September 25, 2013 | Policy Brief

Rouhani’s Corrupt Cabinet

September 25, 2013 | Policy Brief

Rouhani’s Corrupt Cabinet

Co-authored by Saeed Ghasseminejad

Most Western observers welcomed the end of former Iranian president Mahmoud Ahmadinejad’s term with a sigh of relief, interpreting new president Hassan Rouhani’s election as a sign of moderation or even the return of reform. But Rouhani has adopted other dangerous policies. He is now replacing Ahmadinejad’s friends with figures with a record of plundering the country’s resources for personal profit. Rather than reforming the system, there is reason to believe Rouhani’s team will be milking it.

Take for example Bijan Namdar Zanganeh, Rouhani’s minister of oil. Reuters described him as a ‘non-partisan technocrat.’ In truth, Zanganeh’s time at the oil ministry under former president Mohammed Khatami is associated with many high level corruption cases – notably with handing contracts to Petropars under the buy-back scheme he invented to lure foreign oil companies back into the Iranian energy market.

Zanganeh helped establish Petropars, a subsidiary company of the U.S. and EU sanctioned Naftiran Intertrade Company (NICO). During Zanganeh’s tenure at the oil ministry, Petropars was chaired by Akbar Torkan, Iran’s minister of defense under Akbar Hashemi Rafsanjani. Zanganeh rewarded Torkan’s company with lavish contracts – including development of the lucrative South Pars natural gas field. Now the two occupy key posts in government once again – and the contracts are predictably flowing.

There is also, Mehdi Karbasian, the new chairman of the Iranian Mines & Mining Industries Development & Renovation Organization (IMIDRO). Karbasian’s resume reveals that he is a board member of the U.S. sanctioned Parsian Bank and Sepehr Energy Corporation, which has won numerous oil contracts, despite its lack of a proven track record. A past holder of ministerial positions beginning in the early 1980’s, Karbasian’s business interests flourished during his time in the private sector, thanks to government contracts.

Then there’s Rouhani’s minister of justice, Mostafa Pour Mohammadi, who in 1988 was responsible for the death of thousands of political prisoners, executed after infamous one-minute trials. For his service, Pour Mohammadi earned the post of deputy Minister of Intelligence and then interior minister under Ahmadinejad. Eventually, however, Pour Mohammadi came under fire for graft. He was alleged to have stolen millions from the ministry’s account for his own personal use. Fortunately for Pour Mohammadi, he headed the institution in charge of prosecuting him.

Another returning figure is Valiollah Seif, now head of Iran’s Central Bank, who was the CEO of Bank Saderat from 1992 to 1995. His tenure was marked by the embezzlement of millions of dollars from the bank. Seif quit Saderat Bank, but his banking career never suffered. He was quickly appointed CEO of the Revolutionary Guards’ Bank Sepah. He later became the CEO of Karafarin Bank, a U.S. and EU sanctioned bank controlled by Iran’s Supreme Leader.

Rouhani may well be hailed as a moderate, but a number of his appointees are corrupt. Now back in positions of influence, the new president has empowered them to plunder again.

Emanuele Ottolenghi is a Senior Fellow at the Foundation for Defense of Democracies in Washington DC; Mr Saeed Ghasseminejad, a Ph.D. Candidate in Finance at City University of New York.


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