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Turkey

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Crafty_Dog:
Woof All:

With this analysis of the geopolitics of Turkey by the ever impressive Stratfor.com , we open this thread.

TAC,
Marc
=========================

The Geopolitics of Turkey
By George Friedman

Rumors are floating in Washington and elsewhere that Turkey is preparing to move against the Kurdistan Workers' Party (PKK), an anti-Turkish group seeking an independent Kurdistan in Turkey. One report, by Robert Novak in the Washington Post, says the United States is planning to collaborate with Turkey in suppressing the PKK in northern Iraq, an area the PKK has used as a safe-haven and launch pad to carry out attacks in Turkey.

The broader issue is not the PKK, but Kurdish independence. The Kurds are a distinct ethnic group divided among Turkey, Iran, Iraq and, to a small extent, Syria. The one thing all of these countries have agreed on historically is they have no desire to see an independent Kurdistan. Even though each has, on occasion, used Kurdish dissidents in other countries as levers against those countries, there always has been a regional consensus against a Kurdish state.

Therefore, the news that Turkey is considering targeting the PKK is part of the broader issue. The evolution of events in Iraq has created an area that is now under the effective governance of the Iraqi Kurds. Under most scenarios, the Iraqi Kurds will retain a high degree of autonomy. Under some scenarios, the Kurds in Iraq could become formally independent, creating a Kurdish state. Besides facing serious opposition from Iraq's Sunni and Shiite factions, that state would be a direct threat to Turkey and Iran, since it would become, by definition, the nucleus of a Kurdish state that would lay claim to other lands the Kurds regard as theirs.

This is one of the reasons Turkey was unwilling to participate in the U.S. invasion of Iraq. The Americans grew close to the Kurds in Iraq during Operation Desert Storm, helping augment the power of an independent militia, the peshmerga, that allowed the Iraqi Kurds to carve out a surprising degree of independence within Saddam Hussein's Iraq. The Turks were never comfortable with this policy and sent troops into Iraq in the 1990s to strike against the PKK and pre-empt any moves toward more extensive autonomy. Before the war started in 2003, however, the Turks turned down a U.S. offer to send troops into northern Iraq in exchange for allowing the United States to use Turkish territory to launch into Iraq. This refusal caused Turkey to lose a great deal of its mobility in the region.

The Turks, therefore, are tremendously concerned by the evolution of events in Iraq. Whether northern Iraq simply evolves into an autonomous region in a federal Iraq or becomes an independent state as Iraq disintegrates is almost immaterial. It will become a Kurdish homeland and it will exist on the Turkish border. And that, from the Turkish point of view, represents a strategic threat to Turkey.

Turkey, then, is flexing its muscles along the Iraqi border. Given that Turkey did not participate in the 2003 invasion, the American attitude toward Ankara has been complex, to say the least. On one hand, there was a sense of being let down by an old ally. On the other hand, given events in Iraq and U.S. relations with Iran and Syria, the United States was not in a position to completely alienate a Muslim neighbor of Iraq.

As time passed and the situation in Iraq worsened, the Americans became even less able to isolate Turkey. That is partly because its neutrality was important and partly because the United States was extremely concerned about Turkish reactions to growing Kurdish autonomy. For the Turks, this was a fundamental national security issue. If they felt the situation were getting out of hand in the Kurdish regions, they might well intervene militarily. At a time when the Kurds comprised the only group in Iraq that was generally pro-American, the United States could hardly let the Turks mangle them.

On the other hand, the United States was hardly in a position to stop the Turks. The last thing the United States wanted was a confrontation with the Turks in the North, for military as well as political reasons. Yet, the other last thing it wanted was for other Iraqis to see that the United States would not protect them.

Stated differently, the United States had no solution to the Turkish-Kurdish equation. So what the United States did was a tap dance -- by negotiating a series of very temporary solutions that kept the Turks from crossing the line and kept the Kurds intact. The current crisis is over the status of the PKK in northern Iraq and, to a great degree, over Turkish concerns that Iraqi Kurds will gain too much autonomy, not to mention over concerns about the future status of the oil-rich city of Kirkuk. The United States may well be ready to support the Turks in rooting out PKK separatists, but it is not prepared to force the Iraqi Kurds to give them up. So it will try to persuade them to give them up voluntarily. This negotiating process will buy time, though at this point the American strategy in Iraq generally has been reduced to buying time.

