A 2013 Reuters report on Iran’s Setad has been cited in four books and was recently used to justify more sanctions on Iran by Mike Pompeo, but a look into the report’s sources and accuracy reveal questionable journalism and a clear agenda.
Ever since the beginning of Iran’s 1979 revolution, the United States has been leading a propaganda campaign against the country, minimizing its own harmful role in key historical events, justifying an ousted monarchal t regime, and demonizing its new political system. Frequently it is done in lighter forms, such as constant criticism of the new government or even claiming the new government is as bad as the previous one, but the methods can sometimes be so radical that the characteristics of the two systems are completely inverted.
While Reuters claims Iran is active in spreading disinformation online, the agency’s reporting on Iran shows that its own coverage is rife with disinformation. The latest example of which comes via a false report about Iran’s missile program, the rampant falsehoods in that piece have already been carefully dissected. But the coup de gras of Reuters’ quasi-anti-Iran propaganda came in 2013 in an article titled, Assets of the Ayatollah, The economic empire behind Iran’s supreme leader. Authored by Steve Stecklow, Babak Dehghanpisheh, and Yeganeh Torbati, the piece represents a perfect example of the often rampant radicalism and disinformation found in reporting on Iran.
The report has already been cited in at least four published books, the most recent in 2018, including,“Iran’s Political Economy since the Revolution” by Suzanne Maloney (2015); “Democracy in Iran: Why It Failed and How It Might Succeed” by Misagh Parsa (2016); “Challenging Theocracy: Ancient Lessons for Global Politics” by David Tabachnick, Toivo Koivukoski, and Herminio Meireles Teixeira (2018); and “Losing Legitimacy: The End of Khomeini’s Charismatic Shadow and Regional Security” by Clifton W. Sherrill (2018).
The chorus doesn’t stop there and is not limited to academic publishing or to the book industry. The 2013 report lays the ground for an ongoing war of words and aggression towards Iran. Speaking at the Ronald Reagan Presidential Foundation and Library on July 22, 2018, Secretary of State Mark Pompeo used the 2013 Reuters report to attack Iran, saying:
And not many people know this, but the Ayatollah Khamenei has his own personal, off-the-books hedge fund called the Setad, worth $95 billion, with a B. That wealth is untaxed, it is ill-gotten, and it is used as a slush fund for the IRGC. The ayatollah fills his coffers by devouring whatever he wants. In 2013 the Setad’s agents banished an 82-year-old Baha’i woman from her apartment and confiscated the property after a long campaign of harassment. Seizing land from religious minorities and political rivals is just another day at the office for this juggernaut that has interests in everything from real estate to telecoms to ostrich farming. All of it is done with the blessing of Ayatollah Khamenei.”
The speech was enthusiastically applauded by Iran hawks in Washington.
The year 2013 was the year of big news about Iran. Four months prior to the release of the Reuters’ article, the CIA finally admitted its role in instigating the 1953 coup against Iran’s democratically elected government:
Marking the sixtieth anniversary of the overthrow of Iranian Prime Minister Mohammad Mosaddeq, the National Security Archive is today posting recently declassified CIA documents on the United States’ role in the controversial operation. American and British involvement in Mosaddeq’s ouster has long been public knowledge, but today’s posting includes what is believed to be the CIA’s first formal acknowledgment that the agency helped to plan and execute the coup.”
Disinformation is dangerous. Once used to oust Iran’s democratically elected Prime Minister Mohammed Mossadegh, it is being leveraged again to try and bring back the Shah of Iran. As journalist William David Pear highlighted in a 2013 article for the Greeneville Post,
Since Iran was a developing democracy, an excuse had to be found for a US intervention. Churchill accused Mossadegh of being a communist. There was no evidence that he was. Mossadegh was an anti-colonial nationalist who cared about the welfare of the Iranian people, and that was all the evidence that Eisenhower needed. Mossadegh had to be punished for standing up to the British and demanding Iran’s natural resources for the benefit of the Iranian people.”
Reuters’ 2013 report hearkens back to those same patterns of disinformation. The story claims that the Execution of Imam Khomeini’s Order (EIKO), also known as Setad – a little-known organization created to help the poor – morphed into a $95 billion financial empire controlled by Iran’s Supreme Leader, Ayatollah Ali Khamenei. More precisely, the report allegedly uncovered something unknown to Western intelligence services, economists and the most prominent scholars of Iranian studies, even to the Iranian leadership themselves. In fact, much to the contrary, among ordinary Iranians the organization is known for its social programs, helping the poor and other charitable works.
