Delving into Iran’s Corruption Chronicles – Part 1

Amir2018TaghatiDecember 19, 2023
Delving into Iran’s Corruption Chronicles – Part 1
In 2019, Transparency International CPI, a global coalition against corruption, ranked the Iranian regime’s corruption

Written by
Mansoureh Galestan

The Corruption and Plunder of Endowments in Iran min
In 2019, Transparency International CPI, a global coalition against corruption, ranked the Iranian regime’s corruption at 147 out of 180 countries. While corruption is a global issue, Iran faces a unique challenge with systematic corruption, distinguishing it from many other nations.

Systematic corruption in Iran is intricately linked to its power structure. The Supreme Leader, Ali Khamenei, holds political, military, and judicial powers without any accountability. Criticism of Khamenei or entities under his control, such as financial institutions and the Islamic Revolutionary Guard Corps (IRGC), is prohibited. The clerical regime presents the Supreme Leadership as a continuation of God’s rule, making any criticism akin to opposing divine authority.

Ruhollah Khomeini, the founder of the theocratic dictatorship, once said, “The issue of the Supreme Leadership is not something that the Assembly of Experts has created; the Supreme Leadership is something that Almighty God has established. It is the same leadership of the Messenger of Allah.”

Systematic corruption, as defined by the World Bank in its 2017 Development Report, refers to the private use of public resources. In the case of Iran, this form of corruption is a routine practice, spearheaded by figures such as Supreme Leader Khamenei and the IRGC and their affiliated economic empires. A June 2020 report from the state-run Mostaqel newspaper cited Behzad Nabavi, former deputy head of the parliament, stating that “four entities linked to the Supreme Leader control 60% of the country’s wealth.” These entities include the Executive Headquarters of Imam’s Directive, Astan Quds Razavi, the Foundation of the Oppressed, and the Khatam-ol-Anbia Headquarters.

Backing this perspective, on October 9, 2018, the state-run website Eqtesad News quoted Ali Rabiee, then spokesperson for former president Hassan Rouhani’s administration, confirming that corruption in Iran is indeed systematic.

Systematic corruption in the Iranian regime takes on various forms. Although a comprehensive examination of all corruption facets within the regime is time-consuming, several facts and figures might help to get an understanding of the corruption dynamics in the country.

In 1992, Morteza Rafiqdoust, a Khomeini-confidant and a commander of the IRGC, and brother of Mohsen Rafiqdoust embezzled 123 billion tomans (then worth 848 million dollars).
In 1998, then Tehran’s mayor Gholamhossein Karbaschi, a close associate of the former president Ali-Akbar Hashemi Rafsanjani, was involved in embezzlement amounting to 14 billion tomans (then worth 80 million dollars).
In November 2001, Shahram Jazayeri, an economic advisor to several members of the parliament, was engaged in financial corruption amounting to 4 billion tomans (then worth 5 million dollars). He received a 13-year prison sentence.
In September 2011, Mahafarid Amir Khosravi, a state-affiliated businessman, and Mahmoudreza Khavari, the former CEO of Bank Melli, were involved in the embezzlement of 3,000 billion tomans (then worth 2.6 billion dollars). Mahafarid Amir Khosravi was executed, and Khavari fled to Canada.
In 2012, Saeed Mortazavi, a former judge and prosecutor who later became the head of the regime’s Social Security Organization, was implicated in financial corruption and embezzlement amounting to 3,250 billion tomans (then worth 2.6 billion dollars). Surprisingly, despite these charges, he received a lenient sentence of only six months in prison and 70 lashes from his former colleagues. Notably, Supreme Leader Ali Khamenei later granted him a pardon.
Also in 2012, Mohammadreza Rahimi, the former First Vice President under the former president Mahmoud Ahmadinejad, was found guilty of embezzling 2.8 billion tomans (then worth 2.3 million dollars) in the “Iran Insurance” case. As a consequence, he was sentenced to 5 years in prison for his involvement in this embezzlement.
In November 2013, approximately 150 billion dollars in surplus oil revenues, resulting from the spike in oil prices, mysteriously vanished during Ahmadinejad’s administration.
In December 2013, Babak Zanjani embezzled 18 trillion Iranian tomans, equivalent to 14.6 billion dollars at that time. Zanjani, collaborating with ministers and the presidential staff, secured privileges for selling oil by exploiting the pretext of evading sanctions against the state. Remarkably, his debt amounted to only 4 billion dollars owed to the Ministry of Oil.