All of this goes beyond the question of Iraq or an independent Kurdistan. The real question concerns the position of Turkey as a regional power in the wake of the Iraq war. This is a vital question because of Iran. The assumption we have consistently made is that, absent the United States, Iran would become the dominant regional power and would be in a position, in the long term, to dominate the Arabian Peninsula, shifting not only the regional balance of power but also potentially the global balance as well.

That analysis assumes that Turkey will play the role it has played since World War I -- an insular, defensive power that is cautious about making alliances and then cautious within alliances. In that role, Turkey is capable of limited assertiveness, as against the Greeks in Cyprus, but is not inclined to become too deeply entangled in the chaos of the Middle Eastern equation -- and when it does become involved, it is in the context of its alliance with the United States.

That is not Turkey's traditional role. Until the fall of the Ottomans at the end of World War I, and for centuries before then, Turkey was both the dominant Muslim power and a major power in North Africa, Southeastern Europe and the Middle East. Turkey was the hub of a multinational empire that as far back as the 15th century dominated the Mediterranean and Black seas. It was the economic pivot of three continents, facilitating and controlling the trading system of much of the Eastern Hemisphere.

Turkey's contraction over the past 90 years or so is not the normal pattern in the region, and had to do with the internal crisis in Turkey since the fall of the Ottomans, the emergence of French and British power in the Middle East, followed by American power and the Cold War, which locked Turkey into place. During the Cold War, Turkey was trapped between the Americans and Soviets, and expansion of its power was unthinkable. Since then, Turkey has been slowly emerging as a key power.

One of the main drivers in this has been the significant growth of the Turkish economy. In 2006, Turkey had the 18th highest gross domestic product (GDP) in the world, and it has been growing at between 5 percent and 8 percent a year for more than five years. It ranks just behind Belgium and ahead of Sweden in GDP. It has the largest economy of any Muslim country -- including Saudi Arabia. And it has done this in spite of, or perhaps because of, not having been admitted to the European Union. While per capita GDP lags, it is total GDP that measures weight in the international system. China, for example, is 109th in per capita GDP. Its international power rests on it being fourth in total GDP.

Turkey is not China, but in becoming the largest Muslim economy, as well as the largest economy in the eastern Mediterranean, Southeastern Europe, the Middle East, the Caucasus and east to the Hindu Kush, Turkey is moving to regain its traditional position of primacy in the region. Its growth is still fragile and can be disrupted, but there is no question that it has become the leading regional economy, as well as one of the most dynamic. Additionally, Turkey's geographic position greatly enables it to become Europe's primary transit hub for energy supplies, especially at a time when Europe is trying to reduce its dependence on Russia.

This obviously has increased its regional influence. In the Balkans, for example, where Turkey historically has been a dominant power, the Turks have again emerged as a major influence over the region's two Muslim states -- and have managed to carve out for themselves a prominent position as regards other countries in the region as well. The country's economic dynamism has helped reorient some of the region away from Europe, toward Turkey. Similarly, Turkish economic influence can be felt elsewhere in the region, particularly as a supplement to its strategic relationship with Israel.

Turkey's problem is that in every direction it faces, its economic expansion is blocked by politico-military friction. So, for example, its influence in the Balkans is blocked by its long-standing friction with Greece. In the Caucasus, its friction with Armenia limits its ability to influence events. Tensions with Syria and Iraq block Syrian influence to the south. To the east, a wary Iran that is ideologically opposed to Turkey blocks Ankara's influence.

As Turkey grows, an interesting imbalance has to develop. The ability of Greece, Armenia, Syria, Iraq and Iran to remain hostile to Turkey decreases as the Turkish economy grows. Ideology and history are very real things, but so is the economic power of a dynamic economy. As important, Turkey's willingness to accept its highly constrained role indefinitely, while its economic -- and therefore political -- influence grows, is limited. Turkey's economic power, coupled with its substantial regional military power, will over time change the balance of power in each of the regions Turkey faces.

