Parisa Hafezi: Scandal threatens Iranian president

Published on Friday 7 October 2011 00:56

IRAN’S hardline president Mahmoud Ahmadinejad, who campaigned on a pledge to combat corruption, is facing a fresh internal political crisis over the biggest financial scandal in Iran’s history.

The $2.6 billion (£1.69bn) scam, which involved illegal bank withdrawals, has taken on political dimensions as some MPs say the government was involved in order to fund monthly compensation of $40 per person introduced since eliminating fuel and energy subsidies in 2010. The fraud is linked to a so-called “deviant current”, allegedly led by Ahmadinejad’s chief of staff and closest ally.

Esfandiar Rahim Mashaie is accused by many Shi’ite clerics and politicians of trying to undermine the central role of the clergy in politics by emphasising the nationalist strain of Iranian culture.

“Now Ahmadinejad’s hands are filled with the scam... weakened in the eye of the nation, Ahmadinejad has been rendered impotent to initiate any political action ahead of the (March 2012) parliament vote,” said a former senior official, who asked not to be named. The judiciary has said corruption at this level could not have happened “without the involvement and backing of different individuals”, a reference to high-ranking government officials.

The fraud was made public with Supreme Leader Ayatollah Ali Khamenei’s approval, said some hardline politicians.

“Ahmadinejad’s allies are determined to win the next elections and Khamenei’s allies want to block their way... That is the main reason behind the revelation of this scam,” said an economist, Saber Lavasani. “People will not vote for those linked to the scam.”

Some analysts speculated that Ahmadinejad was grooming Mashaei to succeed him in 2013 presidential elections.

“The state of economy is the underlying cause of the nation’s discontent and is considered a crucial factor for political factions’ electoral win,” said an analyst, who asked not to be named. “Who will vote for those involved in a scam that is equal to 1 percent of Iran’s Gross Domestic Product?”

Khamenei’s unprecedented public intervention in April to reinstate the intelligence minister sacked by the president displayed “his disapproval of Ahmadinejad’s policies”.

Analysts say by sacking the minister, Ahmadinejad’s allies wanted to secure a majority in the parliamentary elections, since the ministry is in charge of checking the backgrounds of potential candidates.

It is like a domino. A parliamentary election win will pave the way for winning the next presidential vote,” said commentator Mohsen Sadeghi.

The scam will put further economic pressure on the nation by increasing inflation which officially hovers around 16 per cent. Critics say the figure is really over 30 percent.

Iranian newspapers and websites have given wide coverage to the scandal, criticising Ahmadinejad and his inner circle of allies. The president has rejected the allegations, calling his government “the cleanest in Iran’s history”.

Khamenei criticised the government for failing to prevent the embezzlement but warned the media not to cover the scam in a way to make ordinary Iranians “lose hope and become disappointed” in the Islamic state.

“Khamenei’s red-line is the economy… more economic pressure on ordinary Iranians means less support for the establishment,” said analyst Hamid Farahvashi.

“His aim is to preserve the establishment,”

But frustration is simmering among lower and middle-class Iranians. Prices of most consumer goods have risen and many Iranians struggle to make ends meet.

“I am struggling to meet my children’s school fees… I am unable to even grasp the number of zeros in this corruption,” said taxi driver Reza Bakhshi, 45, a father of three.

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