bribe to Turkey's economic minister and "a few billion" in complex bank transactions. Day 1 recap here, & some thoughts/updates to follow courthousenews.com/turkish-gold-t…
* ex-economic minister - I ran out of room in the tweet for additional context, even with 280 characters. Lots of revelations.
This appeared on the docket yesterday: Halkbank manager Mehmet Atilla's attorneys "object vigorously" to a future expert witness's testimony on the rationale of U.S. sanctions against Iran - replete with references to terrorism documentcloud.org/documents/4315… 
Atilla's attorneys call the evidence irrelevant and "highly prejudicial" to a New York jury. A bit of context, the courthouse is a short walk away from the World Trade Center, and most reports on terrorism cases here make reference to that fact.
Atilla's attorneys objected before to evidence that Zarrab offered money laundering services as "economic jihad" for former Iranian president Mahmoud Ahmedinejad. Judge Berman allowed that evidence, but emphasized to the jury that this is not a terrorism case.
If Berman allows prosecutors to enter the evidence that Atilla's attorneys are now opposing, he is likely to give a similar, if not the same, instruction.
To be clear, this will not become an issue into later in the trial: namely, when witness Mark Dubowitz takes the stand. Here's his bio from his group: defenddemocracy.org/about-fdd/team…
Update on the court now: The prosecutors and attorneys are now milling about and talking, and the press and public are seated in the pews. An exhibit is being set up on an easel, but Zarrab is not yet on the witness stand.
Incidentally, I've been receiving some emails internationally about the case. The best way to reach me by email for work-related queries is aklasfeld@courthousenews.com. If PGP, then my personal address. I'm also reachable securely via Signal and WhatsApp.
Zarrab's now looking snazzy in a dark blazer and light shirt with the top button open. No more prison clothes!
The court is still waiting for one juror before things get started. Very quiet in the courtroom for now.
A brief recap of the prison-garb saga
Overheard in the press room - a reporter says of Zarrab's new wardrobe: "He cleans up nice!"
The jury is now entered. Everyone in the courtroom stands, with proceedings about to begin.
*entering
Prosecutor: I couldn't help noticing you're wearing different clothes. Why is that?
ZARRAB: Yes, my lawyers informed me yesterday that I could wear [civilian] clothes with the permission of the judge.
ZARRAB: Yes, my lawyers informed me yesterday that I could wear [civilian] clothes with the permission of the judge.
Urging lawyers to move on from the clothing questions, Judge Berman quips that he's sensitive to these issues: "I always hear my wife say in the back of my mind, what are you wearing?"
Zarrab says he's still in FBI custody, because of threats against him in prison. Doesn't elaborate.
Crowdsource help needed with names describing a meeting involving National Iranian Oil Company: Names sound like Alipour, Rejai, Jeshals, and Galabani. One of the banks involved was Sarmayeh Bank
Diagram time again: Zarrab is about to map out transactions again for the jury at the easel.
Observation by my Daily Beast colleague @katiezavadski
Zarrab now being questioned about a transcript of a phone conversation with Onur Kaya
ZARRAB: "A meeting between [Turkish ex-economic minister] Zafer Caglayan and Iranians occurred many times — that I also attended."
Zarrab on a meeting with Halkbank: "As I mentioned earlier, NICU and NIOC officials came from Iran. However, the Iranian oil minister did not attend this meeting."
PROSECUTOR: Who was there from Halkbank?
ZARRAB: Aslan, also Mr. Mehmet Atilla
ZARRAB: Aslan, also Mr. Mehmet Atilla
And, Zarrab's back at the easel for more diagramming.
By the end of trial, Zarrab's hand-drawn evidence might fill a rather small coffee-table art book. #joke
At aforementioned Halkbank meeting, Zarrab said that participants worried that bank’s plans might leak out to the media.
ZARRAB: Mr. Suleyman Aslan said... that they would not be the intermediary for making the international payments of Iran-but that they could continue to do their transactions through the existing system. ... He was pointing at me as the existing system.
ZARRAB: I understand that he [Aslan] was referring to what I drew on the diagram… the gold trade system there.
