Elite Revolutionary Guard's expanding role in Iran may limit U.S. options

By Thomas Erdbrink
Washington Post Foreign Service
Sunday, January 10, 2010; A10

TEHRAN -- A major expansion in the role played by Iran's Revolutionary Guard Corps is giving the elite force new economic and political clout, but it could also complicate efforts by the United States and its allies to put pressure on the Iranian regime, according to U.S. officials and outside analysts.

Commanders of the Revolutionary Guard say its growth represents a logical expansion for an organization that is not a military force but a popular movement that protects the ideals of the 1979 Islamic revolution and Iran's supreme leader, Ayatollah Ali Khamenei. The Guard's expanded economic role is mirrored by a greater role in politics and security since the disputed presidential election in June, which the government says was won by incumbent Mahmoud Ahmadinejad in a landslide but which the opposition says was stolen.

U.S. officials consider the Guard a ripe target for sanctions over Iran's controversial nuclear program because of the group's central role in repressing post-election opposition protests. The officials are also concerned that broader-based sanctions risk alienating the Iranian public at a time when the government here faces protests from an energized opposition. But they also know that because of the Guard's growing economic influence, sanctions on it could pinch the broader Iranian public as well.

Supporters and opponents alike say the Guard has dramatically expanded its reach into Iran's economy, with vast investments in thousands of companies across a range of sectors. Working through its private-sector arm, the group operates Tehran's international airport, builds the nation's highways and constructs communications systems. It also manages Iran's weapons manufacturing business, including its controversial missile program.

The Guard has received at least $6 billion worth of government contracts in two years, according to state-run media. But the amount could be much higher in reality because many deals are not made public. Known large projects include the construction of a subway system in the eastern city of Mashhad and infrastructure ventures in the oil and gas industry. In September, Etemad-e Mobin, an investment company that Iranian media have widely linked to the Guard, bought a 51 percent share of the national telecommunications business minutes after it was privatized. Its main competitor was disqualified at the last moment because of "security problems."

Current U.N. and U.S. sanctions already target the Guard, as well as some related companies, for involvement in Iran's nuclear and missile programs. The U.S. Treasury Department has assembled lists of dozens of companies that it suspects are Guard front operations or affiliates. U.S. officials say they hope to broaden the existing sanctions to include this substantial list of additional Guard companies, either with U.N. Security Council authority or through a coalition that would include major industrialized powers and key Persian Gulf countries.

Guardians of the system

Constitutionally established as a defender of the Islamic revolution, the Guard was created to work separately from the regular army, which was distrusted by the country's new leaders when they took over in 1979. The religious leadership has used the Guard to take on competing political and ethnic groups. It was also at the forefront of fighting during the Iran-Iraq war in the 1980s.

Saying the Islamic revolution had entered a "new phase," the Guard led a deadly crackdown on street protests after the election last year and accused opposition politicians, dissidents and journalists of an elaborate plot to bring down Iran's leaders. The Guard has since grown into one of the most visible power players in the country and is the strongest opponent of the grass-roots movement that has staged protests in several cities.

"They [the Guard] have become the main, most faithful caste, to protect the system of Islamic government," said Mashallah Shamsolvaezin, a former journalist, who now works as an analyst at the Center for Scientific Research and Middle East Strategic Studies in Tehran. "In exchange, wealth, power and respect are being transferred to them at an increasing rate." He was among many arrested last month after a day of major demonstrations. The reason for the arrest was not clear.

Ties between the Guard and the Ahmadinejad government are close.

Key cabinet ministries, such as oil, energy, interior and defense, are led by former Guard commanders. A former energy minister, Parviz Fattah, was appointed deputy commander of the Guard's massive Khatam ol-Anbia construction division, which is at the heart of the organization's business activities. It has 29 branches, called 'Ghorbs,' which build airplanes, dams, and oil and gas installations. Most of the Guard's contracts are with the government.

Opposition leaders say the Guard's business interests are corrupting the organization. "If the Guard has to calculate on its abacus every day to see how much the prices of their shares have gone up or down, it cannot defend the country and national interests," opposition leader Mir Hossein Mousavi said last week in a statement posted on a Web site linked to him.

"After the war, the Guard did not become a useless military machine, which would be of no use during peacetime," said the Guard's top commander, Maj. Gen. Mohammad Ali Jafari, in a September interview with the Jam-e Jam newspaper. "Today we are active in the fields that the revolution requires."

The Guard's construction garrison acts as a commercial company, but it is unclear what happens with its revenue. Commanders say the Guard income is transferred to the national treasury, but there are no public records that provide any amounts. Most of the group's contracts are carried out by its business divisions, which directly compete with private-sector firms.

The rise of the Guard

Iranian officials say they are undaunted by the threats of new sanctions. They point to four previous rounds of U.N. sanctions that have not proved very effective.

"U.S. sanctions will have no negative effect since the Guard organization is self-sufficient. Everything they need is here in Iran," Kazem Jalali, a member of the parliament's national security and foreign policy committee, said in an interview. "The Americans know that the Guard Corps is a defender of the values of the Islamic revolution. So the Americans aim to target its core."

The Guard's expansion into Iran's economy started in the early 1990s, when then-President Ali Akbar Hashemi Rafsanjani tried to jump-start private enterprise in the state-run economy by allowing state organizations to undertake commercial projects. The political rise of the Guard runs parallel with the ascendancy of the reformists in 1997. The movement called for more personal freedoms, fewer Islamic restrictions and a greater role for democracy. Political hard-liners turned to the Guard for more muscle in combating the reformists; in exchange, the Guard was given more influence in the economy and in politics.

In a November interview with the Ettemaad-e Melli newspaper, which is critical of the government, Guard commander Gen. Massoud Jazayeri said that the force could now "even compete with huge multinational and international companies" and added: "We don't want to receive an income but want to satisfy the people."

The result has been that the Guard controls a large part of Iran's economy, analysts say. "You can't see a single project above $10 million that is not executed by the Guard or one of their organizations," said Shamsolvaezin, the analyst. He warned that economic power could produce more demands for political power. "Some of our leaders now fear that [the Guard] will take everything into their hands."

Staff writer Glenn Kessler in Washington and special correspondent Kay Armin Serjoie in Tehran contributed to this report.

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