According to the Reuters article, the Iranian president’s office and the Foreign Ministry didn’t respond to requests for comment. Iran’s embassy in the UAE issued a statement calling the report’s findings “scattered and disparate” and said of the claims in the report, “none has any basis.” Hamid Vaezi, Setad‘s then director general of public relations, said that the information presented is “far from reality and is not correct,” but he didn’t elaborate beyond that. These short denials are understandable, considering that the same response could be expected of a scientist asked to make a serious review of a fictional book. For the same reason, no scientific review of the Reuters‘ article has been pursued. However, a review of the details, focusing on personal testimonies and the claims of several groups of sources relied upon in the report, develop a linear counter-story to its claims.
Baha’i personal testimonies
First, there’s the story of Pari Vahdat-e-Hagh, an 82-year-old Baha’i woman living in Europe, who claims that her family’s property, more precisely three apartments in a multi-story building in Tehran, allegedly “built with the blood of herself and her husband,” was seized by Setad. She further claims that her husband Hussein was imprisoned in 1981 because he began working for a gas company that had been set up to assist unemployed members of the Baha’i faith and that he was executed a year later. All of this happened, as the article claims because the family was Baha’i.
The article does not mention the fact that her husband, an alleged philanthropist, was actually a lieutenant in the Shah Pahlavi regime’s military. It also does not mention how the family was able to obtain such a significant amount of property in Iran’s capital city center at that time. Ordinary, military personnel were provided with an apartment, not three of them and it was not possible to earn such vast properties on the meager salary of a lieutenant and teacher, no matter how hard one worked. Miss Vahdat-e-Hagh explicitly stated that all of the property had been obtained by herself and her husband, excluding the possibility of inheritance.
The only way to be awarded three apartments was, in fact, to be an extraordinary and obedient service to Pahlavi’s regime, and taking into account that Hussein Vahdat-e-Hagh’s career was military and that the only war that Iran’s Shah ever led was one against his own people, his merits to the dictatorship become crystal clear. This also explains why Hussein Vahdat-e-Hagh was imprisoned and executed, while tens of thousands of other Baha’is as well as rank-and-file lieutenants – those without ‘special merits’ and three apartments – did not face the same fate. In other words, when Vahdat-e-Hagh referenced her family’s property being “built with the blood of herself and her husband,” the blood in the equation was likely the blood of the people on her husband’s hands. But the contradictions do not stop there.
Pari Vahdat-e-Hagh, also known as Paridokht Khaze, lives in Berlin where she earns a living by giving interviews and selling memoirs about her Baha’i victimhood. In the preface of her 2014 book, “In Search of Justice,” Vahdat-e-Hagh claimed that before the 1979 revolution she hoped to one day fulfill her dream of serving the needy in Africa. Before selling fictitious biographies, according to her own personal testimony to Reuters, during the 1980s she was living in one of the aforementioned three apartments and was earning income by renting out the other two. During these years of war Iran was rife with rampant poverty, but providing free accommodations to the needy was apparently out of the question for the self-proclaimed philanthropist.
Her lucrative rental business continued into the 1990s while she was living in Germany, reaping the rental income from all three apartments. According to the Reuters report, she left Iran in 1993 and it subsequently took six years before Iranian authorities realized she was no longer living in the country. This contradicts a statement she made claiming that Iranian government representatives came to her apartment and threatened to beat her if she did not leave, while she bravely opposed them and yelled: “You can come and kill me.” This elderly women, allegedly under constant pressure and control, indeed left her apartment and was even able to leave the country, and the government, allegedly so greedy for her properties that it sent thugs to her door, did not even notice that she had left Iran was renting out those same properties for six years.
In both the Reuters article and in Vahdat-e-Hagh’s personal memoirs, her departure from Iran is described as a “courageous escape,” typical for a dissident genre, from books to Hollywood movies. In reality, she was free to leave the country and there was no ban, no control, no chase at the airport. In the Reuters article, her false courage and principles are enhanced by claims that Iran’s government finally discovered her absence and demanded she pay rent on the properties, but she refused. The reality is, again, quite the opposite: Vahdat-e-Hagh was refusing to pay taxes on her rental income profit for six years, and in the meantime, she did not even report her change of address (i.e. living abroad). Putting aside the controversial origin of the properties, the consequences of such long-term lawbreaking are almost identical the world over.
