by Amir Taheri
The 180,000 employees of the NIOC and its affiliates are aware of their strategic power and often use it to further their particular interests and to support policies they favor. In the 1990s, they succeeded in overcoming opposition from the revolutionary organs and signed a landmark $1 billion contract with Amoco, a medium-sized U.S. oil company. However, the Clinton administration canceled the contract, which was then awarded to the state-owned French company Total. The Iranian oil industry has been a key target of sanctions imposed by the United States, including measures to punish any company that invests more than $25 million a year in Iran’s energy sector.
The NIOC and its affiliates act as a pool of management skills for the state as a whole, providing competent personnel for other departments of the government at various levels. The NIOC was the first major institution to expel the mullahs who acted as “revolutionary guides” at all levels of its management. It was also the NIOC that initiated the famous debate between “experts” and “believers” in the late 1980s that led to the reinstating of many officials and technicians who had been purged by the revolution. In the past few years, the NIOC and its affiliates have emerged as major instruments in furthering the regime’s foreign policy in a number of regions. In Latin America, Africa, and South Asia, the NIOC is at the center of attempts by the Islamic Republic to project its power and influence as a state. Holding the world’s second largest oil and natural gas reserves, Iran is likely to remain a major player in the global energy market for the foreseeable future. And that means a continued role for the NIOC and its affiliates as key organs of the Iranian state.
Even before he seized power, Khomeini had vowed to destroy the mechanism for secular justice developed by the Pahlavi Shahs between 1925 and 1979. Copied from the “infidel model,” the mechanism was used to transform Iran from a society ruled by Islamic Shariah into one governed by a corpus of laws adopted from Roman traditions. The key organ in that mechanism was the Ministry of Justice (Vezarat e Dadgostari), which Khomeini wanted to abolish but could not. The ministry still offers a system of justice largely patterned on that of western Europe. This is in contrast with Islamic tribunals that operate as organs of revolutionary justice under ambiguous constitutional arrangements with the blessings of the High Council of the Judiciary. The Ministry of Justice recognizes Western-style lawyers and procedures for both civilian and criminal cases, something that is in direct violation of Islamic legal principles. The ministry employs women as assistant judges and advocates, again in defiance of the Islamic Shariah.
The existence of two parallel organs of justice creates an à la carte situation that, in turn, could lead to conflicts between the state and the revolution. Decisions taken by Islamic tribunals are often overruled on appeal by ordinary courts, and vice versa. This could be of crucial importance in business and regarding property rights. This is one reason why many legal experts believe that the Islamic Republic does not have any clear set of laws dealing with property ownership. An Islamic tribunal could seize an individual’s property at any time, on the grounds that the owner is “waging war on Allah.” Then, an ordinary court could annul the decision. However, a revolutionary tribunal could reverse that decision, too. The Ministry of Justice is supported by a powerful lobby consisting of people who at one time or other graduated in Western-style law and worked as lawyers, judges, jurists, and notaries public, before and after the revolution.
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Power Points in a No-Man’s Land
Over the last three decades, there have been countless occasions on which the interests of Iran as a nation-state have clashed with those of Iran as a vehicle for the Islamic Revolution. In most cases, though by no means all, the interests of the revolution have prevailed. nevertheless, the rival interests are given ample opportunity to compete for support within the regime. Several institutions are used as venues for that competition. The most important of these is the Supreme Council for national Security (Shuray Aali Amniyat Melli). Chaired by the president of the republic, who also appoints its secretary general, the council includes the speaker of the Islamic Majlis, the president of the Supreme Judicial Council, key ministers, and the commanders of both the IRGC and the armed forces.
Created during the Iran-Iraq war to supervise and coordinate policy, the Supreme Council for national Security has become a permanent organ of the state enshrined in the constitution. nevertheless, it vacillates between the state and the revolution, now siding with one and now with the other. In 2003, for example, the council decided that it was in “Iran’s national interest” to suspend the uranium enrichment program so as to deny the United States a pretext for pre-emptive attack. At the time, the Islamic Republic leaders had been unnerved by the speedy victory that the U.S.-led coalition had achieved in Iraq while there was much talk of “Iran next” in Washington. In 2005, however, the same council, now certain that there would be no U.S. attack, decided to resume uranium enrichment because it “served the highest interests of our Islamic Revolution.”
Critics of the council argue that its hybrid nature undermines its principal mission, which is to ensure the security of the nation. For example, on a number of occasions, the council has endorsed the brutal repression of citizens’ protest against government policies, something that does not serve the interests of Iran as a nation. The council has also approved support for radical terrorist groups in a number of countries on the grounds that they share Khomeini’s revolutionary ideals. Such support, however, could undermine Iran’s national security by exposing it to retaliation by countries affected by Iranian-sponsored terrorism. Since Ahmadinejad’s election as president, the council has clearly tilted towards the revolution. Its dismissal of Ali Ardeshir Larijani as secretary general in 2007 was a signal that Ahmadinejad wanted the council to endorse his radical foreign policy regardless of its effects on Iran’s longer-term interests.
