Replies

The Last Word: The Difference Between Them

The Difference Between ThemBy James Rubin

Newsweek International
Aug. 9 issue -

Democratic presidential candidate John Kerry claims he'll fix American intelligence and make America safer at home and more respected abroad. James P. Rubin, senior foreign-policy adviser to the campaign, sat down in Detroit with NEWSWEEK's Richard Wolffe to explain what would be different under a Kerry administration. Excerpts:

NEWSWEEK: Expectations are high that American foreign policy would change under a President Kerry. But it sounds like the goals—fighting terror and making America safer—are not that different. Is it a question of style or execution?

RUBIN: The difference, and this is the big and crucial difference, is that John Kerry, by virtue of his experience and his character and his wisdom, will be just as tough as George Bush in defeating Al Qaeda and Islamic extremist terrorists, but he will be a lot smarter in how he solicits the support of other countries. If elected, John Kerry will be sitting down with the leaders of our major friends and allies and demanding action. But he will do that in a way that expresses understanding for other people's points of view, that involves listening and leading rather than alienating, and that involves old-fashioned persuasion and an appreciation for other cultures and values. The bullying of the Bush administration will come to an end.

What makes you think that persuasion and understanding cultures will work now in a way that it didn't before?

Well, 9/11 changed things. Countries like Pakistan that were reluctant to break relations with the Taliban and by extension crack down on Al Qaeda realized after the attacks that they were going to risk their future in the civilized world. So the world's major powers—India, Pakistan, Europe, Asia, Russia, China, Japan—were united, arguably for the first time, to defeat the Taliban and put in place a government that wouldn't support Al Qaeda. It was a great moment, and it has been lost. John Kerry will try to recapture that solidarity.

One of the findings of the 9/11 Commission concerns Iran and its alleged support for Al Qaeda. U.S.-Iranian policy has been in the deep freeze for 25 years. How is that going to change with Kerry?

John Kerry regards an Iran as a state sponsor of terrorism armed with nuclear weapons as unacceptable. He has a multiple-part strategy that is much more realistic than the Bush administration's. One is to rejoin and work through the international legal framework on arms control. That will give greater force to the major powers if they have to deal with violators. Secondly, he has laid out, I think in the most comprehensive way in modern memory, a program to secure nuclear materials around the world—particularly in the former Soviet Union but also in the places where research reactors have existed that could be susceptible to proliferation. The point is to try to prevent Iran from ever getting this material surreptitiously. Thirdly, he has proposed that rather than letting the British, the French and the Germans do this themselves, that we together call the bluff of the Iranian government, which claims that its only need is energy. And we say to them: "Fine, we will provide you the fuel that you need if Russia fails to provide it." Participating in such a diplomatic initiative makes it more likely to succeed.

A lot of European diplomats say Iraq is so toxic politically that they aren't prepared to send more troops. Kerry has talked about changing the dynamic, but what if the dynamic doesn't really want to change?

We will have a far better chance of getting that support in Iraq—to prevent a failed state, a state where terrorism can roam free the way it did in Afghanistan—if we have a president who proposes specific policies to enlist and encourage other countries to participate. For example, giving them a greater stake in reconstruction, being their partner in regional diplomatic initiatives to get countries around Iraq to prevent cross-border incursions and support for the insurgency, making other major powers a partner in those efforts, having an international high commissioner who can work with the Iraqi interim government and have a role in coordinating reconstruction assistance. All of those things give European and other powers a stake in success. You can't just go to them saying: "We've already decided this; this is the way it's going to be."

Sad but true, it wasn't so long ago when governments of moderate Muslim countries or Europe considered it a political plus to be seen cooperating with the United States. Now there's a political cost. But without the toxicity of the debate on Iraq during the Bush administration, and with Kerry sending a message of unity, it will be easier. Is it a sure thing? Nothing is a sure thing, but we'll have a far better chance.

Outside of terror and war, are you going to see a return to the softer principles and concerns of foreign policy—trade, globalization?