The Reuters‘ story ends with a claim that Vahdat-e-Hagh’s “stolen” building appears to be vacant, most of the windows are broken, and the property’s ownership is ambiguous. The claim allegedly came from merchants in the neighborhood, but how three Reuters journalists based in New York, London and Dubai managed to obtain the information in the streets of Tehran isn’t clear. Even less clear is their message, which may imply either that the building remains unused since Vahdat-e-Hagh stopped renting it, or that it is basically worthless. Both possibilities compound the already rampant lack of credibility of the story and reveal it to be what it most likely is, a fantastical dystopian allegory of post-revolutionary Iran.
Besides the story of Vahdat-e-Haghs, the Reuters article also tells the tale of the Katirais, another Baha’i family whose narrative is similar in terms of structure. Again, there’s a rented three-story building in central Tehran, the owner’s emigration to Canada, controversial ties to the Pahlavi regime, and of course, the “just because they’re Baha’i” cliche. Apart from the building, there’re also 750 hectares of land around the city of Hamedan in northwest Iran. The official version of events states that the owner left the country and abandoned their properties and that prior 1979 he collaborated with the Pahlavi regime. The property owner’s daughter, Heideh Katirai, claims that her father was targeted solely because of his religion and denies he had any ties to the Shah’s government.
So, who to believe? Making a choice on this question is easier if one considers the Shah’s 1963 White Revolution whose purpose was to weaken the classes that supported the traditional system, primarily landed elites. Virtually all landlords lost their possessions, with only a few exceptions, i.e. those with close ties to the government. Taking into account that the general status of Baha’is during the Pahlavi period was far from thriving, the claim that a Baha’i person without any connections to the Shah’s regime could retain 750 hectares of land throughout the vigorous land reforms, Katirai’s claims of no ties to the Pahlavi monarchy are questionable at best.
Instead of sticking to the facts known to every historian, and indeed Iranian, Reuters journalists use logically fallacious methods like appeals to empathy, false dilemmas, and good ole’ victimhood. For example, an article quotes Katirai’s daughter saying “I took my kids there every Friday to see the family” and “each corner of that house is a memory for us.” One may wonder whether these trite phrases can be applied in the same way to their former land holdings, perhaps every single square meter of the 7,500,000 square meters they owned is a memory for them. Such a colossal amount of land was highly uncommon even for the richest landlords, and since the Katirais weren’t historically attested among noble or wealthy merchant families prior to the Pahlavi period, it is clear that they did not just keep the property due to the ties with the Shah’s regime, but that they obtained it during that time.
Other statements are less subtle and bear aggressive religious and political undertones. “We know that Islam is a religion of peace, but how can a government that claims to be an Islamic government allow this to happen?” Katirai’s daughter asked, thus offering the false dilemma: either the Iranian government is not Islamic, or Islam is not a religion of peace. Another possibility, unoffered in the article but the most realistic prospect nonetheless, is that she is a liar and demagogue. Additional evidence for this is her claim that legal representatives refused to consider her father’s case solely owing to the fact that he did not belong to one of Iran’s three constitutive minorities: Zoroastrians, Jews or Christians. This implies that all others, from Iranian Hindus to foreign-born East Asian communities, have no legal rights in Iran, an easily disproven canard.
Legal and human rights “experts”
Another group used as a reference in the Reuters report are Iranian-born expats and self-proclaimed human rights “experts” and lawyers. The first is Naghi Mahmoudi, who in the report’s introduction claimed that Khamenei as the Supreme leader oversaw the creation of a body of legal rulings and executive orders that enabled and safeguarded asset acquisitions and that no supervisory organization can question its property. The article represents him as a “lawyer” and uncritically accepts his allegations which serve as the basis for further elaboration.
In reality, Naghi Mahmoudi is only a pity political activist who has a history of lies and manipulation. Back in mid-2010, Mahmoudi and his colleague Javid Hustan Kian claimed to be defectors and “lawyers” of an Iranian woman sentenced to stoning, but the whole case turned out to be a well-organized hoax in what came to be known as “the Sakineh scandal” and the pair was revealed to members of the U.S.-backed MEK terrorist cult. In the meantime, he almost completely vanished from the media, held several pro-MEK speeches in Germany, and sometimes shared a propaganda material on Twitter, including ridiculous pan-Turkish claims that “40% of Iranians are Azeri Turks deprived of basic human rights.” Ironically, even Ali Khamenei was born into an Azeri family, as the Reuters report itself mentions.
The biographical details of other sources cited in the piece are no less controversial. Ottawa-based Hossein Raeesi is a legal advisor to the IHRDC, a U.S. government-funded organization blacklisted as subversive by Iran’s Interior Ministry, and London-based Mohammad Nayyeri, a close associate of Shadi Sadr, an anti-Iranian activist who publicly advocates Arab separatism in Iran.
