What Rouhani's Rivals Really Wanted Was Money

What was the biggest concern for hardliners during the presidential election? On the surface, what they wanted was to form a revolutionary government. Rouhani’s main rival Ebrahim Raeesi said it outright and his fellow conservative candidate Mohammad Bagher Ghalibaf alluded to it during the campaign. So would have been the goals of this so-called “revolutionary government”? Taking care of the needy, eradicating poverty, following the wishes of His Excellency the Supreme Leader, shunning the West, honoring the “resistance economy,” the inward-looking conservative answer to Iran’s financial woes, and so forth.

But there was one promise among many of Raeesi’s promises that did not get the attention it deserved: His plans to haul in the financial gains of the nuclear deal. Raeesi and Ghalibaf both said that the Joint Comprehensive Plan of Action (JCPOA) — was a check that Rouhani’s government had failed to cash. He'd let the Iranian people, who had not felt any of the benefits, down. If elected, Raeesi promised to put this at the top of his list of priorities.  

So what did he mean? Could these gains really be so easily and immediately attainable? Or is something else at play?

Iran’s oil industry is one telling example of how economics in Iran currently works. In 2011, Iran exported 3.63 million barrels of crude oil per day. In August 2013, when Hassan Rouhani was voted in as president, this export level had fallen to 2.68 barrels of crude per day, a direct result of economic sanctions imposed on Iran as a result of its nuclear program. The worst effects of the sanctions took hold within the span of one year, from 2012 to 2013, when Mahmoud Ahmadinejad was still at the helm. But it took until early 2017 for oil exports to return to pre-sanctions levels of around 3.8 million barrels per day. This clearly demonstrates that the Ahmadinejad administration did not deal with the consequences of the sanctions. Instead, it bequeathed them to the Rouhani administration.

This example is one of many that indicate that, despite the time it is taking for the benefits of the JCPOA to materialize, they are starting to take shape. And it is time to step this up and start cashing in.

Nobody knows this better that Iran’s hardliners, and of course they want to be in control of how this money is directed. In early 2016, four conservative parliamentarians, including Raeesi supporters Alireza Zakani and Elias Naderian, wrote to President Rouhani about his brother Hossein Fereydoon. They hoped to use Fereydoon, who had come under scrutiny because of some of his more dubious financial activities, as a symbol of  corruption with close ties to Rouhani. “What decisions about big foreign deals are made in Monday’s meetings at the office of your excellency?” asked the letter. “What is the role of your chief of staff in securing big contracts and closed-door meetings with foreign companies?” And yet the letter was not really about exposing corruption. It was part of a proxy war over the economic spoils of the JCPOA.

So are the economic benefits Raeesi was alluding to really more about bolstering up some of Iran’s biggest businesses, most of them exempt from any kind of government regulation or scrutiny?

The mafia around Raeesi’s campaign was not really thinking about a revolutionary government. It was not preoccupied with fighting corruption, maintaining the resistance economy, implementing an Iranian-Islamic model for development, or any other economic policy the Raeesi campaign championed. It was about reaping the benefits of the JCPOA for very specific purposes.

And herein lies Raeesi’s real defeat.

To get a better idea of this generation of Iranian conservatives and their motives, it’s instructive to look at the country’s large big-earning business foundations, nominally non-profit organizations that are completely immune to  government controls. Among them are the Imam Reza Karamat (“Benevolence”) Foundation, the Barekat (“Blessing”) Foundation, the Revolutionary Guards Cooperative Foundation and the Khatam-al Anbiya (“The Last Prophet”) Construction Headquarters. In addition to his role as guardian of Iran’s biggest financial endowment, the Astan Quds Razavi Foundation (which has has a separate, much more massive, financial structure linked to the shrine of the 8th Shia Imam), Ebrahim Raeesi is also the key person at the Karamat Foundation. Ali Nikzad, his campaign manager, is linked to the Barekat Foundation. Marzieh Vahid Dastjerdi, his campaign spokeswoman, was a member of the board of trustees of the Imam Khomeini Relief Foundation, which is essentially a small empire, and her brother is the head of the Guard’s Cooperative Foundation. Parviz Fattah, the head of the Relief Foundation, had said that he would everything in his power to ensure the victory of hardliner principlists.

In fact, the biggest defeat for  hardliners must be seen from this angle: They were unable to convert the benefits of the JCPOA into cash for the foundations that they control. Add to this the fact that reformists did well in Tehran’s City Council — a bitter defeat for conservatives.

Over the next few years, there will inevitably be clashes between Rouhani’s government and hardliner principlists. But it’s important to keep this in perspective: More often than not this is all about money. In fact, the unofficial motto of many of Iran’s politicians is simply put: Follow the money!