Iran’s $1 billion embezzlement shocks wayward society

On August 16, a parliamentary inquiry report into a massive embezzlement case at the Mobarakeh Steel Company in Isfahan made headlines in Iranian state media. The report which was the result of the regime’s parliamentary inquiry and review commission demonstrated 300,000 documents, which show that the entire establishment of the regime is involved in fraud, corruption, embezzlement funds and corruption.

The report suggested that the company in question, sanctioned by the former US administration, had an embezzlement case worth 92 trillion tomans. Given the average rate of USD at IRR from March 2018 to December 2021, the dollar equivalent of the misappropriation of funds would be approximately US$5.25 billion.

With a net profit of 108 trillion tomans (or $6.17 billion) last year alone, Mobarakeh Steel Company (MSC) is officially one of the largest private companies and is nominally affiliated with the Ministry of Industry , Mines and Commerce of the regime. However, MSC’s policies are actually determined by the Revolutionary Guards (IRGC) who control about 3,000 factories and companies in the country.

Although MSC shares are widely distributed among different government departments, the recent fiasco that caused a severe stock market decline is hitting small shareholders, ordinary people, hard.

The company supplies raw materials to more than 3,000 companies in the petrochemical, gas and automotive sectors and as a result, embezzlement involves a large part of the scheme’s economy.

The investigative report suggests that MSC sold steel plate to Saipa and Iran Khodro (the largest domestic automakers) at lower rates, while these companies sold their excess steel at higher rates on the market.

The report also revealed that Mohammadreza Saket, head of security at Sepahan Football Club in Isfahan, received a monthly salary of 92 million tomans and in one case he considered a bonus of 276 million tomans for himself. . The MSC has been using the Sepahan Club to launder money since 2019, the investigation found.

To understand the dimensions of this case, a few modest comparisons might serve as an overview:

– The amount in question is almost 9 trillion tomans more than the subsidies distributed by the state to the entire population in the last year (1400 according to the Persian calendar)

– He allocated 2.5 times the construction budget of Iran’s 31 provinces last year

– This is twice the amount of the budget allocated to the province of Tehran in the year 1400 (Persian calendar)

– The number of violations in the MSC case exceeded the publicly announced annual budget of seven ministries of Intelligence, Interior, Economy and Finance, Culture and Islamic Guidance, Sports and Youth, Communication and Information Technology and Agricultural Jihad.

Most of the embezzlement took place when Ebrahim Raisi was head of the judiciary, and now, even before the matter is dealt with by the judiciary, the regime’s president has ordered that “officials involved be removed from office”. Political observers believe the move is a populist effort to save face for a government struggling with a crippled economy and high inflation.

Aiming to eliminate cadres affiliated with the Rouhani government, the parliamentary committee launched the MSC’s inquiry process in the very first months of the swearing-in of the new parliament on May 27, 2020.

Following the release of the report, parliament and Ebrahim Raisi’s administration quickly distanced themselves from the blunder and accused the previous Rouhani government of fraud and corruption. Even Reza Fatemi Amin, Raisi’s minister of industry, mines and trade, who has been working with the disgraced leaders for almost a year, spoke on state television and tried to dodge his responsibility.

“Such embezzlement has nothing to do with the government, and the Islamic Republic is clean,” Raisi said in a joint cabinet meeting with judiciary officials. “Today the enemy is doing everything possible to say that the system of the Islamic Republic is ineffective, to create hopelessness and hopelessness among the people.”

In the parliamentary report, people like Abbas Rezaei, then governor of Isfahan, Eshaq Jahangiri, Rouhani’s vice-president, Mahmoud Vaezi, Rouhani’s chief of staff, and Mohammad Nahavandian, the former head of the presidential office, are identified and appointed.

But the rival faction was not silenced and an affiliate website, Tejarat News, wrote: “All these (accused) people cannot be considered as one group and members of one faction. From the media and NGOs to some Twitter users, they have contributed to this violation of 92 trillion tomans. Also, at the time of these events, the current head of government was in charge of the judicial system.

While hundreds of workers from the same company spent several days on the streets protesting against low wages and crying that they could not make ends meet, Mobarakeh Steel Company paid huge sums to government officials and institutions. State.

MSC reportedly gave 22 billion tomans to IRIB, the state broadcaster and broadcaster, to avoid scrutiny. Half a billion tomans took to influential Twitter accounts to create positive vibes. Additionally, 36 billion tomans were donated to 270 media outlets including Kayhan, Fars, ISNA, Mehr, Ettela’at, Ebtekar, Eqtesadonline, Khabaronline, Ruydad, Asr-e-Iran, Hamdeli, Sazandegi, Tejarat, Arman-e – Meli. Given the variety of their editorial orientations, the incident proved once again that there is no honor among Iranian state thieves.

The MSC also donated 8.9 billion tomans to IRGC and Basij-affiliated institutions, 14.4 billion tomans to Friday prayer headquarters, 950 million tomans to religious seminaries and the Ghadir Foundation for construction of a mosque. In addition, 147 billion tomans were reportedly spent to establish a private airline for the company.

“The distribution of rents was the result of approvals and orders from decision-making authorities, and it happened to all companies,” former MSC CEO Hamidreza Azimian said in a statement. “The contributions of Mobarakeh Steel Company from 2018 to 2021 have been paid to the relevant institutions with the full consent of the shareholders, and if money has been deposited in the account of the governor, the imam of Friday prayer and the IRGC commander, it was for spiritual assistance.

While Ali Khamenei, the regime’s Supreme Leader, has remained silent so far, the case is a clear reminder of what happened in October 2011, when an embezzlement case of three trillion tomans by 8 Iranian banks has been made public. In a meeting with state officials, Khamenei said the media “shouldn’t drag this case out” and that “some people want to use these incidents to target state officials.”

Why a parliamentary committee came up with such a damning statement is still unclear. Different analogies point to a variety of diverse, interwoven and complex theories.

Some believe that the parliamentary effort, mostly in line with the Khamenei-Raisi faction, was first initiated to destroy the so-called “moderate” faction and deflect the public rage that is mounting daily.

Another hypothesis suggests that the Raisi administration disagrees with particular elements of the IRGC and wants to eliminate problematic cadres while portraying itself as a champion in the fight against corruption in a troubled society. According to them, the sacking of Hossein Taeb, the former head of the IRGC intelligence organization, was just the tip of the iceberg.

Although the roots of the problem are still difficult to unearth, the fruits are clearly visible. The embezzlement case, which is just one case among many, has clearly demonstrated that the whole system is corrupt, and no state institution is an exception.

Those who initiated the effort are in no way in a position to control the outcome. While a vast majority of the people of Iran suffer from state-created poverty and farmers in Isfahani lose their crops and livestock to the massive water resources monopolized by the MSC, the company is doling out billions for luxury cars, costumes, and perfume.

These astronomical lootings and thefts took place during the most troubling years for the Iranian people. Time and again, destitute pensioners, including those who have spent decades of their lives working for Isfahan’s Mubarakeh Steel Company, have taken to the streets and demanded equalization of wages and demanded the least payment of wages above the poverty line. But this year, pensioners and workers across Iran have a new slogan: “Death to Raisi”!

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