Bank fraud case reveals power struggle in Iran

Ahmadinejad has come under fire from opponents close to Iran’s top leader Ayatollah Khamenei over alleged
involvement in bank fraud, a situation which reveals a bitter power struggle with the spiritual authority.

Iran’s President Mahmoud Ahmadinejad speaks during a Friday Prayers ceremony in Tehran in this file photo. Ahmadinejad has vehemently rejected accusations that anyone in his government is linked to the fraud and says the government had no role in this affair. AP photo.

Iran’s President Mahmoud Ahmadinejad speaks during a Friday Prayers ceremony in Tehran in this file photo. Ahmadinejad has vehemently rejected accusations that anyone in his government is linked to the fraud and says the government had no role in this affair. AP photo.

Iranian President Mahmoud Ahmadinejad has accused his critics of stabbing him in the back by using a recent banking scandal to tarnish those close to him.

“Unfortunately some are just waiting to stab the government in the back although such efforts were and will be doomed to fail,” he said Oct. 5 in an interview with state television.

Ahmadinejad was referring to a recent embezzlement scandal involving more than $2.5 billion from the country’s biggest bank, Bank Melli, which hard-line opposition politicians attempted to connect to some of the president’s advisers.

Twenty-two suspects, including businessmen and bank officials, have been arrested. The head of Bank Melli resigned and reportedly fled the country over the affair, and some politicians have called for the central bank governor and economy minister to be fired in what has become a partisan blame game ahead of a parliamentary election in March.

The hard-line daily Kayhan said the mastermind behind the fraud had links with Ahmadinejad’s chief of staff, Esfandiar Rahim Mashaei. The publisher of another conservative daily, Siyasat-e Rouz, said that some of the stolen money was given to a “deviant current” of advisers for use in the parliamentary election campaign, Reuters reported.

‘Traitorous hands will be cut’

Iran’s supreme leader criticized the government on Oct. 3 for failing to prevent the embezzlement, weighing into the political blame game over the biggest bank fraud the country has ever seen. Ayatollah Ali Khamenei is Iran’s spiritual leader and highest authority. His veto is final in Iranian political affairs.

Khamenei said there should be “no mercy” for the defendants who allegedly used forged documents to obtain credit at one of Iran’s top financial institutions, Bank Saderat, to purchase assets, including major state-owned companies. “People should know all those [responsible] will be pursued. … God willing, the traitorous hands will be cut,” said Khamenei, who has the final say in all state matters in Iran, in remarks broadcast on state TV.

Islamist hard-line legislators loyal to Khamenei have signed a letter accusing the government of fraud, the semi-official Mehr news agency reported Oct. 3. They sent the parliamentary commission a letter requesting specifically that Ahmadinejad be included in the investigation, according to CNN.

That adds to pressure on Ahmadinejad, who was already under fire from hard-line conservatives who have accused him of being in the thrall of the “deviant current” of advisers trying to undermine the authority of Khamenei and the clergy’s role in the Islamic republic.

Ahmadinejad has vehemently rejected accusations that anyone in his government is linked to the fraud. “The government had no role in this affair and the banking system itself discovered the fraud,” Ahmadinejad said.

Some supporters of Khamenei believe that Mashaei is trying to increase his political influence by undermining clerical power and appealing to young people by advocating greater cultural openness.

Iranian newspapers have blamed Iranian businessman Amir-Mansour Aria for masterminding the scam, which reportedly began in 2007, with activity dramatically increasing in the months before the scandal broke in September.

Aria heads a business empire that includes more than 35 companies involved in activities ranging from mineral water production and the importation of meat from Brazil to a football club, the Associated Press reported.

Conservatives accuse Mashaei and others of trying to challenge the authority of Iran’s theocracy. Dozens of Ahmadinejad allies have been arrested in the past month in unrelated crackdowns that have effectively killed the political future for Mashaei, who had been seen as a possible successor to Ahmadinejad in 2013.

Thursday, October 6, 2011
TEHRAN