IRGC bribery in the Iranian Economy - Jamshid Assadi

IRGC bribery in the Iranian Economy - Jamshid Assadi

• By
• 2019-04-04
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Three months after the victory of the Islamic Revolution, Ayatollah Khomeini gave the Islamic Revolutionary Council a decree to establish the Revolutionary Guards (IRGC) to support the Islamic system against chaos, the coup d’état and the Marxist-Leninism and the well-known Marxist-Leninist and Mujahedin guerrillas (May 1979). Then, the Guardian Council included the institution in the constitution and passed it in the referendum on December 11.

In the war with Iraq, the IRGC took over the initiative from the conventional army and defeated the guerrilla groups within the border. Then, with the mobilization of the Basij forces, the creation of secret prisons and intelligence agencies, leveraged the military security control of the country and directly suppressed the protesting citizens. In addition, with the support and organization of Shiite militant groups in Iraq, Lebanon and Yemen, as well as other groups, they expanded their power beyond the borders.

Following its military and military achievements, the IRGC pursued entering political and economic arena, especially following the Presidency of Hashemi Rafsanjani and the leadership of Ayatollah Khamenei. In the years leading up to the Presidency of Mohammad Khatami, and especially during the Presidency of Mahmoud Ahmadinejad, the commanders of the Revolutionary Guards held many high-ranking positions and, with the same political power, gained many economic advantages.

An unlucky however effective cycle, allowed the Revolutionary Guards to become the largest briber and renter in the country: economic privileges allowed the troops to follow and mobilize more and engineered the elections for their own benefit. The political power of the process also allowed them to obtain economic advantages in a formal and legal way. Economic power was behind political power and political power was the basis of economic power.

This article is about this story. First, we will play back the rise of the Revolutionary Guards Corps. Then, we will look at their rise in the economy sphere. And finally take a look at the invisible activities of the Revolutionary Guards.

After the end of the war, the Revolutionary Guards were organized on a ranking system, similar to other armies in the world. But the top ranks were not suitable for all the troops who were more or less alike with the background and skill, and were not happy with the lower ranks. Consequently, on the one hand, commanders struggled to reach the highest levels, and on the other hand, many of them outside of military were in pursuit of political and economic privileges.

The troops did not accept joining the army and its organizational chart. Because in this way, many of the special privileges of the Revolutionary Guards lost their place. Therefore, when, after the end of the war with Iraq, Hashemi Rafsanjani, the then head of the Islamic Consultative Assembly and the successor to the commander-in-chief, called for the guards to join the army (September 15, 1988), the commanders responded sharply and declared that the war was a continuation of the revolution and that reconstruction of the continuing war and, as a result, the commanders of the revolution and war should be involved in the reconstruction.

The tensions between Hashemi Rafsanjani and the IRGC commanders continued. Hashemi Rafsanjani did not want the guards to participate in politics, and the commanders were. In this conflict, Ayatollah Khamenei, the new successor to Ayatollah Khomeini and the commander-in-chief, clearly supported the IRGC and stated that the IRGC had kept the ideological boundaries of the system and that the country's facilities were primarily

It was clear that the Revolutionary Guards were no longer able to support the flow of political currents and demanded a greater share in the political sphere of the country. Therefore, in the fifth parliamentary elections (1375-1389), apparently with the support of the leader they published a list of candidates "Ansar Hezbollah" and demanded more political power. In this parliament, the Principalist were headed by three Hojatoleslam, Ali Akbar Nategh Nouri, Hassan Rouhani and Mohammad Ali Movahedi Kermani, and were able to impeach and dismiss Ataollah Mohajerani and Abdollah Noori in the reformist government of Mohammad Khatami.

However, in the fifth presidential and the sixth parliament elections, the guards lost control and Mohammad Khatami met with a massive popular vote in June 1997 replacing Hashemi Rafsanjani and the reformists gained more seats and the presence and intervention of the IRGC in politics was challenged. The IRGC reacted sharply, and in an open letter to Mehdi Karroubi, the Speaker of the Sixth Majlis, the commander-in-chief of the IRGC, Yahya Rahim Safavi, considered the participation in the country's politics to fight the saboteurs its missions and called for control of the extreme behaviors of some of the representatives. The Revolutionary Guards also warned President Khatami about the student movement in July 1999 and repressed it themselves.