Another phone call transcript.
Q: Can you summarize the purpose of this call?
A: What I had explained on the diagram earlier about bringing money from India — the Indian money over, and we were to transfer that money from Arap Turk Bank.
Q: Can you summarize the purpose of this call?
A: What I had explained on the diagram earlier about bringing money from India — the Indian money over, and we were to transfer that money from Arap Turk Bank.
Q: Why was the money supposed to go from Halkbank to Arap Turk Bank?
A: In order to put another bank in the process to conceal the origin of the money.
Q: Was that discussed at the meeting at Halkbank in Oct. 2012?
A: Yes, this was discussed as a method.
A: In order to put another bank in the process to conceal the origin of the money.
Q: Was that discussed at the meeting at Halkbank in Oct. 2012?
A: Yes, this was discussed as a method.
Zarrab on importance of transferring money in Turkish liras: "If it were in dollars, it would have to go to the U.S. on the way to Arap Turk bank. If it was in euros, it would have to go in Europe. With it being in Turkish liras, it would stay in Turkey."
Zarrab (cont'd): So it would not get hung up in the int’l filters, so it would not draw attention.
Zarrab wrote in an email: “Brother, we talked things out with [Mehmet] Hakan [Atilla] and others.”
Explaining what he meant: "I stated that we talked to Atilla, Mr. Hakan Atilla and there was no problem"
Explaining what he meant: "I stated that we talked to Atilla, Mr. Hakan Atilla and there was no problem"
Again, this is one of the few references so far to Atilla, the man on trial. Prosecutors seem to be pivoting to the defendant today.
Zarrab: Aslan said that he was "feeling uncomfortable" about the risks involved in the transactions, and was "concerned for his future."
Zarrab said he interpreted this sentiment from Aslan as him wanting money, and said he'd get back to him.
Q: Why did you need to get back to him about it?
A: Because I needed to get approval from Mr. Zafer Caglayan.
Q: Why did you need to get back to him about it?
A: Because I needed to get approval from Mr. Zafer Caglayan.
Zarrab: “Just like Zafer Caglayan this one’s asking for money too.” Aslan = "This one," Zarrab says.
Zarrab said that he and associate Abdullah Happani worried about Caglayan finding out Aslan getting paid.
ZARRAB: "Zafer Caglayan, since he was checking our bank statements from time to time to see what’s coming in, he’s saying that will he not notice that we are doing trade with Suleyman Aslan as well."
(cont'd) "I say that Zafer Caglayan will know."
ZARRAB: "During that time period, Ziraat Bank and Vakif Bank also wanted to participate in Iranian business."
Q: At that time, who was the Prime Minister of Turkey?
A: Recep Tayyip Erdogan
A: Recep Tayyip Erdogan
Quote that Zarrab attributed to Suleyman Aslan: “Hand washes hand, and then the hand washes the face.”
Zarrab says: Aslan means that we help A&T bank, and they help us.
ZARRAB: “Mr. Prime Minister” gave approval -- and an order to start doing that trade.
Fuller Zarrab quote: "What I’m saying is that the prime minister at that time period Recep Tayyip Erdogan and minister of the treasury ... had given orders to start doing this trade."
Zarrab notes that he assumed "Ziraat has a branch in New York," which would violate sanctions.
And with that, the court takes a morning recess. Back in a few minutes.
We're back, with more testimony about transcripts of phone calls. Zarrab says - with all of these - that the transcripts accurately recall his conversation.
Transcript quotes Aslan saying: Aslan: “We were with Mr. Minister and others.”
Didn't explain this, but it appears to be a more likely reference to Caglayan (then-economic minister) than Erdogan (then-prime minister).
Zarrab: "Just like Sarmayeh, as I had drawn on the diagram, many Iranian banks have accounts under Halkbank."
Zarrab to Happani: “We will send two to Levent’s boss tomorrow morning. Keep it ready.”
