Records from leaked Paradise Papers over off-shore accounts and companies of prominent wealthy people in a tax-evasion scheme have sent reverberations across the world capitals, shattering political landscapes, while igniting fresh debates over overseas assets and how to effectively stop companies and the rich from parking their fortunes in tax-free heavens.
The storm also hit Turkey after a cascade of revelations suggests that Prime Minister Binali Yildirim‘s family members also found companies in Malta. The link placed the prime minister and his family at the center of public and political scrutiny, prompting the main opposition party leader to bring the issue to Parliament agenda.
The prime minister of Turkey, Republican People’s Party (CHP) leader argued, was placing his fortunes in an island country to evade taxes. On Wednesday, CHP Deputy Chairman Bulent Tezcan even went further and called on Mr. Yildirim, who is currently in Washington, D.C., for a three-day official trip, to resign.
Mr. Yildirim found himself on the defense, trying to deflect criticism by elaborating on the nature of his business and how he relinquished the control of his companies to his sons when he became prime minister.
“Yesterday a newspaper reported that I and my family have off-shore companies. It is better for our citizens to learn the truth. I’m a ship and construction engineer; I did this business during my entire life,” the prime minister said.
“Shipping is a global business; they do business in every part of the world,” Mr. Yildirim said. It is very normal we have companies, he added, with an unwavering conviction. He appeared unfazed amid the roller coaster of the revelations.
He also leaped into the defense of his sons after Cumhuriyet daily report, which combed through details of Paradise Papers, ensnared them in the scandal to haunting effect for the prime minister.
“Offshore Brothers,” the Cumhuriyet story run the headline on its front page, delving into a web of connections by Turkey’s most prominent figures. Another towering figure from Turkey was Berat Albayrak, son-in-law of President Recep Tayyip Erdogan and also Turkey’s energy minister.
“When I entered politics, I had a strong recommendation to my children: You will not have any business with the state. You will not borrow money from state-run banks,” Mr. Yildirim said before departing for the U.S. on Tuesday.
He even challenged the opposition, calling on them to go to courts to prove any wrongdoing.
The Cumhuriyet scrupulously worked on another story, which belied the prime minister who steadily claimed that his family did not get any government contract. Erkam Yildirim, Prime Minister Yildirim’s son, just eight months ago secured a lucrative deal from The Public Procurement Authority, a government agency regulating and administrating government resources and public tenders.
The Cumhuriyet joined 96 media outlets around the world in a joint media task led by the Washington-based International Consortium of Investigative Journalists. The organization acquired leaks of 13 million documents that detail how the wealthy and prominent figures established offshore companies to hide their wealth and evade taxes.
The scandal appears to be particularly damaging especially after President Erdogan launched a purge of local government and replaced mayors of major cities from his own party.
The central theme of the president’s reshuffling of party bigwigs was the ‘war against corruption’ in a bid to re-energize and animate an exhausted party base. The Paradise Papers exposes the dilemma of his engineering and electioneering of the party apparatus through anti-corruption themes given the implications of the findings after leaks from Malta.
The revelations also laid bare the challenges for journalism in Turkey, as many media outlets preferred to ignore the bombshell story. While Hurriyet reported about Queen Elizabeth, there was not a word about Mr. Yildirim or President’s son-in-law. Faced with the prospect of a potential government backlash or incurring its wrath, the newspaper even retracted its story about the British queen, choosing silence about the trove of leaks that shook the Western world.
Only several opposition newspapers sifted through the leaks to find Turkish politicians or business people. Cumhuriyet’s story provided ammunition for CHP to turn their fire on the prime minister. CHP Chairman Kilicdaroglu repeatedly and unreservedly unleashed a scathing criticism of the government, particularly hitting what he said hypocrisy and double standards.
A resurgent national economy is a cardinal element of the government’s recently adopted economic nationalism and patriotic discourse; and tirades against globalist forces, international lobbies have become daily sport for Turkish leaders.
“You always talk about the national economy and emphasize Turkey-first localism, but then go to Malta to open off-shore companies,” Mr. Kilicdaroglu stated in sharp criticism.
Being tainted by corruption or tax evasion would be detrimental to the fortunes of the ruling party after a flagging economy, soaring inflation and a weakening Turkish lira. But given the past record of President Erdogan and his government who survived a politically explosive graft investigation four years ago, it would not be that difficult for him to weather another storm.
What would be overall damage for ruling Justice and Development Party (AKP) is hard to gauge given the insular political culture of the country and media censorship, which in turn insulate core supporters of the government from “damaging effects” of any information from outside.