Conflicts of interest, nepotism, and preferential treatment pervade charity ownership among Iran’s ruling elite
For members of Iran’s political-business elite, owning a foundation is a prerequisite that’s become virtually automatic. Aside from making regime grandees appear altruistic, it entitles them to government grants, tax and financial reporting exemptions, and the opportunity to pay lucrative salaries to their family members.
All but one of the prominent regime figures whose networks we outlined in our Political Business Empires issue are involved in small charities. These men–and they are all men–either directly hold executive-level positions in the organizations or are linked to them through family members. For example, three members of former conservative MP Ali Motahari’s family manage one charity, Bonyad Motahari.
Although powerful men on both sides of the political spectrum own charities, the data suggests that the number of charities they’re involved in is proportional to their proximity to the supreme leader. In other words, the higher up you are in the Islamic Republic’s pecking order, the more charities you’re likely to own or control. Islamic Revolutionary Guard Corps founder and Expediency Council head Mohsen Rezaei is on the board of seven small charities including the Sobh Qarib Iranian Foundation, which operates in Iraq as well as Iran, and brings together a group of IRGC officers and right-wing clerics.
Like larger bonyads, small charities are exempt from financial reporting obligations but receive preferential access to government grants. With the exception of established family-owned organizations like Bonyad Motahari, publicly available information on the small charities we mapped is limited. Most provide only a vague description of activities in their articles of incorporation, which they are required to submit as part of their registration. Some, such as the Ahmad Rezaei charity set up by Rezaei in 2017, lack even this basic description.
So what’s involved in getting a charity off the ground in a country where–as the Doing Business 2020 Index puts it–starting a business takes 72 days on average? Here is our take on the step-by-step breakdown of how it all works, which we base on recent examples:
- Be someone powerful
Earlier this year, politically influential businessman Habibollah Bourbour joined up with Mahmoud Lolachian, a member of Supreme Leader Ali Khamenei’s family. Bourbour already presides over at least four other foundations, whose declared activities range from general charitable work to providing sex education and promoting family values. Together, Bourbour and Lolachian founded the Rahmat-e Vase’eh Bonyad. The charity aims to help the impoverished and “promote donations,” according to its articles of incorporation. A description of the intended recipients of the donations is not provided. This type of vague language is often found in the articles of incorporation of small charities.
- Team up with a Khamenei
Lolachian is the father-in-law of Khamenei’s youngest son, Meysam Khamenei. Including the charity he co-founded with Bourbour, he is a board member of seven charities: Rahmat-e Vase’eh Bonyad, Enfaq Sols Charity, Imam Sadeq Charity and Welfare Bonyad, Fajr Clothing Bonyad, the Association of Charities Building Mosques, the Association of Charities Supporting the Expansion of Seminaries, and the Association of Astan and Dar-al Hadith Charities.
- Wait for a funding opportunity (or a subliminal message in one of the supreme leader’s speeches)
Bourbour told Fars News the impetus for starting Rahmat-e Vase’eh Bonyad came from Khamenei himself. In remarks he made on April 9, the supreme leader urged non-government actors to aid the country’s recovery from the impact of the COVID-19 pandemic.
- Be a member of the regulatory council that issues the permit
On April 18, Bourbour et al. submitted a request to the Interior Ministry’s Social Council, of which Bourbour himself had conveniently been a member in 2018. They received a permit just two days later, on April 20.