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Foulad Scandal, Latest Instance of Systematic Corruption in Iran

As Iran’s judiciary mercilessly issues and implements harsh punishment against minor offenders, it cold-bloodedly ignores officials’ multi-billion-dollar embezzlements.

As the majority of Iran’s population is failing to afford its essential expenses, the stellar Foulad Mobarakeh scandal in the country has shocked society. The company is the country’s largest steel company, with its headquarters being based in Isfahan’s central province.

At the peak of the economic crisis, state-backed employers embezzled more than 900 trillion rials. The revelation has profoundly stunned ordinary Iranians, particularly millions of low-income families who have had to rummage waste bins to make ends meet and survive.

Unsurprisingly, the Iranian Parliament [Majlis] has downplayed the case, calling it an ‘economic violation!’. At the same time as this scandal came to light, the Judiciary had issued arbitrary merciless rulings of finger amputations for minor offenses, while intentionally ignoring such incredible cases related to high-ranking officials, including judicial authorities. As they stated, “Hawks will not pick out hawks’ eyes.”

The Escalation of Corruption in Foulad Mobarakeh Co.

According to the Parliament [Majlis], there were around 90 “violations, deviations, damage inflictions, and rent distributions” worth 920 trillion rials at the Foulad Mobarakeh company in just three years.

At the same time this corruption was uncovered, the Statistic Center declared on August 23 that the inflation rate in Iran had reached 41.5 percent compared to the last financial year.

According to the official foreign exchange rate, 920 trillion rials are equivalent to $21.9 billion, which could cover Iranian families’ essential needs for around a year, even if the inflation rate remained on the rise.

To have a better view, this amount would offset all of Tehran’s expenses and enable the municipality to manage this metropolitan for years.

The dimension of this historic corruption is expanding and surprising, as officials do their best to deny or conceal the full scale of the misdeeds.

One of these officials is Hossein Mirzaei, the Majlis Investigation Committee chair in the Mobarakeh Steel Co’s scandal. He stated, “A so-called report about the investigation into Isfahan’s Foulad Mobarakeh has spread in social media that is not officially citable.”

Embezzlement Cases Continue Systematically

Government officials have described the Foulad Mobarakeh as private incorporation, diverting public opinion from linking this massive embezzlement to the government.

However, evidence has shown that the Iranian Mines & Mining Industries Development & Renovation Organization (IMIDRO) choose Foulad’s board of directors. The IMIDRO is one of the Ministry of Industry, Mine, and Trade’s subsidiaries, proving that the Foulad Mobarakeh is a state-run company, not a private one and that high-ranking officials were involved in the scandal.

In its 2021 report, Transparency International ranked the Iranian government the 150th among 180 states based on financial and administrative corruption perceptions. This ranking leaves no doubt that the mullahs ruling Iran have shaped one of the most corrupt states in the world.

Incredibly, the Foulad Mobarakeh scandal was not the only embezzlement case in the past four decades. This is the tip of the iceberg, and these cases have been revealed in recent years as the financial crisis in Iran has been exaggerated.

In September 2011, Judicial officials and media exposed 30-trillion-rial embezzlement in the country’s banking system. Further reports revealed that the then-Bank Melli governor Mahmoud Reza Khavari had colluded with businessman Mahafarid Amir Khosravi and lined his pocket with 28 trillion rials [$2.333 billion].

Later political rivalries shed light on the footprint of several influential judicial authorities, including current judiciary chief Gholam-Hossein Mohseni-Eje’i, in the case. Eventually, Khavari fled to Canada, Amir Khosravi was hanged, Mohseni-Eje’i’s role was hidden, and many people were abandoned in misery.

‘Teachers’ Charity Fund’ is the nickname of another massive embezzlement case under the theocratic government. According to media reports, teachers and many people lost around 80 trillion rials at the time.

In ‘Petrochemical Gate’, influential officials lined their pockets with €6.6 billion of citizens’ assets. However, Mohseni-Eje’i’s judiciary has yet to follow these cases; instead, it hastily and mercilessly issues and implements death and finger amputation sentences against minor offenders.

The authorities have neglected to investigate many massive corrupt cases in the past 43 years, showing corruption has been institutionalized in the core of the Islamic Republic system. However, all of these facts are insignificant in comparison to embezzlements, fraudulent, and plundering cases carried out by the most powerful official, the regime’s Supreme Leader Ali Khamenei.

In its November 2013 report, Reuters revealed that Khamenei is in control of the Executive Imam Khomeini’s Order (EIKO) Setad, whose assets are worth more than $95 billion.

The report stated, “Reuters was able to identify about $95 billion in property and corporate assets controlled by Setad. That amount is roughly 40 percent bigger than the country’s total oil exports last year. It also surpasses independent historians’ estimates of the late shah’s wealth.”

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