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Corruption in Iran

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Political corruption
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Corruption is a serious problem in Iran, being widespread, mostly in the government.[1][2][3][4][5] Reformists and conservatives alike[6] – routinely criticize corruption in the government.[citation needed]

Transparency International's 2022 ranking of perceived corruption in 180 countries found Iran somewhat more corrupt than average—25 on a scale where 43 is average.[7]

In the Islamic Republic

Transparency International defines corruption as "abuse of entrusted power for personal gain".[8] Its Corruption Perceptions Index evaluates perceived corruption in the public sector of 180 countries on a "combination of at least 3 data sources drawn from 13 different corruption surveys and assessments. ... collected by a variety of reputable institutions, including the World Bank and the World Economic Forum".[9] The 2022 Index scored Iran at 25 on a scale from 0 ("highly corrupt") to 100 ("very clean") where 43 was the global average. The least corrupt country (Denmark) scored 90, and the most corrupt country (Somalia) scored 12.[7]

Problems attributed to

As of 2019, corruption, nepotism, cronyism, (along with mismanagement and lack of "much needed" structural reforms), are blamed for country's economic shortcomings such as the 50 to 70% of workers "in danger of falling into poverty", lack of job creation, poor housing,[10] inflation, stagnating incomes and unacceptable rates of poverty.[11] One of the objectives of the Iranian revolution was to have no social classes in Iran. Yet, Iran's Department of Statistics reports that 10 million Iranians live under the absolute poverty line and 30 million live under the relative poverty line.[12] In 2016, then-president Hassan Rouhani linked social ills, including poverty and homelessness, to corruption.[13] (These problems have often been attributed to the economic sanctions imposed by the U.S., but Hossein Raghfar, an economist at Tehran's Alzahra University, has suggested that they may be responsible for as little as 15% of Iran's economic woes.)[14] A study of income inequality (by Djavad Salehi-Isfahani)[15] found levels as discouragingly high (a Gini coefficient of above 0.40) in 2002, over 20 years after the revolution, as during the Shah's time in 1972, "pointing to the lack of inclusive economic growth".[10] Corruption or the uncovering of corruption has led to unrest in the form of riots, strikes, anti-government demonstrations—likely connected with the decline in economic growth corruption brings.[16]

Characteristics

Ali Fathollah-Nejad describes the impediment to economic function and justice as a "political economy that favors regime loyalists... 'insiders' (khodi) or those with access to state resources and privileges also enjoy privileged access to jobs."[10]

According to Iran International, the privatization drive that began around 2007 led mainly not to efficiently run private firms competing for business, but "quasi-governmental firms controlled by powerful insiders who earn economic rent from activities such as blocking competition", using public funds to stay afloat, "insider information to benefit from foreign exchange and gold price fluctuations when the government intervenes in the market", and circumventing sanctions to sell sanctioned goods at high prices.[17]

An example of more explicit corruption in Iran (circa 1990s) came from Nobel Peace Prize winner, Shirin Ebadi, who gave up on the practice of commercial law as a waste of time, because in his words, "What was the point of knowing case law and preparing a defense when decisions were decided by bribes?"[18]

The Islamic Revolutionary Guard Corps has often been cited for its great power and privilege. According to Hooshangt Amirahmadi, director of the Center for Middle Eastern Studies at Rutgers University, "A lot of ministers and governors are from the Revolutionary Guard... They are using the money to buy loyalty and create power bases."[19] Among the questionable activities the Corps has engaged in are the operation of an "an illegal airport" near Karaj City—discovered in 2005—where it imported and exported goods "without any oversight". In 2005, the IRGC forcibly closed the then-new Imam Khomeini International Airport in Tehran, allowing it to reopen under Revolutionary Guard management.[19]

