October 5, 2014

Order came straight from the top: Sink the parallels!

Zafer Özcan, a former correspondent for the Zaman daily and current economy news manager for the Bugün daily, recently released a book titled “Paraleli Batırın” (Sink the Parallels), which unfolds the government's attempts to take over Bank Asya and the smear campaign led by pro-government media outlets, aimed at institutions allegedly affiliated with the Hizmet movement, comparing them to the aggressive attacks on Islamic capital in the Feb. 28, 1997 coup era.

Özcan answered the questions of Sunday's Zaman in an exclusive interview, revealing the background of the alleged parallel operation and stating that the Turkish economy is experiencing its second Feb. 28 period.

Özcan's book analyzes events from the Dec.17 and 25 anti-corruption operations up until this August, including all actors who were involved in slanderous attacks on Bank Asya. With a short timeline at the very beginning of the book, Özcan recalls the government's steps to stifle claims of corruption and bribery. However, he leaves the details of this for another work in order to focus only on the parallel operation. Nonetheless, the book gives the impression at the end that the government has been carrying out all its dubious practices for the sake of covering up the major corruption probes, which were made public following the Dec. 17 and 25 operations. We talked with Özcan about the further implications of the smear campaign.

It is widely known that then-Prime Minister and current President Recep Tayyip Erdoğan has been accusing the Hizmet movement and institutions affiliated with it of attempting to perform a coup against the government, from which four ministers were forced to resign after their names were cited in connection with bribery accusations and audio recordings that were exposed on the Internet. Erdoğan has pointed to a number of policemen who participated in the bribery and corruption investigations and alleged that they are members of a “parallel structure,” which he believes to be a secret structure inside the state.

“Depositors in any other country rush to banks to withdraw their money when it is going bankrupt; however, Bank Asya depositors put more money into their accounts, as if competing with each other to save the bank,” Özcan says in this book.

The book's subtitle is as striking as the sentence above, as it states that the order to sink the “parallels” came straight from the top.

Interior Minister Efkan Ala's statement that “Bank Asya made $2 billion in profit by buying a large amount of US dollars before the Dec. 17 investigation” was in the headlines for days. However, the lender announced a $1.5 billion loss in the same period. Later on, Ala stated that he had not mentioned Bank Asya. Have these last two facts been published by pro-government media outlets?

The pro-government media have not felt the need to release these statements, which would reveal their lies. It would be too optimistic to expect an opposite approach.

What is the latest situation with Kaynak Holding? Are inspections continuing?

It has been revealed by a court decision that the suspicious inspections of Kaynak Holding were unlawful. There are no more inspections being carried out on the holding.

Muharrem Yılmaz, the former president of the Turkish Industrialists and Businessmen's Association (TÜSİAD), stated on a TV program that the association is both against a banana republic and a pineapple republic. How should this announcement be understood? How did Mustafa Koç respond to this saying, you think?

Muharrem Yılmaz became the first president in history to resign from TÜSİAD. The efforts of the pro-government media outlets, which attack Yılmaz over his own company, Sütaş, had played a crucial role in his resignation. The dailies that were not pleased with Yılmaz's statement as president of TÜSİAD pursued a campaign of attrition with Sütaş. Looking at his resignation, his speech at the last general assembly meeting of TÜSİAD and the talks on his business trip to China drew a great reaction. His statement saying foreign investment does not go to a country where there is no rule of law, was labeled as traitorous by Erdoğan. In the end, Yılmaz resigned after being lynched by pro-government dailies, and after Erdoğan called him a traitor, a traitor based on his discourse about the expectations of businessmen in terms of the rule of law and the minimum level of democracy.

Do you think the state institutions/state-run companies that withdrew their money from Bank Asya on the advice of the government damaged public interest?

Participation banks do not pay profit shares to the account holders if the money is withdrawn before the maturity date. Of course, state institutions and companies suffered serious losses after they withdrew their money from Bank Asya. However, these losses were not paid out of the pockets of those who made this decision. The burden fell on ordinary citizens who sustain state institutions via taxes. So, the public has been damaged by this decision.

What do you think about the latest amendment that put the Foreign Economic Relations Board (DEİK) under control of the Economy Ministry?

The DEİK decision is a result of government efforts to have more control over the business world. In this period, the government has been obsessed with keeping both the public sphere and non-governmental institutions under its control. This approach is in deep contradiction with the philosophy of democracy and the standards of the EU, which Turkey has been trying to join for long.

In spite of the fact that the state-run Halk Bank announced profits after the Dec. 17 investigation, pro-government media outlets released several reports claiming the investigation had attacked the bank. Do these reports not go against the Banking Law and Capital Markets Board (SPK) legislation? Russia has been sentenced by the International Criminal Court (ICC) to pay $50 billion to shareholders in the Yukos oil company since it allegedly forced the company into bankruptcy. Besides, Turkey had previously been forced to pay a fine to the Süzer Group for bankrupting Kentbank. Do those two events set an example for Bank Asya's future?

Considering all the happenings from Dec. 17 to the present, we see that the financial stability the government has being ensuring for the past 10 years is at risk of destruction. The resilience of the Turkish banking system played a crucial role overcoming the last crisis, which originated in the US and affected economies all over the world in a very short time. This event caused Turkey in 2009 to experience the greatest economic shrinkage in its history. In spite of this, we are witnessing an operation in this country in which a president and his government are trying to sink a bank, creating risks for economic and financial stability.

If Bank Asya had been taken over as planned, Turkey would have been on the brink of an immense crisis that could have triggered fear and panic among deposit holders, and consequently a deposit outflow from all banks. At this stage, the clients of Bank Asya have acted out of prudence, which the government has failed to show, to prevent a financial crisis in the country, all while looking out for their bank.

It is obvious that the Banking Law has been violated by Erdoğan and pro- government media outlets, which made statements several times defaming the commercial credit of Bank Asya. However, the Banking Regulation and Supervision Agency (BDDK) and the Capital Markets Board (SPK) -- the two institutions responsible for the protection of banks and the banking system -- failed to do what they are supposed to.

Instead, the BDDK moved immediately and made statements protecting the state-run Halk Bank when the name of the general manager of the bank, Hüseyin Aydın, was cited in the Dec. 17 investigation.

We have been witnessing the discriminatory and biased treatments of regulatory agencies, a political move that may be seen as historically significant.

Excerpted from the ıntervıew publıshed on Today's Zaman, 04 October 2014, Saturday