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Corruption Without End

by REIHANEH MAZAHERI in Paris

23 Apr 2010 23:41Comments
2699.jpgEmbezzlement, kickbacks, coverups define the Ahmadinejad administration.

During his first term in office, President Mahmoud Ahmadinejad made anticorruption a central theme, promoting his administration's fight against financial misconduct. Today, not far into his second term, the government that claimed to be the most egalitarian and most pious since the 1979 Revolution now leads and embodies a financial mafia.

This, only two years after the president declared, during a trip to Mashhad, "The government's determination to uproot sources of corruption is resolute, and because of the action already taken, the possibility of any corrupt mark on the body of this government is zero." This, after a half-decade of promises that his government was devoted to crushing financial crime.

Over the past couple of years, corruption charges have brought scores of people, most of them part of the current administration, before the Court for Financial Affairs. Ahmad Ghasemei told the government-aligned Fars News Agency that in 2008 and 2009 there were convictions in 68 financial corruption cases involving a total of 257 people. The monetary value of these cases totaled 1.265 trillion tomans (US$1.265 billion), most it derived from the diversion of government property and the abuse of power by those serving in the executive branch.

The first Ahmadinejad administration effectively shut down the Center for Anti-Corruption Campaign by keeping the positions reserved for representatives of the executive vacant. In a November 2008 letter to the head of the Majles, the four representatives of the legislative branch -- hailing from Amol, Qazvin, Tehran, and Golpayegan -- announced that the center's sessions could not come to order due to the absence of executive representation: the administration's delegates were routinely absent, purportedly "traveling," and failing to designate the necessary substitutes.

The Supreme Jurist intervenes to prevent exposure of electoral fraud

Among the considerable number of incidents of financial corruption involving Ahmadinejad's underlings, one of the most prominent -- involving a close ally of his -- was exposed by a reformist representative after last year's rigged election. The revelations eventually forced the Supreme Leader, Ayatollah Ali Khamenei, to once again intervene on behalf of the administration in order to keep the full truth from becoming public.

In mid-March, during the final days of the past Iranian year, a number of media outlets reported on an embezzlement charge against an insurance company and the involvement of a senior government figure in a major financial scandal. Confirming those reports, Ayatollah Sadegh Larijani, the head of the judiciary, said, "The members of this gang were able to deprive citizens and the treasury of billions of tomans through forging administrative and judicial documents. One of them alone embezzled 6 billion tomans." The identity of this embezzler, who stole the equivalent of $6 million, remained unknown.

The website Nedaye Sabz-e Azadi (Green Proclamation of Freedom) also revealed that a prominent government figure close to Ahmadinejad was the head of the embezzlement gang, and that in addition to this high-ranking official, the head of an insurance company and a number of other Ahmadinejad administration officials were also involved. The website reported that the president intervened to prevent the arrest of the ringleader. As for the identity of the culprit, the report -- referencing another site, FaraRoo -- described a letter from Majles representative Elias Naderan relating to the fake Ph.D. degree and questionable financial dealings of Mohammad Reza Rahimi. It was on this basis that news agencies identified the latter as the $6 million man.

As the scandal grew, Naderan, a leading reformist critic of Ahmadinejad's, explicitly accused Rahimi of being the boss of what is now called the Fatemi Street Nexus. He added that nearly all the members of this cabal, except Rahimi, had been detained, and pointed out the grave injustice of exempting someone from responsibility for criminal acts because of his position in the administration.

Government officials, including Rahimi, initially denied the reports and denounced Naderan for baselessly attempting to sully the government's image. In the past, they had similarly berated critics who raised questions about Rahimi's forged doctoral degree and his conduct while in charge of the Board of Financial Accounting. Ahmadinejad, dismissed the latest allegations, stating, "I have noticed that a certain amount of money was being used by my associates, but I am ready to testify that my appointees have used all the funds for election purposes and in no way have they used it on personal or family matters."

On the other side, the government's critics continued to bring forth more evidence of Rahimi's culpability and the extent of the Fatemi Street cabal's corruptive influence within the government. Ahmadinejad's level of intervention in the case drew criticism even from Majles representatives. An open letter to Larijani, signed by 216 representatives, pointed out that certain people in high administrative positions had more central roles in the case than those who have been detained. Reformist members have expressed their dismay that Rahimi has not been legally confronted.

