On a visit to his boyhood home in Mashhad in August , he told the story of how while he was president, a next-door neighbor erected a tall building overlooking his yard. Khamenei dropped the matter. In , the reformist Mohammad Khatami was elected president. The General Inspection Office is an anti-corruption body that monitors many Iranian institutions and reports to the head of the judiciary, who is appointed by Khamenei.
That year, a government legal commission declared that the GIO had no right to inspect Setad unless the supreme leader requested it to do so. Setad still faced competitors. Among its main rivals for seized assets, according to attorney Mohammad Nayyeri, was another organization: Sazemane Jamavari va Forooshe Amvale Tamliki, or Department for the Collection and Sale of Acquired Property, which is controlled by the Ministry of Economic Affairs and Finance.
In , the judiciary adopted a bylaw granting Setad exclusive authority over property taken in the name of the supreme leader. In , Khamenei ordered a review of Article 44 of the constitution, which mandates state ownership of critical industries. The Expediency Council, a state advisory body appointed by the supreme leader, issued a new interpretation of Article 44 allowing the privatization of major industries.
The targets included banks, insurers and oil-and-gas firms. The other big winner was the Revolutionary Guards, which controlled most of the winning consortium. Even before then, Setad had been drawing attention from the reformist wing of the establishment. Elections in brought a strongly conservative parliament deeply loyal to Khamenei.
In , hundreds of thousands of Iranians in the so-called Green Movement protested the re-election of President Ahmadinejad. Amid the unrest, one of the two men who established Setad spoke out against the organization. That man, Mehdi Karoubi, had emerged as a major reformist politician, serving as speaker of parliament and making unsuccessful bids for the presidency in and After the vote, he wrote a letter to a longtime rival of Khamenei in which he reported that Khomeini had intended Setad to last just two years.
And in the name of privatization they create another saga that continues and completes the recent saga of the presidential elections? Khamenei is sensitive to suggestions that he and his appointees receive special treatment under the law. Government by its very nature entails accumulation of power and wealth. That is to say, national wealth and social and political power are entrusted to a few government officials.
As a result, they must be supervised. Personally, the more supervision I receive, the happier I will be. He lacks the religious authority of Khomeini but has far greater resources at his disposal. Khomeini operated from a modest house in northern Tehran with a small staff. Khamenei lives in a large compound in Tehran. The grounds contain a variety of buildings, including a large hall where Khamenei gives speeches. It employs about people, many recruited from the Guards and security services.
Setad itself remains veiled from the public eye. The European Union sanctioned him in but lifted the sanctions last year, without any explanation. Setad reveals little about its income, expenditures or staffing. That same month, the chief justice, a Khamenei appointee, issued a fresh declaration of support for Setad.
Reuters reporters identified nearly properties that Setad put up for auction in May alone, many worth millions of dollars. His order spawned an entity intended to manage and sell properties abandoned in the chaotic years after the Islamic Revolution.
According to one of its co-founders, Setad was created to help the poor and war veterans and was meant to exist for just two years. Almost a quarter-century on, Setad has morphed into a business juggernaut with real estate, corporate stakes and other assets. The supreme leader, judges and parliament over the years have issued a series of bureaucratic edicts, constitutional interpretations and judicial decisions bolstering Setad. 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. 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. 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. Reuters found no evidence that Khamenei is tapping Setad to enrich himself. But Setad has empowered him. Through Setad, Khamenei has at his disposal financial resources whose value rivals the holdings of the shah, the Western-backed monarch who was overthrown in How Setad came into those assets also mirrors how the deposed monarchy obtained much of its fortune - by confiscating real estate.
A six-month Reuters investigation has found that Setad built its empire on the systematic seizure of thousands of properties belonging to ordinary Iranians: members of religious minorities like Vahdat-e-Hagh, who is Baha'i, as well as Shi'ite Muslims, business people and Iranians living abroad. Setad has amassed a giant portfolio of real estate by claiming in Iranian courts, sometimes falsely, that the properties are abandoned.
The organization now holds a court-ordered monopoly on taking property in the name of the supreme leader, and regularly sells the seized properties at auction or seeks to extract payments from the original owners. The supreme leader also oversaw the creation of a body of legal rulings and executive orders that enabled and safeguarded Setad's asset acquisitions.
Khamenei's grip on Iran's politics and its military forces has been apparent for years. The investigation into Setad shows that there is a third dimension to his power: economic might. The revenue stream generated by Setad helps explain why Khamenei has not only held on for 24 years but also in some ways has more control than even his revered predecessor.
Setad gives him the financial means to operate independently of parliament and the national budget, insulating him from Iran's messy factional infighting. Washington has acknowledged Setad's importance. In June, the Treasury Department imposed sanctions on Setad and some of its corporate holdings, calling the organization "a massive network of front companies hiding assets on behalf of … Iran's leadership. The Iranian president's office and the foreign ministry didn't respond to requests for comment.