Interestingly both Raeesi and Nayyeri, along with the Beverly Hills-based Reghabi couple, complain about legal complications over the return of property in Iran but concede it is possible, but it takes time and money. They could not agree, however, on how much money it took. Some claimed they were charged legal fees of 20% in order to reclaim their property while others put the number at 50%. Since both amounts come across as exaggerated and are not provable, Reuters relies on the alleged testimony of two anonymous sources as evidence. The first is an Iranian expat who put fee at 55%, and the second is an alleged client of Nayyeri who recovered their house but had to pay 20% of the property’s assessed value, a religious tax called khums mandated by Iranian law who funds are used to support the needy among other things. No names, no documents, and no sense. To fill such logical gaps and inconsistent claims, journalists had to rely on the tired orientalist cliché of ubiquitous corruption.
Finally, the last group of sources consists of individuals more deeply involved in politics, comparing to the previous activists who operate under the guise of human rights. The Reuters report tellingly conceals the organizations they represent and introduces them as respectable scholars and politicians, allegedly authoritative on the subject. For example, three journalists first claim that they had identified “about $95 billion in property and corporate assets controlled by Setad” and that amount “surpasses independent historians’ estimates of the late shah’s wealth,” and as an evidence for such comparison, they further use statements by Abbas Milani who believes the estimate of the Shah’s fortune was “extremely exaggerated” and stood at “a billion dollars.” In other words, about $3 billion in today’s money, or only a fraction of the worth of Setad‘s holdings, Reuters concluded.
It is difficult to enumerate how many manipulations this escapade contains. First of all, the closest semblance of a historian sourced in the report is Abbas Milani, who is far from “independent” thanks to his membership in the neoconservative Hoover Institution, an advocate of multilateral crippling sanctions against Iran in the U.S. Congress. His books are full of revisionist portrayals of the U.S. role in the 1953 coup, support for the brutal Pahlavi regime during the 1979 Revolution and after, as well as contorted interpretations such as his claim that “Iran went from politically moderate Monarchy to the totalitarian Islamic Republic.” Milani’s statement about the Pahlavi fortune does not represent a historical consensus, nor a serious scholarly assessment, only an utter whitewashing of the Shah’s financial crimes.
In January 1979, the New York Times reported that Pahlavi’s wealth was rivaled in the Middle East only by the holdings of the Sauds of Saudi Arabia and the al‐Sabah dynasty in Kuwait, and according to bankers, the Shah’s personal portfolio is worth “well over $1 billion.” New York bankers told journalists that “a substantial part of the $2 billion to $4 billion belongs to the Pahlavi family,” speaking only of the sums that were “transferred from Iran to the United States during last two years” [1977 and 1978]. The NYT article further states that “the accumulation of immense sums was made possible through the blurring of state funds and royal funds in Iran,” primarily the Pahlavi Foundation which the Shah controlled absolutely.
In 1958, the Shah formed the Pahlavi Foundation, declaring at the time that he was transferring 90% of his holding to the new institution, a combination of charitable organization and family trust. Documents would later prove the royal family’s penetration of almost every corner of the nation’s economy, including among other things 17 banks and insurance companies, 80% ownership in the nation’s third-largest insurance company, 25 metal enterprises, 8 mining companies, 10 building materials companies, 45 construction companies, 43 food companies, and 26 enterprises in trade or commerce, and a share of ownership in almost every major hotel in Iran, or 70% of the hotel capacity. Some of these holdings were joint ventures with American corporations.
Behind the facade of charitable activities, the NYT article continues,
the foundation is apparently used in three ways: as a source of funds for the royal family, as a means of exerting control over the economy through the foundation’s holdings in key sectors, and as a conduit for rewards to supporters of the regime.”
The transfer of billions of dollars out of Iran was underway years before the 1979 revolution took place. In 1974, when popular anger over the decadence and brutality of the Shah’s regime was beginning to manifest, the monarchy began to give large loans to members of his family that were never repaid and numerous transactions from Iran were made through American corporations and banks as well as some New York investment houses. Additional uncounted resources were deposited into banks in Switzerland and other countries with strictly enforced bank-secrecy laws.
In the autumn of 1978, during the revolutionary turmoil, 64 members of the Pahlavi family fled abroad. Like other wealthy Iranians, they all made substantial deposits in Swiss bank accounts and bought luxury residences in Europe and North America following their departure. Of course, the royal court never revealed the true extent of its wealth, but Iranian and Western estimates place the fortune accumulated by the royal family, both inside and outside Iran, far above Abbas Milani’s “a billion dollars” claim. New York bankers, Ervand Abrahamian, and Michael Axworthy, both highly critical of Iran but still regarded as authoritative historians of modern Iran in the West, offer a completely different picture.
