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Iran Report: July 5, 2004

5 July 2004, Volume 7, Number 22

IRAN TO RESUME BUILDING NUCLEAR CENTRIFUGES. Radio Farda's Golnaz Esfandiari reported that the head of the United Nations' International Atomic Energy Agency (IAEA) on 27 June urged Iran to abandon its decision to build centrifuges as part of its nuclear program. Iran announced in a letter to the head of the IAEA as well as to Britain, France, and Germany that it will resume building centrifuges as of 29 June but will continue to suspend uranium enrichment. Iran's decision came after a recent IAEA resolution criticized Tehran for not cooperating fully with nuclear inspectors.

According to the Radio Farda report, the IAEA, the United States, and the European Union have criticized Iran's decision to resume building centrifuges -- equipment that can be used to create weapons-grade enriched uranium.

Iran says its decision came after London, Paris, and Berlin failed to keep their promise to convince the IAEA to remove from its agenda by June its investigation into Iran's nuclear program.

Under a deal brokered last year by France, Germany, and Britain, Iran agreed to fully cooperate with the IAEA and to suspend its uranium-enrichment activities. The three European countries in return promised to ease Iran's access to advanced nuclear technology.

Tehran says its nuclear program is for civilian purposes only, and not to build weapons of mass destruction, as the United States has alleged.

Britain's "The Guardian" newspaper on 28 January quoted unnamed Western diplomats as saying Iran had never fully honored its promise. The paper quoted one source as saying: "They had suspended about 95 percent of the activities, but it's the other 5 percent that bothers us."

Iranian Foreign Ministry spokesman Hamid Reza Assefi said on 27 June that Tehran wants the IAEA and the three European countries to supervise Iran's building, assembling and testing of centrifuges when the program resumes.

Assefi said Iran will continue to suspend its uranium-enrichment program despite proceeding with work on the centrifuges.

Defense analyst Paul Beaver said Iran's decision has a "dangerous connotation." "The problem is that, if it just builds centrifuges, it's a little bit like Iran saying, 'Well, we're going to have nuclear warheads and we're going to have ballistic missiles, and keep them in different parts of the country so you need not worry.' It wouldn't take them very long to start the centrifuge program," Beaver said. "I see this as a negotiating tool, a negotiating ploy. This is their current position and I can see them having that position in place as a way of trying to influence the international community and trying to gain some political or diplomatic power."

The IAEA board of governors on 18 June unanimously adopted a resolution "deploring" Iran's lack of full cooperation in disclosing the extent and details of its nuclear program.

The EU-drafted resolution was condemned by Iran as politically motivated.

Speaking in Moscow on 27 June, IAEA Director-General Muhammad el-Baradei expressed hope that the move would be temporary, and that Iran would go back to full suspension of its activities: "They said that they are going to boost manufacturing, assembly and testing of part of their centrifuges. That's what the letter says," said el-Baradei. "I hope it wouldn't change the dialogue. I hope it will be temporary. I hope Iran will also go back to a comprehensive suspension as they have committed to us before. So I hope this is not a major reversal. But we still need to work with them."

The United States on 27 June condemned Iran's decision to continue making centrifuges. "Iran needs to come clean and fully cooperate with its international obligations," White House spokesman Scott McClellan said. He added that the United States has expressed concern within the IAEA about the need to seriously consider sending the matter to the UN Security Council.

U.S. national security adviser Condoleezza Rice said that Iran was providing daily proof why it belonged in the "axis of evil" -- the phrase used by President George W. Bush in early 2002 to denote Iran, Iraq, and North Korea.

But at the same time, Rice said a diplomatic solution to the row over its nuclear program was still "within sight."

In a joint statement on 27 June, the United States and the European Union called on Iran to rethink its decision to resume centrifuge construction.

The countries of the EU are engaged in a policy of constructive dialogue with the Islamic republic. Some analysts view Iran's decision to resume building centrifuges as a blow to the EU's policy of engagement.

