Turkey PM reshuffles cabinet amid graft scandal

Turkish Prime Minister Recep Tayyip Erdogan replaced nearly half his cabinet in a dramatic reshuffle late Wednesday after a spreading graft scandal forced the resignation of three top ministers and threatened the premier's own hold on power.

Erdogan announced on television he had replaced the three resigning ministers -- for the interior, economy and the environment -- as well as his EU affairs minister, and reshuffled the justice, transport, family, sports and industry portfolios, and one of his four deputy prime ministers' posts.

The reshuffle was decided in a closed-door meeting with President Abdullah Gul, who had said since Tuesday that it was imminent.

There was no indication the characteristically defiant prime minister was himself contemplating stepping down, as demanded by anti-government protesters -- and by the environment minister who resigned, Erdogan Bayraktar.

Yet the corruption scandal is rapidly becoming a major challenge to Erdogan's 11-year grip on power in Turkey, a NATO member and significant emerging economy.

His image was already badly bruised in June when he ordered a heavyhanded crackdown on anti-government protests sparked by plans to raze an Istanbul park.

Another protest took place in Istanbul on Wednesday demanding Erdogan's ouster, but police used tear gas to disperse the estimated 5,000 demonstrators after some skirmishes. Protests were also reported in Ankara and Izmir.

The probe into the alleged corruption, which has seen recent police raids, focus on numerous offences including accepting and facilitating bribes for construction projects and illegally smuggling gold to Iran.

Erdogan himself has sought to define the corruption scandal as "a conspiracy" plotted by "international powers".

He insists his ruling Justice and Development Party (AKP) party has a clean record and has responded to the investigation by sacking dozens of police chiefs.

Ministers 'excused due to the recent developments'

Announcing the reshuffle, Erdogan referred to the scandal only indirectly, saying: "Some of my friends have asked to be excused due to the recent developments."

Others, he said were leaving to contest March 30 local elections, "and others are changes proposed to the president within my discretion and approved by him".

Erdogan named Idris Gulluce as his new environment minister; an interior ministry undersecretary, Efkan Ala, his new interior minister; and Nihat Zeybekci his economy minister.

Emrullah Isler became a deputy prime minister, replacing Bekir Bozdag who became justice minister.

The scandal hit a politically critical level when the sons of the previous interior and economy ministers were among two dozen people to be charged in the wide-ranging bribery and corruption probe, which has also ensnared close government allies and top businessmen, including the chief executive of state-owned Halkbank.

The environment minister's son was also detained last week, but has not been formally charged and has been released pending trial.

On Wednesday, the previous economy minister Zafer Caglayan, interior minister Muammer Guler and environment minister Bayraktar announced their resignations.

Both Caglayan and Guler have rejected the bribery accusations against their sons.

But it was Bayraktar who raised the stakes by calling Erdogan to follow suit by resigning -- the first time the popular prime minister has faced such a challenge from a minister in his own party.

"I believe the prime minister should also resign," Bayraktar told the private NTV television.

"A big majority of construction plans in the investigation dossier were carried out with the approval of the prime minister," he said.

As Bayraktar was speaking live, the channel cut its feed, raising a stir on Twitter, where critics slammed it as censorship.

Observers see the corruption probe as the result of a rift between Erdogan and a former major ally, Fethullah Gulen, a Muslim cleric who lives in the United States and whose movement wields considerable influence in Turkey's police and judiciary.

Gulen, who denies being behind the graft investigation, is thought to be at odds with Erdogan, a conservative and Islamic-leading leader, after the government moved to shut down a network of Gulenist schools -- a major source of revenue for his group.

Gulenists were previously key backers of the AKP, helping it to win three elections in a row since 2002.

The graft investigation is apparently widening still, with prosecutors in Ankara saying they have opened a probe into the national rail authority over corruption claims in public tenders. No arrests have yet been made, the prosecutor's office said.

The tensions from the overall scandal have clearly hurt the already slowing Turkish economy, pushing the national currency to record lows against the US dollar.

The lira weakened to 2.0907 against the dollar at Wednesday's close. The Istanbul stock market plummeted by 4.2 percent to 66,096.56.

