In his address to the United Nations, Benjamin Netanyahu described Hassan Rouhani as a wolf in sheep’s clothing, but you’d have to be very gullible or very nearsighted to be fooled by the Iranian president’s flimsy disguise.
After all, Rouhani has not conceded one iota of Iran’s nuclear program on substance. He has stood defiantly at the United Nations and challenged the international community over Iran’s continuing refusal to comply with UN Security Council resolutions and its solemn obligations under the Nuclear Non Proliferation Treaty. His speeches offered convoluted verbiage that, while not as esoteric as his predecessor’s, were in line with his regime’s third world-ist grievance-filled rhetoric. He rejected a request for a meeting with the U.S. president – though he found time to sit with many other world leaders – and settled only for a phone call on his way to the airport that the White House initiated. Finally, while he did not deny the Holocaust in as crass and insulting a fashion as Mahmoud Ahmadinejad, he engaged in the kind of belittling typical of more sophisticated Holocaust denier.
And yet, Rouhani’s charm offensive seems to be working – witness the enthusiasm triggered by his New York visit as evidence that many wish to turn a new page on the strength of charm alone. In fact, Rouhani is a more polished version of Ahmadinejad – more sophisticated and worldly, but not substantively better.
Many words have been used to describe Iran’s former president – vile, radical, authentic, messianic, confrontational. But behind the rhetoric, there stood a leader who attempted to leverage his presidency as a challenge to the entrenched power structure of the Mullahs and wealthy revolutionary aristocracy that had power over the country’s purse strings. While it is doubtful that a more moderate Iran would have emerged had he been successful, it’s almost certain that Rouhani, with the installation of an old guard of insiders and trusted loyalists of former Iranian president Akbar Hashemi Rafsanjani, has plans to continue in a familiar and corrupt oligarchical vein, a troubling development as current events unfold in the Eastern Mediterranean.
Most Western observers welcomed the end of Ahmadinejad’s term with a sigh of relief, interpreting Rouhani’s election as a sign of moderation and, perhaps, even a return of something like a reformist agenda. Western chanceries were adamant that anything was better than Ahmadinejad.
This was a mistake, if an understandable one. Rouhani presented himself as a moderate. But he has begun meticulously replacing Ahmadinejad’s friends with familiar faces who spent previous decades plundering the country’s resources for their own personal profit, or in pursuit of proliferation activities that allowed them to make money on the side. Rather than reforming the system, there’s every reason to believe Rouhani and his clique will be busy milking it.
Take for example Mr. Bijan Namdar Zanganeh, Rouhani’s minister of oil. As the holder of a key position that controls billions of dollars’ worth of contracts and revenues, Zanganeh knows his way around. He served as oil minister under reformist president Mohammad Khatami. Reuters described him as a ‘non-partisan technocrat.’ In truth, Zanganeh’s time at the oil ministry is associated with many high level corruption cases – most notably with handing contracts to Petropars under the buy-back scheme he invented to lure foreign oil companies back into the Iranian energy market during the reformist era.
Petropars is a subsidiary company of the U.S. and EU sanctioned Naftiran Intertrade Company (NICO), which Zanganeh helped establish. During Zanganeh’s tenure at the oil ministry, Petropars was chaired by Akbar Torkan, who previously served as Iran’s minister of defense under Rafsanjani. Zanganeh rewarded Torkan’s company with contracts worth billions – including several development phases of the lucrative South Pars natural gas field. Now the two occupy key posts in government once again – and the contracts are predictably flowing.
Zanganeh and Torkan are but two in a long list of recent returnees to the corridors of Iranian power. Mehdi Karbasian, the newly appointed chairman of the Iranian Mines & Mining Industries Development & Renovation Organization (IMIDRO), is a board member of the U.S. sanctioned Parsian Bank and of Sepehr Energy Corporation, which has been winning oil contracts at an astonishing rate, despite its short existence and lack of proven record.
Like Zanganeh and others, Karbasian never really left the control room – his resume reads like a U.S. Department of Treasury sanctioned entities’ list, with past and present executive roles with companies in the shipping, heavy industry, food, transport, banking, and oil sectors. A veteran of the Islamic Republic’s early glories and, like Zanganeh, a past holder of ministerial positions beginning in the early 1980’s, Karbasian’s business interests flourished during his time in the private sector thanks to government contracts. He is now back at the helm of a key government holding company, whose portfolio he needs to privatize – presumably to friendly investors like himself. Above him sits Minister of Industries and Trade, Mohammad Reza Nematzadeh, another veteran of the Islamic Republic’s cabinet, who, in between government assignments, ran overseas companies for Iran’s energy industry.
Then there’s Rouhani’s Minister of Justice, Mostafa Pour Mohammadi, known for his blood-soaked past. In 1988, at the behest of the late Ayatollah Ruollah Khomeini and with the full knowledge and backing of former president Rafsanjani, Pour Mohammadi was responsible for the death of thousands of political prisoners, who were ultimately executed after infamous one-minute trials. For his solicitude in efficiently ridding Iran of so many political undesirables, Pour Mohammadi earned the post of deputy Minister of Intelligence once Rafsanjani became president in 1989. And his corruption extends beyond his reputation as a ruthless murderer.
Ahmadinejad appointed Pour Mohammadi Interior Minister because of his bloody record, but eventually tried to fire him because of his graft. The trigger was the allegation that he had stolen millions from the ministry’s account for his own personal use. There was only one problem: Pour Mohammadi headed the institution in charge of prosecuting him. With Ahmadinejad now gone, Pour Mohammadi is back in a position that allows him to return to his old habits of theft and graft.
Another example is Valiollah Seif, the new head of Iran’s Central Bank, who was the CEO of Bank Saderat from 1992 to 1995, and presided over one of the most notorious corruption cases in Iran involving the embezzlement of millions of dollars from Saderat Bank. The main culprits in the scheme were Fazel Khodadad and Morteza Rafiqdoust, the latter the brother of the president of the Mostazafan Foundation, Mohsen Rafiqdoust, whose vice president for international and economic affairs at one point was Seif himself. Khodadad was executed, but not Rafiqdoust.
Moshsen Rafiqdoust stayed at the Foundation. His brother Morteza stayed alive. Seif quit Saderat Bank, but his banking career never suffered – he was quickly appointed CEO of the Bank Sepah. He later became the CEO of Karafarin Bank, a U.S. and EU sanctioned bank controlled by Iran’s Supreme Leader, its main shareholder. In short, Mr. Seif has a record of corruption and of loyalty to the Islamic Republic’s financial interests, which appears to have been the reason Rouhani appointed him.
It is increasingly clear that Rouhani’s skilled and moderate technocrats are in fact the old elite of regime stalwarts, whose main claim to fame is making themselves rich in pursuit of public office. Competent though they may be at maximizing business profits for government companies, these new appointees are faithful servants of the Islamic Republic and loyal associates of those who, like Rafsanjani, helped make them rich. Rouhani has provided them with renewed access to power so they are free to plunder again.
Ahmadinejad’s rhetoric will not be missed. But given that his successor brings only a smile and experienced embezzlers to the job, it’s a pity his assault on the entrenched elites of the Islamic Republic was not more successful.
This post was co-authored by Emanuele Ottolenghi, a Senior Fellow at the Foundation for Defense of Democracies in Washington DC; Mr Saeed Ghasseminejad, a Ph.D. Candidate in Finance at City University of New York.