Just as evidence, and debates, concerning the dimensions of Rahimi's embezzlement and the breadth of the financial corruption case reached crisis proportions, suddenly all official inquiry into the case was halted by a decree from the Supreme Leader.

The pro-Green Jaras website published a statement, attributed to a well-informed source, explaining what happened: "When Ahmadinejad's funding methods for electoral largess and openhanded spending in villages, towns, and cities was revealed, and proved the basis of Mousavi and Karroubi's assertions that the government had bought votes, Ahmadinejad visited the Supreme Leader, Ali Khamenei, and testified, swearing on the Qur'an, that all the funds in question were spent for election purposes and not diverted for any other, personal, purposes."

The source continued, "Ahmadinejad then asked the Supreme Leader to halt all inquiries into financial crime and corruption allegations against his first deputy, Rahimi. His rationale was that the pursuit of such investigations would bring the elections under question and inevitably, the whole regime. He therefore urged Khamenei to order the cessation of the probe."

The judicial investigations, according to this source, had meanwhile disclosed that 18 billion tomans ($18 million) were placed at the disposal of Esfandiar Rahim Mashaei, head of the president's office (equivalent to the U.S. president's chief of staff), $10 million were put under the discretionary control of Ahmadinejad's son, and $7 million under that of Rahimi. The source of these slush funds is the "5 percent commission," or kickback, on a $700 million loan, procured for a close associate of this group, through the national banking system.

As a result of his ongoing collusion with the corrupt administration, Khamenei has come out once again in support of the government. He again has asked -- rather, ordered -- the government's critics in the Majles to once again check their voices.

It may be because of this that Naderan, who had been uncovering and releasing crucial evidence in the case in the weeks before Khamenei's statement, suddenly retreated. Referencing the Supreme Leader's decree, he said, "Of course, we will pursue our complaints, but the most important thing is the regime's interest."

From forgery to fraud in elections

At the moment, Mohammad Reza Rahimi remains the first vice president to Ahmadinejad and the administration's spokesman. He is also in charge of the Center for Anti-Corruption Campaigns. This, despite the well-founded allegations that he was the leader of the Fatemi Street Nexus, as well as the aforementioned reports that his academic documents were forged.

While all eyes were focused on the impeachment proceedings of the late Ali Kordan, interior minister during the first Ahmadinejad administration, for offering a forged academic degree, the name of Rahimi, then Ahmadinejad's legal affairs deputy, surfaced in the same case. A Majles member describe Rahimi's academic credentials as a cheap copy of Kordan's forged documents.

The affair turned surreal when another Majles representative reported that the director of Ahamadinejad's Office of Legislative Affairs was handing out $5,000 checks in an effort to reverse Kordan's impeachment vote. When that vote-buying scheme was exposed, the Majles expelled a president's legislative affairs chief for the first time in its history.

After those events, the Majles's interest in Rahimi's academic fraud dissipated. But the issue was not forgotten. In autumn 2009, pursuant to Representative Naderan's request for the review of Rahimi's doctoral claim, the Executive Committee of the Majles assigned the head of the Office of Legislative Investigations to the case. He declared that the submitted documents were "certainly irregular." When questioned by the press about his academic claims and the Majles's decision to review them, Rahimi calmly retorted, "Doesn't the country have more pressing problems for the representatives' attention than proving the forgery of my doctoral degree?"

Who is Mohammad Reza Rahimi?

Mohammad Reza Rahimi's political activities go back to the early years of the Revolution, right after which he was designated as the public prosecutor of the Qarvah district in his native province of Kordestan. He remained at that post until the election of the second Majles in 1984, when he was voted in as a fundamentalist representative for the first of three successive terms. During President Hashemi Rafsanjani's first term, Rahimi left the Majles and became governor of Kordestan. The first scandal with which he is associated took place in 1997: presidential vote rigging in his province.

While preelection reports predicted a clear victory for Mohammad Khatami in Kordestan, there were widespread irregularities in the vote count. Along with Mazandaran, his opponent's birthplace, Kordestan was the only province not to wind up in Khatami's column. Rahimi's electoral malfeasance didn't produce the desired result on the national level and he resigned his governorship of Kordestan shortly after Khatami took office.

Rahimi then served for a short time as council to the head of the judiciary, which brought him back to the capital. Soon after, he took over the chairmanship of the law school at Azad University's Tehran campus.

