A 40-Second Guide To The Crisis In Turkey That Sent Markets Tanking And Put The Government In Its Weakest Position Yet

Turkey erdoganREUTERS/Umit BektasTurkish Prime Minister Tayyip Erdogan addresses the media in Ankara September 30, 2013.

Turkey is embroiled in a massive corruption scandal that has reached the inner circle of Prime Minister Tayyip Erdoğan, whose Justice and Development Party (AKP) took power in 2002, and involves several different international actors.

Here’s what has happened in the last few days:

  • At the heart of the scandal is an alleged “gas for gold” scheme gas for gold schemeinvolving The drama surrounding two personalities are particularly eye-popping: Police reportedly discovered shoeboxes containing $US4.5 million in the home of Suleyman Aslan, the CEO of state-owned Halkbank, and also arrested Reza Zarrab, an Iranian businessman who primarily deals in the gold trade, and who allegedly oversaw deals worth almost $US10 billion last year alone. – See more at: http://www.foreignpolicy.com/articles/2013/12/26/irans_turkish_gold_rush#sthash.V8sPEDr6.dpuf The drama surrounding two personalities are particularly eye-popping: Police reportedly discovered shoeboxes containing $US4.5 million in the home of Suleyman Aslan, the CEO of state-owned Halkbank, and also arrested Reza Zarrab, an Iranian businessman who primarily deals in the gold trade, and who allegedly oversaw deals worth almost $US10 billion last year alone. – See more at: http://www.foreignpolicy.com/articles/2013/12/26/irans_turkish_gold_rush#sthash.V8sPEDr6.dpuf the CEO of the state-owned Halkbank, who had $US4.5 million in cash stored in shoeboxes in his home, and an Iranian businessman who was involved in about $US9.6 billion of gold trading last year. Both men were arrested this week. (Jonathan Schanzer and Mark Dubowitz explain “Iran’s Turkish Gold Rush” in Foreign Policy.)
  • On Friday, a Turkish court blocked a government attempt to force police to disclose investigations to their superiors. The initial order came after Erdogan’s government purged about 70 of the police officers, including the head of the force in Istanbul, who were involved in the corruption probe.
  • Also on Friday, senior prosecutor announced that he had opened a corruption investigation targeting the prominent Turkish charity TÜRGEV, where the prime minister’s son Bilal is a board member.
  • On Wednesday three member’s of Turkey’s cabinet quit, one of whom called on Erdogan to resign, after their sons were detained in connection with the probe.
  • Apart from the gold trade, much of the alleged corruption involves Turkey’s construction industry, which has boomed under Erdogan.
  • Dozens of people, including officials in three government ministries and some of Turkey’s most powerful businessmen, have been reportedly implicated in overall probe. 20-four people are currently arrested.
  • A prosecutor fired on Thursday alleges that police failed to carry out some arrests, including that of a Saudi businessman named Yusuf Al Qadi who is linked to al-Qaeda and has access to high level security officials.

The fiasco is widely seen as part of a power struggle between Mr Erdogan and a powerful Islamic network created by Fethullah Gulen, a Pennsylvania-based imam who runs schools and charities across Turkey and abroad. His following of at least a million and includes senior police and judges.

Erdogan remains defiant, saying that he would overrule the courts if he could and described the corruption probe as an planted obstruction to his government’s vision.

“This is the last resistance of the old Turkey against the new Turkey. They will be not able to stop the building of the new Turkey,” Erdogan said.

The crisis has sent markets tanking and sent people to the streets.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.