Globalization is a phenomenon, not a policy. One of the failings of the Bush administration is to not understand the extent to which subnational, nongovernmental actors pose both risk and opportunities for the United States and the world. So for too long prior to 9/11, terrorism, international crime, drugs, disease and the environment were seen as soft issues rather than realities. In Kerry you will see a president sophisticated and smart enough to deal not just with classic nation-state interactions, but the amalgam of activities that have come to be known as globalization, whether it's communication or travel or the computer revolution.

http://msnbc.msn.com/id/5570503/site/newsweek/

Terrorism Suspects Traced to Iran [Excerpt]

Los Angeles Times - By Sebastian Rotella
Aug 1, 2004

"When the Iranian government says it is not dealing with Al Qaeda, it is telling the truth," said Mustafa Alani of the Royal United Services Institute, a think tank affiliated with the British Defense Ministry. "It's not the government — it's the Revolutionary Guard.

"We are talking about an ideological army, not just an intelligence service, and the politicians really have no power over them. There is some sort of tactical alliance with Al Qaeda in which the Revolutionary Guard turns a blind eye toward the activity in Iran."

Al Qaeda figures who allegedly have operated in Iran, according to court documents and investigators in Europe, include Abu Musab Zarqawi, the Jordanian seen as a leader of the Iraq insurgency and a broader international network; Saif Adel, an Egyptian regarded as Al Qaeda's military chief; and Mustafa Setmariam Nasar, a veteran Spanish-Syrian fighter seen by Spanish police as a possible mastermind of the Madrid attacks.

Intelligence reports from foreign agencies last year placed Nasar in Iran, high-ranking Spanish investigators said. Nasar, a former propagandist in London and commander of a training camp in Afghanistan, has emerged as a prominent figure in a faction that has distanced itself from Bin Laden, Spanish investigators said.

Although Bin Laden and his right-hand man, Ayman Zawahiri, are believed to be hiding in the Afghan-Pakistani borderlands, other core leaders found shelter in Iran after fleeing the U.S. military operation in Afghanistan in late 2001, officials say.

"The intelligence reports about a year ago said elements of the shura [leadership council] had relocated to northeastern Iran," a top Spanish law enforcement official said. "The Iranians don't cooperate with information, they deny everything, so it's not clear what's going on. They want to present themselves as reformers opening to the West, but it's possible that there are power groups within the regime supporting Al Qaeda."

Some European experts accept the Iranian argument that the presence of militants is confined mostly to vast border areas that are hard to control. And Iran has arrested prominent figures such as Bin Laden's son Saad, the top French anti-terrorism official said.

Yet Iran has offered little information about the status of suspects such as Saad bin Laden and Adel, the former Egyptian commando who is Al Qaeda's military chief. About a year ago, U.S. officials said Iranian forces had Adel in custody, but Iran did not confirm his detention. Reports among counter-terror officials suggest that Iranian agents allow some leaders "controlled freedom of movement," the French official said.

Adel is a top suspect in the bombings last year of expatriate compounds in Riyadh, Saudi Arabia; U.S. communications intercepts indicate that those attacks were ordered from Iran, European officials say.

There are also suspected links between bosses in Iran and the suicide bombings in Casablanca, Morocco, that took place four days after the Riyadh attacks, the French official said. The Casablanca bombings, in turn, intersect with the network involved in the Madrid train bombings.

As Al Qaeda geared up three years ago for its offensive on the West, Iran was a busy route to training camps in Afghanistan, investigators say. In a March 10, 2001, conversation wiretapped by Italian police, a member of a terrorist cell in Milan said associates passing through Iran had nothing to fear, according to the transcript in court documents.

"Isn't there a danger in Iran?" asked a Tunisian named Tarek Charaabi, who was later convicted on terrorism-related charges.

"No, because there's an organization that takes care of helping the mujahedin brothers cross the border. There's total collaboration with the Iranians," responded a Libyan named Lased ben Heni.

"Pakistan was the most comfortable route, but in these past years there's too many secret services," Ben Heni continued.

He said an Al Qaeda operative "in Iran receives the brothers and selects them and decides whether to send them to Afghanistan. It's better to go to the Iranian Embassy in London because it's very smooth and then everything's well organized all the way to the training camps."

The Iranian entry route became an escape route in late 2001. When the U.S. military smashed Bin Laden's Afghan sanctuary, dozens of his militants fled into Iran, some with wives and children in tow. Iranian authorities soon arrested and deported many of them — including Tunisians connected to the Milan cell.

But other suspected terrorists got different treatment, investigators say. Fugitives ran to Iran after eluding dragnets in Spain and other European countries, according to investigators and court documents. Others used Iran as a departure point to attempt attacks in Europe.

