For the last few years, the Zanjani scandal has stood out as one of the most significant cases emerging from international sanctions against Iran and the economic environment they produced. Zanjani and his associates repeatedly bypassed sanctions, selling Iranian oil abroad and pouring the proceeds back into the Iranian economy, all with the blessing of the Islamic Republic. At the same time, Zanjani and his cohorts made huge profits for themselves, shortchanging the government to the tune of around $2.2 billion.
The court upheld Zanjani’s death sentence on the charge of “spreading corruption on earth.” According to Article 286 of Iran’s Islamic Penal Code, “Any person, who extensively commits felony against the bodily entity of people, and offenses against internal or international security of the state, spreads lies, disrupts the economic system of the state, commits arson and destruction of properties, distributes poisonous and bacterial and dangerous materials, and supports the establishment of, or aids and abets the establishment of places of corruption and prostitution, [on a scale] that causes severe disruption in the public order of the state and insecurity, or causes harsh damage to the bodily entity of people or public or private properties, or causes distribution of corruption and prostitution on a large scale, shall be considered as corrupt on earth and shall be sentenced to death.”
“But I Helped Iran”
Throughout the proceedings, Zanjani repeatedly claimed that he and his associates had cooperated with Iran’s security and economic institutions to help reach solutions for some of the most severe problems that sanctions had produced. He also transferred the assets he held in Iran to the National Iranian Oil Company to clear his debt, but ministry officials claim that the value of these assets fell considerably short and would at most cover 30 percent of his debt. They also argued that the majority of his assets are actually held in companies he and his team had set up outside of Iran, including in Turkey, Tajikistan and Malaysia.
Zanjani’s partners and co-defendants, British-Iranian Mahdi Shams and Iranian citizen Hamid Fallah Heravi, had also received death sentences, but the supreme court vacated them.
The presiding judge in the original trial, the infamous Revolutionary Court judge Abolghasem Salavati, sentenced Zanjani to death on October 3, 2015. Salivati has an international reputation for widespread and consistent violation of human rights. In 2011, the European Union placed Salavati on its sanctions list in connection with these violations. As he has been so prominent in the public eye, it is likely that the Iranian judiciary appointed him to the Zanjani case in a bid to repair the judge's image, and give him the opportunity to demonstrate his strong resolve and ability to take firm action in one of the country’s most significant corruption cases.
Where is the Money?
President Hasan Rouhani’s administration has repeatedly said that it did not want to execute Zanjani. Government officials believe Zanjani is simply the public face of a corrupt network, and that the clues to untangle the web of corruption will be lost if he is executed. “An individual has been sentenced to death,” Rouhani said in March 2015. “But where did the money go? His execution will not solve anything.”
Besides Rouhani’s government, various parliamentarians have also repeatedly talked about the corrupt network behind Zanjani. “Babak Zanjani is just a shop window,” said Amir Abbas Soltani, head of the parliamentary committee in charge of pursuing Zanjani’s case. “At least 60 to 70 percent of the people behind him are political figures.” They all believe Zanjani is only a pawn in a much bigger game.
Intelligence Ministry financial officials and the Revolutionary Guards’ Intelligence Unit have all been linked to Zanjani’s case. It appears that the behind-the-scene battle between the two security organizations has played an important part in shaping events. Mohammad Yazdi, the financial vice minister at the Intelligence Ministry during Mahmoud Ahmadinejad’s presidency, and Hossein Taeb, commander of the Guards’ Intelligence Unit, are two of the most well-known names mentioned in connection with the case.
During his defense, British-Iranian dual citizen Mehdi Shams outlined his dealings with the Revolutionary Court’s Intelligence Unit. It was Shams who introduced Babak Zanjani to the Oil Ministry, thereby laying the groundwork for him to pursue deals in the oil sector. Shams was active in Dubai and Istanbul.
Hamid Fallah Heravi, the third defendant in the case, had direct links with the Iranian Intelligence and Defense Ministries. In 2012, he was laid off from his intelligence job, and soon after he teamed up with Babak Zanjani.
Hero To Revolutionary Guards
Babak Zanjani worked closely with the two Revolutionary Guards-affiliated organizations that oversee a range of important activities across Iran's economy, including dam construction, petroleum, petrochemicals, marine structures, ship-building and tunnels. Zanjani also worked with the Revolutionary Guards to import pharmaceuticals and meat products. He worked with Ansar Bank, which is also affiliated with the Guards. He also bought the airline Qeshm Air from the Revolutionary Guards.
During the proceedings, Guards-affiliated media tried to portray Zanjani as a hero who helped Iran during the dark and difficult days of international sanctions. Islamic Republic authorities supported the bypassing of sanctions — among them Supreme Leader Ayatollah Khamenei. In a speech on August 17, 2011, Khamenei explicitly praised efforts to circumvent sanctions. Zanjani himself has publicly expressed pride over his ability to bypass sanctions.
Zanjani also cooperated with Reza Zarrab, a Turkish-Iranian dual national. After Zarrab was arrested in Turkey in 2013 for bribery, corruption and smuggling, he claimed during his interrogations that he had laundered $17.5 billion worth of Iranian oil money. Turkey eventually released him, but in March 2016, he was arrested in Florida on charges that he and others conspired to conduct hundreds of millions of dollars in financial transactions for the Iranian government or other entities to evade US sanctions.
Zarrab is one of many figures with whom Zanjani has been linked. If Zanjani is silenced forever, many people — including a number of influential security and political figures in Iran — will finally breathe a sigh of relief. At last, the fall guy will have done his job.