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Despite sanctions, Iran's Ayatollah amasses wealth

A money dealer counts Iranian rial banknotes bearing a portrait of the late founder of the Islamic Republic of Iran, Ayatollah Ruhollah Khomeini, at an exchange office in Baghdad, Iraq.

Iran is no stranger to economic sanctions levied against them by the UN and countries including the United States. In fact the Obama Administration has used sanctions in the diplomatic battle over Iran’s nuclear weapons program since 2012.

But the leader of Iran, Ayatollah Khamenei has remained in control of the country and a new investigative report from Reuters may explain why.

An organization called Setad, run by Ayatollah Khamenei, has for several years profited from a law that allows abandoned properties to revert to the state.

Except, “many of the properties weren’t abandoned at all but they belonged to ordinary Iranians who have left the country for various reasons” says Steve Stecklow, an investigative reporter for Reuters who is based in London.

Stecklow says that despite the sanctions, property in Iran is still extremely valuable –it’s not uncommon for an apartment in Tehran to sell for several million. He and his team have documented numerous accounts of Setad claiming eminent domain over an apartment building and charging the former owners rent or selling the building out from under them.

It’s impossible to know the true value of Setad’s worth because the numbers are kept secret but it’s estimated to be in the billions.

According to the story:

Setad has become one of the most powerful organizations in Iran, though many Iranians, and the wider world, know very little about it. In the past six years, it has morphed into a business juggernaut that now holds stakes in nearly every sector of Iranian industry, including finance, oil, telecommunications, the production of birth-control pills and even ostrich farming.

The organization's total worth is difficult to pinpoint because of the secrecy of its accounts. But Setad's holdings of real estate, corporate stakes and other assets total about $95 billion, Reuters has calculated. That estimate is based on an analysis of statements by Setad officials, data from the Tehran Stock Exchange and company websites, and information from the U.S. Treasury Department.

Just one person controls that economic empire – Khamenei. As Iran's top cleric, he has the final say on all governmental matters. His purview includes his nation's controversial nuclear program, which was the subject of intense negotiations between Iranian and international diplomats in Geneva that ended Sunday without an agreement. It is Khamenei who will set Iran's course in the nuclear talks and other recent efforts by the new president, Hassan Rouhani, to improve relations with Washington.

The Ayatollah doesn’t use the money for his own enrichment – he famously lives in threadbare lodgings with few material possessions. But he uses the wealth to maintain an iron grip of power over the country.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.
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