In 2016 then-President Mahmoud Ahmadinejad vouched to fight "economic/oil Mafia" at all echelons of government.[20] He also proposed that lawmakers consider a bill, based on which the wealth and property of all officials who have held high governmental posts since 1979 could be investigated.[21] Out of the $700 billion earned by the state during the presidency of Ahmadinejad for the sale of oil, $150 billion could not be accounted for.[22] On February 3, 2013, President Mahmoud Ahmadinejad played a video tape in the Iranian parliament that tied the heads of two branches of the government, the legislative and judiciary, to a documented financial corruption case related to the Larijani brothers.[23]

Iranian Supreme Leader Ali Khamenei has stated that although there “are cases of corruption; it is not systematic” in Iran.[24] On the other hand, a Reuters special investigation found Khamenei controls a massive financial empire built on property seizures worth $95 billion.[25] He also said in 2023 that malpractice and corruption were "contagious" and leading to instability in the Judiciary.[26]

Causes

Some explanations suggested for corruption in Iran by Mohammad Hossein Ziya include:[24]

  • the lack of freedom of information undermining the ability of independent media to expose corruption;
  • the lack of power among civil society and non-governmental organizations active in reporting and attempting to fight corruption;
  • the lack of transparency in state-owned and semi-state-owned companies;
  • the so-called circumvention of sanctions, which involve a small group close to the government and who are major culprits in corruption.[24]

Pahlavi Era

The Imperial State of Iran, the government of Iran during the Pahlavi dynasty, lasted from 1925 to 1979. Corruption was a serious problem during this period.[27]

Stephanie Cronin of the University of Oxford describes corruption under the rule of Reza Shah as "large-scale".[28] As oil prices rose in 1973, the scale of corruption also rose, particularly among the royal family, their partners and friends. According to Manouchehr Ganji who created a study group for Farah Pahlavi, Mohammad Reza Pahlavi was not sensitive to the issue, but addressed every now and then petty matters of low-ranking officials. As Ganji writes, the group submitted at least 30 solid reports within 13 years on corruption of high-ranking officials and the royal circle, but the Shah called the reports "false rumors and fabrications". Parviz Sabeti, a high-ranking official of SAVAK believed that the one important reason for the success of the regime's opposition was corruption.[29]

According to a report of a journal associated with The Pentagon, "By 1977 the sheer scale of corruption had reached a boiling point.... Even conservative estimates indicate that such [bureaucratic] corruption involved at least a billion dollars between 1973 and 1976."[30]

In Michel Foucault's view, corruption was the "glue" that kept the Pahlavi regime, despotism and modernization together.[31]

After the revolution, the Central Bank of Iran published a list of 178 prominent individuals who had recently transferred over $2 billion out of the country, among them:[32]

Corruption among the royal family and court

Piaget Building, located in Manhattan, New York was designed for Pahlavi Foundation

Built up by forced sales and confiscations of estates, Reza Shah was "the richest man in Iran" and "left to his heir a bank account of some 3 million pounds and estates totalling over 3 million acres.[33] A 1932 report of the British Embassy in Tehran indicates that Reza Shah developed an "unholy interest in land" and jailed families until they agreed to sell their properties.[34]

In the 1950s, Mohammad Reza Pahlavi founded the Pahlavi Foundation (now the Alavi Foundation) which "penetrated almost every corner of the nation's economy".[35] Bostock and Jones unambiguously declared of the Pahlavi Foundation that this "nominally charitable foundation fostered official corruption". According to Houchang Chehabi and Juan Linz, the Alavi foundation's $1.05 billion assets, $81 million capital and its declared devined[clarification needed] $4.2 million was the "tip of the iceberg of official and dynastical corruption, outside and inside Iran".[36] The foundation, which was one of his main wealth sources alongside estates left from Reza Shah and Iran's oil revenue, was a tax haven for his holdings.[35]