Iranian Foreign Ministry spokesman Assefi said yesterday that Iran's decision did not mean an end to dialogue with the EU. He added that talks between Tehran and Paris, Berlin, and London are planned for the coming days.

He also said Iran had cooperated with the IAEA in the past and would continue to do so in the future.

The UN nuclear agency says it will not remove the Iranian issue from its agenda until it has the assurances it wants that Tehran is not pursuing a weapons program.

Speaking on 27 June, el-Baradei said: "Whether we close the Iranian file next months or in six months from now depends on the cooperation we get from Iran." (Golnaz Esfandiari)

NUCLEAR INSPECTORS VISIT SUSPECTED IRANIAN SITE. IAEA Director-General el-Baradei said on 28 June in Moscow that IAEA inspectors were given access to a suspect site in Tehran, AFP reported. Satellite imagery of a site in Lavizan-Shian, a northeastern Tehran neighborhood, revealed that large buildings inside a secure perimeter had been dismantled, the rubble removed, and the earth scraped (see "RFE/RL Iran Report," 21 June 2004). "Today, we went to Lavizan, we took environmental samples, we did all we wanted to," El-Baradei said. "We got a prompt response for access from the Iranians." El-Baradei viewed the prompt Iranian response as "something positive," Reuters reported.

Foreign Ministry spokesman Hamid Reza Assefi on 27 June dismissed concerns about the Lavizan site as U.S. "psychological war against Iran," the Islamic Republic News Agency (IRNA) reported. "They have raised an issue against Tehran municipality's decision to demolish a district of Lavizan for redevelopment," Assefi said. "I suppose they expect the Iranian municipalities to obtain [a] permit from the mayor of New York to carry out redevelopment plans." (Bill Samii)

TEHRAN DISMISSES REPORT OF NUCLEAR SPILL AT AIRPORT. Government spokesman Abdullah Ramezanzadeh dismissed a recent press report about the delay in the opening of the new Imam Khomeini International Airport near Tehran, IRNA reported (see "RFE/RL Iran Report," 19 April and 17 May 2004). England's "The Sunday Telegraph" reported on 27 June that use of the airport has been delayed because of an accident during the December 2002 delivery of a "secret shipment of weapons-grade uranium from North Korea." Some of the uranium was spilled, and although it was cleaned up, the authorities fear that IAEA inspectors might detect the spillage. "Iranian aviation officials, who cannot be named for their own security," assert that the new airport will not reopen until Russian nuclear experts can confirm the absence of nuclear spillage. (Bill Samii)

IAEA HEAD SANGUINE ABOUT RUSSIAN NUCLEAR AID TO IRAN. IAEA Director-General el-Baradei said in Moscow on 29 June that his agency is not concerned about Russia's nuclear assistance to Iran, despite U.S. allegations that the assistance is helping Tehran to acquire nuclear weapons, Reuters reported. "Bushehr is not apparently at the center of international concern because Bushehr is a project to produce nuclear energy," el-Baradei said, referring to the nuclear power plant being built with Russian technical assistance. He lauded an agreement between Moscow and Tehran under which spent nuclear fuel from Bushehr will be returned to Russia. el-Baradei told the news agency that he did not discuss Bushehr in his hour-long meeting with President Vladimir Putin and other senior Russian officials. (Rob Coalson)

'THE ECONOMIST': EUROPEAN POLICY ON IRAN A 'FLOP.' British, French, and German hopes that a policy of engaging Iran will persuade it to give up its nuclear ambitions are fading, "The Economist" reported on 1 July. The October agreement with Tehran indicated that multilateral diplomacy could work in difficult cases, and it also suggested that inspections could facilitate nonproliferation more successfully than force could. Although Tehran has apparently not forsaken its desire to develop a nuclear weapons capability, according to "The Economist," the Europeans have only delayed negotiations on a trade and cooperation agreement. Iran and Europe apparently are awaiting the outcome of the U.S. presidential elections. Tehran may believe that Europe will never get tough. "The Economist" concludes, "Iran could become a big irritant in relations between America and Europe." (Bill Samii)

IRANIANS CRITICIZE GOVERNMENT'S LACK OF TRANSPARENCY. Hojatoleslam Ali-Akbar Mohtashami-Pur, a former reformist legislator, said on 30 June that Supreme National Security Council Secretary Hojatoleslam Hassan Rohani should apologize to the Iranian people for the secrecy surrounding Iran's nuclear activities, Radio Farda and the Iranian Students News Agency (ISNA) reported. Mohtashami-Pur referred to Rohani's trip to Brussels earlier this year and an agreement that he signed with the European Union. Mohtashami-Pur asked what right Rohani has to sign such agreements with the Europeans behind closed doors and not inform the public about it.

