Iran’s President Rouhani enriches himself and his core supporters in government and business

Since late May, a series of media leaks and allegations of corruption has rocked Iran’s banking and financial sectors. The scandal has revealed, among other things, that civil servants and business executives are being paid as much as $230,000 a month.  Hossein Fereidoun, Rouhani’s brother, played a role in the appointment of some of the recently dismissed corrupt bank directors, which has further tainted Rouhani with the suggestion of familial corruption. Rouhani however is only a newcomer to the financial corruption endemic within Iranian society.

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This expose of corruption, reaching the highest levels of Iranian power has placed the 2017 re-election of Rouhani in question. The hard line Politico-religious opponents of the Rouhani administration, and followers of the Apocalyptic ‘Twelver Cult’ within Shi’s Islam, appear to be rising once more, after the departure of the cultist former President Ahmadinejad stood down. All this at a time when Iran is rushing to install Russian S-300 integrated Air Defence missile systems around its nuclear weapons processing sites and laboratories. With Iran now fast becoming a nascent nuclear power, with only a 6-12 month timeline to field an operational nuclear warhead, such a turn of events can only further destabilise the whole Middle East.

Government financial largess, towards business executives friendly to the Iranian administration and towards powerful government figures, was in place well before Rouhani took office. In an Iranian economy bolstered by the inflow of tens of billions of dollars, of previously sequestered funds by the Obama administration, the economy is beginning to recover and the Iranian ‘big end of town’ are cashing in.  With inflation back to single digits, increasing oil revenues and foreign direct investment pouring from the Europeans , the Iranian economy is beginning to boom and all factions of the Iranian power elite are cashing in. The well-connected political elites and the vast business empires of family members of the “oil mafia”, that Rafsanjani and Khatami’s economic liberalization policies created in the 1990s, are still powerful and put the comparative corruption of Rouhani in perspective.

On June 22 the Supreme Leader Ayatollah Ali Khamenei weighed in, voicing his disapproval of the corrupt practices that had sprung up under Rouhani’s administration, and Ali Khamenei called for quick action by Rouhani to resolve the situation. Eight days later, four of the country’s biggest banks — Mehr, Mellat, Saderat Iran and Refah — were shown to have been involved in the corruption and had their directors removed. Not long after that, the entire executive team of the National Development Fund of Iran resigned.

Some hard line conservative Islamist members of government, and associated fundamentalist media organs, have sought to use this corruption scandal to unseat Rouhani in the 2017 elections and replace him with a radical Islamo-fascist cult driven ‘Twelver’ apocalyptic administration. Even some Islamist factions normally opposed to Rouhani within the current Iranian government are supporting the President, as they jockey for position with the ‘Twelver’ cultists.

In the 1990s when economic reformers like Rafsanjani or Larijani were brought down by hard line religious Islamists and members of the Iranian Revolutionary Guards, they were in a much more powerful position that Rahani is today. The chances of Rouhani surviving the 2017 elections must be rated as slim, especially so when his economic reforms have been stopped and are incomplete. Though inflation has dropped to its lowest point in 25 years, and foreign direct investment has risen to its highest peak in 10 years, the yawning gap between Iran’s upper class and middle-to-lower classes remains. Iran’s religiously conservative and economically at-risk constituencies, which could bode ill for Rouhani’s political future.

The threat is that the Islamist fundamentalists and especially the ‘Twelver’ Apocalyptic cultists could be positioning themselves for another run at the Presidency in 2017. This, at a time when Iran is now at any time less than a year away from getting an operational nuclear warhead.

We do live in ‘interesting times.