United States v. Halkbank

• Decision Date: 24 August 2020
• Docket Number: 15 Cr. 867 (RMB)
• Parties: UNITED STATES OF AMERICA, v. HALKBANK Defendants.
• Court: U.S. District Court — Southern District of New York

UNITED STATES OF AMERICA, v. HALKBANK Defendants.

15 Cr. 867 (RMB)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

August 24, 2020

DECISION & ORDER

This decision denies defendant Halkbank's recusal motion, dated July 14, 2020, on waiver and estoppel grounds and because it has no substantive merit. No "objective and disinterested observer, knowing and understanding all of the facts and circumstances, could reasonably question the court's impartiality." See S.E.C. v. Razmilovic, 738 F.3d 14, 29 (2d Cir. 2013).

I. Background

Halkbank's co-defendant, Reza Zarrab, made a nearly identical motion over four years ago focusing upon the Court's discussion at an international symposium in Istanbul in 2014. The Symposium was devoted to the "rule of law." Zarrab's motion was also dismissed on both procedural and substantive grounds. This Court in Zarrab's case concluded that: (1) recusal could not be founded upon comments made by the Court at the Symposium which were properly devoted to civic and educational discussion of the rule of law and the importance of an independent and effective judiciary; (2) recusal was specifically waived by Zarrab's defense counsel, Benjamin Brafman;¹ (3) the Zarrab recusal motion was untimely; Id. at 13; and (4) theZarrab recusal motion included incorrect and misleading statements by the defense. As the Government had pointed out: "the defendant's claims rely on a mischaracterization of the Court's remarks at the Istanbul conference, rank speculation, and impermissible consideration of press coverage. The comments about which the defendant complains were no more than noncontroversial opinions about fundamental principles of a fair and effective justice system, like judicial independence and impartiality." See Sept. 14, 2016 Gov't Opp. at 1; Sept. 29, 2016 Decision & Order at 4, 15-16. The Zarrab motion failed to overcome the presumption of impartiality; and it would have been objectively unreasonable to conclude from the Court's remarks that the Court was biased or partial. Id. at 17. The September 29, 2016 Decision & Order dismissing the Zarrab recusal motion was not appealed or challenged in any way.

Halkbank's recusal motion is a belated rerun of the Zarrab recusal motion, supplemented by 1,014 additional pages of exhibits and two purported expert declarations.² In addition to the Court's Symposium comments, Halkbank litigates comments at sidebar and in oral rulings made by the Court during co-defendant Mehmet Hakan Atilla's case; comments about Rudy Giuliani; and comments made in the pre-arraignment stage of Halkbank's case.

2014 Rule of Law Symposium

The Symposium was held in a large conference room at the Four Seasons Bosphorus Hotel in the heart of the City of Istanbul, Turkey. It was well-attended and seemingly well-received. The panelists were diverse, very well-qualified and well-informed men and women, many from Europe, Turkey, and the U.S., but including other countries as well. They included,among others, Lord Harry Woolf, former Lord Chief Justice of England and Wales; Charles Hunter, then United States Consul General in Istanbul; Professor Sami Selçuk, former First President of the Turkish Court of Cassation; Stefano Manservisi, the European Union's Ambassador to Turkey; Thomas Guddat, Vice President of European Judges for Democracy and Liberty and President of the Polish-German Judge's Association; and Marina Wes, Lead Economist at the World Bank.

The panelists also included five Americans, namely professors of constitutional law (Dean) Heather Gerken from Yale Law School, Richard Fallon from Harvard Law School, and Richard Pildes from New York University School of Law; the then Vermont Attorney General, William H. Sorrell, and myself.³

At the time of the Symposium, Turkey was an applicant for accession to the European Union. The EU-Turkey admission agreement had been signed "creating new momentum in EU-Turkey relations." President Recep Tayyip Erdoğan of Turkey had declared 2014 as the "Year of the European Union." See Ministry for EU Affairs - Republic of Turkey, Turkey's New European Union Strategy, at 15; European Commission, October 2014 Turkey Progress Report, at 1. And, panelists understood the issues surrounding Turkey's EU accession and endeavored diplomatically to impart ideas, ideals, and practices which might be expected of EU members.⁴

In his keynote address, Lord Harry Woolf helped set the stage as follows:

The rule of law is international. It may not be precisely the same in all jurisdictions but it is international . . . It needs to be emphasized there is nothing western or eastern or northern or southern about the underlying principle of the rule of law. It has a global reach and dimension. Rule of law symbolizes the quest of civilized democratic societies, be they eastern or western, to combine that degree of liberty without which law is tyranny, with that degree of law without which liberty becomes license . . . The rule of law is the heritage of all mankind because of its underlying rationale, which is belief in the human rights and human dignity of all individuals everywhere in the world. Ex. A at 149.

