Various Free Zones

Various Free Zones

The financial corruption cases involving the heads of free zones in Ahmadinejad’s administration are among the most challenging conflicts between the previous administration and the Judicial System of the Islamic Republic of Iran. Unlike the other questionable cases in the previous administration, these cases were confronted firmly by the Judicial System. Many proponents of Mashaei’s circle who were appointed as the heads of different free zones were arrested, tried, and convicted finally in embezzlement cases worth billions of tomans. Although their apprehension was publicized at that time, this report aims to reveal further information about the crimes committed by those embezzlers associated with the previous administration.

Aras Free Zone Organization – Having a high school diploma and only experience of working as the head of Saadabad Historical Complex, Alireza Moghimi was appointed as the head of Araz Free Zone Organization by Baghaei in December 2010. Moghimi lacked any experience in civil management required for running the second-generation zones (with no infrastructure). It was also claimed that Moghimi was appointed with the recommendation of Mashaei. In the internal introduction meeting, the planning vice-president for the Center of Iran’s Free Zones addressed Moghimi as a special assistant of Baghaei, but Moghimi insisted that he be introduced as Mashaei’s soldier. After a short while, his unusual actions to bypass regulations and formalities of governmental transactions led to serious allegations regarding substantial cases of financial abuse, some of which are reviewed. In his first managerial decision, Moghimi allocated the organizational credit to the purchase of five luxurious foreign cars worth over three billion rials by the names of a few real entities. Purchasing cars with governmental resources for the associates of a CEO would be considered an unprecedented but evident exemplar of abusing governmental properties. These resources were spent buying a Hyundai Veracruz 2011 with a chassis plate number of KMHNU81CDBU139894. The fate of this car is now unknown. In early 2011, Moghimi insisted on the necessity of completing the construction of Aras Free Zone entrance gates. As a result, he ignored the main project based on the laws of the Free Zone Vice-Presidency to construct deployment sites for respective organs such as the Iranian Police and the Iranian Customs Organization. Instead, he ordered to build a poll kiosk at each gate. Before any actions such as holding tenders and signing contracts, the matter was announced by the management of an organization to a contractor in Tehran. With the assistance of local contractors, the main contractor started operating immediately. Without the

employment of a legal process and any legal relationships with the organization, the contractor was first selected by the CEO to implement the project. The other actions were taken to bypass the regulations. The experts estimated the cost of implementing this project more than four billion tomans. The CEO of the organization ordered the head of his civil department that the tender was supposed to be held in a way that the designated contractor could win. The head of the civil department took all the necessary actions to conduct the formalities of a limited tender. By falsifying the date on the letter numbered 89S11151/, the legal process of holding the tender was changed by the development deputy of the management, the executive advisor of the organization, and a manager of the civil department. Although this action was protested by the inspector of the organization, Moghimi wrote a letter to the development and project management department and announced the finalization of this process by the end of that year. He then excluded the formalities of the tender by stating that the project had to be completed by the end of that year. This was against the president’s order announced in the letter number 167/128589 issued by the secretary of the state council. Moghimi signed a contract worth 7 billion and 500 million rials (more than 85% of the first estimate) with the designated company. According to an order issued by the head of Aras Free Zone in an ordinary A4 sheet typed by an unknown company in Tehran, gaming devices were set to be purchased from that so-called company for 1 billion and 500 million rials. However, with the emphasis of the then vice-president of culture on the necessity of complying with all legal requirements, the arrangements were made to conduct the transaction through the tender. After the CEO was made aware of the need to go through formalities and the low chances of the designated company to win, the tender was canceled. The price was then changed. Referring to two unsealed sheets in the first stage, 410 million rials was paid to the designated company. The rest of the fee was also set to be paid. It has been said that Moghimi’s crimes were much worse. Finally, he was arrested in July 2011.

Chabahar Free Zone Organization – Shabaz Yazdani was another controversial manager appointed by Baghaei. Before entering Mashaei’s circle of assistants, Yazdani was just a simple office worker in the Research Institute of Forests and Rangelands. After he was acquainted with the previous president’s chief of staff, Yazdani’s star was on the rise. He was first appointed as the Vice-President of Cultural Heritage and Tourism and then appointed as the head of Chabahar Free Zone Organization. An unusual action he took was to rent Chabahar lands to afghans for 50 years, something which was protested by many Iranian locals and officials. This action was taken when the people of Chabahar, in which the unemployment rate is the highest, have to go through the year-long bureaucratic processes of Chabahar Free Zone Organization to register a company. Another illegal action recorded in Yazdani’s legal case was to appoint his relatives. For example, his wife was on a four-million-toman payroll (without being present in the free zone), or his cousin was on an eight-million-toman payroll. He also sold coastal lands without depositing

the fees into the state’s account. Yazdani was arrested when he was escaping through a western border of Iran with a great deal of money. He is now kept in Prison.

