As an aside: one of the distressing features of clever official messaging versus cursory and/or easily manipulated media consumers is the way various statements are distorted and exaggeraged by not just eager fellow travelers but by general readers. We’ll get to this bad side effect before dealing with the main event.

A US Treasury department official chided Turkiye in a press conference in Istanbul over its charge that Turkiye was effectively supporting Hamas by not cracking down on Turkiye nationals who were funding Hamas. Mind you, we have no idea how important these alleged money sources were in the overall scheme of Hamas funding. The same Treasury official also separately complained that Turkiye also appeared to be helping Russia via re-exporting dual use components like chips to Russia.

Let us first look at the Financial Times headline, US ‘profoundly’ worried over Turkey’s financial links to Hamas. As a Pulitzer Prize winner remarked, words like “ties” and “links” were the most misleading in all journalism, since almost any sort of connection was a link, and could then be trumped up amount to more than it amounted to.

You need to read the piece carefully, since the key admission comes late, that Turkiye has not signed up for sanctions against Hamas yet the US expects Turkiye to pursue what looks like the comparatively few cases it has found. On top of that, the US actually concedes that it does not appear that any money has gone via Turkiye to Hamas since October 7, yet it decides to make a stink now anyhow. From the Financial Times:

Brian Nelson, the US Treasury’s under-secretary for terrorism and financial intelligence, said the anxiety stemmed from the fact that Turkey had historically played a “prominent role” in allowing the militant group behind the October 7 attack on Israel to access funds….

The US had not detected additional Hamas money flowing through Turkey since October 7, according to Nelson, but the country had played “a prominent role in [past] fundraising streams and . . . that Hamas is going to seek to take advantage of that fact as it raises additional funds”….

The US last month imposed sanctions on three individuals it said were Turkey-based Hamas operatives who help run the militant group’s investment network. The Treasury has previously implemented sanctions against a Turkish real estate investment company it alleged was controlled by Hamas. 

Nelson said that while Erdoğan’s public support for Hamas made it unlikely that Turkey would sign up to US sanctions on the group, Washington did expect Turkey to utilise its own powers to target Hamas’s funds because of its “capacity for terrorism”. 

The pink paper says the US asked Turkiye to comment on Nelson’s remarks; the foreign ministry did not deign to respond.

Let us also review who the US deems to be Hamas’ big money bags. From Reuters in October this year:

Matthew Levitt, a former U.S. official specialised in counterterrorism, estimated the bulk of Hamas’ budget of more than $300 million came from taxes on business, as well as from countries including Iran and Qatar or charities.

Last February, the State Department said that Hamas raises funds in other Gulf countries and gets donations from Palestinians, other expatriates and its own charities.

$300 million is couch lint. So another conclusion is Hamas manages to be effective despite limited financial support.

The Reuters article later has the US saying that Hamas has shell companies all over the Middle East, including in Turkiye.

Now perhaps the US, being the US, would have engaged in this public chiding in a visit to Turkiye regardless. But this looks instead to be the US engaging in a tour to enlist countries who did not sign up to new sanctions against friends of Hamas to nevertheless enforce them. From the Treasury website on November 14:

Today, U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed its third round of sanctions targeting Hamas-affiliated individuals and entities since the October 7 Hamas terrorist attacks on Israel. This action designates key Hamas officials and the mechanisms by which Iran provides support to Hamas and Palestinian Islamic Jihad (PIJ). Today’s designations are coordinated with action by the U.K. and are aimed at protecting the international financial system from abuse by Hamas and their enablers. The U.S. Department of State is concurrently designating a leader of PIJ’s military wing.

Now of course it may also be that the US decided to embarrass Erdogan (a seemingly impossible task) by speaking out in public in Turkiye as opposed to through the normal channels. Perhaps the US is using device to register its unhappiness with Erdogan, who sins in US eyes include fierce criticism of Israel’s civilian-murdering operation in Gaza and his (so for not going anywhere but still potentially destabilizing) 1000 ship flotilla-to-Gaza scheme.