U.S. intelligence agents warned Italian police in December 2001 about a suspected leader of a terrorist cell known as Hamza the Libyan, according to Italian court papers.

"American intelligence organisms" advised that "Hamza the Libyan is a mujahedin trained in Afghanistan who has traveled to Italy via Iran to plan criminal actions against unspecified targets in Europe," the documents state.

U.S. agents provided cellphone numbers for the Libyan, who allegedly was in telephone contact with Saad bin Laden in Iran, according to Italian investigators. British police arrested the Libyan, whose name is Farj Hassan, in 2002.

As the U.S. confrontation with Saddam Hussein gathered momentum, so did Al Qaeda-related activity in Iran, investigators say. Police in London and Paris broke up terrorist plots in late 2002 and early 2003 that involved primitive chemical and biological weapons.

The plots were traced to Zarqawi, who had fled Afghanistan to Iran, where he had a support structure in the city of Mashhad near the Afghan border, Italian investigators said.

Zarqawi set up shop at training camps with the Kurdish extremist group Ansar al Islam in Iraqi Kurdistan near the Iranian border, an area out of Hussein's control.

Although U.S. officials cited those camps as evidence of an Al Qaeda-Hussein alliance, Zarqawi spent a lot of time on the Iranian side of the border, European investigators said. Along with Syria, Iran became the gateway for militants from Europe and North Africa traveling to the Zarqawi camps to prepare for battle against U.S. forces, according to investigators and court files.

"Our cases showed that Iran was the preferred trampoline for the militants bound for Iraq," a high-ranking Italian investigator said.

When U.S.-led forces overran the camps in Iraq, many Ansar and Al Qaeda militants fled to Iran. Western intelligence agencies reported that agents of the Iranian secret services set up a field hospital and shelters for fleeing militants, Italian investigators said.

Nonetheless, Iran also captured a number of the jihadis and handed them over to European authorities after the war, officials acknowledge.

Zarqawi is also believed to have found refuge in Iran after the war, French and Spanish officials said. In Spanish communications intercepts last year, a fugitive Moroccan suspect, Amer Azizi, said he was "in Iran with Abu Musab Zarqawi," Spanish investigators said. Police believe Azizi made his way back from Iran to Madrid to play a lead role in the train bombings.

Zarqawi's whereabouts, meanwhile, are a mystery. Some U.S. military officials place him in Iraq at the forefront of the insurgency. French investigators say he moves among Iraq, Iran, Syria, Jordan and Lebanon.

"The Iranians have been saying for two years that they have dismantled the networks," said Claude Moniquet, director of the European Strategic Intelligence and Security Center, a Brussels think tank. "But there are people in the European services who think Zarqawi was in Iran until recently. It's a contradictory picture."

http://www.daneshjoo.org/generalnews/article/publish/article_7419.shtml

A REGIME BUILT ON TERROR

Symbiotic relationship links Iran's tyrants, the terrorists they aid

by Michael A. Ledeen
National Post
July 31, 2004

WASHINGTON - Last week's 9/11 Commission report had a considerable amount of new news about the connections between al-Qaeda and Iran. Earlier leaks had flagged the discovery that Iranian border guards had assisted at least eight of the 9/11 terrorists as they crossed Iran on their suicidal mission; the report added the detail that their passports were not stamped. It is possible this was an oversight, or that the guards were bribed. Such things happen. But it's more likely that there was active co-operation, especially since it turns out that al-Qaeda personnel were trained by Iranians and Iranian surrogates, first in Iran itself and then in the Bekaa Valley of Lebanon, where Hezbollah -- a wholly owned subsidiary of the Islamic Republic of Iran -- has long operated terrorist training centres. Moreover, the commission reported, such top al-Qaeda leaders as Khalid Sheikh Mohammed spent time in Iran, and parked his family there for several months while he travelled elsewhere.

There are other details, but you get the point. For those who have followed the assembly of the al-Qaeda mosaic, these new tiles are beautiful, but do not change the overall design we have come to know over the past few years. Indeed, the Iranian regime, knowing there is abundant proof that al-Qaeda leaders have spent a lot of time in the Islamic Republic both before and after 9/11, has long since proclaimed that fact, all the while claiming the terrorists were actually "in detention" in Iran. When things got alarmingly hot for Tehran, they even promised to hand over the a-Qaeda killers to the United States (at the same time that the regime's leaders constantly praise the terrorists and call upon the people of the Middle East to do everything necessary to drive out the Coalition forces from Iraq). But of course the promises were never kept, and for good reason: Iran's tyrants can no more surrender the terrorists than amputate their own limbs. Terrorism is the essence of the Iranian regime, and the terrorists are there because the regime wants them, helps them and guides them.