Iran's embassy in the United Arab Emirates issued a statement calling Reuters' findings "scattered and disparate" and said that "none has any basis. Setad's director general of public relations, Hamid Vaezi, said by email in response to a detailed description of this series that the information presented is "far from realities and is not correct. In a subsequent message, he said Setad disputes the Treasury's allegations and is "in the process of retaining U.
Setad was to use the funds to assist war veterans, war widows "and the downtrodden. Setad has built schools, roads and health clinics, and provided electricity and water in rural and impoverished areas. It has assisted entrepreneurs in development projects. But philanthropy is just a small part of Setad's overall operations. Under Khamenei's control, Setad began acquiring property for itself, and kept much of the funds rather than simply redistributing them.
With those revenues, the organization also helps to fund the ultimate seat of power in Iran, the Beite Rahbar, or Leader's House, according to a former Setad employee and other people familiar with the matter.
The first supreme leader, Khomeini, had a small staff. To run the country today, Khamenei employs about people in his administrative offices, many recruited from the military and security services. A complete picture of Setad's spending and income isn't possible. Its books are off limits even to Iran's legislative branch.
In , the Iranian Parliament voted to prohibit itself from monitoring organizations that the supreme leader controls, except with his permission. But Reuters has put together the fullest account yet of the organization's holdings.
They include: Loading If this message does not disapper you could be using an outdated browser and cannot view this interactive. Please upgrade your browser or activate Google Chrome Frame to improve your experience. The value of Iran's currency has plunged since then, while property values have soared. The property portfolio has also changed, so its current value is hard to establish. Setad regularly conducts large auctions of its real estate - at least 59 to date, according to a review of Iranian newspaper advertisements and auction websites.
One recent auction took place in May , when nearly properties went on the block - including houses, stores, tracts of farmland and even a spa-and-pool complex in Tehran. Treasury Department sanctioned Setad and 37 companies it controls over the organization's alleged role in "assisting the Iranian Government's circumvention of U.
But the June action covered just part of Setad's corporate holdings. According to a Treasury spokesman, sanctions only apply to subsidiaries if the targeted entity "owns 50 percent or more of a company.
Reuters identified at least 24 public companies in which Setad - or a company it invested in - held less than 50 percent. Reuters also identified 14 companies Setad has invested in - directly or through other companies - that couldn't be valued because they are not publicly traded.
That amount is roughly 40 percent bigger than the country's total oil exports last year. It also surpasses independent historians' estimates of the late shah's wealth.
The suit was dismissed. Abbas Milani, director of the Iranian Studies program at Stanford University who wrote a biography of the shah published in , told Reuters he believes the estimate of the shah's fortune was "extremely exaggerated. But, he wrote in the biography: "Those most likely to know estimate the Shah's fortune to be close to a billion dollars. In an interview in April with the Iranian reformist newspaper Shargh, Ali Ashraf Afkhami, who was identified as the head of Tadbir Economic Development Group - the main unit that handles Setad's financial investments - called the organization a "custodian" of "property without owners," and suggested that none had been confiscated.
He also described the way Setad had accumulated its real estate as nothing unusual. If the lack of ownership is confirmed through the order of the court, then the property is given to Setad.
Setad controls a charity. Other charitable trusts, known as "bonyads," served as a vital safety net during and after the Iran-Iraq War, assisting disabled veterans, widows and orphans, and the poor.The supreme leader also oversaw the creation of a body of legal rulings and executive orders that enabled and safeguarded Setad's asset acquisitions. He singled out the United Arab Emirates for criticism, saying it had become a base for attacks on Iran, and repeated earlier Iranian threats to attack all U. In , she said, she was jailed for three months. Hundreds of Baha'is were expelled from universities or had their businesses attacked or their properties confiscated, members of the community say.
You can also send us an email at investigations thomsonreuters. He said Setad plans to challenge sanctions imposed on it earlier this year by the U. It also surpasses independent historians' estimates of the late shah's wealth.
In the early s, Setad confiscated about hectares 1, acres - the family's entire land holdings in the area. Then, in November , Setad entered the picture. Setad sent an appraiser to determine the property's current worth. When a reporter called it, the person who answered confirmed it was Setad's office. Iraq invaded Iran in
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. Setad, however, is a much broader operation than these foundations.
Setad was to use the funds to assist war veterans, war widows "and the downtrodden. The revenue stream generated by Setad helps explain why he has not only held on for 24 years but also in some ways has more control than even his revered predecessor. The other big winner was the Revolutionary Guards, which controlled most of the winning consortium. Khamenei dropped the matter.
They accumulated property. The value of Iran's currency has plunged since then, while property values have soared. Setad later sold three more apartments that belonged to her two other children and late husband. It was a chaotic time.