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Millionaire Mullahs

A nuclear threat to the rest of the world, Iran is robbing its own people of prosperity. But the men at the top are getting extremely rich.

Millionaire Mullahs -
On The Cover/Top Stories -
  
It's rumble time in Tehran. At dozens of intersections in the capital of Iran thousands of students are protesting on a recent Friday around midnight, as they do nearly every night, chanting pro-democracy slogans and lighting bonfires on street corners. Residents of the surrounding middle-class neighborhoods converge in their cars, honking their horns in raucous support.

Suddenly there's thunder in the air. A gang of 30 motorcyclists, brandishing iron bars and clubs as big as baseball bats, roars through the stalled traffic. They glare at the drivers, yell threats, thump cars. Burly and bearded, the bikers yank two men from their auto and pummel them. Most protesters scatter. Uniformed policemen watch impassively as the thugs beat the last straggler.
These Hell's Angels are part of the Hezbollah militia, recruited mostly from the countryside. Iran's ruling mullahs roll them out whenever they need to intimidate their opponents. The Islamic Republic is a strange dictatorship. As it moves to repress growing opposition to clerical rule, the regime relies not on soldiers or uniformed police (many of whom sympathize with the protesters) but on the bullies of Hezbollah and the equally thuggish Revolutionary Guards. The powers that be claim to derive legitimacy from Allah but remain on top with gangsterlike methods of intimidation, violence and murder.

Who controls today's Iran? Certainly not Mohammad Khatami, the twice-elected moderate president, or the reformist parliament. Not even the Supreme Leader Ayatollah Ali Khamenei, a stridently anti-American but unremarkable cleric plucked from the religious ranks 14 years ago to fill the shoes of his giant predecessor, Ayatollah Khomeini, is fully in control. The real power is a handful of clerics and their associates who call the shots behind the curtain and have gotten very rich in the process.

The economy bears more than a little resemblance to the crony capitalism that sprouted from the wreck of the Soviet Union. The 1979 revolution expropriated the assets of foreign investors and the nation's wealthiest families; oil had long been nationalized, but the mullahs seized virtually everything else of value--banks, hotels, car and chemical companies, makers of drugs and consumer goods. What distinguishes Iran is that many of these assets were given to Islamic charitable foundations, controlled by the clerics. According to businessmen and former foundation executives, the charities now serve as slush funds for the mullahs and their supporters.
Forbest.com
 
 
Iran has other lethal secrets besides its nuclear program, now the subject of prying international eyes. Dozens of interviews with businessmen, merchants, economists and former ministers and other top government officials reveal a picture of a dictatorship run by a shadow government that--the U.S. State Department suspects--finances terrorist groups abroad through a shadow foreign policy. Its economy is dominated by shadow business empires and its power is protected by a shadow army of enforcers.

Ironically, the man most adept at manipulating this hidden power structure is one of Iran's best-known characters--Ali Akbar Hashemi Rafsanjani, who has been named an ayatollah, or religious leader. He was the speaker of parliament and Khomeini's right-hand man in the 1980s, president of Iran from 1989 to 1997 and is now chairman of the powerful Expediency Council, which resolves disputes between the clerical establishment and parliament. Rafsanjani has more or less run the Islamic Republic for the past 24 years. 
 
He played it smart, aligning himself in the 1960s with factions led by Ayatollah Khomeini, then becoming the go-to guy after the revolution. A hard-liner ideologically, Rafsanjani nonetheless has a pragmatic streak. He convinced Khomeini to end the Iran-Iraq war and broke Iran's international isolation by establishing trade relations with the Soviet Union, China, Saudi Arabia and the United Arab Emirates. In the 1990s he restarted Iran's nuclear program. He is also the father of Iran's "privatization" program. During his presidency the stock market was revived, some government companies were sold to insiders, foreign trade was liberalized and the oil sector was opened up to private companies. Most of the good properties and contracts, say dissident members of Iran's Chamber of Commerce, ended up in the hands of mullahs, their associates and, not least, Rafsanjani's own family, who rose from modest origins as small-scale pistachio farmers.

"They were not rich people, so they worked hard and always tried to help their relatives get ahead," remembers Reza, a historian who declines to use his last name and who studied with one of Rafsanjani's brothers at Tehran University in the early 1970s. "When they were in university, two brothers earned money on the side tutoring theological students and preparing their exam papers." 
 
The 1979 revolution transformed the Rafsanjani clan into commercial pashas. One brother headed the country's largest copper mine; another took control of the state-owned TV network; a brother-in-law became governor of Kerman province, while a cousin runs an outfit that dominates Iran's $400 million pistachio export business; a nephew and one of Rafsanjani's sons took key positions in the Ministry of Oil; another son heads the Tehran Metro construction project, an estimated $700 million spent so far.
Today, operating through various foundations and front companies, the family is also believed to control one of Iran's biggest oil engineering companies, a plan assembling Daewoo automobiles, and Iran's best private airline.
Though the Rafsanjanis insist they do not own these assets.
  
 
Discontent Unveiled
Disaffected, denied opportunity and just plain bored, Iran's youth have taken their frustrations with the clerics' regime to the streets. 
 
 
 
 
 
 
Paul Klebnikov