Rahimi gained some notoriety for a statement he made as head of the Board of Financial Accounting, a post he held early in the first Ahmadinejad administration. At its annual directors' meeting in 2005, he spoke in bizarre acclamation of his boss, who was in attendance: "In Syria, a Muslim man told me that he believed that if there was to be another prophet after the Prophet [Muhammad], it would have been Ahmadinejad. Such deep expressions bring us great honor. It is by your blessed eminence that we are received so graciously and treated with such respect." Perhaps it was on this basis that when the Majles rejected the appointment of Mashaei as Ahmadinejad's first deputy, he named Rahimi in his stead.

The Immortal Guardian's decree against the Majles

As we have seen, the anticorruption slogans of Ahmadinejad's first term were hollow. A political and economic expert in Tehran observes the range of corruption that has been exposed among close associates of the president's -- exposed, but not pursued. Along with the case of the first vice president and the Supreme Leader's decree to halt the investigations, he also points to the case of the Welfare Organization, where no legal action was taken after clear exposure of several financial malfeasance there.

This expert adds, "Since the electoral coup last year, no opposition group has the right to express anything against the government, and in cases where the executive branch can't stand up to the legislative or the judiciary branches, it takes refuge at the Jurist Guardian's court, which is none but Ali Khamenei, and seeks redress through a binding decree." As we have witnessed repeatedly, the administration uses decrees from the clerical leadership to force the Majles to abandon its oversight responsibilities.

First financial scandals -- 1386 (2008)

Along with "Delivering Oil Money to Everyone's Dinner Table," anticorruption slogans were at the center of both of Ahmadinejad's election campaigns. He repeatedly referred to the existence of an organized crime gang in the Oil Ministry. He would often tap his breast pocket to indicate that he had a list of the malefactors that he would reveal in due time. Of course, such revelations have never been forthcoming. Most of the cases of financial corruption that have come before the judiciary during his time as president have involved officials in his own government.

In 2007, reports surfaced of rampant financial malfeasance at a government-run concern, Behzist Bonyad, and its subsidiary, Behzist Petroleum. The actual agency was setup for the charitable distribution of low-cost goods, free health care vouchers, and medicine, but ended up being a cover for the illicit import of tobacco and other high-demand contraband products by close associates of the administration. Behzist Petroleum was set up as a shell for exporting of petrochemical products earmarked for internal consumption, again under the "charitable" cover provided by Behzist Bonyad.

The newspaper Tehran-e Emrooz (Today's Tehran), affiliated with the Islamic Propaganda Organization, detailed how both Behzist organizations became involved with the illegal import and export trade soon after Ahmadinejad took power in 2005. A source close to investigations of the company has offered detailed accounts of its wrongdoing, including the export of 15,000 tons of petrochemical products and byproducts through Armenia, using the cover of charitable operations.

In July 2009, the government-funded website Eghtesad Penhan (The Hidden Economy) reported on a vast network of illicit trade involving nominally charitable agencies that had been exposed by Tehran's civilian constabulary. Massive amounts of high-end branded clothing were moved under the guise of "charitable functions." Behzist Bonyad officials allowed the agency to be used as the vessel for the import of hundreds of other items for the illegal trade, such as mobile handsets, iPods, rice, tea, and automobile tires, for which it received $4.6 million in kickbacks. The agency's operations were almost entirely divorced from legitimate charitable work. One of the three members of its directorate is Seyyed Rostan Agaha-Khan, a hardline candidate for the Tehran city council in 2006 and a relative of Ahmadinejad's.

These are but a few examples of how a government that declares itself popular, egalitarian, democratic, and vigilantly opposed to corruption has actually facilitated and engaged in it at every turn.

As a measure of the degree to which financial corruption has escalated under Ahmadinejad's watch, consider the corruption rankings compiled by Transparency International. Iran slid in its overall assessment from 87th position in 2004 to 133d in 2008, a drop of 46 places that now puts the country in the bottom quartile of the 180 evaluated countries. Except for war-ravaged Yemen, Iraq, Afghanistan, and Pakistan, the crown of most corrupt country in the entire Middle East goes to the Islamic Republic of Iran.

Presidential Tête-à-Têtes: Mahmoud Ahmadinejad and Mohammad Reza Rahimi. Archive photo.

Copyright © 2010 Tehran Bureau

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