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Accusations of corruption grow at Iran's Bank Mellat

Since the arrest of the head of Bank Mellat, government officials have been divulging more and more details on the scope of corruption at the bank.
People walk past a branch of Iran's Bank Mellat in Istanbul August 18, 2010. Picture taken  August 18, 2010.       REUTERS/Murad Sezer (TURKEY - Tags: BUSINESS) - RTR2HUBS

Tehran public prosecutor Abbas Jaffar Dowlatabadi sat down with reporters and divulged new information about the corruption cases that have rocked Iran in recent weeks.

On the arrests at Bank Mellat, Dowlatabadi said that it was related to the “movement of 800 billion toman” (approximately $258 million at today’s exchange rate). Reiterating comments by the judiciary, he added that four people in total have been arrested but a number of other suspects are outside of the country. The Intelligence Organization of the Islamic Revolutionary Guard Corps (IRGC) recently arrested the former managing director of Bank Mellat, Ali Rasteghar Sorkhei, and his deputy. IRGC commander Brig. Gen. Mohammad Ali Jaffari said that Rasteghar Sorkhei was linked to an “organized group of banking corruption.”

Dowlatabadi did not explain what the “movement” of money entailed but said that “the development and investigation” into such a case is one of the challenges that judicial authorities have. He added that the prosecutor’s office had requested that Minister of Economic Affairs and Finance Ali Teyebnia and governor of the Central Bank Valiollah Seif present reports “about the actions of the accused.”

Dowlatabadi also asked regulatory authorities, particularly at the Central Bank, to take steps to prevent future violations of this kind, saying, “When the regulatory officials of the banks, financial and credit institutions do not perform their basic duties, the courts have no choice but to get involved and defend the people.”

Jaffari had previously said “other officials” were involved, though it is not clear how deep into the administration the charges will go. Conservative media have for months been trying to link President Hassan Rouhani’s brother and special advisor, Hossein Fereydoun, to various corruption allegations. Just after Rasteghar Sorkhei’s removal at Bank Mellat and just before his arrest, Tasnim News Agency wrote that Fereydoun and Rasteghar Sorkhei were long-time friends and his appointment at Bank Mellat was at the urging of Fereydoun. In another article, Tasnim News Agency lamented that the corruption at Bank Mellat has been overshadowed by the news of exorbitant salaries.

Hojat al-Islam Musa Ghazanfarabadi, head of Tehran Revolutionary Court, made headlines July 27 when he accused Fereydoun of being involved in the Bank Mellat corruption case. “I do not have exact information,” Ghazanfarabadi told Basij News, “but there is news that indicates that Fereydoun is linked to this banking corruption network.” He said the scale of corruption is so large that “one hopes it’s not true.”

Ghazanfarabadi said it is difficult for people to tolerate seeing the brother and special adviser to the president abuse his access in so many fields. He said the president should ask the judiciary to seek life in prison for his brother.

Mohammad Bagher Nobakht, spokesman for the Rouhani administration, announced July 26 that the administration has taken a number of steps in response to the exorbitant salaries. The administration has identified 13 directors and removed them from their positions, said Nobakht. He said they also introduced salary caps of 10 million toman ($3,200) for government officials and 18 million toman ($5,800) for economic bodies. Nobakht said regulatory officials will also conduct monthly inspections.

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