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Hit by scandal and resignations, Turk PM names new ministers

By Orhan Coskun and Ece Toksabay

ANKARA/ISTANBUL (Reuters) - Turkish Prime Minister Tayyip Erdogan reshuffled his cabinet on Wednesday after three members quit over a corruption scandal that has posed an unprecedented challenge to his 11-year rule.

The crisis erupted on December 17 when dozens of people, including of the head of state-run Halkbank, were arrested on graft charges. Erdogan responded by purging police investigators. The ensuing feud with the judiciary reignited long-simmering street protests and rattled foreign investors.

Earlier on Wednesday, three ministers who had sons among those detained resigned. Two of them echoed Erdogan in depicting the inquiry as baseless and a conspiracy. The third, Environment Minister Erdogan Bayraktar, turned on the premier.

"For the sake of the wellbeing of this nation and country, I believe the prime minister should resign," he told NTV news.

By breaking ranks, Bayraktar may have diluted any easing of pressure on Erdogan afforded by the ministers' resignations, although some commentators thought their timing was off.

"These are very late and difficult resignations. They don't have any value in terms of democracy," said Koray Caliskan, an associate professor at Istanbul's Bogazici University.

After nightfall, a spent-looking Erdogan announced he was appointing 10 new ministers to replace the three who quit and others planning mayoral runs in local elections in March.

The fact that the shake-up happened over Christmas cushioned the blow to Turkey on dormant international markets. But the stock index closed 4.2 percent and the lira weakened to 2.0862 against the dollar.

During his three terms in office, Erdogan has transformed Turkey by tackling its once-dominant secular military and overseen rapid economic expansion. He weathered anti-government demonstrations that swept Istanbul and other cities in mid-2013.

The gauntlet thrown down by Bayraktar set off fresh protests in Ankara, Istanbul and Izmir. Erdogan was unmoved.

PROTOCOL, PURGES

In a speech earlier on Wednesday, he vowed no tolerance corruption. He argued that the work of the about 70 police investigators he had sacked or reassigned - including the chief of the force in Istanbul, Halkbank's headquarters - was deeply tainted.

"If a verdict is made by the opposition party on the second day of the investigation, what's the point of having judges? If a decision is made by the media, what's the point of having these long legal procedures?" Erdogan said to provincial leaders of his Islamist-rooted AK party.

Alluding to TV news reports that have riveted Turks with footage of cash-filled shoe boxes allegedly seized at suspects' homes, he asked: "How do you know what that money is for?"

The 14-month investigation was conducted largely in secret. At the weekend, the government changed regulations for the police, requiring officers to report evidence, investigations, arrests and complaints to commanding officers and prosecutors. Journalists have been banned from police stations.

The Hurriyet newspaper said up to 550 police officers, including senior commanders, had been dismissed nationwide in the past week by Interior Minister Muammer Guler, who has now resigned.

Erdogan's critics see an authoritarian streak in his rule. The European Union, to which Turkey has long sought accession, on Tuesday urged Ankara to safeguard the separation of powers.

"The only way you can explain an interior minister removing the police chiefs working in an investigation regarding his own family is that the aim is to obstruct evidence," said Caliskan, who writes for the centrist newspaper Radikal.

"The prime minister thinks Turkish people are not very clever (but) he will be slapped hard at the ballot box."

Turkey's next parliamentary election is not until 2015. But with the local ballots looming, pollsters say the scandal's so-far modest erosion of AK's popular support could quicken.

In a fourth resignation on Wednesday, AK lawmaker Idris Naim Sahin, a former interior minister, told the party he was also stepping down, according to sources in his office.

The scandal has laid bare rivalry between Erdogan and Fethullah Gulen, a U.S.-based Turkish cleric whose Hizmet (Service) movement claims at least 1 million followers, including senior police officers and judges, and which runs schools and charities across Turkey and abroad.

While denying any role in the affair, Gulen described Erdogan as suffering "decayed thinking" after the premier portrayed himself as fending off a shadowy international plot.

In an apparent reference to Gulen, Erdogan said on Wednesday: "We would not allow certain organisations acting under the guise of religion but being used as the tools of certain countries to carry out an operation on our country."

(Writing by Dan Williams; Additional reporting by Humeyra Pamuk, Seda Sezer, Gulsen Solaker and Tulay Karadeniz; Editing by Alistair Lyon)

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Turkey PM reshuffles cabinet amid graft scandal

Turkish Prime Minister Recep Tayyip Erdogan replaced nearly half his cabinet in a dramatic reshuffle late Wednesday after a spreading graft scandal forced the resignation of three top ministers and threatened the premier's own hold on power.