The Revolutionary Guards intervened to replace the government and the reformists in Majlis, and finally to take political power. The Basij forces went to the ballot boxes under the "inspiring plan" and under the control of the Revolutionary Guards. Thus, with the help of 70 to 100 guards entering Majlis, they were able to control 12 of 23 critical commissions such as national Security and Foreign Policy.

Following the control of the Seventh Majlis, the Revolutionary Guard began engineering the ninth presidential elections to replace the reformist government of Mohammad Khatami. Four of the Revolutionary Guards were among the eight candidates: Mohsen Rezaei, Sepah Commander during the war years, Mohammad Bagher Qalibab, Former Police Chief, Mahmoud Ahmadinejad, Special Forces Special operations officer of the Revolutionary Guard Corps in offshore and maritime engineering operations, and Ali Larijani, deputy secretary of the Islamic Revolutionary Guards Corps and successor to the Revolutionary Guards Corps in 1981. It is true that these candidates did not have the same goal and approach, and each represented a different group. But they were all part of IRGC and this represented a turning point.

Of these, Mahmoud Ahmadinejad, won the presidency, and immediately selected Asghar Ahmadi Moghaddam, commander of the large-scale Basij militia that played a decisive role in the election, to the commander-in-chief of the entire Police Force. Ahmadinejad chose six of his ministers from the Revolutionary Guards commanders. During his tenure, 20 of the 30 governors came from the IRGC. With the presidency of Ahmadinejad in 2005, the Revolutionary Guards, with no rivals in the military arena, also held political power and, in particular, did not let this power out of control by the 2009 coup d'état. Sardar Zolghar, the successor to the Sepah-era commander, implicitly accepted these interventions and said at the congressional meeting of the military and labor commanders that the fundamentalist forces were able to attract the support of the majority of the people to more and more effective servicing.

The intervention of the Revolutionary Guards in the ninth presidential election did alarm the reaction of other failed candidates, such as Hashemi Rafsanjani and Karroubi, both of whom were senior officials of the regime. But they could not do anything about it. Thus, there was no other job for the Revolutionary Guards, except for achieving more economic advantages. Of course, the Revolutionary Guards had always had a hand in economic affairs, but with an overwhelming array of military, political, and legislative institutions in the country defeated any resistance and gained the greatest economic privileges.

Revolutionary Guards Bribery and renter in the economy of the country

The economic activities of the Revolutionary Guard began when the commanders returned from the battlefield. They had a good deal of attention, but the bankrupt economy had no chance. Therefore, Hashemi Rafsanjani, who came to the presidency after the war, devoted a great deal of credit to strengthening their arsenal, but also major plans such as Karkheh dam and Saveh highway to calm the troops and prevent them from interfering in politics. He was also given to the Guards without any formalities or tenders. The head of the construction government also allowed the IRGC commanders to freely import and export goods by constructing docks and special stages on the southern sides of the country, away from any customs control. Rafsanjani's gamble was wrong. He was known for his waste and largeness to his friends while the power of rival guards grew.

The IRGC continued to gain points during Rafsanjani presidency. At the time of Khatami's presidency, Kowsaran Institute, one of the IRGC's companies, managed to implement the 8800 hectare irrigation project of Omidieh Khuzestan. The commanders of the IRGC used military force and ordered the government of Mohammad Khatami to terminate the contracts of Imam Khomeini airport and the cell operator of Turkcell and the trial of “Kish Orinatal” to take all the credits for themselves.

In the name of opposition to the presence of the foreign workers for the launch of Imam Khomeini International Airport which was legally won by the government of Mohammad Khatami, The Revolutionary Guards occupied the airport with a military operation, similar to a coup, preventing its progress. This led to the resignation of Ahmad Khoram, minister of road and transportation.

The Revolutionary Guard, with the pressure and leverage of the Seventh Majority, and having the majority of the delegates, took away the mobile phone operator privilege entrusted to the government from Torkxel and handed over to Irancell, a subsidiary of the Mostazafan Foundation.

