EXCLUSIVE: Senator probes DOJ's deal to end historic Iran sanctions case

Giving a pass to a record-breaking Iran sanctions-busting scheme during the war smacks of "rank incompetence" — or worse, Sen. Wyden says.

Senator Ron Wyden (D-Ore.) grills Treasury Secretary Scott Bessent (Photo by Andrew Harnik/Getty Images)

The Trump Justice Department’s lenient deal for a Turkish bank at the center of a record-breaking Iran sanctions-busting case has sparked a Senate inquiry, All Rise News has learned.

Sen. Ron Wyden (D-Ore.), the top Democrat on the Finance Committee, sent a letter pressing Treasury Secretary Scott Bessent on why the Trump administration suddenly decided to let Turkey’s state-run Halkbank off the hook on charges of conspiring to launder billions of dollars in Iranian oil money.

Halkbank’s deferred prosecution agreement would allow the bank to dismiss the case without a fine or admission of wrongdoing.

“This favorable agreement, which still needs to be approved by the court, comes as Iran and its proxies terrorize the Middle East and threaten Americans at home,” Wyden wrote in a 5-page letter. “That this administration has chosen to wage war on the Iranian regime, while at the same time abandoning prosecution of an entity that materially aided that same regime is nothing short of rank incompetence.”

‘A little conflict of interest’

Sen. Wyden has been investigating Trump’s relationship with the Turkish government and reported efforts to interfere with the Halkbank case since Trump’s first term.

Long before he was president, Trump expanded his real estate empire into Istanbul in 2012, and Turkey’s then-Prime Minister Recep Tayyip Erdogan attended the ribbon-cutting. Years later, Trump would admit in an interview with Steve Bannon that his financial interests could influence his foreign policy.

“I have a little conflict of interest because I have a major, major building in Istanbul,” Trump told Bannon in December 2015.

As Wyden noted, Trump’s disclosure forms indicated that he received $1.2 million and $7 million in royalties from the buildings during his presidency, and Trump cultivated a widely reported “bromance” with Erdogan, who kept consolidating power as Turkey’s strongman president.

Throughout his first term, Trump’s top officials kept reporting his efforts to torpedo the Halkbank case and a separate case against gold trader Reza Zarrab, who masterminded the money laundering scheme. Trump’s attorney Rudy Giuliani briefly represented Zarrab and unsuccessfully tried to negotiate a prisoner swap that would have ended the case.

Once that effort failed, Zarrab pleaded guilty, testified against a Halkbank manager, and implicated Erdogan in sanctions-busting trades on a New York witness stand. A separate indictment of Halkbank itself followed, and Erdogan intensely lobbied Trump officials to make it disappear.

Wyden noted that former Treasury Secretary Steven Mnuchin reported seven meetings with senior Turkish officials, including an Oval Office meeting with Erdogan’s son-in-law Berat Albayrak and Trump’s son-in-law Jared Kushner in 2019.

“These reports are part of a larger story highlighting former 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,” Wyden’s letter states.

At the time, Ballard Partners enjoyed the reputation as “The Most Powerful Lobbyist in Trump’s Washington,” as reported by POLITICO.

‘The Administration’s interference’

Two of the former U.S. Attorneys who brought cases against Zarrab and Halkbank — Preet Bharara and Geoffrey Berman, respectively — accused Trump of intruding on their prosecutorial independence.

The New York Times reported that ex-Attorney General Bill Barr explicitly urged Berman not to pursue the case against Halkbank, which was filed days after the Turkish invasion of northern Syria.

“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,” Wyden said.

Former national security advisor John Bolton wrote in his memoir “The Room Where It Happened” that Trump wanted to make the Halkbank case go away as a favor to Erdogan, one of the “dictators he liked.” Those efforts failed as then-U.S. Attorneys from the Southern District of New York rebuffed pressure from Main Justice, and the Halkbank case stalled amid appeals on sovereign immunity issues.

Now, Wyden notes that the years of work by federal prosecutors to keep the case alive could come up empty.

“This deferred prosecution to which DOJ and Halkbank agreed last month does not require the bank to admit to any criminal wrongdoing or pay any fines,” he wrote. “In addition, Halkbank will be allowed to select the monitor that will review Halkbank’s sanctions and anti-money laundering compliance. In court, DOJ told the judge hearing the case against Halkbank that U.S. judges generally lack the discretion to evaluate the substance of deferred prosecution agreements.”

Wyden gave Bessent two weeks to respond to a list of questions about Treasury’s role in this outcome, asking whether the agency recommended any fine or held any meetings with Turkish officials since Trump’s second inauguration.