Rohani had come to the legislature on 27 June, and in a conversation with a correspondent said: "In Brussels, we had an agreement with three European countries, which they confirmed in a letter dated 26 February. But as the three European countries failed to act by their commitments, Iran will go back to the state before the Brussels agreements," "Resalat" reported on 28 June.

"Aftab-i Yazd" on 30 June also noted that this is the first time Rohani has referred to a Brussels agreement. It cited Boin-Zahra representative Qodratollah Alikhani's criticism of Rohani. (Bill Samii)

IRANIAN OFFICIALS EXPELLED FROM U.S. The Iranian Foreign Ministry on 29 June condemned the expulsion from the United States of two of its UN mission guards, IRNA reported. State Department spokesman Adam Ereli said on the same day that the guards were expelled for engaging in activities "incompatible with their stated duties," RFE/RL reported. According to the RFE/RL report, this is diplomatic language for spying.

At UN headquarters in New York, meanwhile, U.S. envoy Stuart Holliday told reporters, "These individuals were moving around New York City and essentially taking photographs of a variety of New York landmarks and infrastructure and the rest," Reuters reported. Holliday added, "We had to notify the mission that we had information that their security officials were not conducting themselves appropriately, and they took it upon themselves to accept the invitation to depart the country over the weekend."

A 30 June statement from Iran's Permanent Mission to the UN denied that the guards were filming sensitive or security-related sites, IRNA reported, and said they were only filming popular tourist attractions. This is not the first case of Iranian officials' behavior in New York eliciting suspicion (see "RFE/RL Iran Report," 1 July 2002). (Bill Samii)

9/11 COMMISSION CONNECTS IRAN, AL-QAEDA, AL-KHOBAR. The commission investigating the 11 September 2001 terrorist attacks on the United States has concluded that Iran and Al-Qaeda had "long-running contacts" and that Al-Qaeda might have been involved with the 1996 bombing of the Khobar Towers housing facility in Saudi Arabia that killed 19 U.S. service members, "The Washington Post" reported on 26 June. Iran is referred to almost 40 times in the June 2001 indictment relating to the bombing (see "RFE/RL Iran Report," 25 June 2001, 8 December 2003). In retaliation for the alleged Iranian involvement, a U.S. intelligence operation exposed Iranian intelligence agents to governments worldwide (see "RFE/RL Iran Report," 5 April 2004).

The so-called 9/11 Commission's investigators assert that there is intelligence showing greater potential for Al-Qaeda/Hizballah cooperation than previously believed. According to the report, "We have seen strong but indirect evidence that [bin Laden's] organization did in fact play some as yet unknown role in the Khobar attack." The report also addresses discussions between individuals representing Al-Qaeda leader Osama bin Laden and Tehran on cooperation against their common enemy, and it addresses contacts between Hizballah and Al-Qaeda.

Iranian Foreign Ministry spokesman Assefi denied on 27 July the possibility of Tehran cooperating with Al-Qaeda, ISNA reported. "Iran, because of its ideology and political doctrine, has nothing to do with Al-Qaeda," Assefi told reporters. "America created Al-Qaeda and the Taliban; how can Al-Qaeda be in alliance with Iran?" (Bill Samii)

IRANIAN INTERFERENCE IN IRAQ REMAINS A PROBLEM. UN special envoy Lakhdar Brahimi met with President Hojatoleslam Mohammad Khatami, Foreign Minister Kamal Kharrazi, Interior Minister Abdolvahed Musavi-Lari, and parliamentary speaker Gholamali Haddad-Adel in Tehran on 3 and 4 July, news agencies reported. Specifics on the discussions were not available, but Mehr News Agency reported that Brahimi was conveying a message from UN Secretary-General Kofi Annan. The meetings could have something to do with recent claims about Iranian interference in Iraq. Kharrazi told Brahimi that the United States is disseminating false news in order to sow discord between Iraq and its neighbors, IRNA reported.