Erdogan announced on television he had replaced the three resigning ministers -- for the interior, economy and the environment -- as well as his EU affairs minister, and reshuffled the justice, transport, family, sports and industry portfolios, and one of his four deputy prime ministers' posts.

The reshuffle was decided in a closed-door meeting with President Abdullah Gul, who had said since Tuesday that it was imminent.

There was no indication the characteristically defiant prime minister was himself contemplating stepping down, as demanded by anti-government protesters -- and by the environment minister who resigned, Erdogan Bayraktar.

Yet the corruption scandal is rapidly becoming a major challenge to Erdogan's 11-year grip on power in Turkey, a NATO member and significant emerging economy.

His image was already badly bruised in June when he ordered a heavyhanded crackdown on anti-government protests sparked by plans to raze an Istanbul park.

Another protest took place in Istanbul on Wednesday demanding Erdogan's ouster, but police used tear gas to disperse the estimated 5,000 demonstrators after some skirmishes. Protests were also reported in Ankara and Izmir.

The probe into the alleged corruption, which has seen recent police raids, focus on numerous offences including accepting and facilitating bribes for construction projects and illegally smuggling gold to Iran.

Erdogan himself has sought to define the corruption scandal as "a conspiracy" plotted by "international powers".

He insists his ruling Justice and Development Party (AKP) party has a clean record and has responded to the investigation by sacking dozens of police chiefs.

Ministers 'excused due to the recent developments'

Announcing the reshuffle, Erdogan referred to the scandal only indirectly, saying: "Some of my friends have asked to be excused due to the recent developments."

Others, he said were leaving to contest March 30 local elections, "and others are changes proposed to the president within my discretion and approved by him".

Erdogan named Idris Gulluce as his new environment minister; an interior ministry undersecretary, Efkan Ala, his new interior minister; and Nihat Zeybekci his economy minister.

Emrullah Isler became a deputy prime minister, replacing Bekir Bozdag who became justice minister.

The scandal hit a politically critical level when the sons of the previous interior and economy ministers were among two dozen people to be charged in the wide-ranging bribery and corruption probe, which has also ensnared close government allies and top businessmen, including the chief executive of state-owned Halkbank.

The environment minister's son was also detained last week, but has not been formally charged and has been released pending trial.

On Wednesday, the previous economy minister Zafer Caglayan, interior minister Muammer Guler and environment minister Bayraktar announced their resignations.

Both Caglayan and Guler have rejected the bribery accusations against their sons.

But it was Bayraktar who raised the stakes by calling Erdogan to follow suit by resigning -- the first time the popular prime minister has faced such a challenge from a minister in his own party.

"I believe the prime minister should also resign," Bayraktar told the private NTV television.

"A big majority of construction plans in the investigation dossier were carried out with the approval of the prime minister," he said.

As Bayraktar was speaking live, the channel cut its feed, raising a stir on Twitter, where critics slammed it as censorship.

Observers see the corruption probe as the result of a rift between Erdogan and a former major ally, Fethullah Gulen, a Muslim cleric who lives in the United States and whose movement wields considerable influence in Turkey's police and judiciary.

Gulen, who denies being behind the graft investigation, is thought to be at odds with Erdogan, a conservative and Islamic-leading leader, after the government moved to shut down a network of Gulenist schools -- a major source of revenue for his group.

Gulenists were previously key backers of the AKP, helping it to win three elections in a row since 2002.

The graft investigation is apparently widening still, with prosecutors in Ankara saying they have opened a probe into the national rail authority over corruption claims in public tenders. No arrests have yet been made, the prosecutor's office said.

The tensions from the overall scandal have clearly hurt the already slowing Turkish economy, pushing the national currency to record lows against the US dollar.

The lira weakened to 2.0907 against the dollar at Wednesday's close. The Istanbul stock market plummeted by 4.2 percent to 66,096.56.

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France's top rabbi takes leave amid scandal

PARIS (AP) — France's top rabbi is taking leave from his post after he acknowledged "borrowing" other people's work and lying about his education, a top Jewish leader said Thursday.

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