Mahmoud Ahmadinejad Under Fire for Alleged Connections With Iran Banking Scandal

An outspoken critic of the Iranian government has accused Ahmadinejad of being linked to a banking scandal.

Vahid Salemi

The Iranian president is taking heat.

Speaking in an interview with Voice of America, Mehdi Khazali, the son of a high-ranking conservative cleric in Iran, recently accused Iranian President Mahmoud Ahmadinejad of being directly involved in a $2.6 billion banking scam in Iran. Over the past few weeks, the scandal that has taken place inside the Iranian banking system (Mahmoud Ahmadinejad appointed the latest governor of Iran’s central bank) has turned into a tug of war among Iranian political factions. Some even believe that the scandal could push the controversial Iranian president out of office.

Khazali, who is known as an outspoken government critic, appeared on a popular program called Parazit and stated that Ahmadinejad would not be able to finish his second term in office, and would be impeached and ousted by the Iranian Parliament before then.

“Ahmadinejad’s second-term presidency has been fraudulent from its very inception in 2009, when masses of millions of people poured into streets believing that his election was rigged, and now the very same people who defended him are accusing him of the biggest bank fraud in Iranian history,” Hamid Dabashi, a professor of Iranian Studies at Columbia University, told The Daily Beast. “This is not just a crisis in Ahmadinejad’s presidency that may indeed end with his impeachment. This is the widening crisis of the Islamic Republic as a theocracy suffocating the democratic aspiration of a nation.”

Many believe that if it were not for the support of Iran’s Supreme Leader, Ayatollah Ali Khamenei, Ahmadinejad would have been impeached much earlier because of his alleged connections to this scandal and other issues. Khazali said that Iranian officials are concerned that confronting Ahmadinejad could lead to an intelligence war in which Ahmadinejad and his team might leak classified information that could subsequently lead to chaos within the political establishment.

“Ahmadinejad will not tolerate an impeachment and will move to disrupt the environment,” Khazali said. “He will leak certain information, publication of which could create tension in the society. [Iranian] authorities should not be concerned, however; as the sooner this cancerous tumor is removed, the better.”

When Khazali was asked by the show’s popular host, Kambiz Hosseini, who he thinks is behind the banking scandal, he said that Ahmadinejad was directly involved in the scam and managed it through his chief of staff, Esfandiar Rahim Mashaei. (In an interview with Iran’s state-run television, Ahmadinejad said that he has chosen to stay silent regarding accusations directed toward his inner circle, but was not responding directly to Khazali’s allegations.)

This is the first time the son of a high-ranking cleric close to Iran’s Supreme Leader has given an interview with a satellite television network outside Iran. The Iranian regime considers the Voice of America a medium that aims to overthrow the Tehran regime. Iranian citizens are barred from interviewing with satellite television stations, in particular with Voice of America and the BBC Persian Service, which are both very popular throughout the country. Over the past two years, there have been several cases of arrests and months-long imprisonment of individuals who have interviewed with such networks.

According to Fars News Agency, the embezzlement scandal allegedly involved seven government-owned and private banks, which had used fraudulent Saderat Bank documents to secure multibillion-dollar credit and purchase state-owned companies.

Those involved in the fraud allegedly forged letters of credit from Saderat Bank, Iran’s second-largest bank, in the southern province of Khuzistan and Melli Bank of Kish Island. The letters of credit were later allegedly sold to a number of banks at discounted rates.

On Oct. 3, the Judiciary’s spokesman, Gholam Hossein Mohseni Ejeie, said that a number of top-ranking officials have “supported’ or “facilitated” the loans. Although he said it’s not clear to the Judiciary whether it was done to promote entrepreneurship or for the officials’ or others’ political gain.

A number of conservative websites published a letter signed by Chief of Staff Mashaei, in which he recommended that top banking officials support Amir-Mansour Aria, a company reportedly at the heart of the fraud.

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Mehdi Khazali’s father, Ayatollah Abolghassem Khazali, is a cleric in the inner circle of Iran’s Supreme Leader, as well as a staunch opponent of Iran’s reformists. Mehdi Khazali routinely attacks the cleric's domestic and international policies in his blogs. This has led to his repeated arrests and imprisonment over the past several months.

When asked why he would consider interviewing with a medium the Iranian government considers to be an enemy, Khazali said that the reason for his decision was the Iranian state media’s monopoly. “Ninety-nine percent of Mr. Ahmadinejad’s interviews are with foreign media. Why is interviewing with you allowed for him and prohibited for us?” answered Khazali.

Khazali also told the Voice of America program that he is a regime supporter. “I believe in the Islamic Republic. [But if] they won’t tolerate me, how could they tolerate other people’s thoughts? ... I believe in a religious state. I believe in Islam, but the Islam in which I believe respects secular, liberal, and any other way of thinking, including Christianity or Judaism, and respects their followers as much as it would Muslims.”

Some Iranian economic analysts have said they believe it would be impossible for any individuals or institutions to have access to almost $3 billion worth of credit in order to create a bank and buy privatized companies without the permission of top officials in the executive branch.

On Oct. 3, Ayatollah Khamenei stressed the necessity for serious punishment of those guilty in the bank scandal and blamed the country’s officials for their lack of diligence in preventing the case.

Some observers believe that it might be difficult for Ahmadinejad to survive the scandal because of his alleged connection to the issue and that this could be the end of the Supreme Leader backing him.

“Khamenei came within an inch of having Ahmadinejad impeached” for many reasons, Abbas Milani, director of Iranian Studies at Stanford University, told The Daily Beast.

“There is too much money and power at stake, and the two men are nothing if not megalomaniacs. One claims to have a model for management of the world, and the other calls himself the Leader of All Faithful in the world.”