The Iranian government began an unprecedented fight against economic corruption over a year ago. News of trials in corruption cases is broadcast on Iranian state television and other media outlets every day and officials, particularly in the judiciary, stress the need to tackle economic corruption on all fronts.
Previously, anti-corruption efforts in Iran had been limited to a few isolated cases, such as those of Shahram Jazayeri, Mahafarid Amir-Khosravi, and Babak Zanjani. Now, it seems that Iranian authorities are fighting corruption relentlessly and comprehensively, even in the cases of President Hassan Rouhani’s brother, the daughter of a former minister in Rouhani’s cabinet, and even high-ranking officials working in the office of the former head of the Iranian judiciary and current chair of the Expediency Council, Sadeq Larijani. The extent of the fight against economic corruption is such that a special complex to deal with such cases has been set up in Tehran Province’s justice department.
Iran appears to be pursuing three goals in its fight against economic corruption:
Neutralizing U.S. and Opposition Propaganda
The Trump administration has been close to many exiled Iranian opposition groups, especially the Mojahedin-e Khalq Organization or MEK, through people such as Trump lawyer Rudy Giuliani and former National Security Advisor John Bolton. The MEK and royalists (supporters of the Pahlavi Dynasty) have been making allegations about corruption within the Islamic Republic for years.
The Trump administration itself has also used corruption as a rhetorical weapon against Tehran. Secretary of State Mike Pompeo, and U.S. Special Representative for Iran Brian Hook have claimed time and again that Iran’s leaders are squandering the Iranian people’s money or using it to finance their aggressive regional policies. In emphasizing on this issue while simultaneously trying to cripple the Iranian economy through its “maximum pressure” sanctions program, the U.S. intends to lay the groundwork for popular unrest and the collapse of the Iranian regime from within. Hence, publicity by the U.S. administration and exiled Iranian oppositions against the Iranian regime intensified after the December 2017 protests, which were mainly against state corruption, embezzlement, and discrimination.
In return, by setting up courts to fight economic corruption, Iran tried to show its resolve to combat this anomaly and thereby reduce public discontent. Since people are unhappy with widespread economic corruption, anti-corruption efforts by the establishment aim to neutralize U.S. propaganda and reduce public discontent at the same time. Speaking in August this year, Iranian Interior Minister Abdolreza Rahmani Fazli said that protests dropped by 38 percent in the first five months of this year (the Iranian year, which begins in March). The seriousness and scope of the fight has been successful to a certain extent.
Government Spending and International Commerce
Oil revenue is the Iranian government’s most significant income source and U.S. oil sanctions have drastically reduced Iran’s foreign exchange earnings. In past years, this revenue was more than sufficient to fund the Iranian government and there were no concerns about combating embezzlement and economic corruption. But current constraints have led Iran to economize in spending and fight corruption to finance part of its budget.
According to the judicial laws of the country, economic offenders in both the private and public sectors are sentenced to jail and fined in cash payable to the state fund. The number and amount of embezzlement and economic corruption in Iran is so high that the total sum of financial penalties can be very significant and cover part of government spending.
Additionally, Iran is trying to reduce its dependence on the dollar and has begun trading with several countries without using this currency. The Governor of the Central Bank of Iran (CBI) announced recently that all Iranian trade with Russia and 30-40 percent of its trade with Turkey will be conducted in national currencies. With this shift, the fines paid by those who are convicted of corruption can now be used to finance international trade as well as domestic spending.
Iran’s Supreme Leader, Ayatollah Ali Khamenei, is 80 years old and talks about his succession have been ongoing in the political circles of Iran in recent years. Presently, two people seem to have the most potential to succeed him.
The first person is President Hassan Rouhani, who has attempted to de-escalate tensions and expand economic ties with the West. He succeeded on this path to some extent by signing the Joint Comprehensive Plan of Action (JCPOA) nuclear deal with China, France, Germany, Russia, the United Kingdom, and the United States in 2015. But the economic consequences of Donald Trump’s withdrawal from the deal, coupled with resistance from Rouhani’s domestic opponents, means that he has now lost not only his popularity, but is also under pressure from both sides of the political spectrum.
The second person is Ebrahim Raisi, currently the Head of the Judiciary, who gained fame during his 2017 presidential campaign. He is active in the fundamentalist camp. Running as a conservative challenger in the 2017 election, Raisi won 38.3 percent of the vote but lost to Rouhani, who won 57 percent of the vote. This defeat diminished the possibility of Raisi’s election as the future Supreme Leader of Iran. According to the Iranian constitution, the Supreme Leader is elected by the Assembly of Experts, yet the acceptance of a future leader by the people is necessary.
But Khamenei’s decision to appoint Raisi as the head of the judiciary in March 2019, and recent political setbacks for Rouhani, have put Raisi back in the game. His seriousness in fighting economic corruption, even targeting corrupt judges and agents within the judiciary, has gained him support not only in the independent camp but also among reformists.
As such, the anti-corruption campaign seems to be a good way to popularize Raisi and increase his chances of succeeding Khamenei. In this respect, the fundamentalist faction—which holds many positions of power in Iran—is trying to use the fight against economic corruption to lay the groundwork for electing one of its key members as Iran’s future Supreme Leader.
Is the Crackdown Targeting Reformists?
Certain media outlets in the West believe that, given the large number of reformists being arrested in the anti-corruption campaign as compared to fundamentalists, the fight against economic corruption in Iran is aimed at weakening reformers and moderates. But this claim is not accurate.
Corruption in Iran is linked to political power. Therefore, whichever of Iran’s two main political factions—fundamentalist or moderate-reformist—takes over the executive branch, corruption among the members of that faction increases. At the end of former President Mahmoud Ahmadinejad’s term in office, for instance, his first vice president, Mohammad-Reza Rahimi, and his Vice President for Executive Affairs, Hamid Baghaei, were imprisoned for economic corruption and embezzlement. Such corruption reached an all-time high during his tenure in office.
Hence, if there are more detainees among the reformists at this time, it is because they are currently in charge of the executive branch. Nevertheless, fundamentalists such as the Minister of Welfare and Social Security under Ahmadinejad, Parviz Kazemi; former Deputy Chief Executive of the Judiciary Akbar Tabari; the deputy to former Tehran Mayor Mohammad-Bagher Ghalibaf, Issa Sharifi; and two fundamentalist MPs, Mohammad Azizi and Fereydoun Ahmadi, are also among the detainees.
As such, it seems that the current anti-corruption campaign is being waged without discrimination, although to be sure some influential figures continue to remain immune.