Iran Focus: London, May 11 - The Islamic Revolutionary Guards Corps constitutes the backbone of clerical rule in Iran and is controlled directly by supreme leader Ali Khamenei. Most trade and oil contracts signed by Iran necessarily involve the IRGC. The first part of our overview of the IRGC focuses on its economic enterprises.

 

Iran Focus

London, May 11 - The Islamic Revolutionary Guards Corps (IRGC), which under Iran’s constitution is tasked with “guarding the Revolution and its achievements,” constitutes the backbone of clerical rule in Iran and is controlled directly by supreme leader Ali Khamenei. The IRGC’s increasing sway in the regime signals the concentration of power in the hands of Khamenei, the purging of all other factions, and closing of the regime’s ranks.

The IRGC plays the key role in security, intelligence and military matters. Under Khamenei, it has grabbed a large portion of Iran’s economy, especially in the oil and gas industries, and its former commanders occupy numerous government posts. As a result, most trade and oil contracts signed by Iran necessarily involve the IRGC.

The first part of our overview of the IRGC focuses on its economic enterprises.

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Mahmoud Ahmadinejad’s rise to power as Iran’s president in 2005 marked the beginning of a trend that has seen top government posts filled by current and former IRGC commanders. Ahmadinejad himself is a former commander.

Ten out of the 21 ministers in his current cabinet, formed in September 2009, are IRGC commanders, as are one-third of 30 provincial governors.

80 seats in the 290-seat Majlis (Parliament) are held by former IRGC commanders. The Majlis Speaker, Ali Larijani, was an IRGC Brigadier General.

The head of the state Radio and TV, Ezzatollah Zarghami, was an IRGC Brig. General. The Secretary of the Supreme National Security Council and Iran’s chief nuclear negotiator, Saeed Jalili, was an IRGC commander. The mayor of Tehran, Mohammad-Baqer Qalibaf, was a Commander of the IRGC Air Force.

Khamenei’s decision to transfer control of a large portion of Iran’s commerce, industry, oil and gas and services sectors to the IRGC follows three objectives:

1) To create front companies in a bid to conceal the nuclear and missiles program and facilitation of purchases and activities in this regard;

2) To fund the nuclear project and fundamentalist activities in the region;

3) To exclude other factions and to accumulate power in the hands of Khamenei himself.

In recent years, Ahmadinejad’s government has given control over state enterprises to the IRGC at a comparatively negligible cost through the granting of special privileges.

The IRGC’s economic ventures are carried out by a large conglomerate known as “Khatam ol-Anbia Base,” which has 812 registered companies in Iran and abroad.

The IRGC does not answer to either the government or Majlis with regards to its economic activities and does not publish any records or reports about its revenues. In 1993, Khamenei issued a decree making all of the IRGC’s economic activities exempt from taxation.

In addition to running the nuclear facilities and other missile and military industries, the various sectors of the Iranian economy that the IRGC is rapidly proceeding to dominate are as follows:

 

Telecommunications

In 2009, the IRGC purchased a 51 percent stake in the Telecommunications Company, which handles all telephone land lines, cell phones and data communications, and employs over 47,000 people.

 

Electronics Industry

The “Iran Electronics Industry” is one of the IRGC’s largest companies and has a chain of affiliates:

  • Electronics Industry Complex
  • Shiraz Electronics Industry
  • Iran Communications Industry
  • Iran Information Systems
  • Iran Electronic Parts Industry
  • Isfahan Optics Industry
  • Iran Electronics Research Institution
  • “Moj-e Nasr Gostar” Telecommunications and Electronics Company

 

Mining and Production

  • National Copper Company
  • “Shahab Sang” (meteorite) Mining Industries
  • Isfahan Liquid Zinc Company
  • “Angouran” Mine, the biggest lead and zinc mine in the Middle East and one of the biggest in the world
  • Zinc Mine Development
  • Sina Pharmaceuticals
  • Jaber Ibn Hayyan Pharmaceuticals
  • Bahman Cigarette Group

 

Automobile Manufacturing

  • Bahman Automobile Manufacturing Group (manufactures the Mazda brand)
  • A portion of Saipa Automobile Manufacturing (selling 850,000 vehicles per year, with a 50 percent share in Iran’s car market)
  • Tabriz Tractor Manufacturing
  • Kurdistan Tractor Manufacturing

 

Transportation

  • Pars Air Services Company
  • Tidewater Company (Managing the major portion of port, maritime and shipping services in the country);
  • Payam International Airport (Near Karaj, west of Tehran and exclusively used by the IRGC).

 

Building Infrastructure Projects

The IRGC also handles a significant portion of infrastructure projects, including the building of dams, roads, electrical power transmission lines, and tunnels. In addition to generating profits, a number of these projects also have a military dimension. This is specifically true for the building of tunnels, which is carried out with the cooperation of European companies, in order to conceal nuclear and missile projects.

