Turkey Graft Suspects in Court as Erdogan Purges Police

Prosecutors asked an Istanbul court to jail the sons of Turkish ministers pending trial on graft charges, stepping up a corruption probe that has shaken Prime Minister Recep Tayyip Erdogan’s government and roiled markets.

The sons of Interior Minister Muammer Guler, Economy Minister Zafer Caglayan and Environment Minister Erdogan Bayraktar entered the court flanked by police officers, three days after they were taken into detention in a dawn raid. Prosecutors asked the court to formally arrest them, along with Suleyman Aslan, chief executive of state-run Turkiye Halk Bankasi AS, and 10 others, Hurriyet newspaper said.

Police have said the inquiry targets organized graft, money laundering and gold smuggling. Erdogan has denounced it as an effort to smear his government, and at least 60 police chiefs have been purged this week.

The probe has sparked concerns of an escalating confrontation between Erdogan and his former political ally, U.S.-based Islamic cleric Fethullah Gulen, who has a wide following in the police and judiciary. Some politicians from Erdogan’s party signaled that Gulen was behind the operation, which he has denied.

Erdogan’s government and the Gulen movement have been publicly sparring since November over plans to shut down private prep schools, a source of money and influence for Gulen’s followers. Two lawmakers resigned from Erdogan’s party this month over the decision.

‘Dirty Game’

Erdogan has vowed to defeat what he called efforts to build a “state within a state.” Deputy Prime Minister Bekir Bozdag today said opponents had embarked on a “dirty game” aimed at damaging the government ahead of local elections in March and a presidential poll scheduled for August.

The lira fell to a record low today and traded at 2.0857 per dollar at 7:30 p.m. in Istanbul. The yield on benchmark two-year domestic debt climbed 25 basis points to 9.61 percent, the highest in more than three months.

The country’s top business group, Tusiad, warned yesterday that the dispute may destabilize the economy. “These developments create anxiety” and undermine the stability that Turkey’s economy needs, Muharrem Yilmaz, head of Tusiad, said in Izmir, according to Anatolia.

Opposition parties accused the government of seeking to thwart the corruption probe by removing top policemen. Kemal Kilicdaroglu, head of the main opposition Republican People’s Party, accused Erdogan of being a “gang leader,” and called the appointment of new police chiefs illegal.

‘Disgusting Slander’

The probe undermines Erdogan’s claims that he’s cleared Turkey of graft. The initials of Erdogan’s Justice and Development, or AK, party mean “transparent” or “clear” in Turkish, and it swept to power in 2002 after a financial crisis revealed rampant corrupt lending at the nation’s banks.

Fending off a further challenge to Erdogan, Numan Kurtulmus, a deputy chairman of the ruling party, said a pornographic clip allegedly featuring him and published on the Internet was taken from a movie. He vowed to respond to what he branded a “grave and disgusting slander,” Anatolia said.

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