Image Credit: Niño Jose Heredia/©Gulf News

Shortly after Ayatollah Khomeini consolidated the power of his revolution in Iran in 1979, he issued an order to set up a financial organisation to manage the properties and the many companies owned by the Shah’s family and his wealthy supporters who fled with him into exile. The huge confiscated wealth under the newly-set financial organisation ‘Setad’, whose Persian name is ‘Setad Ejraiye Farmane Hazrat Emam’, meant that it was The Headquarters for Executing the Order of the Imam. Khomeini’s order was designed to channel the revenues generated from the confiscated wealth of the Shah regime to charity. It is well-known that the Shah financial empire at the time was worth billions of dollars and was considered by the new Islamic regime as “wealth stolen from the Iranian people” and Setad was created to return its revenues to the people of Iran.

An in-depth report published by Reuters in 2013 under the title ‘Setad, Khamenei’s Conglomerate, Thrived as Sanctions Squeezed Iran,’ revealed much of its evolution. According to this report, when western powers, along with the United Nations, subjected Iran to harsh economic sanctions, Iran’s Supreme Leader Ayatollah Ali Khamenei “ordered Setad’s executives who are totally under his control to study ways and means which would make developing economies grow and thrive yielding very high profits”. Using the billions of dollars generated by Setad, major stakes in banks and in Iran’s largest telecommunication company were acquired. Holdings of Setad now include brokerage firms, insurance companies, power plants, energy and construction firms, refineries, cement companies and soft drinks manufacturing.

While investigating the financial wealth, Reuters interviewed General Mohsen Sazegara, co-founder of the Islamic Revolutionary Guard Corps military force, now in exile in the US, who said that “Khamenei has a huge sum of money at his disposal that he can spend without any restrictions and when you have this much money, that’s power itself”. The report included that “Reuters found no evidence that Khamenei is tapping Setad to enrich himself”. The main aim of the Supreme Leader of Iran, according to Reuters, is for Setad to “give him the financial means to operate independently of parliament and the national budget, insulating him from Iran’s messy factional infighting”. A proof of this emerged when Khamenei sent, without delay, more than $500 million (Dh1.83 billion) in cash to Hezbollah in Lebanon to be distributed to whoever lost their homes in order to rent and furnish apartments while their homes were being constructed free of charge.

However, an important issue was missed in the Reuters report which is ‘Al Khums’ or the Fifth of excess income paid as a form of Zakat (alms-giving), which is usually reserved for Aal-Al-Bayt, Prophet Mohammad’s Household (PBUH). The black turban of Khamenei signifies that he belongs to Imam Ali Ibn Abi Talib and Fatima’s household and being Al Wali Al Faqeeh (guardian of Islamic jurists with full control of the society’s affairs) gives him the majority share of the Fifth, as was the case with Ayatollah Khomeini. The amount is worth hundreds of millions of dollars accrued annually and added to Setad’s revenues.

To add an additional credible source, according to the US Treasury, “Setad now generates billions of dollars in profits every year”. Reuters could only identify $95 billion (Dh349.41 billion) of Setad’s holdings, but that is only a partial worth, according to western experts. The US Treasury reported that, “Setad obtained in 2010 the control of the biggest prize: Rey Investment Co, whose value was worth more than $40 billion as of December 2010.” The total yearly estimates of Setad’s revenues are $20 billion. In addition to Setad, the Iranian Revolutionary Guard Corps is also in control of another financial empire worth billions of dollars which is also outside the Iranian parliament’s scrutiny.

Nevertheless, recent reports coming from Iran indicate a fundamental change now taking place that may affect both financial empires. Iran’s parliament has decided “to tax these two financial empires.” Ali Motahari a conservative and very outspoken parliamentarian called Setad an “economic cartel” and demanded the Assembly of Experts that chooses the supreme leader “to fully exercise its powers and investigate the organisation (i.e. Setad) overseen by Ayatollah Khamenei”, according to news agencies reporting from Tehran. This move by the parliament’s conservatives is seen as a prelude to intense competition among various parties to decide who is going to be the next supreme leader elected after Ayatollah Khamenei who is old and is battling health problems. To western intelligence agencies, the move is meant to restrict the influence of the supreme leader and his allies in the Revolutionary Guard Corps to designate his successor. It is a wait-and-watch game now.

Professor As’ad Abdul Rahman is the chairman of the Palestinian Encyclopaedia.