Major IRGC companies active in this field include:

  • Qorb Construction Company (employs over 25,000 engineers and contractors, and has completed more than 1,000 projects)
  • Sepasad (overseeing projects like the seventh line of Tehran’s Metro)
  • “Hara,” which handles excavation operations and building of tunnels all over Iran. In recent years, it has constructed 190 km of tunnels, much of which are used for nuclear and missile projects.

 

Construction Companies

  • Jahad Home Construction businesses in 20 provinces
  • Sepahan Home Construction Complex
  • Razmandeh Home Construction Complex

 

Financial Institutions and Banks

  • Iranians’ Mehr Economic Institution, an investment consortium with 700 branches and eight million depositors; one of the biggest banking networks in Iran
  • SATA (Armed Forces Welfare Organization)
  • Armed Forces Retirement Services Organization
  • Ansar Financial and Credit Institution, which includes several affiliates, including the al-Ghadir Institution
  • Pasargad Bank
  • Behshahr Industrial Development Investments
  • Saadi Investments Company
  • National Investments of Iran Company
  • Industrial Development Investment Company

 

Petrochemicals

  • Zagros Petrochemicals
  • 25% stake in Kermanshah Petrochemicals
  • 40% stake in Pars Petrochemical Company
  • A portion of Arak Petrochemicals
  • A portion of Khark Petrochemicals
  • 19% of shares of Maroun Petrochemicals

 

Commerce

  • IRGC-affiliated companies control more than 57% of the country’s imports
  • The IRGC controls 30% of non-oil exports

 

Smuggling Activities and the Black Market

Among the most important revenue generating activities for the IRGC are illegal imports and exports and involvement in the black market. Revenues from IRGC black market activities exceeded 12 billion dollars last year.

  • Sixty-eight percent of the country’s exports take place through illicit docks and ports controlled by the IRGC;
  • A major portion of clothing products from China are imported through the Rajai Port in southern Iran;
  • From Rajai Port, the IRGC also smuggles cheap government gasoline abroad and reaps profits to the tune of 200 to 300 percent;
  • The IRGC imports billions of dollars of luxury items, household products, pharmaceutical drugs, spare parts, mobile phones and SIM cards, various electronics equipment, and food products outside the confines of customs regulations and without paying any tariffs;
  • The IRGC has at least 60 exclusive docks in the country’s ports, which lie completely outside the control of the country’s official institutions;
  • At least 25 gates at the Tehran International Airport operate outside the control of the Customs Office and have been placed under the exclusive control of the IRGC.

 

Food and Agriculture Industry

  • Maedeh Food Industry
  • Chahar Mahal Food Products
  • Shadab Khorasan Agriculture Industry
  • Fadak Agricultural Complex
  • Yek-va-Yek (One and One) Food Industries

 

Oil and Gas Sector

In recent years, the IRGC has controlled most contracts in Iran’s oil and gas sector. In 2006, in the span of a month, the IRGC signed three large oil and gas contracts with the government worth 7 billion dollars. Some of the IRGC’s activities in this field include:

 

1. Rights to Exploration, Extraction, Technical and Construction Projects in the Oil and Gas Sector

The IRGC carries out these projects with the help and close cooperation of European countries. Some of these projects include:

  • Phases 15 and 16 of the South Pars oil field (the most important gas production project in Iran). The South Pars field is also one of the largest gas fields in the world;
  • Drilling an exploration well near the joint South Pars gas field;
  • Construction of a 600-mile-long gas pipeline passing through Iran, Pakistan and India. In order to fund the project, the government has given a nonbinding loan worth 2 billion dollars to the IRGC funded from the foreign currency reserves;
  • A project to build 10 oil rigs;
  • Constructing more than 10 gas pipelines in Iran;
  • A project to export gas to Armenia;
  • Handling repairs of three oil docks in the Persian Gulf;
  • Construction of an ethylene petrochemicals unit;
  • Building pipe rack steel structures for Phases 9 and 10 of South Pars;
  • Planning for repairs to oil platforms in Siri Island;
  • Construction of new crude oil pumping stations in Tabriz (large northwestern city);

 

2. Acquisition of Numerous Companies in the Oil, Gas and Petrochemicals Sectors

  • 60% stake in Petro Pars Company
  • The North Drilling Company
  • Esfahan Refinery and Oil Bi-products Company
  • A portion of Maroun Petrochemicals Company
  • Oriental Kish Oil Company
  • Masdara Oil Company

 

3. Creating a Monopoly over Oil Reservoirs

Today, the IRGC is the most important builder of oil reservoirs, creating a monopoly over such projects, which include:

  • A project for four reservoirs with the capacity to hold one million barrels in Khark island;
  • Construction of reservoirs in 12 cities and ports;
  • Building 5 reservoirs with a capacity to hold 60,000 cubic meter of liquefied gas in various South Pars phases;
  • Building propane and butane reservoirs in Khark Island.

 

4. Smuggling Iraqi Oil

In April 2006, the opposition National Council of Resistance went public with information that up until that year Iran had smuggled more than 20 billion dollars worth of oil from Iraq.

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