Delving into Iran’s Corruption Chronicles – Part 3

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Written by
Mansoureh Galestan

Corruption poses an enduring global challenge in various parts of the world; however, in Iran, it has taken unconventional and extensive forms. Faced with a lack of political legitimacy and diminishing social support by the end of the Iran-Iraq War, the clerical dictatorship sought to secure its survival by involving the Islamic Revolutionary Guard Corps (IRGC), a pivotal force for the regime, in the country’s economy.

Now and then, tightly state-controlled media reports suggest questionable practices, such as awarding contracts at inflated prices, with the regime diverting the surplus funds for its gain. The repercussions have been severe, resulting in a substantial drain on the nation’s resources that could have otherwise been allocated to improving the quality of life for ordinary Iranians.

One notable example was the contract between the National Iranian Oil Company and Crescent Petroleum, an Emirati company, in 2001. Mehdi Hashemi Rafsanjani, the son of the former regime president Akbar Hashemi Rafsanjani, allegedly received a $120 million bribe to facilitate the deal. As a result, Iran’s regime reportedly incurred a $56 billion loss in its dealings with Crescent, according to Alireza Zakani, the head of the parliamentary committee overseeing oil contracts in 2013.

In a separate incident reported by the state-run Mashregh News in December 2015, Mehdi Hashemi Rafsanjani was found guilty of taking an $11 million bribe in connection to a petroleum contract involving Statoil and the Fuel Consumption Optimization Organization. The narrative further reveals that Statoil incurred a $3 million fine in Norway for its involvement in bribery payments.

 

In 2018, the IRGC-run Mashregh News also reported another $104 million bribery case involving French oil company Total and Iranian Ministry of Petroleum officials under the leadership of Bijan Zanganeh during the years 1995 to 2004. This bribery was linked to the allocation of phases 2 and 3 of the South Pars oil field to Total. Reuters announced that a court in Paris condemned Total to pay $570,000 for bribery. Reuters further states that court documents indicate Mehdi Hashemi Rafsanjani as one of the beneficiaries of this bribe.

Corruption has also infiltrated Iranian football. In April 2020, Mashregh News brought attention to a parallel issue in Iranian football amid the global coronavirus pandemic. The report highlighted the significant sums of money that mysteriously disappear within the realm of football.

Similarly, in October 2020, the newspaper Taadol noted that Persepolis Tehran had advanced to the AFC Champions League finals twice in recent years, securing several million dollars in official rewards from the AFC. However, the precise utilization and allocation of these funds remain undisclosed, casting a shadow on the transparency within Iranian football’s financial management.

These instances only scratch the surface of the pervasive systematic corruption within the regime. The reports that come to light and see the light of a so-called courtroom, primarily involve factions that have now been sidelined from power. Media outlets exposing these cases are frequently aligned with the current ruling faction. Notably, the most significant instances of corruption and fraud occurring within companies and entities affiliated with the IRGC or the Supreme Leader’s Office are highly unlikely to be exposed or scrutinized.

The endless list of embezzlements and financial misconduct in Iran is staggering. By aggregating the stolen amounts mentioned in numerous reports of state media, billions of dollars have been siphoned from the pockets of the Iranian people due to corruption.

 

If we contemplate the potential uses of these embezzled and stolen funds, the scale of the impact on Iranian society becomes apparent:

Healthcare: According to the state-run Tasnim News Agency in October 2019, the construction cost of a hospital was 1 billion tomans per bed. Therefore, considering the current exchange rate, a 1000-bed hospital would amount to 20 million dollars.

Education: In September 2019, the construction cost of each classroom in Iran was estimated at 200 million Iranian tomans, approximately 4,000 dollars. Considering the embezzled funds by the Debsh Tea company, the state had the potential to construct a staggering 925,000 classrooms for the education of Iranian children.

Higher education: At a high standard, the construction cost of a university in England has been around 2,000 pounds per square meter. Using the same standard and building a university like Tehran’s Science and Industry University spanning over 400,000 square meters, the ideal construction cost would be 1 billion dollars.

Housing: According to state media, there are 20,000 homeless individuals in Tehran. The cost of constructing one square meter of a 7-story building in Tehran is 4.6 million tomans or 1000 dollars. Therefore, a seven-story, 300-square-meter house with 28 units would cost 300,000 dollars. To address the housing needs of 20,000 homeless individuals, an estimated cost of 215 million dollars would be incurred.

The lingering question persists: Where do the vast sums, illegitimately acquired from the Iranian people, find their destination? A segment is earmarked for sustaining the opulent lifestyles of government officials, while another portion is channeled into bolstering autocratic regimes, financing terrorism, and entangling in proxy conflicts.

The grim economic landscape, characterized by a staggering inflation rate of 156%, widespread hunger, and more than 70% of Iranians grappling beneath the poverty line, functions as a time bomb, poised for potential public unrest. Weary from years of suppression, the Iranian people are on the verge of reaching a tipping point, clamoring for accountability and an end to the pervasive grip of systemic corruption.

 

Delving into Iran’s Corruption Chronicles – Part 3

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