Officials did not name all 19, only the one man previously implicated as the headman behind the fraud-Amir-Mansur Aria, a billionaire tycoon who lads an empire of three dozen companies with interests ranging from mineral water to imports of Brazilian beef. (See last week’s Iran Times, page one.)
More importantly, Aria is being tabbed as a buddy of Esfandiar Rahim-Mashai, the president’s chief of staff and the man Ahmadi-nejad’s opponents most like to hate. While many Iranians are chiefly asking how anyone could get away with such a massive sum as $2.6 billion, others in politics seem more concerned to tie the fraud to Ahmadi-nejad’s coattails.
With politics involved, it is even harder to discern truth from fantasy.
Some newspapers have published what they say is the text of a letter signed by Mashai directing the ministers of transport and finance to sign over half of the shares in the Khuzestan Steel Co. to Aria.
A major concern is the whereabouts of the funds. Several news reports have asserted that the bulk of the money has been taken out of the country. But regime officials have been swift to deny that. Intelligence Minister Heydar Moslehi says only $25 million or 1 percent of the purloined money has been expatriated.
He didn’t say how he could know when the government doesn’t claim it has yet got its hands on any of the money.
What proportion of the money is in cash in unknown. As explained by officials, much of the funds embezzled from banks was used to buy businesses being privatized by the government. Then those firms were used as collateral to borrow more money from banks. Thus, some proportion of he money is tied up in fixed assets inside Iran.
Akbar Torkan, a former defense minister and loud critic of the president, has accused the Ahmadi-nejad Administration of being linked to the fraud. “Such a big fraud could never have been carried out by one person alone,” he said. “Definitely, high-ranking government officials helped pull it off.”
Ahmadi-nejad snapped back that his government was the cleanest in the nation’s history. He accused rivals of trying to tar his government with baseless accusations “of just about anything.”
The fraud is huge. In fact, Jamshid Assadi of the Burgundy School of Business in France says the Islamic Republic may just have set a record. “You cannot find any similar financial scandal, banking scandal-proportionately, if you consider GDP-in any country,” he told Radio Farda.
But Meir Javedendar, an Iranian-born analyst in Israel, said what surprises him is that the scandal ever became public. “I think it is possible that fraud bigger than this has been carried out before [in Iran] and we don’t know about it because the government wanted to keep it quiet,” he told Radio Farda. “But I think the reason now we are hearing about this kind of fraud is because of political score-settling between different factions.”
Assadi doubts the investigation will go very far. He expects Ahmadi-nejad to stop the hardliners by threatening to expose frauds by some of them. “This is a kind of competition,” he said. “They want to put pressure on the other faction to get some concessions. And, for sure, they cannot go that far because all of them have done things like this.”
Central Bank Governor Mahmud Bahmani said the fraud was first detected August 6 but was kept close hold for five weeks while investigations tried to unravel who all was involved. While officials say 19 have been arrested thus far, they also say they are looking for others.
Those arrested have had their assets frozen and are under a travel ban.