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Iran: Millions Of Dollars' Embezzlement In Teachers' Investment Fund

The economic corruption institutionalized within the Iranian regime
The economic corruption institutionalized within the Iranian regime

NCRI, April 21, 2018--  The dimensions of the economic corruption institutionalized within the Iranian regime has expanded so much that state officials can’t help simply acknowledging it, rather than vainly trying to hide or deny it.

There’s no conventional mechanism that could describe the corruption taking place under the Iranian regime. The scourge is rooted so deep in regime’s entire body that major banks, ministries, municipalities and other entities and foundations associated with the regime have a hand in a widespread corruption.

Among the embezzlements, the one related to Teachers’ Pension Fund is different, both in terms of its extent and the amount embezzled, showing yet another aspect of the mafia network within the regime.

“Thousands of billions of tomans were put at the disposal of a few, without them being required to put up any collateral”, says regime’s Judiciary Spokesman ‘Mohseni Ejei’, adding “I’ve been in touch with a number of cases in this area. But I’m yet to see one with as many violations as the one related to Teachers’ Investment Fund and Sarmayeh Bank.” (State-run Tasnim news agency, January 23, 2018)

Also in this regard, head of regime’s parliamentary Investigation Committee acknowledges that “more than 100 companies and business enterprises are involved in the corruption case related to Teachers’ Investment Fund.” (Terrorist Quds Force’s Tasnim news agency, April 17, 2018)

History and fate of Teachers’ Investment Fund

Established in 1995, the Teachers’ Investment Fund was aimed at promoting financial resources and improving the livelihood of Ministry of Education’s pensioners. According to its Articles of Association, the fund was to be equally financed by its members and the government. Fund members had to pay a monthly membership fee equivalent to five percent of their monthly salaries, while the government was also supposed to invest as much as the members’ deposits, so that through investing in such areas like industries and business enterprises, service sector, education, properties, banks, insurance companies and the stock market the fund could support the pensioners with adequate services and facilities.

But what happened in practice?

The so-called business enterprise and 25 of its biggest, Revolutionary Guards-owned affiliated companies, including Khorasan Petrochemical Company, MiddleEast Kimia Pars Company, Arak’s Machine Building Company, Sarmayeh Bank, Moalem insurance company, etc., stole all the money deposited by teachers, in such a way that it’s been referred to as the country’s biggest state embezzlement case.

The dimensions of embezzlement are so huge that according to the head of regime’s Parliamentary Investigation Committee a 580-page report has already been gathered in this regard, with more investigations on the way.

“Investigating the violations committed in Teachers’ Investment Fund and all its affiliated companies, and auditing the income sources and expenses of the business enterprise will take a long time and needs the contribution of many experts. But any area the committee entered, there was a huge violation involved so that the experts couldn’t help acknowledging that the violations and crimes committed are institutionalized”, the report says. (State-run ISNA news agency, April 8, 2018)

It was only two years ago that the details of corruption and embezzlement in the fund was revealed. Given that the fund has currently 900,000 members, the money stolen from every member teacher was 8,800,000 tomans. 90 percent of bank facilities in 2015 were provided to a group of only 30, with each one receiving billions of tomans of no-collateral loans under a single name written on a piece of paper. A teacher, in the meantime, who requested a 4,000,000 toman personal loan, would end up regretting it.

Parliament’s so-called ‘Khane Mellat’ news agency quotes Mohammad-Mehdi Zahedi, head of parliament’s Education and Research Committee, as saying “following the investigations, it became clear that unfortunately a grand financial corruption has taken place in the fund, showing that financial violations in the fund’s subsidiaries and its holding companies have become institutionalized, with some companies having been established only to facilitate financial violations.”

“Sarmayeh Bank has provided loans to people that had nothing to do with the fund”, adds Zahedi, “for instance, a 100 billion toman loan has been provided to a homeless person, while there’ve been influential figures behind the scene that have actually received the amount, using the name of the homeless person for opening a fake account in the process.”

The news agency eventually points to a mafia network within the regime that refuses to repay the loans, saying “there are 31 groups that have received huge loans and now refuse to pay them off. For example, a 688-billion-toman loan has been provided to one group between 2013 and 2015, and another group has received 400 billion tomans between 2007 and 2011, with neither having paid off the loans yet. Besides, at least 9,000 billion tomans of repaid loans to Sarmayeh Bank are doubtful.”

Another important issue is setting off the mutual debts against each other. Judiciary experts were bribed and lured into valuing the debtors’ properties at four times higher than their real prices, thanks to which the debtors could balance their debts to Sarmayeh Bank and Teachers’ Investment Fund. For example, if a 100-billion-toman debtor owned a 30-billion-toman property, the judiciary experts valued the property at 130 billion, so that the debtor could both clear his debt and have the real value of his property back.”

Parliament’s news agency acknowledges that there’s a systematic corruption in all parts of the Teachers’ Investment Fund, writing “the final embezzlement amount is yet to be determined as it’s too high. We were not able to investigate all aspects of the case. All monitoring bodies should help determine the embezzled amount in a process that might last up to three years.”

The state plundering is while a large part of Iran’s population is in need of their daily meals, with lack of jobs and economic recession, increasing unemployment and production crisis along with inflation and high prices continuing to increase a crushing pressure on the back of low-income population.

The effect of the systematic plundering on Iranian teachers’ lives is that they have to take multiple jobs such as street vending, taxi driving or any other job so they can earn a frugal livelihood for their families.