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Iran: Legislators allege corruption at charitable foundations - ASHARQ AL-AWSAT English Archive
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In this September 22, 2010 file photo, members of Iran's Basij militia march during a parade to commemorate the anniversary of the Iran–Iraq War, in the Iranian capital, Tehran. (Reuters/Morteza Nikoubazl/Files)

In this September 22, 2010 file photo, members of Iran’s Basij militia march during a parade to commemorate the anniversary of the Iran–Iraq War, in the Iranian capital, Tehran. (Reuters/Morteza Nikoubazl/Files)

London, Asharq Al-Awsat—While the eyes of the rest of the world are focused on the international negotiations on Iran’s nuclear program, within Iran allegations of high-level corruption at one of the country’s leading institutions are threatening to provoke a major political crisis.

A parliamentary committee set up to scrutinize the financial affairs of Iran’s Foundation of Martyrs announced that it has uncovered a series of fraudulent activities involving money laundering and the diversion of funds originally intended to support the widows and children of the country’s war dead into foreign bank accounts.

In one case, 56 million US dollars went missing under the management of Masoud Zaribafan, the former head of the foundation and a close aide to former president Mahmoud Ahmadinejad. This is one of a total of 80 corruption cases currently under investigation, according to Iranian MP Jaafar Imen-Abadi.

Another member of the parliamentary select committee, MP Mostapha Afzali-Fard, said that members of his committee had been placed under intense political pressure to drop their investigations.

The Foundation of Martyrs is one of the most highly regarded foundations in Iran. Established by Ayatollah Khomeini in the early 1980s, it was set up to provide a wide range of assistance to the families of soldiers killed during the devastating eight-year Iran–Iraq War.

The foundation controls massive assets in Iran through a number of subsidiaries and holding companies, including Kawsar, which owns at least 1 billion dollars of assets in the agricultural, manufacturing, and banking sectors. The head of the foundation is directly appointed by Iran’s head of state, Supreme Leader Ayatollah Ali Khamenei.

Originally created with a variety of charitable aims, there are several dozen, perhaps more than a hundred, of these institutions—known as “bonyads” in Persian—and control a substantial proportion of the Iranian economy. Under the Iranian constitution, the Supreme Leader has the power to establish and appoint his representatives to head these quasi-state foundations and institutions, which benefit from government subsidies and tax breaks, yet are not accountable to government audit and scrutiny.

Unconfirmed reports about widespread corruption in the Foundation of Martyrs had been circulating across Farsi-language websites, leading to the establishment of a select committee of MPs to investigate the allegations. If the allegations are confirmed, the issue is potentially political explosive, both because of the issues at stake, the role of bonyads in the Iranian economy, and their links to the highest reaches of the Iranian political system.

MP Imen-Abadi said: “The latest case of the missing 56 million dollars is just a minor incident compared to a vast collection of financial and other outrageous cases that we are not allowed to reveal.”

“If we reveal what we know, we all will be hugely embarrassed before the martyrs’ families and the nation,” he added.

The allegations have touched a raw nerve within the Iranian government, following on the heels of a number of other recent corruptions scandals.

On October 12, just a few days after extensive media coverage over the alleged involvement of four former cabinet ministers and the former governor of Iran’s central bank in a multi-billion-dollar fraud case, Ayatollah Sadeq Larijani, head of Iran’s judiciary, warned Iranian journalists over what he described as the “exaggeration of corruption in the country.”

“I have ordered the Prosecution Bureau to closely monitor media reports and summon anyone involved in smear campaigns against the integrity of the state apparatus,” Sadeq Larijani was quoted as saying by the official Mehr News Agency.

Larijani also banned members of parliament from publicly discussing or disclosing details of the corruption cases under investigation, claiming that only the judiciary has the right to be involved in the process.

Many observers have criticized the government’s stance, accusing it of attempting to cover up rampant corruption by former and current officials under the justification that these revelations harm the legitimacy of the state.

Over the last two years and due to internal conflicts between various political factions within the Islamic Republic, some significant cases of corruption by officials have become public, leading to a number of arrests and one execution. Despite this, observers believe that many corruption cases remain to be discovered in Iran.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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