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The $3.7 Billion Corruption Case Is Tip of Iceberg, Says Academic

Iran International Newsroom
Dec 17, 2023, 15:46 GMT+0Updated: 11:21 GMT+0
A view from Debsh tea factory
A view from Debsh tea factory

Some media outlets and commentators in Iran have argued that a recent $3.7 billion corruption case is only one case among tens of others, offering very high estimates.

In a report on Khabar Online website, Iranian academic Mohammad Hossein Gharib suggested that the largest corruption cases in Iran have occurred after 2005 when populist President Mahmoud Ahmadinejad first came to power. Ahmadinejad brought with him individuals, who quickly proved adept at using their government positions to get rich.

These cases include a $6 billion corruption case resulting from Iranian tycoon Babak Zanjani's efforts to help the government bypass international sanctions and sell Iran's oil in in the international markets. A $7.2 billion case at the Iranian Insurance Company, a $5.3 billion embezzlement case at the Iranian Teachers' Pension Fund, and a one-billion-dollar embezzlement case about financial irregularities in importing poultry feed. All of these occurred when the rate of exchange for US dollar was around 30,000 rials per dollar.

The most recent case, amounting to $3.7 billion, was even larger considering the exchange rate at the time was over 500,000 rials per dollar. The report attributed this corruption to a centralized government economy, attempts to circumvent sanctions, the government's granting of concessions to its loyalists, and the traditional practice of nepotism.

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Iranian academic Mohammad Hossein Gharib

Former lawmaker Heshmatollah Falahatpisheh told local media on Saturday that at least $57 billion has been embezzled by government officials and operatives in the past two decades.

A report on Faraz daily website, investigated the role of former Agriculture Minister Javad Sadatinejad in the Debsh Tea corruption case, while describing the case as the tip of the iceberg of financial corruption in the government of President Ebrahim Raisi. However, the website added that Raisi has tried to blame the previous government under President Hassan Rouhani and the Iranian Judiciary for the case.

According to the report, Raisi claimed that his government had detected and stopped the embezzlement, leading to the firing of around 60 managers whose cases were sent to the Judiciary. However, Judiciary Chief Gholamhossein Mohseni-Ejei later contradicted this claim, stating that the government had not implicated anyone in the case.

The report also revealed that the Judiciary was the entity that initially exposed the corruption case, and Ejei disclosed that Sadatinejad had been forced to resign when signs of financial corruption became public. Ejei further revealed that despite ongoing corruption since 2019, additional funds were channelled to the Debsh Tea company by the government as recently as 2022, with Vice President Mokhber implicated in media reports as the facilitator. The report suggested that Mokhber may have tipped off Sadatinejad to resign.

Meanwhile, centrist Aftab News quoted Farshid Mohebbi, the managing director of the Union of Tea Planters in northern Iran as saying that the Iranian state TV pulled him off the air when he started to say that even the tea served at Iranian government offices is imported because the government does not wish to support domestic producers.

He revealed that Debsh Tea Company, mixed outdated Iranian tea with imported foreign tea and exported the blend to countries such as Tajikistan, Afghanistan and Russia although its officials knew that their product was carcinogenic.

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