The Revolutionary Guards were inefficient in oil and gas and did not operate in the oil industry, except for renting machinery at the South Pars gas field. Hence, it sought to take over the private company Kish Oriental, which was commissioned during the second round of Mohammad Khatami's rule (1381 solar, 2002) for production and trade with foreigners. Kish Oriental had signed a cooperation contract to work with American firm Haliburton contractor for Oil Equipment licensed by the Government of the Islamic Republic of Iran to operate on joint oil and gas fields with Iraq, Saudi Arabia (Foruzan Field) and Qatar (Salman Field).  First, the Revolutionary Guards tried to put pressure on the board of directors of the Kish Oriental to accept their people which were declined. The Corps, therefore, increased the pressure and charged the co-operation of Kish Oriental with the American company Haliburton until the contract was finally terminated between the two entities, and finally an arrest warrant was issued for Cyrus Nasseri, the managing director of the Oriental Kish and one of the previous Atomic negotiators.

During the presidency of Mahmoud Ahmadinejad, the commanders of the Revolutionary Guards no longer needed to use an iron fist unlike during the Khatami era. The Revolutionary Guards, who sent Mahmoud Ahmadinejad to the presidential palace and many other troops to the parliament, provincial governors and other institutions, could easily have achieved the greatest economic bribes in the country. In the first year of Mahmoud Ahmadinejad's rule in 2006, the Revolutionary Guards had 247 contracts.[i]

With the presidency of Mahmoud Ahmadinejad, the Revolutionary Guards entered into oil and gas sector easily and obtained a one billion, three hundred million dollar contract without a bid on June 17, 2006 to draw a 900-kilometer pipeline from oslouyeh to Bandar Abbas and from there to Iranshahr in Sistan and Balochistan and eventually to Pakistan and eventually India. By pulling the pipeline to the Pakistan border, the value of the contract reached to two and a half million dollars. On the day the contract was signed, Seyedreza Kassayazadeh, CEO of the National Gas Company, clearly stated that the contract was on the order of the president. Oil Minister Kazem Vaziri Hamaneh added that he was "missing the formalities" in the awarding of the project and did not have a competition. Rahim Safavi, the commander of the Revolutionary Guard Corps, also reminded: "The Revolutionary Guards ... In addition to two missions to defend the country's security and defend the Islamic Revolution, after the end of the war, its greatest honor was to help the government in the development of Iran. We are not opposed to private companies/contractors and have always been involved when no one else was available.”   The point is if there is no security it is the guard’s responsibility to provide one. Besides Sistan and Baluchistan, is it not safe in other places like Tehran, where a large contract are given to IRGC.

During this period, the presence of the IRGC in oil and gas projects was not limited the contract of oslouyeh. Headquarters of Khatam-ol-Anbia of the Sepah won the contract for the construction of four reservoirs of oil reserves in Khark Island in April 2006 and shortly thereafter, without competition, won a contract for two billion and ninety six million dollars for the development of Phases 15 and 16 of South Pars on July 7, 2006. The two phases were awarded to Norwegian firm "Ergogravurner", but with the withdrawal of the Norwegian company from the consortium, the contract was given to the Revolutionary Guards. During the first round of Mahmoud Ahmadinejad's rule, Khatam Al-Anbiah's headquarters took over kish Oriental including all technical equipment and facilities, as well as several oil rigs for the company at a cheap price of $90 million (summer 2007, 2007). In the second round of Ahmadinejad’s presidency, a $500 million contract for the 539-kilometer pipeline of Ethan was awarded to Khatam-ol-Anbia construction site (Sept. 2011) to supply feed to Fars province's petrochemical.

The Revolutionary Guards easily earned economic benefits during the Ahmadinejad era. But if needed, they would not hesitate to use force. During the first round of presidential election of Mahmoud Ahmadinejad, it seized the oil drilling rigs of the Romanian company cervic Petliereira in the Persian Gulf and arrested 19 crew members for several hours. Private Petrochemical Company Svirichi operated drilling oil and gas wells and rented two oil rigs (mid-summer 2006).