Not only does Turkey interface with an extraordinary number of regions, but its economy also is the major one in each of those regions, while Turkish military power usually is pre-eminent as well. When Turkey develops economically, it develops militarily. It then becomes the leading power -- in many regions. That is what it means to be a pivotal power.

In 2003, the United States was cautious with Turkey, though in the final analysis it was indifferent. It no longer can be indifferent. The United States is now in the process of planning the post-Iraq war era, and even if it does retain permanent bases in Iraq -- dubious for a number of reasons -- it will have to have a regional power to counterbalance Iran. Iran has always been aware of and cautious with Turkey, but never as much as now -- while Turkey is growing economically and doing the heavy lifting on the Kurds. Iran does not want to antagonize the Turks.

The United States and Iran have been talking -- just recently engaging in seven hours of formal discussions. But Iran, betting that the United States will withdraw from Iraq, is not taking the talks as seriously as it might. The United States has few levers to use against Iran. It is therefore not surprising that it has reached out to the biggest lever.

In the short run, Turkey, if it works with the United States, represents a counterweight to Iran, not only in general, but also specifically in Iraq. From the American point of view, a Turkish invasion of northern Iraq would introduce a major force native to the region that certainly would give Iran pause in its behavior in Iraq. This would mean the destruction of Kurdish hopes for independence, though the United States has on several past occasions raised and then dashed Kurdish hopes. In this sense, Novak's article makes a great deal of sense. The PKK would provide a reasonable excuse for a Turkish intervention in Iraq, both in the region and in Turkey. Anything that blocks the Kurds will be acceptable to the Turkish public, and even to Iran.

It is the longer run that is becoming interesting, however. If the United States is not going to continue counterbalancing Iran in the region, then it is in Turkey's interest to do so. It also is increasingly within Turkey's reach. But it must be understood that, given geography, the growth of Turkish power will not be confined to one direction. A powerful and self-confident Turkey has a geographical position that inevitably reflects all the regions that pivot around it.

For the past 90 years, Turkey has not played its historic role. Now, however, economic and politico-military indicators point to Turkey's slow reclamation of that role. The rumors about Turkish action against the PKK have much broader significance. They point to a changing role for Turkey -- and that will mean massive regional changes over time.

Crafty_Dog:
stratfor.com

TURKEY: The Turkish military will safeguard a secular and democratic Turkey against the "evil" Islamic forces in the upcoming presidential election, military chief Gen. Yasar Buyukanit states on the military's Web site. The military has seized power from civilian governments three times in the past and has threatened to do so again if presidential candidate Foreign Minister Abdullah Gul wins the election.

Crafty_Dog:
Geopolitical Diary: Envisioning Turkey under the AK Presidency

The Turkish parliament on Tuesday elected a former Islamist as the staunchly secularist republic's 11th president. After close to four months marred by controversy and contention, Abdullah Gul, the No. 2 man in Turkey's ruling Justice and Development (AK) Party, made it into the president's chair after the 3rd round of voting. He secured 339 votes in the 550-seat legislature, but he only needed a simple majority of 276.

Gul's election brings to an end the latest chapter of a long struggle between religiously inclined political forces and Turkey's ultra-secularist military establishment -- with this round going to the Islamists. By no means does this mean that the men in uniform have thrown in the towel. Far from it: the generals will be closely watching the AK, and especially the behavior of the 56-year-old Gul. This much was spelled out by military chief Gen. Yasar Buyukanit on Monday in an Internet statement that said "our nation has been watching the behavior of centers of evil who systematically try to corrode the secular nature of the Turkish Republic," and warned that "the military will, just as it has so far, keep its determination to guard social, democratic and secular Turkey."

Modern Turkey was founded by Mustafa Kemal "Ataturk" in 1923 following the collapse of the Ottoman Empire, an essentially Islamic polity. Kemal, who himself was a military commander, implemented radical changes whereby the Turkish republic was established as a secular entity along the lines of European states. Since then the military has served as the praetorian guards responsible for preserving the Kemalist character of the constitution and the secular fabric of the republic.

