Columnist

At the center of the increasingly bitter dispute between the United States and Turkey is a demand by an irate President Recep Tayyip Erdogan that American prosecutors free a Turkish-Iranian gold dealer who is about to go on trial on money-laundering and fraud charges.

The confrontation sharpened Thursday, as Erdogan protested in Ankara that the businessman, Reza Zarrab, was being squeezed as a "false witness" about corruption. Turkey alarmed Washington by arresting a U.S. consular official last week, in what some U.S. officials feared was an attempt to gain leverage for Zarrab's release before the scheduled Nov. 27 start of his trial in New York. Turkish and American officials plan to meet next week for talks to ease tensions.

What dirt could Zarrab dish in court? A possible preview comes in a May 2016 court filing by then-U.S. Attorney Preet Bharara. Citing a December 2013 Turkish prosecutor's report, Bharara's memo said the Turkish evidence "describes a massive bribery scheme executed by Zarrab and others, paying cabinet-level governmental officials and high-level bank officers tens of millions of Euro and U.S. dollars to facilitate Zarrab's network's transactions for the benefit of Iran" to evade U.S. sanctions against that country. Bharara's memo noted that these "conclusions are corroborated by emails obtained through the FBI's investigation."

Erdogan's campaign to free Zarrab has been extraordinary. He demanded his release as well as the firing of Bharara in a private meeting with then-Vice President Joe Biden on Sept. 21, 2016, in which U.S. officials say half the 90-minute conversation was devoted to Zarrab. Erdogan's wife pleaded the case that night to Jill Biden. Turkey's then-justice minister, Bekir Bozdag, visited then-Attorney General Loretta E. Lynch in October to argue that the case was "based on no evidence" and that Zarrab should be released.

Erdogan appealed personally about the matter in his last two phone calls with President Barack Obama, in December and early January, former aides say. "Our operating assumption was that Erdogan's obsession with the case was that if it moved forward, information would come out that would damage his family, and ultimately him," said one former senior Obama official.

Erdogan's government began cultivating Donald Trump's team before the election. Michael Flynn, then a campaign aide, was hired as a pro-Turkey lobbyist, and his firm continued to receive Turkish money during the transition. After Flynn resigned as national security adviser in February, the Turks began working with Rudy Giuliani, a close Trump adviser.

The case is toxic to Erdogan because it intersects with his nemesis, the self- ­exiled Turkish cleric Fethullah Gulen, who lives in Pennsylvania. Erdogan blames Gulen's followers for gathering and leaking the 2013 evidence about Zarrab, which Turkish media reports say included allegations against Erdogan's family. When Erdogan met with Biden a year ago, he claimed bizarrely that Bharara was a Gulenist tool, according to a former official.

Giuliani's involvement is one of the many unusual aspects of this case. He contacted Bharara on Feb. 24 to inform him that he planned to travel to Ankara on Zarrab's behalf. Trump fired Bharara in March; around that time, Giuliani began pressing the Justice Department for "some agreement between the United States and Turkey" to aid American "security interests" and help Zarrab, Giuliani said in a filing with the court.

Despite these various attempts to halt the prosecution, the case rolled forward — and even broadened in an expanded indictment last month that named a former Turkish cabinet minister and three other prominent Turks. Then- ­Justice Minister Bozdag on Sept. 11 condemned the expanded charges as another "coup attempt." Erdogan sees Gulenist plotting behind the 2013 allegations against his inner circle and a failed July 2016 military coup.

Erdogan may have hoped that Trump would support his push to free Zarrab. And Trump initially seemed sympathetic to the Turkish leader, inviting him to Washington for a May meeting. But that visit was marred when Erdogan's security detail attacked protesters outside the Turkish ambassador's residence; and Trump's maneuvering room has narrowed because of investigations surrounding his administration.

Some U.S. officials fear that Erdogan might be seeking bargaining chips in the detention of pastor Andrew Brunson, arrested a year ago on charges he backed Gulen, and the arrest last week of Metin Topuz, a longtime employee of the U.S. consulate in Istanbul, who a Turkish newspaper has alleged was in contact with a pro-Gulen prosecutor back in 2013. And Erdogan himself suggested last month a trade of Brunson for Gulen.

The phrase "NATO ally" is repeated so often about Turkey that it obscures how adversarial and autocratic recent Turkish actions have been. Washington is worried about what's next.

Read more from David Ignatius's archive, follow him on Twitter or subscribe to his updates on Facebook.