Insider news & Analysis in Iran

By INU Staff

INU - General Abdollah Abdollahi, who commands Khatam al-Anbia Construction Headquarters, a conglomerate of the Islamic Revolution Guards Corps (IRGC), has dismissed the latest criticism of the organization’s increasing role in the Iranian economy and claims that IRGC companies are undermining the private sector.

Speaking at a press conference on Thursday, Abdollahi stated that his organization is currently working with 5,000 companies to jointly implement construction and other projects. Additionally, Khatam al-Anbia’s projects across the country employ nearly a quarter million people. He discussed the organization’s relief assistance to earthquake victims in Kermanshah Province, and said further that the government owes Khatam al-Anbia approximately $10 million.

Following reports that the Supreme Leader Ali Khamenei ordered the IRGC to divest financial and commercial assets not relevant to its mission, Abdollahi told reporters that the IRGC does not engage in economic activities. He said of the IRGC’s economic projects, “We successfully ended the war [with Iraq] with the support of the people and we emerged victorious against all super powers. Today, work needs to be done for construction and development projects.” He also revealed that Khatam al-Anbia will increase its role in projects relating to the energy industry, water management, and other key sectors.

On January 20th Iran’s defense minister, Amir Hatami, said that the Supreme Leader ordered the IRGC to limit its growing business empire. Brigadier General Esmail Kowsari subsequently downplayed them, saying, “Sepah [IRGC] has never embarked on economic activity and most of its [economic] activities have been through construction work in accordance with the constitution. According to the law, the armed forces in peacetime need to help the government. Based on this, since the end of the [1980s Iran-Iraq] war, Sepah has executed construction work that other companies were unable to deliver,” said Kowsari, the deputy commander of IRGC’s Sarallah Unit, who is responsible for security in Tehran. “The construction activity of Sepah [IRGC] is based on Ayatollah Khamenei’s permission,” he added.

Brigadier General Mohammad-Saleh Jokar said a few days later, that he has no information about a recent decree issued by Khamenei. “I was unable to find such a declaration and have not seen it,” the deputy head of IRGC in parliamentary and legal affairs commented. “I do not know where this report – which you say the defense minister has announced – has come from,” he added. “The issue is that this report says that Sepah [IRGC] and Artesh [regular army] have economic activities, which is questionable!” Jokar argued that “all of Sepah’s activities are construction work that is carried out through the Khatam al-Anbia Construction Base,” and that the IRGC’s projects are not profit-generating initiatives.
The IRGC’s economic role has long been the subject of controversy. In recent years, President Hassan Rouhani has repeatedly argued against the IRGC’s domination of Iran’s economy. Still, the IRGC has continued to expand its economic activities.

The Grand Ayatollah Ruhollah Khomeini founded the IRGC after the 1979 revolution as a safeguard for the regime against internal and external threats. The IRGC has evolved into Iran’s most powerful military force, and is also said to control much of the country’s key economic sectors, such as energy, construction, telecommunication, media, mining, electronics, automobile, banking, and more. In fact, the IRGC’s Chief Commander Major General Mohammad Ali Jafari announced last year that his forces are now also involved in Iran’s agricultural industry.

IRGC leaders claim that their economic activities are meant to help the country, the elite force spends most of its revenues on military expenditures.

The privatization program of former President Mahmoud Ahmadinejad benefitted Khatam al-Anbia and other IRGC-affiliated companies. The company secured deals worth at least $7 billion in the oil, gas, transportation and other sectors in 2006.

The US Department of Treasury designated Khatam al-Anbia and several other IRGC companies under EO 13382 in October 2007, and in February 2010, the Treasury further designated the company’s commander, General Rostam Ghassemi, and its subsidiary companies. According to the Treasury, the IRGC uses profits from Khatam al-Anbia for its illicit activities, including nuclear proliferation and support for terrorism in the region.

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