The Red Crescent Movement has a long tradition in Turkey, dating back to the Ottoman Empire. The world’s best-known relief organization aids people in Turkey mainly in cases of natural disasters, for instance earthquakes, but also conflicts, such as in northern Syria. The Red Crescent Movement has always enjoyed great popularity in Turkish society.
The humanitarian organization is mostly funded by donations. Among its sponsors and supporters is the German Foreign Ministry. For the current year, the Germans have already allocated a total of €28 million to the international organization for the relief of refugees in northern Syria.
Nevertheless, the overall positive image of the Red Crescent Movement in Turkey was dealt a huge blow lately. The relief organization has been accused of complicity in a tax evasion case of the gas company Baskentgaz. The issue has prompted massive speculation in Turkey over the question of whether the Red Crescent Movement plays a central role in the system of nepotism established by President Erdoğan.
Accusations
Following the recent earthquake in Turkey that claimed the lives of more than 20 people, Red Crescent President Kerem Kinik had called on citizens to donate money to those affected. Hundreds of thousands of Turks responded, as usual.
The huge response prompted journalists to put the organization’s donor list under close scrutiny. Some suspicious transactions immediately came to their notice. In December 2017, $ 8 million were remitted to the organization by the gas company Baskentgaz. The money, however, was not spent on humanitarian actions, but was rather directed to the government-affiliated ENSAR and TÜRGEV Foundations. Both institutions, dealing with youth and education issues, according to their articles of association, are inextricably linked to the Erdoğan family.
Following the wave of anger expressed on social media, the ENSAR administration issued a statement claiming that it had forwarded the donation to the TÜRKEN Foundation, a subsidiary of the TÜRGEV Foundation operating in the US, which used the money for the construction of a student dormitory in Manhattan aimed at “protecting Turkish students from the Gülen movement”.
Analysts and public opinion in Turkey are now referring to the Red Crescent’s complicity in an outrageous tax evasion case. As they explain, through a “false” donation Baskentgaz saved hundreds of thousands of euros in taxes. In particular, donations to organizations carrying out recognized social work are deducted from taxable income – and, in fact – as a whole. If, on the other hand, the money was donated directly to the ENSAR or TÜRKEM Foundation, without the “Red Crescent” acting as an intermediary, only 5% of the total € 8 million would be deducted from taxation.
Tax avoidance or tax evasion?
“A tax audit of Baskentgaz must be carried out immediately “ says well-known Turkish tax consultant Nedim Turkmen. He points out that the Red Crescent also violated the law by actively participating in a tax evasion case.
The organization itself claims otherwise. It was a case of legal tax avoidance and not tax evasion, Red Crescent President Kerem Kinik objects. “We do not want to participate in this discussion any further” was the comment of a Red Crescent affiliate on a relevant question by DW.
Yet, there is another element in this case that justifiably causes even greater mistrust in Turkish public opinion. All the institutions involved in the suspicious deal have maintained close relations with the Turkish government and the Erdoğan family in particular. Baskentgaz’s manager is an old school friend of Erdoğan, while the President’s daughter, Esra Albayrak, participates in the board of directors of the TÜRGEV Foundation, which built the aforementioned dormitory in New York. The second foundation alleged to be involved in the case, ENSAR, also has close relations with the government, as is demonstrated by the frequent outsourcing of public works to it.
The “eight million dollar” case provides with new, unmistakable arguments all those who speak of a well-established system of nepotism by Erdoğan. It is noteworthy that this is one of the few times that the system exhibits “cracks”, thereby allowing the intrusion of the “inquisitive” look of the public.
dw.com