Iran Revolutionary Guards Amass Power While Backing Ahmadinejad

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June 29 (Bloomberg) — Iran’s Revolutionary Guards, whose forces helped President Mahmoud Ahmadinejad suppress street protests over his disputed re-election, may be among the biggest winners as he moves to consolidate power.

A guards-controlled paramilitary force called the Basij, as well as police, violently quelled protests by supporters of presidential candidate Mir Hossein Mousavi, who said Ahmadinejad’s re-election was rigged. Seventeen demonstrators and eight Basij died in the protests, according to state-run media.

Guards officials, having backed Ahmadinejad, may now cement their economic power, said Alireza Nader, an analyst at the Rand Corp. in Arlington, Virginia. They already control more than 100 companies in the construction, real estate and energy industries, he said.

“They are the praetorian guards created to protect the revolution,” said Nader, who helped write a study of the guards for the U.S. defense secretary’s office that was published in January. “Now they want to protect their own economic interest.”

The 125,000-strong Guards Corps was created by Iran’s clerical rulers after the 1979 Islamic Revolution. Its influence has grown under Ahmadinejad, himself a guards veteran, said Michael Eisenstadt, a senior analyst at the Washington Institute for Near East Policy.

Eight of the 21 posts in the president’s cabinet are held by former members, according to Ali Alfoneh, an analyst at Washington’s American Enterprise Institute. Among them are Interior Minister Sadeq Mahsouli, whose agency ran the election, and Defense Minister Mostafa Mohammad-Najjar.

Not Monolithic

Another five places are occupied by past Basij commanders. The state broadcasting arm is headed by Ezzatollah Zarghami, a former guard. At least one-third of Iran’s parliament members are former guards, according to Nader.

Under Ahmadinejad’s predecessor, Mohammad Khatami, 65, only three ministers had belonged to the guards or Basij.

The organization is not monolithic. Though senior commanders picked by Supreme Leader Ayatollah Ali Khamenei remain loyal, there are “real fissures” between them and former members who favor better ties with the West, said Karim Sadjadpour, an Iran expert at the Carnegie Endowment for International Peace in Washington.

Mohsen Rezai, who commanded the force from 1981 to 1997, was one of three candidates running against Ahmadinejad, 52. Rezai, 54, came in third with 1.73 percent and complained of irregularities in the count. He withdrew his objections on June 24, said IRNA, Iran’s official news agency.

‘Existential Vulnerability’

Ali Larijani, another former guards commander and now the parliament’s speaker, questioned the neutrality of the Guardian Council, Iran’s election-oversight body. Tehran Mayor Mohammed Bagher Ghalibaf, also an ex-commander, said on June 26 that the authorities should address the complaints of those protesting the vote and that this “cannot be resolved through force.”

“The Revolutionary Guards are the regime’s existential vulnerability; they are key to ensuring its stability,” said Kaveh-Cyrus Sanandaji, an Iran expert at the U.K.’s University of Oxford. “Divisions within it could prevent it from carrying out its mandate and could turn it against its master.”

In October 2007, the U.S. Treasury Department sanctioned the guards for pursuing nuclear capabilities and seeking to develop ballistic missiles. The U.S. and its European allies suspect Iran of developing a nuclear weapon, a charge Ahmadinejad denies.

Construction and Engineering

U.S. companies were forbidden to have any financial dealings with nine petroleum, construction and engineering companies that Treasury said were controlled by the guards. They include the Khatam al-Anbia construction company, Sahel Engineering Consulting Co. and Sepasad Engineering Co. Treasury also barred dealings with Bank Melli Iran, Iran’s largest bank, Bank Mellat and Bank Saderat, as well as eight individuals, including General Hossein Salimi, head of the guards’ air force.

The force “is so deeply entrenched in Iran’s economy and commercial enterprises, it is increasingly likely that if you are doing business with Iran, you are doing business with” the guards, then-Treasury Secretary Henry Paulson said in an Oct. 25, 2007, statement.

Following the end of the Iran-Iraq War in 1988, the parliament enacted legislation permitting the corps to use “its engineering capability in rebuilding the country’s economy.” According to the Web site of Khatam al-Anbia, the company has been awarded more than 780 construction contracts.

Water and Bridges

Under Ahmadinejad, the government has favored the guards by offering its companies no-bid contracts, especially in oil and natural-gas extraction, pipeline construction and large-scale infrastructure development, according to Rand’s report.

Khatam al-Anbia was awarded a $1.3 billion contract in May 2006 to construct a 560-mile (900-kilometer) gas pipeline from Asalouyeh, in southern Iran, to Iranshahr near the Pakistani border. The Fars news agency reported the contract. In June 2006, the construction group won a $2.3 billion contract to develop part of the South Pars offshore natural gas field. It also got jobs potentially worth $2 billion to expand Tehran’s subway system, the IRNA news agency said.

Revolutionary Guards commander in chief Major General Mohammad Ali Jafari last December appointed Rostam Qasemi as the new head of Khatam, according to Fars news agency. Qasemi had previously headed the construction unit of the guards’ naval arm. Jafari chairs the company’s management meetings.

“The IRGC’s growing economic might has increased its sense of political privilege and entitlement,” the Rand report said.

— With assistance from Ali Sheikholeslami in London and Ladane Nasseri in Tehran. Editors: Anne Swardson, Anne Pollak.

To contact the reporters on this story: Kambiz Foroohar in New York at [email protected], Henry Meyer in Dubai at [email protected]

To contact the editor responsible for this story: Peter Hirschberg at [email protected];

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