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Iran Report: June 2, 2008

Iran: Courts Chip Away At Millionaire's Sentence

By Farangis Najibullah

A former shopkeeper, Shahram Jazaeri claims to have made at least $180 million

Some Iranians are fond of comparing Shahram Jazaeri to Russia's fallen oil oligarch, Mikhail Khodorkovsky. After all, both amassed their fortunes at early ages and both were eventually convicted of defrauding the government.

Unlike the former Yukos oligarch, however, Jazaeri is not known to have harbored political ambitions. Also unlike Khodorkovsky, whose case serves as a reminder of the cost of running afoul of the Kremlin in the Putin era, Jazaeri has twice been the beneficiary of courts interceding on his behalf.

Last week, an Iranian court reduced Jazaeri's already-shortened 14-year prison term to 11 years.

The 36-year-old Iranian is serving a prison term for his involvement in a high-profile corruption case involving politicians and the family members of many famous Iranian clerics, including the supreme leader's brother.

But Jazaeri's ability to run his multimillion-dollar business activities from prison and two reductions in his sentence for white-collar wrongdoing raise questions about the authorities' seriousness in dealing with corruption.

President Mahmud Ahmadinejad and his allies have made corruption a frequent theme of their attacks against entrenched political rivals and a convenient whipping boy during the president's whistle-stop tours to drum up support for his policies.

But the leniency now being afforded to Jazaeri could prompt public skepticism of the authorities' willingness to tackle corruption, particularly since it appears that no officials have ever been prosecuted in the case.

Jazaeri reportedly confessed during his 2001 trial to paying hundreds of thousands of dollars to Hadi Khamenei -- the brother of Iranian Supreme Leader Ayatollah Ali Khamenei, who holds ultimate political and religious power under Iran's Islamic constitution -- as well as to former parliament speaker Mehdi Karrubi.

Karrubi has denied any suggestion of bribery and described the claim as a politically motivated attack on the legislature, the Majlis.

The scandal has mostly been linked to reformist politicians, but allegations of cash for favors in Jazaeri's case have extended to both reformists and conservatives alike.

Jazaeri was arrested in 2001 and charged with a long list of crimes including bribery, forging official documents, and massive embezzlement of state money and assets.

Key details of Jazaeri's alleged illegal activities were not disclosed during his trial, sparking speculation that officials were trying to cover up their own involvement in the case.

Qasem Sholeh-Saadi, an Iranian lawyer and former legislator, tells RFE/RL's Radio Farda that although Jazaeri was found guilty of bribing some officials, not a single official has been tried or punished in any way for taking the bribes.

"Only Mr. Shahram Jazaeri has been prosecuted and convicted," Sholeh-Saadi says. "I have never heard of any of those people who received this illegal money -- or bribe -- have been prosecuted or convicted."

Jazaeri emerged from modest beginnings and worked as a shopkeeper in the western city of Ahvaz until his mid-20s.

By the time he was arrested in 2001, at the age of 29, Jazaeri had made some $180 million by his own account. Many of his business activities are unknown, but he has founded several successful enterprises and worked as a broker in the oil business.

His 2002 trial reportedly involved 50 defendants -- many of them the sons of prominent clerics. Jazaeri was convicted and initially sentenced to 27 years in prison. In 2004, his sentence was partially overturned and reduced to 14 years.

In February 2007, Iran's Special Judicial Complex for Economic Affairs announced that Jazaeri had escaped while being transferred for a hearing before an expert financial committee.

Reports have suggested that Jazaeri had previously been allowed leaves from prison, a privilege unavailable to most inmates.

Iranian media suggested that some clerics were involved in aiding that escape. Iran's judiciary fired several officials who were involved in his case, including the head of Tehran's vaunted Evin Prison and a number of judges.

Soon afterward, Iranian security services confirmed that Jazaeri had been arrested in an Arab country, with some reports saying he had been hiding in a remote village in Oman.

Many Iranian prisoners suffer desperate conditions with little access to the outside world. But Jazaeri reportedly has access to a laptop computer and mobile phone while in jail, where he continues to manage his business interests.

RFE/RL's Radio Farda contributed to this report

U.S. Says IAEA Report Highlights Iran's Failure To Disclose Nuclear Activities

U.S. Ambassador Schulte (left) and IAEA head el-Baradei

The United States has reacted sharply to the latest report on Iran's nuclear-related activities from the International Atomic Energy Agency (IAEA). The U.S. envoy to the IAEA said Iran is "stonewalling" about its activities, while Iran has said the report shows how well it is cooperating with the UN agency.

The U.S. ambassador to the IAEA, Gregory Schulte, said the report on Iran's nuclear-related activities shows "in great detail how much Iran needs to explain, and how little it has" done so, AFP reported.

Schulte was commenting on the contents of the IAEA report that became available to news organizations in Vienna on May 26. In it, the IAEA said Iran is holding back information in several research areas that could be linked to its nuclear program.

The IAEA said Iran's research into the testing of high explosives and its work on missile-reentry vehicles are a matter of "serious concern." And it said Iran has not given it access to nuclear sites that the agency has requested to inspect.

The report said that "substantive explanations are required from Iran to support its statements on the alleged studies and on other information with a possible military dimension."

The new report is the latest in a series ordered by IAEA chief Muhammad el-Baradei in an attempt to resolve by diplomatic means the crisis between Iran and Western powers that accuse it of trying to develop a nuclear bomb.

U.S. envoy Schulte has said the report amounts to a direct rebuttal of Iran's assertions that it has answered all questions about it's nuclear program.

He said that at the same time as Iran is "stonewalling" IAEA inspectors, it has moved ahead with the development of enriched uranium in violation of UN Security Council resolutions.

In Washington, State Department spokesman Sean McCormack said the IAEA report is "disturbing" because it points to the Iranian military's involvement in the nuclear program. He said Iranian scientists are trying to fabricate what he called "hemispheres of uranium," which he said are the most suitable for weapons production.

"The IAEA and their experts took a look at this information, deemed that it was important information, and based on that they were going to present to the Iranian government a series of questions. I think they even presented to them, or showed them, some of the documents," McCormack said. "And thus far the Iranians have been willfully noncooperative. And you can read that in the report. It's disturbing, and we'll see what diplomatic next step will flow from this."

Uranium enrichment is a key part of the West's concern about Iran's nuclear program because, when sufficiently enriched, uranium can be used in weapons. A much lower level of enrichment makes it suitable for fuelling civil nuclear power plants, and this is what Iran says is all it seeks.

The IAEA report says that Iran has 3,500 uranium-enrichment centrifuges operational at its Natanz nuclear facility. The agency has previously said most of the centrifuges are of an old type based on 1970s technology. Tehran has said this number will soon be boosted to 6,000, presumably using a newer design which has already been tested at Natanz.

Iran's envoy to the IAEA, Ali Asghar Soltanieh, drew the opposite conclusion from the latest report as the United States. He said the report's conclusions are "a vindication and reiteration of the peaceful nature of Iran's nuclear activities," AFP cited the semi-official Fars news agency as reporting.

He said the report underlines that that there is no evidence of any diversion of nuclear materials to military purposes.

Soltanieh adds that Iran will continue with its uranium-enrichment program.

compiled from agency reports