Widespread public anger at the regime that has controlled the country's resources for more than 35 years has led to protests and strikes throughout Iran. Poverty, unemployment and deteriorating infrastructure in the second most powerful economy in the Middle East and North Africa in terms of GDP has exposed the extent of corruption inside the country.
The stages of corruption and the control of the Revolutionary Guard over the economy
The Revolutionary Guard was established in the wake of the 1979 Iranian revolution, to become a major military, political and economic force with close relations with many influential figures.
Middle Eastern Affairs Researcher Ahmed Albaz confirmed to 7Dnews that the alliance between the Revolutionary Guard, with its financial clout, and the clergy with its religious authority had helped create a block against any moves for change. Albaz said both sides will do whatever it takes to maintain the situation as it is, compromising any popular moves to tackle corruption.
The Chairman of the Arab Centre for Research and Studies in Cairo Hani Suleiman has described the Revolutionary Guard as the worst example of corruption in the Middle East. According to the latest Transparency International report, Iran came top in the global corruption index, ranking 131 out of 176 countries monitored by the organization.
Suleiman told 7Dnews that the monopolization of the economy has led to financial and political corruption, and increased the suffering of the Iranian people, who are fed slogans of the revolution claiming to relieve that same suffering.
Suleiman illustrates the stages of Revolutionary Guard control over - and corruption of - the Iranian economy. The first stage began in the early 1980s when the Revolutionary Guard took control over reconstruction projects that pumped millions of US dollars into the pockets of those in leadership positions at the time.
This first phase, according to Suleiman, ended with the establishment of an empire consisting of guards who depended on construction companies such as "Khatam Al-Anbiya", and many telecommunications and energy companies.
The second stage began during the era of former presidents Mohammad Khatami and Ahmadinejad. At that point, the process of controlling the economy was accomplished through the appointment of Revolutionary Guard leaders to ministerial positions, government companies and other parts of society.
During that stage, the Revolutionary Guard acquired massive financial power and took official control of over 55% of the entire Iranian economy. This is where the increase in poverty and unemployment started.
Suleiman says that all indicators of collapse in the Iranian economy emerged as a result of control by the Revolutionary Guard, in the absence of transparency and accountability.
As for the third stage, it is about benefiting from international sanctions to make more profits through the exploitation of the Iranian people, with the expansion of the Revolutionary Guard in the private and semi-government sectors, as well as the establishment of a parallel economy in full control of the country's resources.
"There is a lot of corruption inside Iran, there are reports of suspicious deals, embezzlement of profits and exaggerated salaries," Suleiman says. "Revolutionary Guard salaries reveal the extent of the corruption; for example the commander of the Revolutionary Guard Qasim Soleimani has a salary of about 170,000 dollars a month.
Media and the trick of sanctions
The Iranian media, which is entirely controlled by the regime, has been tricking the people for decades, by blaming the degraded economic status of the country on international sanctions.
According to observers, the media’s justification conceals massive corruption; billions of dollars have been looted through the armaments of the Iranian regime, represented by the Revolutionary Guards.
“There is control by unofficial organization of the economy of Iran, represented by the Revolutionary Guard, which leads to an ever tighter hold on the economy and narrowing of competition in business and in markets," says Ahmed Albaz.
The protests across Iran at the end of last year, and the subsequent strikes and demonstrations, have presented the media with a real dilemma, especially given the continuing deterioration of living conditions despite the partial lifting of sanctions by the previous US Administration which signed the nuclear deal with Tehran. Economic conditions did not improve as a consequence, mainly due to corruption among the leaders of the Revolutionary Guard.
Albaz adds that the Revolutionary Guard easily acquire all available tenders in all sectors of the economy, whether in agriculture, construction or armaments, eliminating any attempt to encourage real competitors and companies to make a profit.
The Guard's business and the corruption cases
The companies are estimated to have a net worth of more than $100bn, including Iran’s biggest construction company Khatam Alanbiya which has hundreds of government contracts and more than 20,000 employees. It also has under its umbrella more than 800 companies inside and outside Iran, with holds shares in a number of banks, refineries, car factories, petrochemical and food manufacturers.
The Revolutionary Guard also owns 51% of the Iranian telecom company, purchased in 2009 for $7.8bn, and 45% of Bahman Automobile Company, including Mazda.
This is in addition to Anguran which owns the biggest lead and zinc mines in the Middle East, and the Iranian Company for Marine Industries that constructs oil tankers, contributes to oil and gas projects, and carries out smuggling to get round US sanctions.
Several reports estimate that the Revolutionary Guard network contributes 15% to the GDP of Iran, whilst the entire quasi-governmental sector contributes 40%, the private sector 25%, and the public sector 35%.
In April 2017, economic reports showed that organizations that ran projects in Iran or had plans for investment after the partial lifting of sanction faced very high risks due to the spread of corruption.
Amro Rafaat, an Iranian Affairs researcher, also says the Iranian regime relies on the words “US sanctions” to show they are innocent of anything leading the country towards poverty and economic collapse.
Rafaat adds that most economic reports on Iran confirm that the political system fosters patronage in all sectors and often forces investors to pay bribes for services, permits, and contracts.
Whilst there are multiple regulations that criminalize various forms of corruption in both public and private sectors, impunity is rampant and the trials of officials accused of corruption are no more than a drop in the ocean.
Among the most noted cases that Iranians remember is that of Mohammed Reza Rahimi, the former deputy to former President Ahmadinejad, who was sentenced to five years imprisonment, a $300,000 fine, and $800,000 compensation.
There is also the case in which the head of the Iranian judicial authority was accused of transferring $310 million from bail paid by defendants . As the corruption scandals escalated, documents showing the salaries of officials in the Hassan Rouhani administration were leaked.
Documents revealed that officials and ministers in Rouhani's government invented imaginary numbers, at a time when the country suffered its highest rate of poverty.
Some salaries amounted to about 622 million Iranian riyals, equivalent to 20 thousand dollars, while the salary for government or private sector employees averaged a monthly $400.
The story did not disappear until a new story of corruption in Tehran's municipality appeared, as the official was accused of distributing land to officials.
The case was known as the "imaginary real estate", referring to Major General Mohammed Baqer Qalibaf, one of the Revolutionary Guard leaders.
In January 2017, forty deputies sent an open letter to the head of the judicial authority, Sadeq Ethraha Larijani asking for a quick trial of Hussein Fredon, brother of the Iranian President, on charges of receiving bribes from Rasoul Danialzadeh, one of the most prominent people accused of economic corruption.
Corruption had reached the highest levels of the Iranian regime; the Supreme Leader’s son “Mujtaba” was implicated in reports that 1.6m euros from oil revenues were deposited in his account in 2011 through the central bank without any legal entitlement.