In 2013, corruption amounting to 8 trillion Iranian tomans, then valued at 6.5 billion dollars, was uncovered within the Martyrs Foundation of the regime. Gholamali Jafarzadeh, a member of the executive board investigating the foundation, expressed astonishment, stating, “As we delved deeper, we discovered that the scope of corruption was more extensive than we had initially thought.”
In November 2013, a corruption case involving 900 million dollars came to light, implicating the Central Bank and the Ministry of Industry in the importation of essential goods.
In December 2014, the disappearance of an oil rig valued at 87 million dollars, named Forouchuna, was reported. The son of Ataollah Mohajerani, who served as the Minister of Culture during Mohammad Khatami’s presidency, was arrested in connection with this incident. The missing Forouchuna rig was not an isolated case; an Iranian state-controlled newspaper highlighted the vanishing of 30 oil rigs during Mahmoud Ahmadinejad’s administration.
In 2016, corruption amounting to 800 billion Iranian tomans, equivalent to 266 million dollars at that time, was uncovered within the Khatam Al-Anbia Base.
In September 2016, corruption came to light in the allocation of Tehran Municipality properties, reaching a value of 2,200 billion Iranian tomans, equivalent to 733 million dollars at that time, benefiting government officials.
In September 2016, the media reported the disappearance of three massive oil tankers from Iran during Ahmadinejad’s administration. The state-run website, Aftab News, highlighted the loss of 100 million dollars from Iran’s national assets.
In October 2016, corruption amounting to 8,000 billion Iranian tomans, then valued at 2.6 billion dollars, was exposed in the Cultural Fund. The CEO of the Cultural Fund was implicated in the scandal. Mohammad Mehdi Zahedi, a representative of the regime’s parliament, had asserted that corruption had infiltrated all levels of the Cultural Fund.
In January 2017, a corruption case involving 2.6 trillion Iranian tomans, then valued at 860 million dollars, was associated with an individual named Rasoul Daniyalzadeh. This case had ties to the brother of the regime’s president, Hassan Rouhani, and Akbar Tabari, the former director-general of financial affairs and deputy of the judiciary in the regime.

In February 2018, a theft of 100 billion Iranian tomans, then worth 31.2 million dollars, occurred in the Exploration Department of the Ministry of Oil, orchestrated by senior managers.
In August 2018, the state-run newspaper Shargh disclosed the allocation of 20 billion dollars from the country’s foreign currency reserves to various groups that purportedly had no external presence.
On November 29, 2018, the ILNA news agency reported that over the past 10 months, 30 billion dollars had gone missing from the banking network.
In January 2019, an individual named Hamidreza Baqeri Darmani, known as the King of Bitumen, faced trial for corruption totaling 2.4 billion dollars, coordinated with officials from the regime’s refineries.
In March 2016, corruption involving 6.6 billion euros (then valued at approximately $8 billion) was exposed in Iran’s petrochemical industry. The CEO of the Petrochemical Trading Company, some petrochemical managers, as well as Ali Ashraf Riahi, the son-in-law of the Minister of Industry under then President Hassan Rouhani and the advisor to the Minister of Oil at that time, Mohammad Reza Nemat-Zadeh, were brought to court as defendants. However, according to state media reports, the Minister of Industry’s son-in-law fled Iran in July 2020 while the trial was ongoing.
In October 2019, it was disclosed that Hossein Fereydoun, the brother and special aide to then-President Hassan Rouhani, and an advisor to the regime’s Foreign Minister Mohammad Javad Zarif, received a bribe of 31 billion tomans, equivalent to 7.3 million dollars.
In October 2019, the Minister of Economy of the regime announced, “In the past 18 months, we had approximately 61 billion dollars in non-oil exports, and 45% of these exports have returned to the country.”
In June 2020, Karimi Ghoddousi, a representative in the parliament, alleged that then-President Hassan Rouhani personally instructed the then-Central Bank Governor, Valiollah Seif, to release 36.1 billion dollars from the treasury into the market within three years. This sum ended up in the hands of three smuggling networks dealing with currency, goods, and narcotics, eventually finding its way to Sulaymaniyah, Iraq.
In July 2019, Saeed Namaki, Health Minister in Rouhani’s administration, acknowledged the allocation of 1.3 billion dollars for medical equipment, but the exact beneficiaries remained unclear. He also highlighted the presence of organized corruption in the pharmaceutical import process.

In October 1998, the state-affiliated website Etemad Online revealed a statistical discrepancy of approximately $127 billion in Iran’s customs data compared to foreign trading partners during the 80s, from 2001 to 2010, indicating potential malfeasance.
In June 2020, former deputy head of the judiciary, Akbar Tabari, received a 31-year prison sentence and a fine of 118 billion tomans (then worth 28 million dollars) for financial corruption and bribery. Tabari facilitated the transfer of numerous properties, lands, and forests in Iran to government entities, personally profiting over 30 billion Iranian tomans, equaling 7 million dollars in bribes.
In August 2020, the state-run website Bahar News reported that at least 22 billion tomans of the government-allocated currency had disappeared, quoting the head of the Fars Province Chamber of Commerce.
In a video interview, former Minister of Foreign Affairs Javad Zarif admitted that 35 billion dollars had been spent to bypass sanctions, but the destination of this money remained unclear.
The instances disclosed here provide only a partial view of the extensive economic corruption involving state officials and affiliated individuals over the years. Based on available information, the cumulative total of systemic theft is estimated at around $97.6 billion, reflecting a staggering loss for the people of Iran. It’s crucial to note that this figure is solely derived from accessible data, and given the lack of transparency within the regime, which considers exposure a “threat to national security,” the actual extent of fraud, embezzlement, and corruption is likely much higher.

Amir2018TaghatiDecember 19, 2023
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