Regardless, this US posturing comes off as a hubristic wet noodle lashing. The US does not have any serious goods on Turkiye with respect to Hamas. What it seems to be really upset about the Turkiye not acting like a good NATO member, as in not following the European party line on Israel and being way way way too friendly to Russia. Oh, and perhaps not surprisingly, Treasury official Nelson also made noise about that. Again from the Financial Times:

Nelson said he also raised concerns with Turkish counterparts that Russia is gaining access to western-made parts for its war machine via Turkey.

His comments come after the Financial Times reported that Turkey’s trade in these items, including microchips and optical scopes, with Russia and suspected intermediaries had boomed since the war in Ukraine began last year, deeply frustrating the US and other allies including the EU and UK. 

If you read the Financial Times’ November 27 article, it sounds as if Nelson was primed to take a much tougher line and didn’t get very far. You’ll notice that the Financial Times’ tone about the alleged military imports was also fiercer than in the new story. From the older piece:

Turkey’s exports to Russia of goods vital for Moscow’s war machine have soared this year…

The growing trade, and the corresponding rise in imports to Turkey of 45 civilian materials used by Russia’s military, has undermined US and European attempts to curb Moscow’s ability to equip its armed forces, fuelling tensions between Ankara and its Nato partners.

In a sign of how it has become a priority in Washington to rein in this trade, Brian Nelson, US Treasury under-secretary for terrorism and financial intelligence, will visit Istanbul and Ankara this week, where he is set to discuss “efforts to prevent, disrupt and investigate trade and financial activity that benefit the Russian effort in its war against Ukraine”.

The new article finishes by effectively acknowledging that the US/NATO and Turkiye are at loggerheads on other fronts, with Turkiye not having approved Sweden joining NATO and the US holding back on selling F-16s to Turkiye.

To return to the issue flagged in the headline, of what may be either artful propagandists or less than careful editors then feeding less than careful readers to think even worse of US official enemies than they already do, consider the Wall Street Journal headline on the same Treasury effort to muscle Turkiye over not cracking down on Hamas money channels and being too cozy with Russia: U.S. Leans on Turkey to Stop Supporting Hamas and Russia. I have already had two reader attempt to depict that article as proving that Russia provides financial support to Hamas, when it says no such thing. On top of that, Putin personally has been a long-standing supporter of Israel.

Now there may well be Muslims in Russia who are sending money to Palestinians, but neither article makes any such allegation. It’s the mere guilt by association trick: that putting Hamas and Russia in the headline has led lazy or Russia-hostile readers to use the headline to make an unsupported accusation.

To its credit, the Journal does describe how Turkiye objects to Treasury’s charges regarding Hamas:

The Erdogan government doesn’t recognize Hamas as a terrorist organization, as the U.S. does. It draws a distinction between the group’s military and political wings and has questioned whether the flow of funds from the businesses directly finances arms…

“Hamas is not a terrorist organization, it is a liberation and mujahedeen group, trying to protect its land.” Erdogan said in a speech to members of his ruling party last month, using an Arabic word for those who fight in the name of religion.

The US is also threatening to sanction Turkiye companies and individuals that it sees as involved in providing goods Russia might be using in its war. The article also mentions:

U.S. officials met this week with Turkish bank executives in closed-door briefings. Turkish banks are required to stop terrorism financing and suspected money laundering to maintain access to U.S. dollar financial markets.

While anything is possible, it would seem unwise for the US to try to sanction Turkiye banks the way the US did with UK banks that violated US anti-money-laundering rules against Iran, such as threatening Standard Chartered with yanking its US banking license. Turkiye has restricted US access to the critically important Incirlik and could do so again. So I would expect only more whinging and comparatively penny-ante punishments. But his row is yet another proof that US dominance is running on brand fumes.

This entry was posted in Banking industry, Media watch, Middle East, Politics, Regulations and regulators, Russia, Turkey on by Yves Smith.