In the no-man’s land between state and revolution, we also find a number of business concerns that play major roles in both economic and political domains. The most important of these is the Foundation for the Dispossessed and Self-Sacrificers (Bonyad Mostazafan va Janbazan). This is a trust that existed under the name of the Pahlavi Foundation before the revolution, under the shah’s control. Since 1979, the bonyad has seized the assets of a further 17,000 small and medium-size companies. Its annual turnover is estimated at around $12 billion, making it the nation’s third largest business concern. The foundation owns banks and insurance companies, shipping and airlines, hotels, armament factories, cash-crop farms, feature-film companies, advertising agencies, and hundreds of smaller businesses throughout the country. Its head is named by the Supreme Guide, who must also approve all nominations to the board of directors. The foundation is used to distribute favors among the supporters of the regime, and thus tends to side with the revolutionary camp whenever it comes into conflict with the state. nevertheless, the foundation knows how far it can go in its relations with the state, which is needed for legal protection as well as lucrative contracts. For example, the foundation does good business in supplying the armed forces with some of their needs.
The Foundation for the Dispossessed is not alone in its role as a means of “democratizing” corruption and distributing favors in the Islamic Republic. In 1979-80, the Khomeinist regime seized the assets of over 1.2 million Iranians. These included 750,000 housing units and over 50,000 businesses. Under the revolutionary regime, these assets have been distributed among a number of “foundations.” The latest register available in 2005 showed the existence of 113 such foundations, each of which was headed by an influential mullah. These are all based on the same model as the bonyad. They never publish their accounts, pay no taxes to the state, and ignore most laws, especially as far as terms of employment are concerned. One of the key grievances of independent trade unionists concerns the fact that the foundations do not respect even the so-called Islamic Labor Code in force. The best known of these foundations are the Martyrs’ Foundation (Bonyad e Shahid)
and the Fifth of June Foundation (Bonyad 15 Khordad).
The Supreme Guide appoints almost all the heads of these foundations. Virtually all the foundations seek their legitimacy in real or imaginary revolutionary pedigrees, fearing that normalization—that is to say a restoration of state authority at the expense of the revolution—could undermine their position and threaten their interests. At the same time, they depend on the state for part or sometimes the whole of their income. They also need the state for privileges, such as reserved places at universities for children of revolutionary families introduced by the foundations. One example of the contradictory behavior of the foundations is the decision by the Fifth of June Foundation to continue announcing a prize for the murder of the British novelist Salman Rushdie even after President Khatami had declared that the dispute had been settled. In some Muslim countries, the financing of radical groups is done through the foundations often in defiance of the Iranian government. In 2000, for example, while Iran as a state was trying to improve ties with Saudi Arabia, various foundations continued to finance groups dedicated to causing trouble in the kingdom. There are periodic calls from advocates of normalization for the state to assume direct control of the foundations. So far, however, the balancing act has continued with both sides seeking to use the foundations for their own purposes.
The foundations often act in the style of the Italian Mafia. The method is to contact businessmen and ask for “voluntary donations” to support charitable projects in favor of “families of martyrs” or in aid of Islamic causes abroad, especially in Palestine. This is always backed by the implicit threat that refusal to make a “voluntary donation” could lead to “complications with our martyrdom-seeking youth,” social ostracism of the guilty businesses, or boycott of their goods and services. In some cases, businessmen who have refused to pay have been accused of being Baha’is, a charge that amounts to a death sentence, and have had their businesses ransacked and burned. Even foreign companies doing business with Iran are subjected to this kind of pressure. French businessmen claim that up to 5 percent of all contracts they conclude in the Islamic Republic go to secret accounts held by the bonyads. no one knows what actually happens to the money. It is certain, however, that at least part of it is distributed among the five thousand or so mullahs who provide the backbone of the regime. These mullahs have their unofficial bodyguards and maintain their own networks of favor distribution, and thus need a steady flow of cash.
The most powerful of the foundations operating as a state within the state is the Sacred Precinct of Imam Reza (Astan e Qods e Razavi). This is, in effect, a major holding company that handles assets bequeathed to the shrine of Imam Reza, the eighth imam of shiism, in Mash’had, capital of the northeastern province of Khorassan. The astan existed before the revolution, with the shah as its nominal head. Its assets are estimated at around $50 billion, with an annual turnover of some $15 billion, making it the nation’s second largest business entity after the NIOC. The astan owns vast tracts of land, a massive real estate portfolio, factories, hotels, gold, turquoise and lapis lazuli mines, farmlands, orchards, and its own bank. It also owns an airline, several intercity coach companies, and a share in the natural gas fields of Sarakhs on the border with Turkmenistan. It holds a virtual monopoly on the production and sale of saffron, of which Iran is the world’s number-one exporter. The astan also runs a university and provides scholarships for thousands of students each year. The wealth of the astan increases every year because many believers leave a part or the whole of their inheritance to it in their testaments.