"Levent's boss" = Suleyman Aslan, Zarrab says
"Levent's boss" = Suleyman Aslan, Zarrab says
Background: Levent Balkan, another bank executive, is under indictment, and prosecutors say he's at large. justice.gov/usao-sdny/pr/f…
Zarrab testifies that he worried about being bumped form the transactions.
"I was fulfilling the int'l money orders given by Iranians, and the request from Iranians was for Halkbank to do this instead. If Halkbank would agree to do this, then I would be completely eliminated."
"I was fulfilling the int'l money orders given by Iranians, and the request from Iranians was for Halkbank to do this instead. If Halkbank would agree to do this, then I would be completely eliminated."
Zarrab: I was paying 50 percent … to Zafer Caglayan with regard to the Iranian trade… and the sum of those profits had to be calculated.
Zarrab is explaining internal accounting of the trade. Reviewing a piece of evidence.
One of the payments involves the purchase of a watch. No context given. Zarrab says he bought many watches, and they move on.
Another payment says cash to the initials of Suleyman Aslan in the amount of 2 million euros.
Prosecutor asks if Zarrab bribed anyone else at Halkbank, like Levent Balkan or Attilla.
A: "No, absolutely not."
Prosecutor asks why.
A: "I was already giving bribes to the Turkish minister of the economy."
Essentially, he says, there was no need.
A: "No, absolutely not."
Prosecutor asks why.
A: "I was already giving bribes to the Turkish minister of the economy."
Essentially, he says, there was no need.
Lunch break! Or as we reporters call it, filing time break. Back at 2 p.m. EST.
Still no Zarrab on the stand. Possible delay...?
Okay, he's back at the stand taking a sip of water. Now, we're waiting for the jury.
We're back and the prosecutor jumps into transactions involving China.
PROSECUTOR: The text contained in the email, does that relate to the business you were doing in China?
ZARRAB: Yes, it’s related to the Iranian trade.
ZARRAB: Yes, it’s related to the Iranian trade.
Zarrab says that the Chinese transactions had more trouble than in Turkey because they were nervous that the transactions had to do with Iran.
Zarrab said he contacted the Turkish minister of the interior’s son.
The son was working for Zarrab while his dad was minister of the interior, Zarrab says. Zarrab said he met in person. Called over the telephone and messaged over WhatsApp
This appears to be a reference to Barış Güler, son of then-minister Muammer Güler. Turkish coverage of that episode at the time (in English) hurriyetdailynews.com/high-profile-f…
Testimony turns to another transcript of a phone call between Zarrab and associate Ruchan Bayar (spelling?)
Zarrab said that Bayar told him their Chinese bank contact "is absolutely not allowing the same trade that we’re doing at Halkbank to [happen] in China."
They came to the conclusions that they would not be able to "pull this off," i.e. Iranian transactions in China, without bribing the Chinese official who's the equivalent of Halkbank general manager Suleyman Aslan, Zarrab said.
*conclusion.
Testimony turns to Zarrab's company Royal Maritime
ZARRAB: "We had to do the gold export equivalent to the amount that we received in the money. I can show it on the drawing if they want."
Judge says no to the art show, for now. Testimony continues.
Judge says no to the art show, for now. Testimony continues.
Observation from earlier today still stands
Another phone call transcript being entered into evidence. Side note: Atilla's attorney objects to admission of all of these transcripts, where are being entered subject to connection and authentication. (A fact that likely previews cross-examination.)
Alleged convo between Levent Balkan and Zarrab describing an HSBC transaction.
Zarrab says the HSBC transaction is apparently unrelated to Iranian transactions.
Defense then objected on relevance grounds.
Testimony has moved on.
Defense then objected on relevance grounds.
Testimony has moved on.
Q: What did you use WhatsApp to communicate with Suleyman Aslan about?
ZARRAB: Generally, we were writing on WhatsApp the sensitive subjects, the private subjects and the important subjects.
ZARRAB: Generally, we were writing on WhatsApp the sensitive subjects, the private subjects and the important subjects.
Prosecution moves to enter WhatsApp messages into evidence. Atilla's attorney objects and requests a sidebar (where the attorneys chat privately with the judge to elaborate on the nature of their objections)
Judge Berman calls for a 5-minute break.
