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Features

Guards Implicate Rouhani in Corruption Scandal

March 9, 2015
Reza HaghighatNejad
6 min read
Hassan Afrashtehpour, third from right
Hassan Afrashtehpour, third from right

The Revolutionary Guards arrested a man, known as “H.A.” or “Dariush”, on charges of widespread corruption and financial misdemeanors on March 5.

The man was accused of building a corrupt network of dealers that used restrictions imposed by international sanctions to make financial gains. The arrest is the latest in a string of arrests carried out by the Guards to curb corruption.

Over the past year, President Rouhani’s administration has made fighting corruption one of its key priorities, speaking often and loudly about its aim to stamp out a culture of illegal dealings and criminal scandals. And, on multiple occasions, members of the Revolutionary Guards have been accused of a range of illegal activities.

With this latest arrest, hardliners have been quick to link the Rouhani administration with new corruption charges. In particular, there has been much discussion on social networks and online forums about the friendship between the youngest son of former President Rafsanjani, Yasser Hashemi Rafsanjani, who is a wealthy importer-exporter, and three men with previous corruption convictions:  Gholam Hossein Karbaschi, the former reformist-leaning mayor of Tehran, and brothers Hassan and Davoud Afrashtehpour.

Karbaschi was convicted on corruption charges in 1998 and the three brothers were charged the year before. The relationship between the four men and Rouhani’s first vice-president, Eshaq Jahangiri, has also aroused interest. “What a feast for the purples!”, wrote one anti-Rouhani online commentator, making reference to the president’s election campaign color.

In 2010, a number influential figures in President Mahmoud Ahmadinejad’s administration, including Esfandiar Rahim Mashaei, were implicated in a corruption scandal that led to hardliners withdrawing their support from the president and his allies, even though they supported the former president just the year before. At the time, General Mohammad Ali Jafari announced that the Revolutionary Guards were tasked with identifying and punishing the so-called “deviant current” within the government.

Can “H.A.’s” arrest be interpreted as a new anti-corruption campaign? Have the Revolutionary Guards taken new steps to target the Rouhani government?

The Revolutionary Guards issued a statement that said the “financially corrupt individual” in question was able to incur huge debts within Iran’s banking system thanks to the “cooperation of his brothers and others in positions of influence.” The statement went on to offer a few hints as to H.A.’s identity:  

“This individual was one of the main convicted offenders in the famous [1997] financial corruption case.” After his release from jail in 2001, it said, “he was able to use financial and legal loopholes and take advantage of people in positions of influence to return to the economic arena.” According to the Guards, he made his fortune by setting up companies to import goods in high demand due to international sanctions and was able to secure “colossal amounts of foreign currency at the official rate.” Instead of importing the goods, he invested in high-rise developments, including the 7000-square meter house he lived in.

According to Fars news agency, which is affiliated with the Revolutionary Guards, H.A. played a leading role in setting up “houses of corruption,” paying enormous bribes to cover up its dealings and implicate business rivals in shady dealings. Fars reported that H.A. set up a number of companies and then forged and destroyed documents in order to prevent oversight agencies from discovering his corrupt practices.

All of this bears close resemblance to another high profile corruption scandal in Iran, which resulted in a jail sentence for Mohammad Reza Rahimi, Ahmadinejad’s First Vice-President, in January this year.

 

The Corruption Habit

In recent years, the names Mohammad Reza Rahimi, Babak Zanjani and Mahafarid Amir Khosravi (who was executed in 2014) have been synonymous with swindling and illegal business practices. Before this, the name Hassan was invariably linked to financial corruption during the presidency of Hashemi Rafsanjani in the 1990s. 

The 1997 corruption case against Hassan and Davoud Afrashtehpour and a third brother called Mehdi involved both their property investments and import-export businesses.

In November that year, after court proceedings that lasted nine sessions, Hassan Afrashtehpour was sentenced to 25 years in prison and 399 lashes. His brother Davoud received 23 years and 299 lashes. Despite the lengthy sentence, Hassan Afrashtehpour was released in 2001 — something that is customary in cases like this.

The judge presiding over the case also sent the CEO of Bank Saderat Iran, a multinational financial corporation, to jail, after it was established that the bank gave the brothers $60 million for imported goods that never existed, including sugar.

But there were other rumors. Some media accused Gholam Hossein Ejei, the judge who oversaw the Afrashtehpour brothers’ case, of owning some of the properties that belonged to the brothers. Ejei is now spokesman for Iran’s judiciary. Intelligence Ministry agents, including Akbar Khosh-Kush, also had links with the Afrashtehpour brothers, and were implicated in the illegal import of mobile phones. Khosh-Khush was also one of 27 people arrested in 1999 for his part in the “Chain Murders” (1988-1998), when more than 80 dissidents were murdered or disappeared. Later, Khosh-Kush committed suicide in prison.

After their arrest, the Afrashtehpour brothers spent a year in solitary confinement. They confessed to financial misconduct, illegal dealings with Bank Saderat and the illicit imports of mobile phones, and to charges of giving out cocaine at parties they hosted.

After their release, the brothers quickly went back to criminal activity. In 2007, they set up a new commercial corporation, with Mehdi as chairman of the board, Hassan as his deputy and Davoud as a board member. The company gradually expanded into other sectors, including investing in basketball teams and other areas of the sports industry.

The brothers created Afra Persian Gulf Holding Corporation to manage their vast operations — the corporation’s list of interests covered sugar refinery, vegetable oil, butter, health products and the import of basic necessities and agricultural products.

 

The Rule of Law and Traps of Corruption

Hardliner circles have discussed this widely as a way of implicating those connected to President Rouhani – much in the way that Ahmadinejad’s enemies sought to build a case against him.

This is a familiar tactic. During his presidency fron 1997 to 2005, reformist president Mohammad Khatami called for the government to uphold the rule of law. Hardliner opponents retaliated by using or distorting out-dated existing laws to send a number of reformists to court and prison. They used the “rule of law” to silence Khatami’s government.

It now appears that by the Revolutionary Guards’ intervening publicly, they could be setting up new traps, this time under the banner of fighting corruption, something Rouhani’s government has committed itself to battling. This means tools to fight corruption are being used to implicate the president, catching him in his own trap.

Many years ago, Hassan Afrashtehpour described in court how his corrupt actions were like “taking a bucket of water from the sea” — reminding both people and politicians how deep corruption runs in Iran. Like many countries, Iran’s endemic corruption problems can often be linked to some of the most influential people in the country. And, by using it as a means of destabilizing the presidential administration, the Revolutionary Guards are honoring a powerful Iranian tradition: attempting to ensnare a president in his own trap. 

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