Also on the first day of the Symposium, Dr. Yılmaz Argüden, Chairman of the United Nations Global Compact for Turkey, described the Symposium as follows:

[We] attach utmost importance to this Symposium. Development takes its basis from trust, which is created by uninterrupted governance and a legal system that functions in a fair, impartial and rapid manner . . . Now that the main goal of the UN Global Compact is to make the development sustainable, you may now clearly understand why this Symposium is important for us. It will not be possible for us to increase our development and speed and improve our life quality without eliminating our deficiencies in this area in Turkey. ... Well, we have deficiencies, but according to what criteria do we name them deficiencies? You need a benchmark. Our benchmark for this purpose is the EU and EU Council that hosts advanced practices in the field of universal legal norms and democracy, rights, law and freedoms. Ex. A at 18.

Charles Hunter, the United States Consul General in Istanbul at the time, added these opening remarks:

Thank you for inviting me to participate in this impressive gathering of dignitaries and experts from around the world to discuss the topic of profound importance: the rule of law and its role in a successful and democratic modern society. As we have seen in countries transitioning to democracy in this region and around the world, the overall health of any democratic society can be measured by the extent to which it is governed by its own laws . . . [W]hen we speak of the rule of law, we speak of an ideal. No country has ever had a perfect justice system, and all nations have ample room for improvement. So international conferences like this one provide an excellent venue for the sharing of experience. Ex. A at 29.

The relationship of the Symposium to Turkey's EU-accession efforts was highlighted by Stefano Manservisi:

It is a real pleasure and an honour to be here today in this very important event where I think the combination of civil society, academia, institutional, responsible people can help . . . in shedding light at and having a balanced debate on one of the most important and sensitive issues that [Turkey] is going through . . . Because the European Union accession perspective has, without any doubt, contributed to shape and drove the reforms that have transformed Turkey in the fifteen years since the country became a candidate for accession . . . The accession process has formed the backbone and has been one of the primary tools of Turkey's modernization. During this period, and this is worth underlining, Turkey and EU are working together with the close cooperation of the Council of Europe on judiciary reform. Ex. A at 40.

Panelists were aware (to varying degrees) of certain events which had transpired in Turkey in December 2013 and the response to those events by Turkey. See Ex. A. Halkbank describes the events in its recusal motion as follows: "In [December] 2013 . . . police officers, prosecutors, and judges made high-profile arrests . . . ostensibly as part of a corruption investigation." In response, "Turkish authorities . . . removed and reassigned several police officers . . . [and] prosecutors because of their role in the same investigation." See Halkbank Recusal Motion at 5-7; see also Emre Peker, "Under Mounting Pressure, Turkey Premier Shuffles Cabinet," Wall Street Journal (Dec. 25, 2013) ("since December 17 [2013], prosecutors unveiled a wide-ranging corruption investigation targeting dozens of [Turkish government] allies in politics and business."). According to the New York Times: "The Turkish governmentreshuffled the police . . . and sought to expand its power over the judiciary . . . [B]oth actions appeared calculated to fend off a widening corruption investigation that . . . centers on accusations that officials took bribes in return for bending zoning rules." See Dan Bilefsky and Sebnem Arsu, "Turkish Government, Shaking Up Police, Now Seeks More Power Over Judiciary," New York Times (Jan. 8, 2014). "Mr. Erdogan's government sent draft legislation . . . [that] would grant the justice minister greater authority over legal discipline, judicial investigations, and the appointment of judges and prosecutors, powers the minister does not now have." Id.

Panelists who expressed concern over the December 2013 events in Turkey included Marjete Schaake, member of the European Parliament: "While the world's and European eyes have been focused on the Ukranian crisis, the Turkey divisions that remained below the surface for a long time erupted at the end of last year . . . I want to focus on what the European Union can and should do. My fundamental premise in answering that question has been and will be that the EU needs to have the wellbeing of the Turkish population as a...