Two months before his death in 1989,Iranian leader Ayatollah Ruhollah Khomeini tried to solve a problem unleashed by the revolution he led a decade earlier.
Land and other assets were being seized en masse from purported enemies of the young theocratic state. Khomeini issued a two-paragraph order asking two trusted aides to ensure that much of the proceeds from the sale of the properties would go to charity.
The result was a new organization - known as Setad, or "The Headquarters" - that reported to Iran's supreme leader. As one of the aides later recounted, Setad was intended to oversee the confiscations and then wind down after two years.
Twenty-four years later, Setad is an economic giant. Khomeini's successor as supreme leader, Ayatollah Ali Khamenei, has used it to amass assets worth tens of billions of dollars, rivaling the holdings of the late shah. Setad's portfolio includes banks, farms, cement companies, a licensed contraceptives maker, apartments seized from Iranians living abroad and much more.
Reuters found no evidence that Khamenei puts these assets to personal use. Instead, Setad's holdings underpin his power over Iran.
To make Setad's asset acquisitions possible, governments under Khamenei's watch systematically legitimized the practice of confiscation and gave the organization control over much of the seized wealth, a Reuters investigation has found. The supreme leader, judges and parliament over the years have issued a series of bureaucratic edicts, constitutional interpretations and judicial decisions bolstering Setad. The most recent of these declarations came in June, just after the election of Iran's new president, Hassan Rouhani.
But the legal machinations served several purposes. The decrees enabled Setad to beat back rival institutions seeking to take property in the name of the supreme leader. A ruling on the constitutionality of privatizations smoothed Setad's expansion beyond real estate and into owning and investing in companies.
The attention to legal procedure also allows Setad and Khamenei to justify a practice that Khomeini had cited as a reason for overthrowing the shah in 1979: property confiscations. Mohammad Reza Pahlavi, the former king, inherited his fortune from his father, who enriched himself in the first half of the 20th century by expropriating vast amounts of land from his subjects. In October 2010, Khamenei invoked that memory in a speech.
"Our people were living under the pressure of corrupt, tyrannical and greedy governments for many years," Khamenei told officials in the clerical city of Qom, according to an English-language transcript on his official website. The shah's father "grabbed the ownership of any developed piece of land in all parts of the country…. They accumulated wealth. They accumulated property. They accumulated jewelry for themselves."
Source: Reuters