To this end, the military has intervened on four separate occasions (three of them being coups) -- in 1960, 1971, 1980, and 1997 -- and has banned four of the AK's predecessor groups because their Islamist ideology was seen as a threat to the secular order. Therefore, the military establishment is all too aware of what happened Tuesday. The Turkish political system has entered an unprecedented phase in its evolution, where a single party not only has been able to form two consecutive governments on its own, but also now controls the presidency -- which by extension means it controls the judiciary, because the president appoints key judges.

As far as civil-military relations are concerned, the military clearly has lost the current (and what appears to be a decisive) battle -- but the ideological struggle and the contention over secularism is far from over. More importantly, for the first time since the founding of the Turkish republic more than 80 years ago, a political force rooted in Islamism essentially controls all of the key civilian institutions of the state.

There is a lot of trepidation both within and outside Turkey that this will lead to a major Islamist-secular struggle in the country -- which could lead to a period of domestic instability, despite the fact that the AK took 47 percent of the vote and controls a lion's share of seats in Parliament. This is certainly a possibility. It will not be long before Gul will be caught between his national duties as the head of an ultra-secularist state and his commitment to his party's conservative ideology. One cannot expect him simply to behave as a neutral president.

But the AK did not fight hard to win the presidency just for the sake of winning. The party will gradually want to use the position to further consolidate its hold over the state, trying to redefine the secular character of the state -- moving away from the French style, which expressly renounces religious activity, toward the American model, which provides for more tolerance. Undoubtedly, this will lead to a new wave of struggle between the ruling party and the military.

Two factors are tying the military's hands at the moment. First, of course, is the AK's parliamentary majority. Second is the fear that any direct intervention by the military into politics could have serious repercussions, not just for stability and security in Turkey, but also for the economy. A coup would adversely affect foreign investment in the country, taking it back to the financial crisis that hit prior to the AK's rise to power in 2002. This would explain the uneasy accommodation reached in the past five years between the AK government and the generals.

For its part, the AK might have won the presidency, but it will still continue to tread carefully as far as the domestic policies are concerned, and will avoid tampering with the secular order of things. Over time, however, the party will become emboldened, because of the lack of any serious moves by the military to undercut its power. This is when there will be a behavioral change in Turkey, as the AK government begins to feel confident in engaging in policies that it currently might not want to risk.

Such a change will be most apparent and immediate in the foreign-policy arena, given the changes under way in the region. Iran has for the most part moved away from negotiating with the United States over Iraq and is now trying to take advantage of the expected U.S. drawdown of forces from the country. We have already discussed at length Turkish interests in Iraq with regard to Kurdish separatism. This issue undoubtedly will be of a primary concern to the Turks, especially now that a settlement on Iraq appears highly unlikely. Of even greater significance will be future Turkish behavior toward the larger emerging conflict surrounding Iraq: Iran and the Shia versus the Arab states and the Sunnis.

Here is where an AK regime will be forced to balance pan-Islamic issues with Turkish nationalist objectives. On one hand, Turkey will focus on making sure that the ethno-sectarian conflict does not enable Iraqi Kurds (and by extension Turkish Kurds) to further their separatist agenda. On the other hand, Ankara will have to decide whether to side with the Arab states -- who are fellow Sunnis -- against Iran, or align with Iran, or chart a more neutral course.

This would not have been a complicated matter under a purely secular Turkish government, which would have viewed the issue solely from the point of view of Turkish national interest. But because the AK has pan-Islamic ties to various actors in the Arab/Muslim world, the matter becomes complex. The Saudis and the Iranians subscribe to competing notions of Islam -- not just in the sectarian sense but in ideological terms. That will put an AK-ruled Turkey in a difficult spot.
stratfor.com

Crafty_Dog:
And here's the WSJ's take on this:

President Gül
August 29, 2007
Turkey's political process reached its expected conclusion yesterday, when the parliament elected Abdullah Gül of the neo-Islamist AK Party as the country's new president. Despite continued grumbling from a wary military, Ankara may finally be able to resume politics as usual.

