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Turkey Drops Probe Into Alleged Real Estate Corruption

A Turkish prosecutor dropped an investigation into corruption in real estate, one of three graft probes that had been rattling the government of Prime Minister Recep Tayyip Erdogan since December, Hurriyet newspaper said.

Prosecutor Ekrem Aydiner’s decision means the judiciary probably won’t pursue a case against 60 suspects in the probe, including construction magnate Ali Agaoglu and Oguz Bayraktar, the son of former government minister Erdogan Bayraktar, who lost his job in a cabinet shuffle a week after the allegations were made public. Turkey’s state housing agency TOKI and state-linked real estate developer Emlak Konut (EKGYO) had also been implicated in the case.

Erdogan’s government is fighting off graft allegations that broke when the sons of three former ministers were detained in simultaneous police raids starting Dec. 17. Erdogan’s ruling Justice and Development Party, or AKP, says the probes and arrests were orchestrated by political foes and aimed to undermine his government in the run-up to March 30 municipal elections.

“The government is succeeding in its efforts to neutralize the damaging corruption investigation,” Wolfango Piccoli, a political and economic risk analyst with Teneo Intelligence in London, said by e-mail today. “The AKP will now focus more and more on those it believes were behind the probes.”

New Prosecutors

Erdogan’s government is purging people it deems to be followers of U.S.-based Turkish cleric Fethullah Gulen in the police force and the judiciary. The premier blames the cleric for masterminding the allegations of corruption and has vowed to start legal action to request Gulen’s extradition from the U.S., while eliminating his followers from state institutions.

Aydiner, the prosecutor behind today’s decision, was appointed to lead the investigation after his predecessor, who opened the case, was dismissed. In February, Aydiner lifted travel restrictions on most suspects, citing a lack of evidence against them.

The country’s Supreme Board of Judges and Prosecutors today started a probe against prosecutors Zekeriya Oz, Celal Kara and Muammer Akkas, who were initially in charge of the graft case, as well as judge Suleyman Karacol, who had ordered a freeze on assets of the suspects, the state-run Anadolu news agency said.

Corruption Message

Ozcan Yeniceri, a lawmaker for the opposition Nationalist Movement Party, protested the decision, saying the corruption probes were “manipulated by this government” and “there will never be real prosecution,” according to Anadolu.

Kemal Kilicdaroglu, leader of the opposition Republican People’s Party, said in a press conference in Istanbul today that his party would continue to make corruption a campaign issue in the run-up to presidential elections in August.

“We have to talk about what kind of president we want, whether it’s right to have someone accused of corruption in that seat,” Kilicdaroglu said. “We’ll focus on that message.”

To contact the reporters on this story: Onur Ant in Ankara at oant@bloomberg.net; Selcan Hacaoglu in Ankara at shacaoglu@bloomberg.net

To contact the editors responsible for this story: Andrew J. Barden at barden@bloomberg.net Ben Holland, Mark Williams

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