Ahmadinejad, as the mayor of Tehran, had given many projects to the IRGC without any bid. He also made many non-oil concessions to the Revolutionary Guards Corps in Khatam-al-Anbia headquarter, such as the $341 million contract for the development of the port of Shahid Beheshti in Chabahar and the $1.2 billion contract for the Tehran subway and 2.4 billion dollars which was awarded to the Mostazafan and Veterans foundation.

The government of Mahmoud Ahmadinejad handed over the telecom company's stock in good faith without checking and haggling to "develop the confidence of Mobin" affiliated with the Revolutionary Guards Corps. In October 2009, his government decided to sell 51 percent of the shares of the telecommunications company to the private sector. Three companies competed for the purchase of stock worth more than eight billion dollars ($8 billion) including "Development of Trust Mobin", affiliated with the IRGC Cooperative, "Iranian Mehr Economy Investment Company" of the financial institution and the affidavits of the Seal and the "Pioneers of the Great Yazd" from the private sector.

Just before the decision to transfer shares, the privatization organization announced that "the great pioneers of Yazd" had withdrawn from the bid which was not true. The company received a letter that they could not be involved in the deal due to a lack of security so it was excluded from bidding. By leaving the buyer privately, only two affiliated companies remained, and the "Trust Mobin Development Consortium" managed to outbid three rials more than the "Iranian Economy Mehr" proposal in the largest trading transaction of 40 years in Tehran Stock Exchange wining the purchase of a 51%.

Revolutionary Guards' Invisible bribes in the Economy of the Country

Besides the bribes, the Revolutionary Guards also have a network of inviolable transportation infrastructures not under any scrutiny. Thus, the Revolutionary Guard not only receives economic privileges that it sees as it’s right by good terms or by force, but it also has an organization that is not registered in any official office or document. As a result, it imports and exports whatever it wants, without paying any taxes to the customs of the country or paying taxes.

Among those are sixty "invisible" docks in the south of the country, which was first, revealed by the head of the Sixth Majlis, Mehdi Karroubi. By some account the number of unauthorized docks owned by IRGC has been estimated at 70. It seems that a third of the country's imports are through illicit markets, underground economics and unauthorized docks.

Aside from the invisible docks, the Revolutionary Guard also has access to unmonitored airports. Like the Karaj Airport, which appears to be a postal airport, it appears that only 13 billion dollars of smuggled goods were discovered in 2004. Many of the goods were discharged at the airport without the presence of customs officers or at very low cost.

It should be noted that there is no financial report on the economic activities of the IRGC and its budget is confidential. The Revolutionary Guards do not report to the Iranian government and parliament on their political and economic activities and are directly under the control of the regime's leadership.

End of essay. From what it has been explained, it can be clearly understood that the Revolutionary Guards is a multi-headed entity: internal and external armed forces, constabulary, intelligence, commando force, enterprise and political foundations.

While it has the military wing, it acts like a political party. It engineers the "election" and pulls his favorite candidates out of the box. It's also in the economy. It wins large contracts from the government. It has Ports and airports, and imports and exports without the country's customs.

By the end of the war with Iraq until mid-October 2003, during the second term of Seyyed Mohammad Khatami the Revolutionary Guards had over 1,300 projects[ii]. According to another estimate, Khatam-al-Anbia Sepah's construction site from the end of the war with Iraq until the year Mahmoud Ahmadinejad was responsible for 1220 projects.[iii]

The first companies under the cover of Khatam-ol-Anbia's headquarters were Razmandegan and Razmjoo companies, but the number of IRGC affiliated companies was sharply added. Based on various estimates of the IRGC, there are between 100 and more than 500 enterprises[iv]. In 2004, the IRGC had $12 billion sales and made $1.9 billion in profits.[v]

The Revolutionary Guards officially entered the economic field with the establishment of the reconstruction site and the Khatam ol-Anbia camp, and expanded its all-round activities in fields such as agriculture, poultry, bee, industrial production, ore mining, road construction, transportation, Filming, telecommunication, Mazda automobile assembly, foreign dealership, trade, import clearance, Tehran metro expansion, construction of highways, damming and oil and gas projects. Alongside these, the guards also have guns. In 1983, the National Defense Council ended the military monopoly on the production and repair of weapons in the country, giving permission to the Revolutionary Guards to launch its military industries. Today, the Army produces guns to long-range missiles.