During this short recess, this is a developing story on today's proceedings. Much more to be added later. courthousenews.com/money-launder-…
During this short recess, this is a developing story on today's proceedings. Much more to be added later. courthousenews.com/money-launder-…
When Berman said 5 minutes, he meant 5 minutes. We're back.
Finally, back to the defendant: Prosecutors want to introduce an alleged conversation between Zarrab and Atilla over Iran transactions. The audio recording.
Translated transcript comes into evidence.
Zarrab says Atilla was talking about "the amounts being sent from Iran and the partnership structure documents pertaining to these companies that are sending these amounts should be sent to Halkbank."
Defense objects to translation, says it's a "shareholder" issue.
Defense objects to translation, says it's a "shareholder" issue.
Prosecutor moves to admit a new piece of evidence: A message from Suleyman Aslan.
Warning that the gold trade will be coming to an end, Alsan notes: “There’s a huge demand in food, medicine and similar commodities,” according to the evidence.
Background: During opening arguments, prosecutors said that Halkbank eventually ended its gold trade and transitioned to Iranian transactions disguised as humanitarian aid.
This new system started in April 2013.
According to the testimony.
Prosecutor wants to add another phone conversation transcript into evidence: between Zarrab and Abdullah Happani.
Happani tells Zarrab about the food transactions: "Let’s get started right away through [Zarrab’s company] if you’d like," according to the transcript.
WhatsApp message between Zarrab and Suleyman Aslan: “My dear general manager, I started food today.” “In other words, the food trade has started,” Zarrab adds separately.
Missed the date when that WhatsApp message was sent, if anyone caught it, please pass on in the mentions or by DM.
Prosecutors now want to enter their second audio recording of phone calls between Zarrab and Atilla.
Phone call is from around April 2013 (Zarrab's not sure). Zarrab says it's related to the food trade brokering business that he discussed with Aslan.
Zarrab: Aslan says "Yes, I have knowledge of this matter," referring to the food trade.
*Atilla, not Aslan. Typo. Apologies.
A key question
A strong theory about the provenance, and we'll see if it gets confirmed on cross-examination - or later in direct, for that matter
An aside: It's Thursday, and trial is nearly over for the day -- and it's still direct examination of Zarrab. It seems pretty clear that Zarrab is going to be testifying longer than expected. Original anticipated end date was Friday, but I don't see that possibly happening.
Cross examination has not even begun, and then there's possible redirect, recross, etc. Lots more Zarrab coming up folks.
But today's not over yet, so we're back.
Prosecutor reads a back-and-forth message before close of trial today.
In response to this questions - "Do you have a problem with the message proposed by Hakan Atilla?" - Zarrab replied: 'No, that is absolutely correct method.'"
In response to this questions - "Do you have a problem with the message proposed by Hakan Atilla?" - Zarrab replied: 'No, that is absolutely correct method.'"
Judge Berman wanted to close trial today earlier.
Prosecutors wanted to get that message implicating Atilla in there.
Berman jokes to the prosecutor: "When you go to the Turkish bath, you're gonna sweat."
Prosecutors wanted to get that message implicating Atilla in there.
Berman jokes to the prosecutor: "When you go to the Turkish bath, you're gonna sweat."
Important press access issue unfolding right now: Prosecutors and attorneys are fighting against immediate access to transcripts and other exhibits entered today.
Judge Berman: "I think we should make exhibits available."
Judge Berman: "I think we should make exhibits available."
The issue is, many of these exhibits are being entered subject to connection and authentication - and the lawyers want to redact and delay until these issued resolved. Berman notes press entitled to access to exhibits entered into the record.
Berman urges the parties to confer to reach some sort of arrangement where more of the public record becomes public. If it seems like our ability to provide this information is delayed, that's why.
Side note: Berman has a strong record in terms of press access. He understands the needs for transparency and press access. An example. nydailynews.com/archives/opini…
The sun's down in New York and Turkey right now, but let's see if we get more sunlight on these trial exhibits soon.