Yesterday's election, in which Mr. Gül won 339 votes from the 550-member legislature, caps a turbulent four months. The AKP first nominated its co-founder back in April. The result was an electoral boycott by the main opposition party, a threatened coup by the army and a seemingly extralegal annulment of the balloting up to that point by the nation's highest court. Prime Minister Recep Tayyip Erdogan, also of the AKP, called early elections to secure a new mandate. Last month his party won a solid victory.

The military tried scare tactics again Monday, writing on its Web site that "centers of evil" were trying to "corrode the secular nature of the Turkish Republic." Yet a word to the wary of all kinds: Mr. Gül promised during the recent parliamentary campaign to uphold secularism and Turkey's constitution, and the electorate displayed its confidence in him.

Given the military's record of four coups since 1960, its threats can't be taken lightly. Even so, Turkey's generals are traditionally very sensitive to the desires of the country's silent majority, which right now wants stability above all else.

Fortunately, that's what the AKP most likely wants right now, too. It will try to avoid rocking the boat so that it can stay in government. It's been in power for five years now, and parties typically become less, not more, radical the longer they rule. Should the AKP drift from its program of reforms designed to propel Turkey toward European Union membership, its supporters will become agitated.

The Turkish president's authority is fairly limited in any case, though Mr. Gül will wield important veto powers. Under his secularist predecessor, that was seen as a check on any ambitions the AKP might have of foisting Islamism on the country.

So far, there is no indication that Mr. Gül has any hidden agenda for marked change in Turkey. "Secularism -- one of the main principles of our republic -- is a precondition for social peace as much as it is a liberating model for different lifestyles," he said after yesterday's parliamentary vote. "As long as I am in office, I will embrace all our citizens without any bias." Until Mr. Gül gives us cause to believe otherwise, we'll take him at his word.

Crafty_Dog:
Yet another post this AM on Turkey:

WSJ

Well Connected,
A Saudi Mogul
Skirts Sanctions
By GLENN R. SIMPSON
August 29, 2007; Page A1

ISTANBUL, Turkey -- Yassin Qadi is a well-known multimillionaire, founder of a large supermarket chain here and a close friend of the Turkish premier. "I trust him the same way I trust my father," Prime Minister Recep Tayyip Erdogan said on national television last year.

But the Saudi businessman also is a major financier of Islamic terrorism with close business associates who are members of al Qaeda, according to the U.S. Treasury and the United Nations Security Council. At Washington's request, the Security Council ordered Mr. Qadi's assets frozen a few weeks after the Sept. 11, 2001, terrorist attacks in the U.S.

 
The asset freeze has largely crippled Mr. Qadi's international business empire. But previously undisclosed records show he has managed to free up millions of dollars of holdings in Turkey, in apparent violation of the Security Council sanctions -- and without incurring punishment by Turkish authorities.

The case of Mr. Qadi shows the challenges Washington faces in separating friend from foe in the Islamic world. The records detailing his business activities also suggest how easy it can be to skirt sanctions designed to restrict funding of terrorism -- especially for well-connected figures.

Mr. Qadi's friendship with the prime minister also plays into the growing debate in Turkey over the role of Islam in a secular society. Turkey's Parliament for the first time yesterday elected a politician with an Islamist background, Foreign Minister Abdullah Gul, to the presidency. Immediately after being sworn in, Mr. Gul pledged impartiality, saying, "Secularism -- one of the main principles of our republic -- is a precondition for social peace." But the development nonetheless has heightened concern about the direction this pivotal nation, poised between East and West, is taking.

Within Turkey, a Muslim nation of 70 million with a constitutionally mandated secular government, the role of Islam has been the subject of intense debate in recent years, as rising religious sentiment clashes in some quarters with the country's longstanding commitment to secularism. Mr. Erdogan and his Justice and Development Party are broadly popular, but their Islamist roots draw criticism and provoke controversy, especially among critics in the military.

