Leaders of Iran

Tuesday, December 14, 2004



TEHRAN 20 July (IPS) Three weeks after having created an unprecedented turmoil in the country by claiming that the Oil Ministry was riddle with corruption, Ayatollah Ahmad Jannati had now changed his mind, saying he was given wrong information.

In a speech pronounced end of June, the hard line cleric who is also the secretary of the powerful Guardians Council had accused unnamed officials at the Oil Ministry of getting large kickbacks, sending "millions and millions" in their bank accounts outside Iran.

The accusations, coming immediately after the National Iranian Oil Company (NIOC) had clinched an important deal with Italian oil giant ENI, drew sharp reaction from the government, with the Oil Minister, Mr. Bizhan Namdar-Zanganeh urging Mr. Jannati to make public the names of all those who suspect of fraud and kickbacks accompanied of their bank accounts.

Mr. Jannati replied that he would do so without hesitation and present all the names and every bit of information in his possession to the Judiciary, adding that his information comes from a "very informed and reliable" source inside the Ministry.

The charges were also interpreted by some Iranian analysts as heralding a new political showdown, this time between the leader of the regime, Ayatollah Ali Khamenehe'i and the former president, Ayatollah Ali Akbar Hashemi-Rafsanjani, with the former getting closer to the reformists while the latter becoming the flag bearer of the ultra-conservatives staunchly opposed to any kind of reform.

Answering Mr. Namdar-Zanganeh who had called for urgent action and investigation to the ayatollah’s allegations, Mr. Khatami went out of his usual indifference and said openly that the charges were "politically motivated".

He also warned the influential cleric of the possibility of being investigated by the notorious and controversial leader-controlled Clergymen’s Special Tribunal.

Conservatives-controlled newspapers, particularly "Resalat" that speaks for the Bazaar oligarchy criticised Mr. Jannati, observing that his claims had "further confirmed the position of the Oil Minister instead of weakening".

Now, according to the pro-reform daily "Hambastegui" (Solidarity), Mr. Jannati, in a letter to President Mohammad Khatami, had apologised for the recent accusations he brought up against the Oil Ministry.

"In his letter, Mr. Jannati acknowledges that he had been provided with incorrect and distorted information on the deals" the paper added.

At the core of the controversy lies the "buy-back" system with which the government bypass constitutional clauses that forbids foreign investments in Iranian oil industries.

Under the system, introduced in the nineties, a foreign investor is to recover his investments and interests from products produced.

According to many experts, this system benefits mostly the oil firms that accept to challenge the sanctions imposed on Iran by the United States.

As Mr. Jannati retracted from his previous hawkish stand and appoligised for the unfounded accusations, the reformists-dominated Majles (parliament) began probing into the benefits of "buy-back" contracts signed with foreign firms for the development of the country's oil and gas reserves.

The inquiry aimed to determine whether the contracts were in the national interest and whether the projects given to foreigners could be carried out by Iranian experts.

Iran has signed buy-back deals worth billions of dollars with several major international oil firms such as Italy's ENI and France's TotalFinaElf.

But more than the system, it is the agreements that make the Oil Ministry and its officials look suspicious, as nothing ever have been published concerning the deals, worth billions of US Dollars.

Now, according to the pro-government "Aftab Yazd" (The Sun of Yazd), Mr. Namdar-Zangane has promised to publish the full text of all the oil contracts.

"As I have frequently mentioned before, at the time of signing the oil contracts, all the relevant state departments including the Foreign Ministry, the Management and Planning Organization, the Ministry of Economy and Finance, the Central Bank and the Energy Committee of the Majles were aware of these agreements. And there has been full co-ordination between the Majles and the government over this issue", the Minister has told the paper.

Mr. Namdar-Zanganeh has put the net figure of the oil contracts over the past four years to about 10.5 billion dollars and reiterated that the government is "almost obliged" to sign oil contracts on buy-back basis.

He said in accordance with the third economic development plan, the government must invest 31 billion dollars in the oil and gas sector, noting that the figure does not include investment in the petrochemical sector.

"In connection with the American sanctions, Mr. Zanganeh observed that Iran did not allow the sanctions to succeed and added that even Japan, which was the last country to ignore these sanctions, is no longer co-operating with America. As I have said on many occasions before, extension of these sanctions would hurt American firms", Aftab Yazd said. ENDS JANNATI RETRACT OIL CORRUPTION 20701"


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