Discussing the continuing insurgency in Iraq, an anonymous "former senior official of the just-dissolved American-led occupation authority" said in the 2 July "New York Times" that Iranian and Syrian activity in Iraq has increased over the last year. Tehran also might have been financing Shi'a cleric and militia leader Muqtada al-Sadr, the official said. The Iranians, he said, have "become more active over time, and not helpful." The official added that more foreign fighters cross the Syrian border than the Iranian one.

Iraqi Foreign Minister Hoshyar Zebari said in the 4 July "The Sunday Telegraph" that his government soon will publish a report on the interference of foreign powers in Iraqi affairs, and he said his government has intelligence on neighboring countries' support for insurgents. Zebari did not name the countries, but "senior Iraqi officials" indicated that Iran and Syria were the most problematic. Zebari also said that up to 10,000 foreign spies have entered the country since May 2003.

The "Farhang-i Ashti" newspaper reported on 1 July that the Iraqi interim government has closed the border with Iran in response to a request from the U.S. military. The Iranian newspaper contrasted this development with statements of friendship from Iraqi President Ghazi Ajil al-Yawir and Prime Minister Iyad Allawi (see below). An Iranian official said that the Mehran border crossing could be reopened in about 20 days to deal with pilgrimage traffic, "Farhang-i Ashti" reported.

Iraqi Interior Ministry spokesman Sabah Kazim denied on 4 July that Iraq's borders with Iran are closed, IRNA reported. On the same day, Interior Minister Abdolvahed Musavi-Lari said that the border crossing at Mehran is closed on the Iraqi side because of construction, IRNA reported. He added that it would reopen in about three weeks. Musavi-Lari added that Iranians can continue to visit Iraqi holy sites via the Shalamcheh and Khosravi border crossings. (Bill Samii)

TEHRAN WELCOMES IRAQI HANDOVER. Iraqi Prime Minister Ayad Allawi discussed Iran in the context of relations with neighboring states in a speech after his 28 June swearing-in ceremony, Al-Arabiyah television reported. He thanked Iran and other countries who "opened their doors" to exiled Iraqis as they struggled against the regime of Saddam Hussein. "I extend a hand of peace and brotherhood to Iran and Turkey, the two Muslim neighbors," he added. These two countries and Iraq's Arab neighbors must work together to address regional problems and to bring security and prosperity to its people, Allawi said.

Hamid al-Kafai, who heads the Iraqi interim cabinet's public-relations unit, referred to Allawi's speech and said Iran "enjoys a special status" among Iran's neighbors, IRNA reported, citing Iraqi television. He noted that Iran recognized the legitimacy of the interim Iraqi government and said the former regime's eight-year war against Iran harmed relations between the two countries.

Iranian government spokesman Abdullah Ramezanzadeh gave his first news conference in five months on 28 June and commented on that day's transfer of power in Baghdad, ISNA reported. He said that the Iranian government welcomes any development that leads to the majority of Iraqi people running their country's affairs, ISNA reported. Ramezanzadeh hoped that this would lead to the end of the occupation and the establishment of a system based on the popular vote.

"The transfer of power to the Iraqi government and end of occupation, which is taking place on the basis of the Security Council Resolution 1546, is a positive step," Foreign Ministry spokesman Assefi said on 28 June, according to IRNA.

On 30 June, President Khatami congratulated Iraqi President Ghazi Ajil al-Yawir and Iran's First Vice President Mohammad Reza Aref-Yazdi congratulated Iraqi Prime Minister Allawi, Iranian state radio reported. Khatami expressed the hope that grounds for ending the occupation, establishing full sovereignty, and democratic elections would be created.