Amid this debate, Mr. Erdogan has been blasted for his ties to Mr. Qadi by political opponents in Turkey and some conservatives in Washington, who say the Turkish government has a hidden Islamist agenda. Mr. Qadi -- who lives near the Red Sea city of Jidda, the Saudi business capital -- denies all links to terrorism and says his U.N. blacklisting is unjust. Officials of Mr. Erdogan's Justice and Development Party and aides to the prime minister didn't respond to requests for comment.

Pro-Western Rule

Since coming to power in 2002, the Justice and Development Party has run one of the most pro-Western governments to rule Turkey. It has encouraged a Western-style market economy and made painful overhauls in a bid to join the European Union. The party just won an overwhelming new mandate in parliamentary elections.

But tensions are likely to persist. U.S. diplomats lodged strong objections last year when the Erdogan government intervened in Turkish courts to try to lift the freeze on Mr. Qadi's Turkish assets, according to U.S. officials. The Turkish government reversed course.

"That Erdogan personally vouches for this man...raises the possibility that the prime minister of Turkey is far less interested in combating terrorism than he says," said former Defense Department aide Michael Rubin, a conservative critic of the Turkish government who has close ties to top officials in the Bush administration.

The cosmopolitan Mr. Qadi is an architect by profession who trained with the Chicago-based firm Skidmore, Owings & Merrill in the 1970s. He speaks fluent English and has a son who is an American citizen. Mr. Qadi, whose own father belonged to Jidda's business elite, inherited several million dollars in 1988. He also married into money by wedding a member of the Jamjoom family, one of Saudi Arabia's leading business clans, and is now an influential business figure whom the Saudi media and other Saudi businessmen often defend against U.S. and U.N. terrorism allegations.

The sanctions prohibit international travel by Mr. Qadi, a longtime globe-trotter. It is unclear whether his assets are frozen in Saudi Arabia, which some U.S. officials and private-sector experts claim has failed to take action against powerful business figures suspected of supporting terrorism. In an effort to reclaim his reputation, Mr. Qadi has filed civil suits in the United Kingdom, Switzerland, Turkey and other countries. He has also submitted voluminous briefs to the U.S. Treasury in Washington. All of these efforts have been unsuccessful to date.

Mr. Erdogan has defended his friendship with Mr. Qadi, saying the Security Council's terrorist blacklist doesn't prove someone is a terrorist.

Guy Martin, a London-based lawyer for Mr. Qadi, called his terrorist designation "a gross and ongoing miscarriage of justice."

Mr. Qadi, whose business empire is based mostly in Saudi Arabia, is a longtime partner of Turkish businessman Cüneyd Zapsu, as well as other key Justice and Development Party figures. Over the past year, Turkish media and opposition leaders have disclosed that Turkey's financial police investigated the activities of Mr. Qadi and alleged al Qaeda supporters in Turkey. That led them to delve into the relationships of Mr. Qadi and other Saudis with senior Justice and Development figures, including Mr. Erdogan.

Among Mr. Qadi's largest Turkish investments is the discount-supermarket chain BIM, one of Turkey's biggest companies, with more than 1,500 outlets and annual sales of about $1.5 billion. BIM, which trades on the Istanbul Stock Exchange, is a discounter modeled in part on Wal-Mart and other low-price chains. Mr. Zapsu also was among BIM's founding partners.

Mr. Zapsu, who in 2001 helped Mr. Erdogan found the Justice and Development Party, also supported an Islamic charity Mr. Qadi founded that is at the center of the U.S. and Security Council decision to freeze the Saudi businessman's assets. A Turkish financial-police report seen by The Wall Street Journal found that in the 1990s, Mr. Zapsu and his mother gave $300,000 to Mr. Qadi's Muwafaq charity, which U.S. officials labeled a front for al Qaeda shortly after 9/11.

Central Intelligence Agency reports say Muwafaq, now defunct, specialized in purchasing and smuggling arms for Islamic radicals. The U.S. government's special commission on the Sept. 11, 2001, attack and law-enforcement agencies have cited Saudi-backed Islamic charities as a primary source of funding for al Qaeda.

