June 25, 2009
A specter is haunting Iran, the specter of a bloody civil war. Underneath the heroic movement for democracy by millions of Iranians, we are witnessing the final acts of a protracted war for the control of the Iranian economy, and the possibility of violent confrontations within the conservative block that ruled the country in the past thirty years.
June 12th was a coup d’état by Iran’s Islamic Revolutionary Guard Corps (IRGC) against Hashemi Rafsanjani and his family oligarchy. The Iranian economy has been the private turf of a handful of economic and political mafias since the revolution. Hashemi Rafsanjani and his extended family were among the first groups benefiting from Iran’s crony capitalism.
Using his political influence as President of Iran, and Speaker of the Parliament, Rafsanjani created a vast family dynasty. Initiating the liberalization of the economy after the war with Iraq, Rafsanjani ushered an ambitious privatization program, allowing members of his family, and other insiders, to take possession of state property at far bellow market prices. The family made a fortune when Rafsanjani opened the oil industry to private Iranian contractors. By the end of the 1990s, the economic power of the family was unparalleled in Iran’s private sector. In recent years, however, the family dynasty has been facing fierce competition, particularly from IRGC.
Since the 1990s, IRGC slowly transformed itself from a sheer military force, to a complex military, political, and economic oligarchy in control of main arteries of the Iranian economy. It is now a large holding company with multi-billion dollar, legal and illegal, contracts in oil, water, electricity, transport, foreign trade, and other economic sectors.
In 1999, Mehdi Karrubi, then the Speaker of the Parliament, made public IRGC’s smuggling activities through sixty illegal docks. In May 2004, hours after the grand opening of Imam Khomeini Airport in Tehran, armed members of IRGC stormed the compound, closing it down for alleged security reasons. It was later revealed that, using the airport, IRGC had been smuggling goods to the country.
The 2005 presidential victory of Mahmood Ahmadinejad, a former Revolutionary Guard, provided IRGC with a new advantage in its economic war with competitors. Rafsanjani ran unsuccessfully against Ahmadinejad, losing the race due to widespread vote rigging. The election was a turning point in the relationship between ITGC and Rafsanjani. The economic war intensified.
Ahmadinejad vowed to fight and eliminate the “oil mafia.” Appointing veteran guardsmen to cabinet positions, he gave IRGC the control of nine ministries, including Defense, Energy, and the lucrative Ministry of Petroleum, a stronghold of Rafsanjani family, the “oil mafia.”Access to the oil industry proved instrumental for IRGC. The economic war entered a new stage. IRGC aggressively penetrated areas once dominated by the Rafsanjani family.
Since the election of Ahmadinejad in 2005, the National Oil Company of Iran awarded IRGC a no-bid contract to develop the 15th and 16th phases of South Pars Gas, and another contract to build a 600-mile “peace pipeline” from Iran to Pakistan and India. IRGC also received a large contract to build a 900-kilometer pipeline from the Persian Gulf in the south to Sistan and Baluchestan in Iran’s southeast.
Aided by the increase in oil prices, Ahmadinajad pursued populist economic policies, gaining the support of a noticeable section of the electorate. High oil revenue, for a short period, reduced tension between different oligarchies. The decline in oil prices, however, ended the period of peaceful coexistence. A showdown was inevitable. It came during the recent Presidential Elections.
Mahmood Ahamadinejad’s attack on Rafsanjani and his family during his televised debate with Mir Hossein Mousavi was a calculated move, a political maneuver paving the ground for an all out war in later weeks and months. Rafsanjani requested permission to defend himself on Iran’s state-owned television network. His request was rejected. He formally complained to Ayatollah Khamenei. He was ignored, and silenced in the days that followed. Declaring victory in the elections, Ahmadinejad promised to prosecute and bring to justice those he assaulted during his campaign.
The days following June 12th were full of unanticipated developments. Millions of the Iranians poured into the streets, protesting on daily basis. Supporters of Ahmadinejad also waged two separate rallies in Qom, and in front of the Ministry of Justice in Tehran, with slogans against Rafsanjani. Addressing his supporters during Friday prayers at Tehran University on June 19th, Ayatollah Khamenei suggested dealing with Rafsanjani’s family’s economic misconducts through legal channels, while giving full support to Mahmood Ahmadinejad, and ordering a crackdown of all protests. The IRGC coup d’état seemed to have achieved its goal.
Ayatollah Khamenei’s orders to shoot, however, failed to stop people’s fury. The day after, millions poured to the streets of Tehran in an open defiance of the Supreme Leader. Many died, more injured. Violence, however, failed to stop the popular cry for democracy. Unanticipated by IRGC and the Supreme Leader, the continuing street protests opened a new front, influencing the future of the economic war, its winners, and its loses. The powerful democracy movement became the wild card in the battle for the control of Iran, and a possible savior of Rafsanjani in his final battle for survival.
Failing to negotiate a deal, Rafsanjani traveled to Qom, lobbying high-ranking clerics, and using his influence as the head of the Assembly of Experts to create The Council of Leaders to replace Ayatollah Khamenei. Empowered by the constitution to appoint and dismiss the Supreme Leader, the Assembly of Experts is Rafsanjani’s last legal resort in his long battle with IRG and Ayatollah Khamenei.
The removal of the Supreme Leader, if approved by the Assembly of Experts, may, however, prove costly and dangerous, risking a confrontation between various military factions within the ruling elite. Anticipating such an outcome, the Supreme Leader has ordered a reshuffling of top IRGC commanders, removing those suspected of loyalty to Rafsanjani.
Not a monolithic organization, in its leadership, and among the ordinary guards, IRGC may also face possible internal rifts, fracturing in the days and weeks to come. More than one-third of IRGC’s rank and file voted for Mohammad Khatami and his reformist platform in 1997. Dissertation and refusal to shoot at demonstrators remains a possibility. The continuation of the protests may also result in rifts within the Security forces, and the army.
The fight for political reform is intertwined with an entrenched factional struggle within the regime. Unlike 1979 when Iranians fought against a single, and undivided, political and military regime, Iran’s current political elite is divided. Different armed groups back various conservative factions. The rift within the Islamic Republic may be a blessing for the democracy movement, a breathing space for regrouping, and moving forward. It may also be a recipe for an uncontrolled factional violence. The democracy movement may become collateral damage in a larger war. The future remains unclear.