Insider news & Analysis in Iran

By INU Staff
INU - On Friday, Reuters issued a new report on the pending execution of Babak Zanjani, a billionaire Iranian businessman who was charged with “spreading corruption” as a result of allegations that he embezzled approximately 2.7 billion dollars in oil sales conducted on behalf of the government of former Iranian President Mahmoud Ahmadinejad.

The current president, Hassan Rouhani, has vowed to stamp out corruption that was reportedly endemic under his predecessor. But Rouhani and some of his supporters have objected to the planned execution, and Reuters suggests that if it goes forward it will help to conceal the identity of government officials who helped Zanjani to carry out his scheme. But it is unlikely that Rouhani’s objections will prevail, as his office lacks the authority to revoke a death sentence. Such a move could only be made by Supreme Leader Ali Khamenei, who is also the ultimate authority in all matters of foreign and domestic policy.

The Zanjani case has thus provided a new angle on the prospects for reform under the Rouhani government, which has supposedly just gotten more backing from the Iranian parliament in the wake of elections that have so far increased the share of so-called reformist faction to about a quarter of the legislative body.

The harshest critics of the Iranian regime tend to believe that neither Rouhani nor the majority of reformist politicians are genuinely interested in bringing about transformative change in the government. This perspective has been supported over the past two and a half years by Rouhani’s apparent failure to take action on any of his major campaign promises, with the sole example of securing a deal with the West over the Iranian nuclear program.

But others have argued that Rouhani’s ability to take such action has simply been constrained in the midst of internal power struggles. Still, even among those who concede this point, there is much skepticism about the prospects for reform under the current regime. On Thursday, an editorial in the Huffington Post argued that the February elections were not the victory for moderation that some international news outlets have described them as. The article emphasized that even the “moderate” candidate list included acknowledged hardliners, meaning that some of the other victorious candidates would likely support their agenda.

These alliances were seemingly inevitable in light of a fact that those elections were preceded by the highest proportion of disqualified candidates in any election in the 36-year history of the Islamic Republic. By some accounts, the vetting process led by the unelected Guardian Council caused upwards of 90 percent of reformists to be barred from standing for election. And this fact has contributed to the notion that the structure of the regime makes large-scale reform fundamentally impossible.

The Zanjani case is arguably another example of the same phenomenon, in the sense that his execution may allow the regime’s existing authorities to protect the positions of other regime officials, presumably hardliners who will contribute to the same policies that helped to make Iran a pariah state prior to Rouhani’s election in 2013.

And the job security enjoyed by those hardliners allows them to more effectively push back against the moderating trends that so many expect – justifiably or not – from the Rouhani administration. This is an effective we have seen before and are presently seeing in the form of the dramatic increase in death sentences and other forms of repression in Iran.

The established institutions also tend to push back against any reconciliation with the West, such as that which is supposedly represented by Rouhani’s nuclear agreement. The world has lately witnessed this push-back in the form of five post-nuclear agreement ballistic missile tests and the regime’s ongoing efforts to exploit a January incident in which 10 American sailors were captured by the Iranian Revolutionary Guard Corps after straying into Iranian territorial waters.

These confrontational tendencies are making it difficult for foreign investors to reenter the Islamic Republic. On Friday, CNBC reported that despite the resumption of some Iranian shipping operations in the West, there has been no influx of investment from Western countries, in large part because of fears of political interference and a lack of protection for investors who are not connected to the Iranian government.

These concerns may be amplified by Zanjani’s execution if it leads to the perception that corrupt officials have retained their positions and continue to exert influence over the Iranian political system. 

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