Alaedin Borujerdi, who heads the legislature's National Security and Foreign Policy Committee, said one of the biggest problems facing the new Iraqi government is establishment of security, ISNA reported. Borujerdi said the withdrawal of occupation forces would help the security situation, but he did not foresee this happening.

Iranian presidential adviser Mohammad Shariati said on 28 June that the transfer of power was "too late," Al-Arabiyah television reported. He said the current Iraqi government is not legitimized by elections so these should be held soon. (Bill Samii)

DIPLOMACY REVERSES IRANIAN INVASION. An anonymous "senior British officer" said at a conference in London last week that British forces defied an order to repel Iranian Islamic Revolution Guards Corps units that had crossed approximately 1 kilometer into Iraq, reported on 30 June, citing that day's edition of "Defense Analysis." "Some Iranian border and observation posts were re-positioned over the border, broadly a kilometer into Iraq," an unnamed Defense Ministry spokesman said.

Lieutenant General Ricardo Sanchez ordered the British to prepare to attack the Iranian positions, but the British preferred a diplomatic solution. The issue was resolved after a week of discussions between Foreign Minister Kamal Kharrazi and Foreign Secretary Jack Straw.

The incident occurred in July 2003. At the time, Tehran denied violating the Iraqi border (see "RFE/RL Iran Report," 21 July 2003). (Bill Samii)

ROUGH SEAS FOR BRITAIN AND IRAN. A 30 June written statement from U.K. Defense Secretary Geoff Hoon to Parliament about the 21 June naval incident with Iran casts doubt on earlier reports, Radio Farda reported on 1 July (see "RFE/RL Iran Report," 28 July 2004).

The British personnel have claimed in debriefings after their release from Iranian custody that they were "forcibly escorted" from Iraqi waters into Iranian territorial waters by their eventual captors. The British personnel had said on Iranian television that their navigation equipment was not working and they had mistakenly entered Iranian waters.

In his statement, Hoon said negotiations on retrieving the British boats and other equipment that the Iranians seized are continuing. Hoon said London has made clear that the blindfolding of the British personnel is not to be repeated.

The shadow foreign secretary, Michael Ancram, reacted with disgust, saying, "This is outrageous," according to the 1 July "Financial Times." "Not only were our servicemen illegally seized and subsequently humiliated by being blindfolded and paraded in front of the cameras, but their equipment, which was also illegally seized, has not been returned." Ancram added, "At the very least we expect a formal apology."

Iranian Foreign Ministry spokesman Assefi said on 1 July that Hoon's comments about the 21 June naval incident are untrue, IRNA reported. Assefi said the British charge d'affaires signed minutes of a meeting in which the mistaken entry of the British vessels into Iranian waters was acknowledged. Assefi added that Foreign Secretary Jack Straw also acknowledged the mistaken entry of the British personnel into Iranian waters.

Straw said on 1 July that the British boat crews detained by Iran on 21 June never actually entered Iranian waters, AFP reported. Straw added that the government is making "strong representations" about the way the men were treated. He said the United Kingdom would like Tehran to return the navigation equipment it took from the British vessels. "We would be greatly assisted if and when we get back the global positioning equipment because that would tell us for certain where they were," Straw said.

A top official in the IRGC, Ali Reza Afshar, rejected the British claims on 3 July, ISNA reported. He said Hoon's comments are "a lie aimed at conducting a propaganda campaign and psychological operations." (Bill Samii)

IRAN RELEASES ARAB SAILORS. Iranian Foreign Ministry spokesman Assefi announced on 30 June the release of United Arab Emirates (U.A.E.) sailors who were detained for illegally entering Iranian waters, IRNA reported. Assefi said the release was reciprocation for the U.A.E.'s release of Iranian sailors it was holding. (Bill Samii)

