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ISTANBUL

A recent Turkish Financial Crimes Investigation Board (MASAK) probe into the Istanbul Municipality exposed a complex web of financial transactions that allegedly funneled public funds into a private construction company linked to Ekrem Imamoglu, the city’s mayor, who recently was charged with corruption offenses.

The investigation found that in this particular tender, the Istanbul Municipality-affiliated companies Kultur Inc. and Medya Inc., "along with firms involved in unauthorized agreements, carried out arbitrary actions based on unlawful directives,” said a MASAK report.

It also said "advertising billboards on construction sites and buildings, which should not have been granted permits under existing regulations, were approved for illegal advertising upon the instructions of the municipality mayor and the unauthorized directives of consultant Murat Ongun, Ertan Yildiz, then-Kultur Inc. General Manager Serdal Taskin, and (municipality) Deputy Secretary-General Murat Yazici, who was responsible for law enforcement."

Furthermore, the probe suggested that "no penalties were levied," and there was "cooperation with multiple company owners and executives."

It is also stated that "unofficial permits and illegal protocols were issued," payments were made for "fictitious advertising services," and "unlawful fees were collected."

The report asserts that "Kultur Inc. and Medya Inc. were used as fronts for these irregularities," leading to "a public financial loss of $6.8 million (almost 261 million Turkish liras) plus VAT."

According to the investigation, a company awarded the municipality advertising tender is accused of transferring $1.3 million (50 million liras) as a bribe to Imamoglu Construction – a firm closely tied to the mayor.

The funds reportedly flowed in a convoluted way: on June 3, 2024, the sum was initially deposited into the account of Huseyin Koksal, a close associate whose nephew had secured a $10.5 million (400 million liras) advertising contract allegedly meant to benefit Imamoglu’s inner circle.

Investigators assert that the money was later moved from Koksal’s account directly to the construction company under the guise of a land purchase, despite evidence of a developing construction project at the site.

Financial misconduct in ad tenders

The investigation also shines a light on numerous advertising tenders managed by the municipality, which have come under fire for their irregularities and alleged manipulation.

Among these, one contentious 10-year contract for 3,000 billboards and 85 megalight advertising spaces reportedly resulted in public losses of some $31 million (1.18 billion liras) by its third year, with estimates suggesting losses could reach nearly $67.3 million (2.56 billion liras) by the contract's end.

Authorities claim that the tender process was manipulated to favor Vizyonkent Reklam – an advertising agency whose shareholders were linked to previous contract holders – ensuring the continued operation of fraudulent agreements and unauthorized commercial use of public spaces.

Further irregularities were found in contracts for advertising on pedestrian overpasses. In one case, a tender meant for 100 overpasses resulted in the illegal installation of 150 panels instead of the permitted 72, generating losses of around $23.5 million (896 million liras).

A similar irregular tender for 95 overpasses saw fraudulent leasing of 172 advertising panels, with losses mounting to nearly $25.9 million (985 million liras) by the second year and projections nearing $38.6 million (1.47 billion liras) by the contract’s completion.

Other cases include a contract for billboard advertising in municipal parking lots (ISPARK), where unauthorized high-revenue giantboard replacements contributed to an estimated loss of about $2.5 million (98 million liras) by the fifth year, with further losses anticipated if the trend continues.

Additionally, a 10-year tender for 2,000 racket-type ("street furniture") signs and 400 megalight advertising units reportedly generated illicit gains of over $6.4 million (245 million liras) by its fifth year, with projected losses rising to nearly $12.8 million (490 million liras) by the end of the term.

Legal and political implications

The Istanbul Chief Public Prosecutor’s Office has brought charges against Imamoglu and 99 other suspects on a range of offenses, including leading a criminal organization, membership in a criminal organization, extortion, bribery, aggravated fraud, unlawful acquisition of personal data, and rigging tenders.

Mayor Imamoglu was arrested on Sunday by the criminal court of peace as part of a corruption investigation.

The investigation, which is still ongoing, hints at a systematic effort to redirect public funds into private channels, raising serious concerns about institutional manipulation and cronyism within the municipality.

When questioned by police, Imamoglu firmly denied the allegations, stating: "I do not acknowledge these accusations, and I categorically reject all allegations."

His repeated dismissal underscores the contentious nature of the probe, which critics say points to a deep-seated financial scandal at the highest levels of Istanbul’s municipal government.

The MASAK investigation continues to unravel the details of these transactions, with authorities scrutinizing bank records, tender documents, and confidential testimonies.