Many members of the Pahlavi clan were among the chief perpetrators of corruption in Iran.[37] The royal court was described as a "center of licentiousness and depravity, of corruption and influence peddling" in a mid-1970s CIA report.[36] Prime Minister Amir Abbas Hoveyda who served from 1965 to 1977 had no choice but to facilitate or condone "the ubiquitous corruption of the Pahlavi Clan" and ignore "the corruption that saturated the regime".[38]

In 1960, there were rumours that Princess Ashraf, Shah's twin sister was arrested in Geneva carrying a suitcase containing $2 million worth of heroin. She was regarded as Iran's main drug dealer until 1979.[39] A 1976 CIA report declared that she has a "near legendary reputation for financial corruption" and her son Shahram controls some-twenty companies that serve as "cover for Ashraf's quasi-legal business ventures".[36] Prince Hamid Reza, the Shah's half-brother, was ostracized from the royal family because of his widespread scandals of promiscuity, addiction and involvement in drug trade.[40]

According to William Shawcross, hundreds of call girls from Madame Claude's establishment in Paris passed through Tehran for Mohammad Reza Shah and members of his court.[41]

Impact on the 1979 revolution

Further information: Background and causes of the Iranian Revolution

Some scholars have raised the point that widespread corruption among officials and royal court led to the public dissatisfaction and helped the Iranian Revolution.[42][43]

In Handbook of Crisis and Emergency Management, the Pahlavi dynasty is described as an example of governments losing legitimacy because of corruption and facing a public service crisis as a result.[44] According to Fakhreddin Azimi, Professor of History at the University of Connecticut, "the unbridled misconduct of the Pahlavi clan undermined the Shah's proclaimed commitment to combating corruption and seriously damaged his credibility and Stature".[45]

Right before the revolution, in a 1978 National TV appeal to the nation, Shah said :[46]

I pledge that past mistakes, lawlessness, injustice, and corruption will not only no longer be repeated, but will in every respect be rectified... I guarantee that in future the government in Iran will be based on the Constitution, social justice, and the will of the people, and will be free from despotism, injustice, and corruption.

On the other hand, Khomeini repeatedly argued that the only way to eliminate corruption was through a revolution.[47]