According to Abrahamian’s monographies, the royal family’s total assets were estimated “anywhere between five and twenty billion dollars” or “in excess of $20 billion.” With inflation, that would equal $60 billion in today’s currency. In Axworthy’s book, the capital that had been sent out of the country was “estimated around $120 billion.” This figure includes the comprehensive wealth of all Iranian emigrants, but there is no doubt that the majority was concentrated in hands of the ruling family.
In January 1981, the Iranian government filed a $36 billion lawsuit in New York against 65 defendants, most of them relatives of the Shah, in an attempt to recover the country’s stolen wealth. Reuters journalists mentioned this fact but in the context of denying figures. “The suit was dismissed,” their paragraph ends, therefore implying that the “claimed” figure must be false. The New York courts did not deny the amount of money in question, they dismissed the proceedings on the ground of ‘forum nonconveniens’ though they admitted that there was no alternative forum. According to a book by Trevor C. Hartley, Emeritus Professor of Law at the LSE, this was an abuse of the doctrine, for political reasons, the courts were determined to shield the Shah, and ‘forum nonconveniens’ was the tool they chose. After all, those are the same courts which recently ordered Iran to pay billions to relatives of 9/11 victims.
In addition to Abbas Milani, the Reuters article quotes Mohsen Sazegara, introduced as a co-founder of the Revolutionary Guards who is now in exile in the United States, and David S. Cohen, then undersecretary of the Treasury for Terrorism and Financial Intelligence who also served as deputy director of the CIA. The former is a member of the Washington Institute for Near East Policy (WINEP), a subsidiary of the notorious American Israel Public Affairs Committee (AIPAC), while the latter is a member of the Foundation for Defense of Democracies (FDD), a hawkish and neoconservative organization led by Mark Dubowitz that has intensively lobbied for the anti-Iranian and anti-Setad sanctions for years.
An agenda unveiled
All of the aforementioned lobbyists and their advocacy groups, along with three Reuters journalists seem to be striving to the same ends, to convince the world that Ali Khamenei is the same as Shah Mohammad Reza Pahlavi, and Setad is no different than the Pahlavi Foundation. There is, however, a serious problem with this picture. More precisely, there are no Khamenei’s jewels, crowns or designer clothes, no luxury cars or art collections, no luxurious villas or expensive estates, either in Iran or abroad. There are no rich members of the family, no foreign bank accounts, no documents, no independent experts, no New York or Swiss bankers. There is absolutely nothing to substantiate the claim.
There is, indeed, the Reuters “investigative” article with fancy charts and listed properties. Only a few months before the publication of Reuters‘ article, Washington imposed sanctions on Setad and some of its alleged corporate holdings, and the Treasury Department issued a press release containing boring numbers, hard charts, Persian-named properties and other dull text, incomprehensible for wider audiences. And that’s why the Reuters article jumped out.
Investigative journalism is when a report is built on the basis of proven, collected data, but in the Reuters report, it is not. The report is rife with details that serve to buttress the central premise. In other words, when you take out all the worthless tree charts, personal testimonies, stories of poor old ladies, allegations by activists and lobbyists with questionable agendas, and the numerous other cliches, the only thing left standing is the official U.S. press release and accompanying political rampage against Iran. Nothing more.
Regarding Setad itself, as seen through the eyes of the U.S. government, it serves as a useful bogeyman and has multiple purposes. Its first dimension is political-ideological as it follows the tired discourse of bashing Iranian leaders and veterans, equating them with corrupt royal elites. Second, the economy of Iran is now being discussed under the guise the “Setad” name, a sort of trade name which sounds less offensive in public debates and official documents. Third, and most important, it is a perfect tool to further targeting Iran’s economy and expand sanctions, because any new emerging company can easily be declared a Setad holding.
Top Photo | This photo, stylized by MintPress News, shows one of the offices of the Thompson Reuters corporation. Photo via Thomson Reuters career website.
Ivan Kesic is a Croatia-based freelance writer and open-source data analyst who has contributed to “Balkans Post” & “Sahar Balkan.” He worked as a writer at the Cultural Center of Iran in Zagreb from 2010 to 2016.
A version of this article was published by the Strategic Culture Foundation
The views expressed in this article are the author’s own and do not necessarily reflect MintPress News editorial policy.