August 19, 2007

Iranian Guards amass secret fortunes

Sunday Telegraph

By Philip Sherwell Aug 19, 2007

As the zealous enforcers of Iran's Islamic revolution, they are at pains to be seen living humbly, maintaining homes in the crumbling Soviet-style slums of downtown Teheran and driving modest, imported Korean cars.

But for many commanders of the Revolutionary Guards, the force allegedly responsible for ordering attacks on British and US forces in Iraq, life is rather more luxurious than they want it to appear.

Behind the façade of a simple, pious existence, they live in mansions in the exclusive hills of northern Teheran with the latest model of BMW or Mercedes Benz in the garage, luxury hand-woven rugs on the floor, wardrobes full of designer clothes and a safe packed with diamond and gold jewellery.

Such men have grown rich as the Guards have extended their role from imposing religious rectitude at home and exporting Iran's revolution, to playing a huge role in the country's economy. From the oil and gas industries to chicken farms and apiaries, the Guards have used their power and muscle to take control of major areas of business in Iran.

Now, though, their burgeoning economic empire is the focus of White House moves to classify the regime's 125,000-strong praetorian Guard as a "terrorist organisation".

Under plans disclosed last week, the Bush administration is expected to announce the classification in coming months in response to the Guards' alleged role in terror attacks in Iraq and Afghanistan, as well as in Iran's disputed nuclear programme.

The listing would allow the US to freeze or block bank accounts and business involved with the Guards, although the immediate impact would be limited as the US already has an almost complete trade embargo on Iran. But the designation could be more than symbolic if US diplomats can encourage European states and companies to follow suit by persuading them that trade with Iran is effectively trade with the Guards.

General Yahya Rahim Safavi, the leader of the Guards, responded defiantly yesterday. "America will receive a heavier punch from the Guards in the future," he said. "We will never remain silent in the face of US pressure and we will use our leverage against them."

Under the presidency of Mahmoud Ahmadinejad, himself a former Guards commander, the organisation has aggressively expanded its business empire as part of his strategy of placing hardliners in key positions of power.

The National Council of Resistance of Iran, the exile opposition movement which revealed the existence of Iran's secret nuclear programme in 2002, has tracked the explosion of the Guards' economic operations. "The country's economy and politics is now under the command of veteran Guards commanders and senior officials of the security and intelligence apparatus," it concludes in a dossier on the Guards' activities.

Maryam Rajavi, the leader of the council, which Iran itself regards as a terrorist organisation, said: "The designation of the Guards will have been long overdue. The UK and EU should adopt similar measures without delay."

Teheran would doubtless counter that the council's armed wing is itself listed as a terror organisation by the US - the council's supporters claim that designation was made as a bargaining chip when the Clinton administration attempted rapprochement with Iran.

One former Guards commander to have benefited is Sadeq Mahsouli, 47, an Ahmadinejad confidant. He spent much of his career in the military and security apparatus before using his guards contacts and credentials to build a business in construction and oil trading.

Indeed, when he was nominated to be oil minister in 2005, his wealth even raised opposition in the parliament, where one legislator called him a "billionaire general". Mr Mahsouli acknowledged he was a rich man but was quoted by the state-run newspaper Hammiyan as saying: "What Imam [Ayatollah Khomeini] has prohibited is the attitude and demeanour of living in palaces, not living in palaces itself."

They may not technically be palaces, but his six mansions and estates are estimated to be worth £10 million while his total worth could be as much as £86 million, according to Iranian media reports.

Several Iranian businessmen, speaking anonymously, have detailed how the Guards have used force and intimidation to grab business. "If you enter the economy using a gun and handcuffs, it is much easier to deal with competitors and to win the most lucrative contracts," said Mohsen Sazegara, who co-founded the organisation in 1979 but then turned against the regime and was jailed before going into exile in America in 2003.

He claimed the Guards had turned into a "corrupting" and "mafia-like" organisation, which was heavily involved in smuggling goods for the thriving black market. These include alcohol, which is supposedly forbidden but is widely consumed at private parties frequented by the Iranian elite. Much of the smuggling is done through Guards-controlled airports.

Even as Teheran suffers an economic slump, which is undermining Mr Ahmadinejad's popularity, jewellery boutiques and luxury furniture are doing a booming trade thanks partly to patronage from the Guards, who have also been investing heavily in property.

The real "fat cats", however, are funnelling their money abroad into the Gulf states, most notably Dubai. Such investment could also provide a foreign bolthole if the regime falters in the future.