Mr. Zapsu also has business ties to two Islamic banks funded with Saudi capital -- Dallah Al Baraka and Dar Al Mal Al Islam -- that were accused of supporting al Qaeda in civil suits filed by families of Sept. 11 victims in the U.S. District Court for the Southern District of New York. Both defendants adamantly deny the allegations, and the court dismissed claims against Al Baraka.

Mr. Zapsu said in an email that his business and personal relationships with Mr. Qadi were investigated by Turkish police. He said prosecutors decided last year "that there was no reason for a court case and no wrongdoing." Mr. Zapsu said he sold his interest in BIM in 2003 and no longer is involved with the company.

Finance Probes

Two reports by Turkey's financial police allege potential money-laundering and other possible crimes by Mr. Qadi and unnamed associates. But Turkish prosecutors declined to bring criminal cases in both 2004 and 2006, citing a lack of evidence. Mr. Erdogan's political opponents say the probes were quashed by the Finance Ministry. The top officer on the case was recently fired. According to the government, he abused his authority to investigate top politicians.

Mr. Qadi arrived in Turkey in 1996, within a month of alleged al Qaeda logistics coordinator Wael Julaidan. The two men are longtime business partners and engaged in large transactions with a Turkish firm controlled by two of al Qaeda's top leaders, according to business records and U.S. intelligence files. Lawyers for Mr. Julaidan say he denies supporting al Qaeda.

A lengthy paper trail involving an offshore company in the Isle of Man shows how millions of dollars of assets in Turkey once controlled by Mr. Qadi have been shifted in recent years to his associates, in potential violation of the U.N.'s asset freeze. Corporate records show a 26.4% stake in BIM that was originally controlled by Mr. Qadi passed to two of his business partners, through a company called Worldwide Ltd. in the Isle of Man, a tax haven in the U.K.

Worldwide originally was controlled by several people who use the same Jidda business address as Mr. Qadi. In 2004, two Jidda businessmen who are longtime associates of Mr. Qadi took control of Worldwide, Isle of Man filings state. The following year, when BIM released a new financial report, Worldwide disappeared from its list of major shareholders and the two businessmen appeared on the list for the first time. Together with another Isle of Man company, they control precisely 26.4% of BIM shares.

One of the men, Abdul Ghani Al Khereiji, is a longtime business partner of Mr. Qadi who co-founded the Muwafaq charity, records show. He didn't respond to requests for comment. The other new BIM shareholder, architect Zuhair Fayez, also is a longtime associate of Mr. Qadi. Mr. Fayez said in an email that his shares in Worldwide "were not purchased from Mr. Qadi," but he didn't elaborate.

Transferred Stake

In a statement, BIM said Worldwide transferred its stake to the two men in March 2005. "Our information...is that the assignment procedures were made in accordance with the law," BIM said. The company said it "has no knowledge of the share structure of Worldwide." If Mr. Qadi benefited from the sale of Worldwide shares, that would breach the U.N. sanctions against him.

Some of Mr. Qadi's dealings in Turkey are recounted in a 2006 book, "Charitable Terrorist," by Nedim Sener. Mr. Qadi has filed a defamation suit in an Istanbul court against Mr. Sener, who in the Turkish daily Milliyet also wrote of a real-estate deal involving Mr. Qadi that may also violate the Security Council sanctions. The sanctions, legally binding on U.N. member states, ban any large financial transactions or international travel by the roughly 350 individuals designated as terrorists or their sponsors.

Christophe Payot, a spokesman for the U.N.'s sanctions committee, declined to discuss any possible violations by Turkey or Mr. Qadi. The panel's chairman announced in May it would examine "possible instances of noncompliance" with the al Qaeda sanctions.

The U.N. sanctions aren't always effective, according to experts on the subject. Many countries either don't write or police laws to enforce them, or aren't equipped to track designees who use offshore companies and complex corporate structures. In the case of Mr. Qadi's Turkish assets, the problem is that "there are so many ways of structuring and layering things, they are not clearly his assets," said Victor Comras, an attorney and former U.N. terror-finance expert.

Write to Glenn R. Simpson at glenn.simpson@wsj.com

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