WOMAN GIVES BIRTH TO FROG. A gynecologist has confirmed that, on 26 June, a woman in Iranshahr went into labor and then gave birth to a frog, IRNA reported the next day, citing "Etemad." The woman had stopped menstruating for six months and a sonogram showed she had an abdominal cyst. The gynecologist speculated that a frog larva entered the woman's body and developed there. Other specialists cited by IRNA claimed that the frog resembled a human fetus. (Bill Samii)

GUARDIANS COUNCIL GETS CONSERVATIVE MEMBERS. Iran's conservative legislature on 27 July selected three lawyers to serve on the Guardians Council, IRNA reported. Mohammad Reza Alizadeh, Gholam Hussein Elham, and Abbas Kabi secured 195 votes, 174 votes, and 169 votes, respectively, out of the 258 total votes that were cast in a secret ballot. The 12-member Guardians Council comprises six clerics appointed by Supreme Leader Khamenei and six jurists nominated by the judiciary chief. The six jurists must be approved by the parliament. The previous legislature, which was dominated by reformists, had rejected Elham and other conservative nominees for the Guardians Council (see "RFE/RL Iran Report," 17 November and 8 December 2003and 1 March 2004). (Bill Samii)

DRUGS BLAZE IN IRAN. Roberto Albertino, who heads the UN Office for Drugs and Crime (UNODC) in Iran, and other foreign dignitaries participated in a 26 June ceremony in Tehran to mark the International Day against Drug Abuse and Illicit Drug Trafficking, international news agencies reported.

As a bonfire of confiscated narcotics blazed, Iranian police chanted "Death to America," Reuters reported. Police counternarcotics chief Colonel Mehdi Aboui said, according to Reuters: "We hold America and Britain responsible for this situation.... Americans are in charge of Afghanistan's security and Britons are responsible for fighting drugs there."

President Hojatoleslam Mohammad Khatami told personnel from the Drug Control Headquarters (DCHQ) on 27 June that physical measures against drug trafficking would be ineffective until the root causes of drug abuse are addressed, "Iran" reported on 28 June, citing ISNA. Khatami said the Expediency Council and the Fourth Five-Year Plan have put a priority on the counternarcotics campaign.

"Iran" reported on 28 June that, according to DCHQ chief Ali Hashemi, home-laboratories along Afghanistan's borders are a serious problem, and that a security belt around Afghanistan is required to stop cross-border trafficking.

Colonel Aboui took another tack. Aboui on 29 June dismissed complaints about the ineffectiveness of the police's counternarcotics campaign, IRNA reported, in an apparent reaction to Khatami's observation that interdiction alone would not solve Iran's drug abuse problem. Aboui also dismissed as "sheer lies" warnings about home laboratories along Afghanistan's borders.

Aboui added that the 80 tons of drugs seized in Iran during the first three months of the year is a 78 percent increase over the same period last year. In just the 21 May-20 June period, he said, the seizure of 29 tons of narcotics marks a 112 percent increase over the previous year. The increase in seizures, which indicates an increase in trafficking, coincides with greater impurity in the drugs. (Bill Samii)

LEGISLATURE REPORTS ON STATOIL CASE. The Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Okokrim) has ruled that Statoil and one of its officials must pay fines for attempting to gain improper influence with Iranian government officials, the "Financial Times" and AP reported on 30 June. Statoil must pay 20 million Norwegian crowns ($2.9 million) and its former head of international exploration and production, Richard Hubbard, must pay 200,000 crowns ($29,000).

Statoil's agreement with Horton Investments, Okokrim said, "involved an offer of improper advantages in return for Mehdi Hashemi and or others influencing persons who were or would be involved in the decision-making process relevant to Statoil's commercial activity in Iran, including administrative acts concerning the award of contracts."

Horton is reportedly associated with Mehdi Hashemi, the managing director of the Organization for Optimization of Energy Consumption, which is a subsidiary of the National Iranian Oil Company.

The Statoil case hit the news in September 2003 (see "RFE/RL Iran Report," 22 and 29 September, 6, 13, and 27 October, and 10 November 2003). The Iranian legislature questioned Petroleum Minister Bijan-Namdar Zanganeh about the case but was not satisfied. Legislators subsequently called for an independent inquiry into the case, but it was not until the 4 April 2004 legislative session, and after several floor votes, that the decision to go ahead was taken. An anonymous legislator told a "Resalat" correspondent on the sidelines of the 6 April session that three government agencies had investigated the Statoil case as well, and they did not find any wrongdoing.