See also

Notable cases
Institutions in charge of fighting corruption

References

  1. ^ Samii, Bill (2005-04-05). "Analysis: Corruption Becomes An Issue In Iran's Presidential Campaign - Radio Free Europe / Radio Liberty © 2010". Rferl.org. Archived from the original on 2010-09-13. Retrieved 2010-08-09.
  2. ^ "Iran Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption". heritage.org. Archived from the original on 21 June 2016. Retrieved 24 June 2016.
  3. ^ "Iran's Attorney General Announces: All Three Branches of Government Are Corrupt". payvand.com. Archived from the original on 4 March 2016. Retrieved 24 June 2016.
  4. ^ "Corruption, cronyism and flawed supervision: banes of banking system". mehrnews.com. 26 October 2016. Archived from the original on 23 January 2018. Retrieved 24 April 2018.
  5. ^ "The seven-headed dragon of the mafia government in Iran - Washington Times". The Washington Times. Archived from the original on 2018-08-23. Retrieved 2018-08-23.
  6. ^ Behnegarsoft.com. "الف - فرمان رهبر انقلاب در مبارزه با مفاسد اقتصادی". alef.ir. Archived from the original on 6 October 2011. Retrieved 24 June 2016.
  7. ^ a b "Corruption Perceptions Index 2022: Iran". Transparency International. Retrieved 16 April 2023.
  8. ^ "Global Corruption Report 2008: Corruption in the Water Sector" (PDF). Transparency.org. p. 6. Retrieved 16 April 2023.
  9. ^ "The ABCs of the CPI: How the Corruption Perceptions Index is calculated". Transparency.org. Retrieved 16 April 2023.
  10. ^ a b c Ali Fathollah-Nejad (11 July 2019). "Four decades later did the Iranian revolution fulfill its promises". Brookings. Retrieved 15 March 2023.
  11. ^ Pooya Stone (21 September 2021). "Regime corruption at the heart of Iran's economic crises". Iran Focus.
  12. ^ Ten Million Iranians Under "Absolute Poverty Line" Archived 2012-01-05 at the Wayback Machine. Radio Zamaneh, May 29, 2010. Retrieved May 28, 2010.
  13. ^ Iran's President Rouhani links 'grave-sleeping' to corruption Archived 2017-01-02 at the Wayback Machine. Tehran Times, December 29, 2016. Retrieved January 3, 2016.
  14. ^ "Wirtschaftliche Lage im Iran wird schwieriger".
  15. ^ Djavad Salehi-Isfahani (2009). "Poverty, inequality, and populist politics in Iran". Journal of Economic Inequality. 7: 5–28. doi:10.1007/s10888-007-9071-y. S2CID 154248887. Retrieved 16 March 2023.
  16. ^ Mohammad Reza Farzanegan (30 August 2022). "Corruption and Internal Conflict in Iran". Economic Research Forum. Retrieved 16 March 2023.
  17. ^ "Insider Explains Systematic Corruption In Iranian Government". Iran International. 13 December 2012. Retrieved 16 March 2023.
  18. ^ Ebadi, Shirin, Iran Awakening : A Memoir of Revolution and Hope by Shirin Ebadi with Azadeh Moaveni, Random House, 2006 (p.110)
  19. ^ a b Erlich, Reese (2019). The Iran Agenda Today: The Real Story Inside Iran and What's Wrong with U.S. Policy. Rutledge. p. 80. ISBN 9780977825356.
  20. ^ "News Analysis: Firing Tightens Iranian President's Economic Circle". Payvand.com. 2006-11-22. Archived from the original on 2010-09-16. Retrieved 2010-08-21.
  21. ^ "Iran may Probe into Officials' Assets". Payvand.com. 2006-11-22. Archived from the original on 2011-06-04. Retrieved 2010-08-21.
  22. ^ Milani, Dr. Abbas. "Dr. Abbas M. Milani Research Fellow and Co-Director, Iran Democracy Project, Hoover Institution, Stanford University - Abbas M. Milani: Why is Iran Protesting?". World Affairs. Archived from the original on 2021-12-21 – via YouTube.
  23. ^ "Corruption in Iran: Clerics Plan to Hang Businessmen". informationclearinghouse.info. Archived from the original on 6 March 2013. Retrieved 24 June 2016.
  24. ^ a b c Mohammad Hossein Ziya. "The 13 crises facing Iran". Middle East Institute. Retrieved 15 March 2023.
  25. ^ "Reuters Investigates - Assets of the Ayatollah". Reuters. Retrieved 2020-05-16.
  26. ^ Kenyon, Peter (2023-07-01). "Iran's supreme leader lashes out his own judiciary for corruption". WUSF Public Media. Retrieved 2023-07-02.
  27. ^ Milani, p. 471
  28. ^ Cronin, p. 6
  29. ^ Ganji, p. 8-9
  30. ^ Abrhamian (1982), p. 118
  31. ^ Afary and Anderson, p. 79
  32. ^ Abrahamian (1982), p. 517
  33. ^ Abrahamian (1982), p. 137
  34. ^ Abrahamian (2008), p. 71
  35. ^ a b Abrahamian (1982), pp. 437-438
  36. ^ a b c Chehabi and Linz, p. 199
  37. ^ Azimi, p. 203
  38. ^ Azimi, p. 194
  39. ^ Morrock, p. 144
  40. ^ The Pahlavi Dynasty: An Entry from Encyclopedia of the World of Islam, p. 144
  41. ^ Shawcross, p. 96
  42. ^ Harney, pp. 37, 47, 67, 128, 155, 167
  43. ^ Mackay, pp. 236, 260
  44. ^ Farazmand, p. 118
  45. ^ Azimi, p. 204
  46. ^ Azimi, pp. 212-13
  47. ^ Abrhamian (1982), p. 478
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