Bubble Finance Generates Global Deformations: Fuels Endemic EM Corruption And Shoesboxes Of Cash

by Tyler Durden

Suleyman Aslan is the CEO of Turkey's second largest bank; so imagine how shocked police were when, as Bloomberg reports, they raided his home and found $4.5 million cash stashed in shoeboxes and bookshelves. When asked why the funds weren't deposited at the bank he ran, he said that would mean declaring their origin and registering them officially...something he clearly preferred not to do. Add to this a massive 44% surge in non-monetary gold exports (and who knows how much gold smuggled - once again preferring not to explain its origin) and it appears increasingly clear 'wealth' is being extricated from the increasingly totalitarian nation before confiscations begin following the 'successful' elections this weekend for the ruling AKP party.

Via Bloomberg,

When Turkish police raided the Istanbul home of Suleyman Aslan in December, they found $4.5 million stashed in three shoe boxes and hidden in bookshelves.

Aslan, then chief executive officer of the country’s second-largest state-owned bank, said in court that the money was donations collected for his alma mater in central Turkey and to help build a university in Macedonia. When asked why the funds weren’t deposited at the bank he ran, he said that would mean declaring their origin and registering them officially, according to accounts of his testimony in local newspapers.

Dozens of phone conversations purported to be police wiretaps and leaked over the Internet in recent weeks instead paint a portrait of a banker helping a businessman smuggle gold and transfer hundreds of millions of dollars to Iran, evading U.S. sanctions. Surveillance photos said to be taken by police show similar boxes being delivered to Aslan’s home. The money was intended as bribes to ensure his cooperation, police allege.

In a separate investigation, Huseyin Aydin, CEO of Turkey’s largest government-owned bank, was overheard by police approving loans to businessmen who said they were under orders from Prime Minister Recep Tayyip Erdogan to buy a media company.

“What has come out in recent months is definitely raising concerns that maybe we’re back to the old days when these institutions were badly mismanaged,” said Alyssa Grzelak, a Washington-based senior economist for banking risk at research firm IHS Inc. “After the 2001 crisis, they were supposed to be cleaned up and no longer doing the bidding of politicians, but that seems to have been reversed.”

More corruption is coming to light...

In leaked recordings of phone calls allegedly made in October, Aydin can be heard talking to businessmen who say they have been ordered by Erdogan to buy Turkey’s Sabah newspaper and ATV television network. The calls were taped as part of a string of investigations that came to light on Dec. 17, when scores of people tied to Erdogan’s government were arrested or detained on charges including gold-smuggling, bribery and bid-rigging.

Transcripts of the conversations along with thousands of pages of documents have been leaked by unidentified people since the government dismissed and replaced police chiefs and prosecutors involved in the investigation, which Erdogan has said were part of an effort to undermine him in advance of the elections. While each sound recording is labeled and subtitled, the police reports include transcripts of conversations that haven’t been released and couldn’t independently be verified.

Erdogan, who acknowledged the veracity of some recordings, has tied them to a conspiracy by a faction of his governing party that has turned against him...

“We know so little about these new firms that have grown so fast thanks to their political connections,”

Additionally, Turkish exports of non-monetary gold in Feb. were worth $797m, 44.5% higher than yr earlier, according to Bloomberg calculation based on official data by state statistics office in Ankara.

One can only wonder how much was 'smuggled' as opposed to legally defined as exported as it appears increasingly clear 'wealth' is being extricated from the increasingly totalitarian nation before confiscations begin.

It seems there is anything but calm after the implicit vote of confidence for Erdogan...


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