A journalistic investigation has uncovered Turkish President Recep Tayyip Erdogan's politically-motivated arrest of Barbaros Muratoglu, a businessman with close to ties to President-elect Donald Trump. Erdogan reportedly hopes to leverage Muratoglu's freedom for the U.S. extradition of a Muslim spiritual leader whom he believes organized a coup against him.
On Dec. 13, a report by Newsweek revealed that Erdogan has already made maneuvers to prompt Trump to comply with his demands. The arrest of Muratoglu highlights the Trump Organization's deeply ingrained investments in Turkey, which could pose a highly consequential conflict of interest for the incoming administration.
This saga began in July, when the Turkish military attempted to stage a coup against Erdogan. The coup was thwarted, with the Turkish president accusing 77-year-old Fethullah Gulen, a former ally currently based in Pennsylvania, of orchestrating the plot.
President Barack Obama and his administration have declined to extradite Gulen to Turkey, asserting that the Turkish government will have to both produce evidence of the American resident's involvement in the coup and then guarantee that he would have a fair trial, Politico reports.
While Erdogan had initially pledged to root out only the military leaders who had plotted against him, Turkey has jailed 78,000 people, 145 of them journalists, and forcibly removed 115,000 others from employment, drawing accusations of an outright purge.
Leading up to the 2016 presidential election, Erdogan had been a vocal critic of Trump, drawing offense from the business mogul's rhetoric toward Muslims. This tone was rapidly changed on Nov. 8, the day of the election, when incoming Trump national security adviser Lieutenant General Michael T. Flynn penned an op-ed advocating for Gulen's extradition.
Flynn, whose security and intelligence firm receives payments from a prominent Turkish businessman, had called for the U.S. to give up Gulen without any conditions.
A source with insider knowledge of the Turkish government asserts that Flynn's article convinced Erdogan to adopt a conciliatory approach with Trump. He was among the first world leaders to call and congratulate the president-elect.
During their phone call, Trump had referenced his close friend, Mehmet Ali Yalcindag, whose family owns Dogan Holding, a Turkish-based developer which had constructed two Trump-branded towers in Istanbul. The Trump Organization has received roughly $10 million by Dogan Holding since 2014. The Newsweek source has asserted that Trump's reference to the Dogan family provided Erdogan with an idea to hold leverage over the president-elect.
On Dec. 1, Turkish authorities arrested Muratoglu, a senior executive at Dogan Holding, for having affiliations with Gulen. The justification for Muratoglu's arrest was based on accusations made by a newspaper owned by a developer in competition with Dogan.
Following Muratoglu's arrest, Dogan shares have already dropped by 8.6 percent. The source familiar with the situation concluded that the Turkish president will continue to hold Muratoglu and apply more pressure on Dogan -- in effect hurting the Trump Organization's investments in Turkey -- until the U.S. extradites Gulen without conditions.
Ozgur Unluhisarcikli, the Ankara director of the German Marshall Fund of the United States, has previously pointed out that Trump's business interests in Turkey, particularly with Dogan Holding, could pose a devastating conflict of interest while conducting foreign policy.
"It's Trump's soft belly," Unluhisarcikli told BuzzFeed. "It's something that anyone who picks a fight with him can use. So long as relations between the Trump administration and the Erdogan government are going okay this will remain a non-issue in Turkey. But if at some point relations start to sour, this will become politicized."