Tip of the iceberg?

The developments in the past 24 hours in Turkey point out to a new breaking point in Turkish politics, and help expose serious doubts about an iceberg-like corruption. Last night, Hakan Şükür, a deputy of the ruling AKP, resigned, issuing a harsh statement, calling Erdoğan to apologise for what he sees as an aggressive stande against the private tutorial schools and Gulen Movement in general.

And as Today’s Zaman reported earlier today, a bombshell landed on the agenda:

”Turkish police detained around 20 people, including well-known businessmen and people close to the ruling party, on Tuesday morning in an investigation into alleged bribery linked to public tenders. Those detained include Interior Minister Muammer Güler’s son Barış Güler, Economy Minister Zafer Çağlayan’s son Kağan Çağlayan, Environment and Urban Planning Minister Erdoğan Bayraktar’s son Oğuz Bayraktar, İstanbul’s Fatih Mayor Mustafa Demir, businessmen Ali Ağaoğlu and Rıza Sarraf and Halk Bank General Director Süleyman Aslan.

Government officials could not immediately be reached for comment. Police declined to comment on the reports. It was not immediately clear if there was a link between the investigation at Halkbank’s offices in the capital Ankara and the reported detentions. Halkbank shares fell as much as five percent after reports of the police search emerged. Halkbank officials could not immediately be reached for comment.

Police also searched the headquarters of construction magnate Ali Ağaoğlu’s Agaoglu Group, its chief executive Hasan Rahvalı told Reuters. İstanbul Chief Public Prosecutor Turan Çolakkadı said the operation is being conducted by their “own prosecutors” and that deputy chief prosecutor are supervising the raids.

“We can’t provide clear information about this at the moment. There are some detentions,” Çolakkadı said. Sources noted that Zekeriya Öz is the deputy chief prosecutor Çolakkadı is referring to.

The suspects were first taken to Haseki Training and Research Hospital for health screening. Ağaoğlu Holding, where police conducted raids earlier in the morning, said in a written statement that Ağaoğlu was called for interrogation as part of a sweeping corruption investigation. It said police could not find anything that could amount to “crime” during their searches in the office.   

Sources said the suspects are accused of charges such as “granting citizenships to foreigners through bribes,” “suspicious money transfers,” “tender rigging and fraud.”  İstanbul Governor Hüseyin Avni Mutlu declined to comment on the corruption operation, saying that while judicial  proceedings continue, it would not be “appropriate” for him to make additional statements. He noted that the details will be shared with public.

Sources stated that three different investigations are under way and that the arrests are made in connection to these probe. Investigations into allegedly illegal activities of Zerrab, Demir and sons of two ministers are being conducted by prosecutor Celal Kara, who is answering to Öz. The investigation about Ağaoğlu is supervised by prosecutor Mehmet Yüzgeç.

First reaction from the main opposition Republican People’s Party (CHP) came from the party’s deputy chairman of the parliamentary group, Engin Altay. Demanding the prime minister make an urgent statement, Altay called on Recep Tayyip Erdoğan to resign. “This is what the society wants,” Altay added. CHP Deputy Chairman Umut Oran submitted a parliamentary query, asking the prime minister is he is going to resign because three of his ministers are indirectly involved in the corruption.”

The Wall Street Journal reported that the AKP is now facing a political breakdown, if the probe is conducted properly:

‘Commentators immediately linked the arrests to an increasingly public battle, with the ruling Justice and Development Party, or AKP, pitting supporters of Prime Minister Recep Tayyip Erdogan against a faction loyal to Fetullah Gulen, an influential U.S.-based cleric whose broad support helped anchor the party’s political dominance for more than a decade.

Over the past month, Mr. Erdogan has accelerated a yearlong effort to curb the power of the Gulen faction. Analysts say the cleric’s followers control key positions in the Turkish police force and judiciary, which they have used to wield influence over the government and attack political opponents.

“This will cause more than political instability, we have waves of uncertainty and dense fogs spreading over Turkey…Now the AKP’s unity is broken. The whole mythology on which the conservative movement fed suddenly disappeared,” said Atilla Yesilada, an Istanbul-based analyst for Global Source Partners.

The AKP comfortably remains the country’s most popular political party, but its internal rifts have become increasingly public in recent months, emboldening antigovernment segments of society. Antigovernment demonstrations in the summer that drew millions marked the most significant public challenge yet to Mr. Erdogan. But they have yet to boost the divided opposition or dent the government’s popularity.

Among those questioned by police on Tuesday was construction magnate Ali Agaoglu, one of Turkey’s richest men and a high-profile player at the center of a decadelong Turkish building boom, said Hasan Rahvali, chief executive of Agaoglu Group.

Local media also reported that the police detained the sons of ministers, with the number varying from two to four. Economy Minister Zafer Caglayan and Interior Minister Muammer Guler, whose sons were reportedly among those detained, unexpectedly canceled their political meetings this morning. Mr. Caglayan’s spokesman wasn’t available to comment on the reports.

Suleyman Aslan, the chief executive of, Turkiye Halk Bankasi AS HALKB.IS -6.65% , or Halkbank, was also detained, according to media reports that couldn’t be verified. Shares in the bank fell as much as 5% after reports of the police search emerged. Halkbank didn’t immediately respond to requests for comment.

Until late last year, Halkbank processed payments for Turkish government purchases of Iranian gas, allowing Ankara to circumvent U.S. sanctions to stop financial institutions from working with Iran’s central bank.

The news comes ahead of March local elections—a litmus test of Mr. Erdogan’s popularity ahead of his expected bid to become Turkey’s first directly elected president next August.’

Given that one of the arrested is reported to be the son of the Minister of Interior, and the other is the CEO of a public bank, exposes the magnitude of the events unfolding. Whether or not Turkey now faces an exposure of what many suspect beyond the tip of the iceberg remains to be seen. What is clear is that we are now seeing a crisis unwrapping both in politics and in business. Under normal circumstances, the three ministers would either resign or be moved by the prime minister. How the AKP government will react is anybody^s guess.