Khamenei’s office puts up obstacles to transparency to protect its own interests
The search for solutions to Iran’s endemic corruption problem inevitably begins with the identification of its main structural cause: the lack of accountability of Iran’s ruling institutions, especially those whose economic activities fall under the oversight of the Supreme Leader’s Office (Beyt-e Rahbari).
The Beyt is the only entity within Iran’s ruling structure with the legal power to oversee and regulate the financial activities of major bonyads, including Astan-e Qods Razavi and the IRGC’s Sepah Cooperative Foundation and Khatam al-Anbia, as our deep dive on bonyads has shown.
In addition, the Beyt directly oversees an array of umbrella organizations that function as predatory conglomerates as well as propaganda machines. They include: Bonyad Mostazafan (BM), Bonyad Shahid (BS), EIKO, Bonyad Sadouq, Development and Improvement of National Endowments Bonyad (BTOM), Bonyad Maskan, Endowment and Charity Affairs Organization (Oqaf), Imam Khomeini Relief Fund (IKRF), Astan Qods Razavi (AQR), Tamin Social Security Fund, Islamic Development Organization (IDO), 15 Khordad Bonyad, Islamic Economy Organization (IEO), etc.
Though the financials of these organizations are legally shielded from the eyes of elected officials, one institution manages them all: Mofid Rahbar, an auditing firm that exclusively services the companies that fall under the Beyt’s purview. Among the 403 organizations audited by Mofid Rahbar are book publishing, banking and food-producing brands Iranians encounter on a daily basis. Please see our Updated List of Companies Audited by Mofid Rahbar for a complete overview.
Updated List of Companies Audited by Mofid Rahbar
The protection of the Beyt-e Rahbari means these organizations are exempt from tax obligations, anti-corruption regulation and financial reporting rules. They are also entitled to government grants. According to available data, which does not include undisclosed grants to larger bonyads like BM, AQR or EIKO, government allotments to Beyt-controlled institutions totalled 35,717 billion Toman, around 5.9 percent of the 2021-2022 national budget. The companies are managed by a kinship network of several hundred people who simultaneously hold dozens of positions on the corporate boards of these businesses, according to whistleblower testimonies.
Budget Grants to Select Supreme Leader Institutions in 2021-22
Source: Iran’s National Budget
The legal privileges outlined above allow these executives to move vast amounts of funds–including those allotted from public coffers– across industrial sectors, funnel money abroad, and crush competition–all in an effort to maximize private profits.
“Even though these institutions are effectively using public funds or (or in case of institutions such as the Bonyad Mostazafan, public properties which were handed over in the early years of the IRI), it is impossible to audit their accounts,” states Transparency, Corruption and Accountability in Iran, a paper recently published by Small Media Foundation.
The paper’s author notes that the non-state, ostensibly “public” institutions overseen by the Supreme Leader are legally exempt from the control of the Supreme Auditing Council (SAC), an independent, Majles-linked entity which is “in charge of auditing all accounts of government ministries and state institutions.”
Throughout Iran’s post-1989 history, elected government bodies made occasional efforts to regulate the institutions overseen by the Beyt. One such moment was in 1996, when President Akbar Rafsanjani asked the Guardian Council to clarify whether the SAC’s auditing authority would be expanded to certain non-state public institutions including those led by the Supreme Leader, according to Small Media. But here, as in other cases, the “circular structure” of Iran’s government ensured that non-elected public institutions remain accountable only to the Supreme Leader and each other: “The Guardian Council responded that, in its view, the SAC only has the authority to audit the sections of institutional budgets that were directly provided by the government’s annual budget, and nothing more.
Later, in 2001, Mohammad Khatami’s reformist government founded the Organization for Collection and Sale of State-owned Properties of Iran (OCSSPI), challenging the bonyad EIKO’s monopoly over properties seized according to Article 49 of Iran’s constitution. For the following decade, these two organizations were in conflict over jurisdiction. Chief Justice Sadeq Larijani settled the dispute in a 2013 directive, recognizing EIKO as “the only organization with jurisdiction over properties belonging to [the supreme leader].”1
Later, in 2001, Mohammad Khatami’s reformist government founded the Organization for Collection and Sale of State-owned Properties of Iran (OCSSPI), challenging the bonyad EIKO’s monopoly over properties seized according to Article 49 of Iran’s constitution. For the following decade, these two organizations were in conflict over jurisdiction. Chief Justice Sadeq Larijani settled the dispute in a 2013 directive, recognizing EIKO as “the only organization with jurisdiction over properties belonging to [the supreme leader].”/p>
- The correspondence can be read on the Guardian Council’s website: Shora-GC, February 2011.