By Mitch Prothero
May 16, 2020
Iran’s elected government under President Hassan Rouhani is embroiled in an internal power struggle against hardline factions of the Islamic Revolutionary Guard Corps for control of the country’s response to the COVID-19 crisis.
The struggle has been exacerbated by two military disasters this year: January’s accidental shootdown of a Ukrainian jetliner over Tehran, which killed 176 people; and last Sunday’s failed naval missile test that accidentally killed at least 19 Iranian sailors and left more than a dozen still missing.
Iran was the second nation after China to suffer a major outbreak of COVID-19. The disease ripped through top officials and health care workers in the holy city of Qom before spreading to the rest of the nation. But despite social media posts publicising the widespread deaths and a collapsed healthcare system dating back to February, official reports have put Iran’s total infection counts at just 114,533 cases as of May 14, with 6,854 dead.
Insider’s sources say those numbers greatly downplay the extent of Iran’s COVID problem.
‘Khamenei and the Revolutionary Guard have been downplaying the extent of the COVID problem since the initial outbreak hit their guys hard in Qom’
“[The Supreme Leader Ali] Khamenei and the Revolutionary Guard have been downplaying the extent of the COVID problem since the initial outbreak hit their guys hard in Qom at the start of the outbreak,” said a regional intelligence official in the Middle East who does not have permission to speak about a top military rival.
“Rouhani’s government has tried to take control of the situation and use the extensive health ministry networks that it controls to reduce the outbreak. But our intelligence indicated that reports about a struggle between the elected officials and the unelected structures controlled by Khamenei.”
Before the crisis, Iran was already under economic pressure from harsh sanctions enforced by the United States intended to deter its development of nuclear weapons. The partial nationwide shutdown combined to prevent the spread of coronavirus exacerbated the situation. Our source says that national security officials linked to Khamenei reportedly forced the government to ease restrictions — and that generated an uptick in infections across the country in April. The news was suppressed in international reporting.
‘The numbers the Iranians have put out since late April are considered extremely suspect’
“Any of the numbers the Iranians have put out since late April are considered extremely suspect because we have indications that the Revolutionary Guard — which means this comes from Khamenei’s office directly — are not reporting cases from its health and military infrastructure and possibly intimidating reporting from other areas as well because the leadership has decided this is a national security issue, where too many cases will make Iran look inept and weak in the face of American pressure,” one source told Insider.
The Iranian economy, which had been battered by sanctions, is expected to collapse further during the COVID epidemic. The last two years has seen Iran’s currency lose more than 60% of its value and a rise 37% in consumer prices this year alone. At the same time, historically low oil prices in 2020 have reduced Iranian revenue.
An oil industry analyst based in the UAE — who asked not to be identified discussing matters that affect clients’ oil revenues — said that Iran’s elected government is hurt worse by the collapse of the oil prices than the Revolutionary Guard. The Revolutionary Guard maintains its own parallel government and economy in Iran. The government, by contrast, relies on traditional taxation and revenue budgeting processes, which are dependent on the health of the oil market. The Revolutionary Guard, said the source, has far more flexibility to raise and spend money through non-traditional means.
“The Guard has always maintained its own cash flow from oil skimmed off the national production, through sweetheart contracts, and company ownership deals, and through off-the-books trade both in and out of Iran. And that’s before the direct support it gets from religious institutions and charities directly controlled by the supreme leader,” said the source. “Rouhani is forced to try to wrest political control over the Iranian system from a system designed to operate outside of that system. It’s not easy.”
A 2013 investigation by Reuters estimated that Khamenei controlled assets in the tens of billions of dollars from a complex web of religious institutions, corporate investment and asset seizures. The result is that the Revolutionary Guard is a quasi-independent military and economic center of power of its own.
“He’s got the type of money on hand to compete with a nation-state – the only other person with personal access to this much cash is probably Putin,” said a financial intelligence analyst with a NATO member’s intelligence service. “Khamenei funds an independent parallel state that directly competes with Rouhani.”
The Guard’s ineptitude has provided an opening for the government
The elected government — which controls ministries and the official armed forces and intelligence services of the Iranian state — has a financial and security disadvantage, by comparison.
But multiple sources said January’s inept shootdown of the Ukrainian jet, plus last week’s botched naval missile test that struck a naval vessel instead of the target it was towing, has given Rouhani some leverage to pressure the government response to COVID.
“They have refused to say if the missile test last Sunday was the IRGC or the proper Iranian Navy, but it’s assumed that a high-profile test of a high tech weapon system in plain view of all their enemies in the Gulf would have only been a Revolutionary Guard production. But the incident as well as the tragedy in January with the airliner has given Rouhani a legitimate claim that the Guard is failing at both its international responsibilities with these failures as well as poorly responding to COVID,” said the regional intelligence source.