[by Mark Safranski, a.k.a. “zen“]
Reuters has begun a remarkable series on the economic dealings of Iran’s Supreme Leader, Ayatollah Khameini who controls a staggering fortune of $ 95 billion dollars through a secretive fund Setad that expropriates the property of poor Iranians and religious minorities. This would put the venerable theocrat in the same superclass as Bill Gates, Carlos Slim, Warren Buffet and the Sultan of Brunei .
Up until now, former Iranian president Rafsanjani has always been the face of financial corruption in Iran’s clerical hierarchy, but to paraphrase John D. Rockefeller’s comment about J.P. Morgan, compared to Khameini ” he’s not even a rich man”:
Khamenei controls massive financial empire built on property seizures
The 82-year-old Iranian woman keeps the documents that upended her life in an old suitcase near her bed. She removes them carefully and peers at the tiny Persian script.
There’s the court order authorizing the takeover of her children’s three Tehran apartments in a multi-story building the family had owned for years. There’s the letter announcing the sale of one of the units. And there’s the notice demanding she pay rent on her own apartment on the top floor.
Pari Vahdat-e-Hagh ultimately lost her property. It was taken by an organization that is controlled by the most powerful man in Iran: Supreme LeaderAyatollah Ali Khamenei. She now lives alone in a cramped, three-room apartment in Europe, thousands of miles from Tehran.
….But Setad has empowered him. Through Setad,Khamenei has at his disposal financial resources whose value rivals the holdings of the shah, the Western-backed monarch who was overthrown in 1979.
How Setad came into those assets also mirrors how the deposed monarchy obtained much of its fortune – by confiscating real estate. A six-month Reuters investigation has found that Setad built its empire on the systematic seizure of thousands of properties belonging to ordinary Iranians: members of religious minorities like Vahdat-e-Hagh, who is Baha’i, as well as Shi’ite Muslims, business people and Iranians living abroad.
Setad has amassed a giant portfolio of real estate by claiming in Iranian courts, sometimes falsely, that the properties are abandoned. The organization now holds a court-ordered monopoly on taking property in the name of the supreme leader, and regularly sells the seized properties at auction or seeks to extract payments from the original owners.
The supreme leader also oversaw the creation of a body of legal rulings and executive orders that enabled and safeguarded Setad’s asset acquisitions. “No supervisory organization can question its property,” said Naghi Mahmoudi, an Iranian lawyer who left Iran in 2010 and now lives in Germany.
The Persian name of the organization that hounded her for years is “Setad Ejraiye Farmane Hazrate Emam” – Headquarters for Executing the Order of the Imam. The name refers to an edict signed by the Islamic Republic’s first leader, Ayatollah Ruhollah Khomeini, shortly before his death in 1989. His order spawned a new entity to manage and sell properties abandoned in the chaotic years after the 1979 Islamic Revolution.
It used to be said back in the 70’s by Western intellectuals of the tweedy, social democratic, Left variety that the future would be a merging of Communism and Capitalism into a “Third Way”, perhaps, it was optimistically suggested, of the gentle Scandinavian variety with, democracy, universal free child care and quaint, bicycle-riding, constitutional monarchs. I doubt anyone thinks that today. If there is any emerging universal model at all it is that of nasty authoritarian governments being run, sometimes under a facade of elections, by a bareknuckle, crony capitalist Oligarchy that hollowed out the state.
Sometimes,the crony capitalists are merely the junior partners to the mandarins, siloviki and mullahs and at other times you could look “….from pig to man, and from man to pig, and from pig to man again” and be hard pressed to tell the difference.
Khamenei’s conglomerate thrived as sanctions squeezed Iran
….The ayatollah’s organization would go on to acquire stakes in a major bank by 2007 and in Iran’s largest telecommunications company in 2009. Among dozens of other investments, it took over a giant holding company in 2010.
An organizational chart labeled “SETAD at a Glance,” prepared in 2010 by one of Setad’s companies and seen by Reuters, illustrates how big it had grown. The document shows holdings in major banks, a brokerage, an insurance company, power plants, energy and construction firms, a refinery, a cement company and soft drinks manufacturing.
Today, Setad’s vast operations provide an independent source of revenue and patronage for Supreme Leader Khamenei, even as the West squeezes the Iranian economy harder with sanctions in an attempt to end the nuclear-development program he controls.
“He has a huge sum at his disposal that he can spend,” says Mohsen Sazegara, a co-founder of the powerful Islamic Revolutionary Guard Corps military force, who is now living in exile in the United States. “When you have this much money, that’s power itself.”
Indeed. It insulates Khameini’s core supporters from external financial pressure and allows Khameini to have an arsenal of carrots, not just sticks in dealing with other members of the Iranian ruling elite.
It is often overlooked how frequently dictators, even those who were known for ruling through terror like Hitler, Stalin and Mao, could be lavishly generous with gifts and financial rewards or indulged the blatant corruption of powerful subordinates like Goering, Abukumov or Kang Sheng. Every Grand Ayatollah and Marja in Shia Islam maintains a charitable trust to which their pious followers donate. I would be extremely surprised if Khameini, whose scholarly credentials share similarities with Leonid Brezhnev’s military decorations, had not made arrangements for substantial contributions over the years from Setad to the trusts of Iran’s most respected senior clerics.
Baksheesh is an older faith in Iran than is Islam.