“The Supreme Leader has only one concern: annual profits. The rest, he doesn’t care about.”
Created by a brief edict of Khomeini in 1989, two months before his death, to manage “ownerless” properties and redistribute them to the poor, Setad — “Headquarters for Executing the Order of the Imam” — has, under Ali Khamenei, become a $95-billion empire.
After six months of investigation, Reuters reconstructed the implacable mechanics of this nebula, whose inventory is staggering: a real estate portfolio estimated at $52 billion as early as 2008; stakes in Iran’s largest banks; 38% of the consortium controlling Telecommunication Co of Iran (the country’s largest operator, acquired in 2009 for $7.8 billion alongside the Revolutionary Guards); the Rey Investment conglomerate valued at $40 billion by the U.S. Treasury; cement factories; refineries; power plants; insurance companies; an ostrich farm; and even oral contraceptive factories. A paradox for a regime whose Supreme Leader declared in 2012: “Families and young people must increase the birth rate.”
While the rial is melting away and inflation is approaching 100%, Setad rakes in hundreds of millions of dollars in revenue per year. It is the Leader who appoints the administrators, delegates management, and demands optimal profitability. “All he cares about is the number,” a former executive told Reuters.
I knew the other face of this Revolution. In 1978, as a teenager, I spent an afternoon in the company of Ruhollah Khomeini in Neauphle-le-Château. Then a night at his side aboard the Air France plane that was triumphantly bringing him back to Tehran on February 1, 1979. In his modest pavilion in the Yvelines, we shared a meal by hand, sitting on the floor atop piles of carpets in his small living room with faded wallpaper. Khomeini spoke perfect literary Arabic, touched my elbow to emphasize his words, looked at me straight with his sparkling eyes. “You strangely remind me of my son Mostafa, who died a few months ago.” Upon landing at Mehrabad, awaited by millions of people, he took my hand, kissed me on the forehead and slipped me an envelope: “Open it only after you have left Iranian airspace.”
How did we get here?
How did this Ejraiye Farmane Hazrate Emam, originally intended to redistribute its revenues to war widows and the destitute, metamorphose into an economic conglomerate — a state within the state — granting immunity and absolute power to Khamenei, who thus possesses a colossal slush fund, independent of the national budget and factional struggles? Now regarded as a tyrant, Setad is “his insurance policy allowing him to buy loyalties, finance repression and prepare his exile if necessary,” according to anonymous sources cited by Reuters. Over the decades, the Iranian theocracy has generated an opaque oligarchy serving a single man surrounded by a small clique, described by the U.S. Treasury as a “massive network of shell companies concealing assets for the benefit of Iranian leaders.”
I measure the abyss between my visionary Khomeini, whom I encountered, and the crushing machine his legacy has become. The man I knew had memorized the Quran by age 16, spent hours marveling with the poet Nader Naderpour. He did not consider music, chess, or wearing a tie to be blasphemous — unlike almost the entirety of the Shiite clergy. He marveled at Oum Kalthoum and envied my family ties with her: “Her hymns make me shiver, somewhat like Muslim religious chants,” he confided. In 1989, a few months before his death, he wrote to Gorbachev urging him to read — not the Quran — but the Sufi mystics Ibn al-Arabi and the philosophers Avicenna and Farabi — to the great displeasure of his subordinates, the mullahs. In 1979, Khomeini assured me that his destiny was to rehabilitate the lost honor of the Shiites. He became inflamed at the prospect of “overthrowing tyrants and thieves,” believing that Iran was only the first step of his “World Revolution for the oppressed.”
Ironically, Khamenei’s Setad today reproduces the Shah’s methods, but on a larger scale and with chilling bureaucratic efficiency. It is this founding and destructive duality that makes Iran convulse today: on the one hand, mysticism, poetry, the aspiration for justice that had fueled the revolutionary fervor of 1979; on the other, the methodical confiscation of power, economic predation, bloody repression. In this respect, Setad embodies this betrayal: an organization created in the name of the poor that has become an instrument for enriching an autocracy. Families dispossessed of their property on the basis of false declarations of abandonment. Owners forced to buy back their own homes. An old woman lifted up on her carpet, thrown out of her house — still according to the detailed Reuters investigation.
Governments under Khamenei’s tutelage have built a formidable legal arsenal. Article 45 of the Constitution already allowed the State to dispose of “abandoned” lands. Article 49, even more devastating, authorizes the confiscation of “illicit wealth” — drafted so broadly that, according to historian Shaul Bakhash of George Mason University, “it allows expropriation on the thinnest of pretexts.” In 1984, parliament created special confiscation courts attached to the revolutionary tribunals. Far from bringing order, these “Article 49 courts” systematized seizures. In 1997, a governmental legal commission declared that the General Inspection Organization — Iran’s anti-corruption body — had no right to control Setad without the Leader’s authorization. In 2000, the judiciary granted Setad exclusive monopoly over seizures in the name of the Leader. In 2008, parliament finally voted its own prohibition from overseeing organizations under the Supreme Leader’s authority. “No one knows what happens inside these organizations. One detail reveals the scale of the empire: Setad’s headquarters is a large gray concrete building, with small windows, in the heart of Tehran’s business district. You wouldn’t even notice it walking past,” said a former employee.
Invisibility as doctrine, granting Khamenei a power Khomeini never had — and never wanted. Considered insufficiently qualified by the grand Ayatollahs, lacking the clerical rank required by the Constitution, Khamenei was chosen at the last minute by the Assembly of Experts upon Khomeini’s death, thanks to a constitutional amendment passed in urgency. He now operates from a vast complex where about 500 people — recruited from the Revolutionary Guards and security services — work, financed by Setad. It is his colossal slush fund, independent of the national budget and factional struggles, turned into a gigantic lever for enriching an autocracy.
I measure the abyss between the mystic I encountered and the institutional machinery his legacy has become. A nation of factionalists who, as President Pezeshkian admitted before parliament, will not hesitate to confront one another once the man who holds the purse strings disappears.
Having opened the envelope handed to me by Khomeini on my return flight to Paris, it contained an image and a line in Arabic: “History begins now.”
It did indeed begin at dawn on February 1, 1979. It was not, however, written as he had dreamed. The regime he founded is imploding under the weight of its own contradictions — the very ones perceived by the teenager dazzled by that old man of unbearable charisma.
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