Press Releases | April 11, 2022

TDP Calls on Blackstone to Examine All Future Associations in Turkey

(Washington, D.C.) — The Turkish Democracy Project (TDP) has called on Blackstone Group L.P., the American investment management giant, to examine all future associations in Turkey and sever all engagements with the Turkish construction sector, which is notoriously corrupt and benefits from non-competitive government tenders while pursuing environmentally damaging and costly infrastructure projects. 

In Fall 2021, TDP initiated a campaign investigating international companies with links to corrupt Turkish construction firms and dubious government sponsored projects. TDP’s research has found that Blackstone Group L.P. (Blackstone) purchased a number of shopping centers in Turkey and expressed strong interest in investing in the Turkish retail industry. 

Blackstone acquired the Gordion Shopping Center in Ankara, the Erzurum Shopping Center in Erzurum, and the Magnesia Shopping Center in Manisa in 2012 at a time when the company considered Turkey as a promising market for additional investment in the retail sector. 

Since Erdogan’s ascension to the presidency in 2014, the construction and retail industries have been increasingly plagued by corruption. A number of companies with close ties to the regime and the ruling AKP party have been routinely granted overpriced non-competitive government tenders in complete disregard for public welfare. This systematic corruption, coupled with a progressive crackdown on fundamental civil rights including free speech and media freedoms, has led to Turkey’s gradual downgrade in the Corruption Perceptions Index and the Global Emerging Market MSCI equity index. This decline was remarked upon by Blackstone’s Vice Chairman, Byron Wien, in 2018, who noted Erdogan’s growing “authoritarian rule”.

Having identified legal, reputational, and financial risks of doing business with the Turkish construction and retail sectors, TDP sent a letter to Stephen A. Schwarzman, Blackstone’s CEO and founder, urging Blackstone to avoid future associations with Turkey’s retail and construction sectors. 

Commenting on Blackstone’s lack of response, Ambassador Mark Wallace, CEO of the Turkish Democracy Project, said: 

We urge Blackstone to carefully review all existing and prospective associations with Turkish sectors affected by President Erdogan’s malign influenceWe ask that all Blackstone’s activity in Turkey be subject to a full forensic audit and eventual termination should that activity fail to comport with Blackstone’s commitment to “accountability” and “integrity” as defining principles of its character and culture. Blackstone Vice Chairman has explicitly acknowledged Turkey’s worrying slide into kleptocratic illiberalism, and it is high time the company acts on this understanding.”