Khomeini-Shahr representative Nematollah Alirezai said on the sidelines of the 16 May legislative session that the investigative committee went to Norway and met with officials from Okokrim, the judicial authority, the Petroleum and Energy Ministry, and the Statoil board of directors, "Hambastegi" reported on 17 May. He added that the committee also received information from Iran's Petroleum Ministry, Foreign Ministry, Ministry of Intelligence and Security, and state inspectorate. Mehr News Agency on 19 May cited Alirezai as saying that the investigation revealed that Statoil bribed Horton Investments, and that Statoil's agreement with Horton was illegal.

The investigative committee's report was presented at the 26 May legislative session. According to that report, the Norwegian authorities insisted that they must meet with "Mr. M.H." in order to complete their investigation, but this individual has not responded to their two letters, "Sharq" reported on 27 May. The Norwegians asked for the investigative committee's help on this matter so they could close the case, and until then they would not reveal information on this aspect of their investigation. The committee reported, according to "Sharq," that Statoil deposited $5.2 million into Swiss bank accounts; this money was later divided among several people. The involvement of Statoil executives and of Abbas Yazdi (who owns Horton Investments) is possible, according to the report.

The report goes on to state that "Mr. M.H." confirmed meeting with Statoil officials in Norway and in Iran, but this was in connection with his responsibilities as a member of the board of directors of the Iranian Offshore Engineering and Construction Company and as general director of the Organization for Optimization of Energy Consumption. "Mr. M.H." denied that the meetings were connected with other Petroleum Ministry projects. The investigative committee reported that it found no evidence of a relationship between "Mr. M.H." and Horton Investments, nor did it find evidence that he received any payments.

Mehdi Hashemi said on 27 May that he reserves the right to sue Statoil and the Norwegian press, IRNA reported. He added that he would file a complaint with the International Court of Justice and the Iranian judiciary. (Bill Samii)

TEHRAN CONFRONTS CORRUPTION PROBLEM. Speaker of parliament Gholam-Ali Haddad-Adel on 29 June visited an exhibit assembled by the Ministry of Intelligence and Security's (MOIS) economic department, IRNA reported. The exhibit, which is not open to the public, is intended to make national decision-makers aware of the economy's vulnerabilities and of MOIS measures against financial and economic corruption.

One week earlier, Tehran Public Prosecutor Hojatoleslam Said Mortazavi gave a news conference on several embezzlement and corruption cases, "Etemad" reported on 22 June. He said these cases affected the country's industrial, banking, and customs sectors. More than $100 million has been returned to the public purse as a result of the related investigations, according to Mortazavi. In one case, an individual was sentenced to 20 years in jail and fined more than $3 million, and in another case an individual was sentenced to eight years in prison and fined more than 20 billion rials. In a case involving a state-owned bank, Mortazavi said, an employee embezzled more than 5 trillion rials.

During the news conference, Mortazavi described a case in which a customs official issued checks in excess of 1 billion rials to an imaginary person named Husseini. In another case, Mortazavi said, 15 employees of nine university-entrance-exam-preparation institutions sold the exam questions. And in yet another case, members of the Islamshahr municipal council were caught after forging 35,000 birth certificates.

Ardabil Public Prosecutor Reza Jafari said in the 8 June issue of Tabriz's weekly "Azar Payam" that the court is currently dealing with 20 usury cases. There are some famous usurers in Ardabil, Jafari said, and he appealed to the public to provide information on these people. Jafari observed, "Usurers are usually polygamists, and since these individuals do not leave a trace of themselves, it is difficult to review their finances, and it takes a long time." He went on to say that usurers are often bazaar merchants. "For example, one of the usurers owned a small nut and bean shop and turned it into an office for his work, while in fact he was a billionaire." (Bill Samii)