Ruling over the astan is Ayatollah Abbas Va’ez Tabassi, a man who, according to his critics, behaves as an almost independent potentate, disregarding instructions from Tehran. The ayatollah has his unofficial “embassies” in a number of capitals, including some in the European Union, and concludes his separate trade agreements with foreign governments and companies. During the presidential campaign of May 1997, Ayatollah Tabassi publicly barred Muhammad Khatami from visiting his fiefdom in Mash’had. The wealth of the astan is used to distribute favor among supporters of the revolution, especially in Khorassan, which was initially cool or hostile to Khomeinism. At the same time, however, the astan must take the interests of the state into account because of its need for legal protection, import-export licenses, and business permits. The astan has organized its own security force and at times pursues its own policies in such neighboring countries as Afghanistan and the Central Asian republics.
Another power point in the no-man’s land between state and revolution is the so-called Holy Struggle for Construction (Jihad Sazandegi). The genesis of this organ predates the revolution. The shah created three corps in which high school and university graduates could spend all or part of their compulsory national service of eighteen months instead of going into the army. In practice, the three corps—respectively dealing with literacy, health, and reconstruction—absorbed the extra manpower that the regular army could not accommodate in those years of high demographic growth. Later, a fourth corps, the Universal Legion of the Servants of Mankind, was added with the specific task of implementing aid projects in developing countries, especially in Africa.
Initially, Khomeini ordered the four corps to be disbanded as relics of the Pahlavi regime. By 1980, however, he was forced to backtrack because of pressure from lobby groups that had emerged around the four corps over the years. What he did, however, was to merge all the four corps into a single one directly responsible to himself. Since then, the Jihad Sazandegi has been represented within the cabinet by a minister of its own. nevertheless, it could be regarded as a hybrid organ because it has become home to many revolutionary cadres who use it as a means of mobilizing young people and keeping contact with the rural population. The Jihad needs the state for its budget and general legal support, but looks to the revolution for inspiration and guidance. Involved in thousands of projects at home and abroad, it has countless lucrative contracts to offer as a major business concern. But its principal role is to further the goals of the revolution through indoctrination linked with small public projects, especially in the rural areas.
The process of decision-making in the Islamic Republic also involves a number of other bodies that are hard to classify either as revolution-based, state-controlled, or hybrid. These bodies pursue particular interests, and could side with either the state or the revolution in accordance with their own agenda. Many of them overlap with the organs described above and some exist as their appendages. Using Western terminology, one could describe them as lobbies pursuing precise goals. They make a contribution to decision-making by mobilizing support for or against this or that policy within the revolutionary microcosm and, whenever possible, in society at large. Some even act as political parties in all but name, fielding candidates at elections and competing for positions of power within the public sector. The revolutionary microcosm finds part of its cohesion in family relations among its members. The who’s who of the Khomeinist elites reveals an astonishing degree of kinship based on blood or marriage among its members. For example, former president Khatami is married to a sister-in-law of Ahmad, Khomeini’s son. Khatami’s brother, Muhammad-Reza, is married to a granddaughter of Khomeini. Business ties further strengthen the elites’ family relations. In some cases, a majority of board members of a company might find themselves together again as members of the executive committee of a government organ or a political group.
Until Ahmadinejad’s election as president, the most influential of the lobby groups was the so-called Society of Combatant Clergy (Jameh e Rouhaniyat Mobarez). Initially created as a club for Khomeinist mullahs in Tehran in 1979, it was for long headed by Ayatollah Muhammad-Reza Mahdavi-Kani, a former prime minister and éminence grise in the ruling establishment. The society later opened branches in the provinces and tried to organize itself as a political party. This effort ran into opposition from Khomeini, who was determined not to allow Western-style political parties to emerge in Iran. The soc
iety has forged close ties with the traditional bazaars and religious circles in Tehran and major provincial cities. Its candidates have been defeated in all presidential elections since 1997, but it still has a strong presence in the Assembly of Experts.
Its chief rival is the Society of Combative Clergymen (Jameh e Rouhanyoun e Mobarez), a splinter group from the original organization, hence the almost identical name. This one brings together left-wing mullahs who were eliminated from the cabinet and the parliament by Rafsanjani in 1994. The “clergymen” made a bit of a comeback by supporting Khatami, who won the presidency in 1997. Former parliament speaker Ayatollah Mehdi Karrubi, Ayatollah Assadallah Bayat, and former interior minister Ayatollah Ali-Akbar Mohtashami-Pour are key figures in this group, which is largely confined to Tehran and a few other major cities. They control a number of small foundations and publish several newspapers and magazines in Tehran and the major provincial centers.