Arvand Free Zone Organization – Ali Asghar Parhizkar received negative reactions from the representatives of North Khorasan Province in the parliament from the very beginning he was appointed. Indifferent to their warnings, he started committing his crimes. According to his financial corruption case published by Fars News Agency, he paid more than 136 billion rials in aid packages for the neighboring regions to some individuals, organizations, and offices without complying with any regulations from July 23, 2010 to March 20, 2011. Despite having the lowest educational degree (a high school diploma), Ali Asghar Parhizkar operated as a board member of Iran’s Tourism and Cultural Heritage Investment Company (also known as SAMGA) during his tenure at the Cultural Heritage Organization. Benefiting from economic rents, this company managed to sign illegal contracts to acquire the license to construct and use the International Hotels of the Imam Khomeini Airport and selling Lavizan lands. In Arvand, Parhizkar established Arvand Aftab Development Credit Company, in which the employees of Arvand Chabahar Free Zone Organization were the shareholders. This company adopted the exact same policy as SAMGA in the Cultural Heritage Organization. Without passing the legal formalities of tenders, this credit company started to sign service and human resources contracts. In fact, this credit company was established to cover for false financial documentation for the deviant stream in Arvand Free Zone Organization. From establishment to delivery to the new administration, no transparent financial status was provided for the shareholders. He also held an exhibit for modern and classic cars as well as the showy auction to sell Ahmadinejad’s personal car in Arvand Free Zone Organization. According to statistics, executing this project shut down nearly five key civil projects in Arvand Free Zone to provide the hefty costs of the problematic car exhibit. The winner of the auction was basically fake, and there are many unanswered questions in this regard. Parhizkar also allocated a large amounts of credit and prepared the building for the exhibit hastily in 57 days to lay the foundation for his deceptive project under the cover of expos. He constructed many sections of the exhibit buildings against the regulations for the official tenders in an effort to accelerate the construction work. Behind the scene of fake exhibits with benefits for the general interest, there were more than 12 billion rials in guaranteed purchases with purchase coupons given to schools, care seekers, political figures, and different executive organs that had to spend those coupons in a few days at the expos. As usual, organizations and offices in some sectors receive slight sums as resolving funds to cover their current expenses; however, 400 million tomans were provided for Arvand Free Zone Organization as the resolving funds for the PR and logistics. Most of this money was spent on formalities, advertising, and fake documentation. Parhizkar was arrested with Moghimi in July 2011.

Kish Free Zone Organization – The Kish Island drew Mashaei’s attention from the beginning of his tenure as the head of the Cultural Heritage Organization. Due to his direct supervision, several CEOs were appointed to the island in short intervals during the eight years of Ahmadinejad’s administration. Reportedly, different lands on the island were given to specific people during the tenure of each CEO at Mahaei’s discretion. Illegal facilities were also granted to certain people by banks in the Kish Free Zone. The crimes of one bank were even proven in Mahafarid Khosravi’s case of financial corruption for 3000 billion tomans. The head of that bank was convicted as a criminal in the case. Other financial violations occurred during Mohammad Ali Mohebi’s tenure as the CEO. In one case, 450 million euros were embezzled for halls at the Kish Island. At Baghaei’s command, some lands were given illegally to a person living abroad, and a billion figure was then deposited into his account to start the project. Finally, that person left the country with all that money. According to the then head of the General Inspection Office, Mohebi was under pressure to sign a contract with that person and grant him facilities and the lands. Finally, Mohebi was discharged due to his refusal to sign the contract, although the fugitive gained a large amount of money.

Qeshm Free Zone Organization – The financial violations of this island, which have been publicized recently, were not committed by a specific CEO. In fact, they were committed extensively during eight years. According to the new CEO of this zone, billion-toman crimes were discovered only in the last two months of the previous administration. In one case, a land owned by the organization in a posh neighborhood in Tehran was sold at one-tenth of its real price. According to Moshiri, the new CEO of Qeshm Free Zone Organization, this 10-thousand-m2 land was first supposed to be used to construct a hotel dedicated to the organization, but it was finally sold for 6.6 billion tomans, although it was really worth more than 60 billion tomans. Comparing the method of selling lands in Qeshm Free Zone Organization with the Treaty of Turkmenchay, Moshiri added, “Most of the crimes were committed in land sales contracts. A large area of land on the island was sold to some people in installment plans through contracts like the Treaty of Turkmenchay, but no money was deposited into any accounts held by the organization.” According to Moshiri, certain people were granted hefty loans with conditional agreements and pledges of allegiance. In this regard, four bags of uncashed checks were discovered. Shahriar Moshiri also talked about the ships which were bought by someone who borrowed 50 million dollars from the banks of Qeshm Free Zone Organization but then claimed that they were stolen. He said, “The ship manufacturing factories have the serial numbers of the ships they build. If a ship goes missing, its serial number will be announced, but there are no reports regarding the stealing of these six ships.” The new CEO of Qeshm Free Zone Organization also told of the empty fund of this organization and said, “Currently, there is not even one rial in the fund of this organization with 1200 employees. The monthly expenses of this organization exceed 20 billion tomans.”

 



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