Corruption in Iran


Corruption is a serious problem in Iran, being widespread, mostly in the government.

Corruption levels

Transparency International's 2017 Corruption Perception Index ranks the country 130 place out of 180 countries. As of 2019 the ranking is 146 out of 180 countries. Reformists and conservatives alike – at times even the Supreme Leader – routinely criticize corruption in the government. Although a Reuters special investigation has revealed Supreme Leader Khamenei controls a massive financial empire built on property seizures worth $95 billion dollars.
Then-President Mahmoud Ahmadinejad has vouched to fight "economic/oil Mafia" at all echelons of government. President Ahmadinejad has also proposed that lawmakers consider a bill, based on which the wealth and property of all officials who have held high governmental posts since 1979 could be investigated. Out of the $700 billion earned during the presidency of Ahmadinejad for the sale of oil, $150 billion dollars have disappeared. Many Iranians believe the country's economic problems are a byproduct of mismanagement and corruption.
On February 3, 2013, President Mahmoud Ahmadinejad played a video tape in the Iranian parliament that tied the heads of two branches of the government, the legislative and judiciary, to a documented financial corruption case related to the Larijani brothers.
One of the objectives of the Iranian revolution was to have no social classes in Iran. Yet, Iran's Department of Statistics reports that 10 million Iranians live under the absolute poverty line and 30 million live under the relative poverty line. Iranian President Rouhani has linked social ills, including poverty and homelessness, to corruption. Hossein Raghfar, an economist at Tehran’s Alzahra University, has suggested that as little as 15% of Iran’s economic problems can be attributed to sanctions.

Pahlavi dynasty

The Imperial state of Iran, the government of Iran during the Pahlavi dynasty, lasted from 1925 to 1979. Corruption was a serious problem in the Pahlavi dynasty.
Stephanie Cronin of Oriental Institute, Oxford, describes corruption under rule of Reza Shah as "large-scale". As oil prices rose in 1973, scale of corruption also rose, particularly among royal family, their partners and friends. According to Manouchehr Ganji who created a study group for Farah Pahlavi, Mohammad Reza Shah was not sensitive to the issue, but addressed every now and then petty matters of low-ranking officials. As Ganji writes, the group submitted at least 30 solid reports within 13 years on corruption of high-ranking officials and the royal circle, but Shah called the reports "false rumors and fabrications". Parviz Sabeti, a high-ranking official of SAVAK believed that the one important reason for success of regime's opposition is corruption.
According to report of a journal associated with The Pentagon, "By 1977 the sheer scale of corruption had reached a boiling point.... Even conservative estimates indicate that such corruption involved at least a billion dollars between 1973 and 1976."
In Michel Foucault's view, corruption was a "glue" that kept the Pahlavi dynasty, despotism and modernization together.
After the revolution, the Central Bank of Iran published a list of 177 prominent individuals who had recently transferred over $2 billion out of the country, among them:
Built up by forced sales and confiscations of estates, Reza Shah was "the richest man in Iran" and "left to his heir a bank account of some 3 million pounds and estates totalling over 3 million acres. A 1932 report of British Embassy in Tehran indicates that Reza Shah developed an "unholy interest in land" and jailed families until they agreed to sell their properties.
In the 1950s, Mohammad Reza Shah founded Pahlavi Foundation which "penetrated almost every corner of the nation's economy". Bostock and Jones unambiguously declared that Pahlavi Foundation a "nominally charitable foundation fostered official corruption". According to Houchang Chehabi and Juan Linz, Alavi foundation's $1.05 billion assets, $81 million capital and its declared devined $4.2 million was the ":wikt:tip of the iceberg|tip of the iceberg of official and dynastical corruption, outside and inside Iran". The foundation, which was one of his main wealth sources alongside estates left from Reza Shah and Iran's oil revenue, was a tax haven for his holdings.
Many members of the Pahlavi clan were among the chief perpetrators of corruption in Iran. Royal court was described as "center of licentiousness and depravity, of corruption and influence peddling" in a mid-1970s CIA report. Prime Minister Amir Abbas Hoveyda who served from 1965 to 1977 had no choice but to facilitate or condone "the ubiquitous corruption of the Pahlavi Clan" and ignore "the corruption that saturated the regime".
In 1960, there were rumours that Princess Ashraf, Shah's twin sister was arrested in Geneva carrying a suitcase containing $2 million worth of heroin. She was regarded as Iran's main drug dealer until 1979. A 1976 CIA report declared that she has a "near legendary reputation for financial corruption" and his son Shahram controls some-twenty companies that serve as "cover for Ashraf's quasi-legal business ventures". Prince Hamid Reza, the Shah's half-brother, was ostracized from the royal family because of his widespread scandals of promiscuity, addiction and involvement in drug trade.
According to William Shawcross, hundreds of call girls from Madame Claude's establishment in Paris passed through Tehran for Mohammad Reza Shah and members of his court.

Impact on the 1979 revolution

Some scholars have raised the point that widespread corruption among officials and royal court led to the public dissatisfaction and helped the Iranian Revolution.
In Handbook of Crisis and Emergency Management, the Pahlavi dynasty is described as an example of governments losing legitimation because of corruption and facing a public service crisis as a result.
According to Fakhreddin Azimi, Professor of History at the University of Connecticut, "the unbridled misconduct of the Pahlavi clan undermined the Shah's proclaimed commitment to combating corruption and seriously damaged his credibility and Stature".
Right before the revolution, in a 1978 National TV appeal to the nation, Shah said :

I pledge that past mistakes, lawlessness, injustice, and corruption will not only no longer be repeated, but will in every respect be rectified... I guarantee that in future the government in Iran will be based on the Constitution, social justice, and the will of the people, and will be free from despotism, injustice, and corruption.

On the other hand, Khomeini repeatedly argued that the only way to eliminate corruption was through a revolution.