On the Iraqi front, all you have to do is listen to the Defence Minister, who puts it quite clearly: Hazim Shalan was quoted in The Washington Post recently saying Iran has taken over Iraqi border positions, sent spies and saboteurs into the country and infiltrated the new government -- including his own ministry. Iran remains "the first enemy of Iraq," he declared.

It is not just terrorism in Iraq. Hardly a week goes by without new information concerning Iran's active support for the leaders of the intifada against Israel, and the Israeli government has said categorically that Iran is now the leading supporter of Hamas and Islamic Jihad. And why not? Both were created by Iran.

The details are new, but, after all, we already knew the mosaic. Each year, the State Department compiles a list of state sponsors of terrorism, and Iran always wins the blue ribbon.

Alongside the new news about Iran's support for terrorism is the ongoing comic routine about Iran's nuclear program. Here again, the facts are not in dispute. Iran acknowledges its nuclear program, which it claims is necessary for domestic energy generation, even though Iran has a near-inexhaustible supply of natural gas and huge petroleum deposits. The regime faithfully promises to provide the United Nations watchdogs with all the details, and to provide full access. But time and time again the inspectors find the regime has lied, and has lied about components of a program to build atomic bombs. Whenever the International Atomic Energy Agency asks to visit a sensitive site, the Iranians either declare it off limits, or delay the inspection. They talk like virgins, but act like streetwalkers.

President Bush says there is a linkage between terrorism and tyranny, and that the most effective way to win the war against the terrorists is to bring freedom to the Middle East. Nowhere is the accuracy of the linkage, and the importance of a policy of supporting democratic revolution, so evident as in Iran.

The Canadian people have had this point driven home to them by the horrible story of Zahra Kazemi, a brave female journalist who was brutally murdered by the mullahs when she dared to look at the repression under way in Iran.

Time after time, Iran has spit in the face of any Canadian who even hinted that the mullahs should behave in a civilized way. The Iranians told Kazemi's family to get out of the country, for the affront of asking for Zahra's body. The Iranians buried her, destroying the evidence of their crime and humiliating her mourners. Then the regime staged a farcical trial, banned foreign observers, warned the press not to report on it and cleared the only (low-level) person they had bothered to charge.

Faced with this dreadful and dangerous regime, the Western world has punted, combining occasional denunciations and warnings with a constant leitmotif of appeasement. Yet Iran has long been the Middle East's prime candidate for democratic revolution. The mullahs have wrecked the country and alienated the overwhelming majority of its citizens. Given a free choice, Iranians would almost certainly throw the mullahs into history's dust bin. The West should do everything possible to give them that opportunity, just as was done in the Soviet Empire, the Philippines, Yugoslavia, South Africa, Chile and many other former tyrannies that are now much freer and more democratic. If the Iranian people heard the leaders of the West denounce Iran's oppression, its support for terror and its race to build atomic bombs, coupled with calls for regime change in Iran by peaceful means, they might well find ways to accomplish it.

Otherwise we shall soon confront the world's biggest Islamist tyranny, and the world's leading supporter of terrorism, armed with nuclear weapons.

Shouldn't be a tough decision.

http://www.benadorassociates.com/article/6268

New Danger Signals from Iran

August 02, 2004
The Post and Courrier Charleston
Charleston.net

Iran's clerical leadership sent unmistakable signals of defiance to the international community last week, raising a familiar question now a quarter of a century old: What can be done about Iran? There are no easy answers, but a democratic Iraq, a cooperative Pakistan, and a resolute European Union can all help blunt the Iranian threat.

In the span of a few days Iran's rulers:

-- Resumed testing equipment used to produce enriched uranium that can be used in nuclear weapons.

-- Were reported trying to buy deuterium gas from Russia. The substance has peaceful uses but can also be used to boost the power of a nuclear explosion.

-- Removed seals placed by the International Atomic Energy Agency on a centrifuge facility used to make nuclear fuel for civilian reactors, but also capable of making nuclear bomb material. The seals had been put in place following an agreement last fall with the foreign ministers of the European Union to help determine Iran's compliance with the Nuclear Non-Proliferation Treaty.

-- Were charged by Iraq's defense minister with facilitating the entry of Islamist fighters from Afghanistan -- a charge that parallels revelations in the 9/11 Commission report that in 2001 Iran facilitated the transit of some of the 9/11 hijackers from Afghanistan en route to the United States.

-- Dismissed charges against a government intelligence agent accused of murdering Iranian-Canadian journalist Zahra Kazemi who was placed in custody after taking photographs outside a Teheran jail. An angry Canadian government on Thursday demanded the return of her body to Canada to determine the cause of death.

Each development sends the same message of contempt for international norms of justice and security. Each is in the tradition of the Iranian clerical "revolution. All require a firm answer.

It has been 25 years since Ayatollah Ruhollah Khomeini led the movement that put Iran under a religious government, announced his defiance of the United States and launched a terror campaign against Israel, declaring it must be destroyed. Its campaign against this country has included complicity in the truck-bomb murder of 241 Marines in Beirut in 1983. It has never abandoned its determination to crush Israel.

Iran's brief experiment with democracy came to an end earlier this year when the clergy acted to bring parliament back under its control and clamped down on press freedom.

Iran may be deterred from acquiring nuclear weapons, but only if Europe's diplomats firmly hold it to its 2003 agreement. This will require a very un-European willingness to invoke the possibility of United Nations Security Council sanctions if Iran fails to give concrete assurances of the peaceful nature of its nuclear program, and agrees to give up the uranium enrichment technology that puts it within striking distance of nuclear weapons.

If diplomacy fails to stop Iran's apparent nuclear weapons program, Israel's Army chief of staff Moshe Yaalon said last week that "further steps" will have to be considered, Reuters reported. That ominous possibility should act as a spur to the world community to preclude the necessity of military action against a rogue state that is undiminished in its opposition to civilized norms.

http://www.charleston.net/stories/080204/edi_02edit3.shtml

Iran Says Not Afraid Of Possible UN Sanctions Over Nuclear Programme

August 02, 2004
AFX UK Focus
Ingrid Smith

TEHRAN -- Iran is not afraid of being referred to the UN Security Council over its suspect nuclear programme and could easily withstand economic sanctions, a top national security official said.

"The most America can do to get its way is to impose economic sanctions, but our experience of these over the past 25 years have proved that they are ineffective," said a top member of Iran's Supreme National Security Council, Sayed Hossein Mussavian.

"Even if the case is taken to the UN Security Council, nothing more than that (sanctions) can happen. It will fail. It does not worry us," he was quoted as saying by the official news agency IRNA.

US Secretary of State Colin Powell said last Thursday that it is "more and more likely" that Iran will be referred to the UN Security Council as a possible prelude to sanctions.

The US has accused Iran of wantonly flouting international calls to curb its nuclear activities, saying Tehran is engaged in a "direct challenge" to the International Atomic Energy Agency (IAEA).

The next IAEA meeting is in September. Iran, which insists it has fully cooperated with the IAEA, wants its dossier to be taken off the agenda of the UN nuclear watchdog.

Mussavian also shrugged off speculation that Israel may try to launch military strikes against Iran's nuclear facilities.

"These threats are baseless, just part of a psychological war. I don't think the Americans and the Israelis would dare to attack Iran's nuclear facilities," he said.

"The Europeans are opposed to that, and America's position in the region would stop them from taking such a risk," he added.

His comments come amid increasing signs of a potential breakdown in relations between the IAEA and Iran.

According to diplomats, talks the European Union's "big three" held with Iran last week on its nuclear programme produced "no substantial progress" in efforts to restrict the Islamic republic's activities.

Officials from the UK, France and Germany met with an Iranian delegation in Paris on Thursday and Friday, and stressed their wish to see a halt to Iran's work on the sensitive nuclear fuel cycle.

Iran denies it is seeking nuclear weapons, but insists on its legal right to master the fuel cycle for power generation. Being dependent on outside sources for nuclear fuel, Iran says, is not an option.

ingrid.smith@afxnews.com

http://www.iii.co.uk/shares/?type=news&articleid=5039357&action=article

A Refresher Course on the Rafsanjanis : (the following was excerpted from an April/2004 Bloomberg article)

"a dozen families with religious ties control much of Iran's $110 billion gross domestic product and shape its politics, industries and finances, says Ray Takeyh, a professor and director of studies at National Defense University's Near East and South Asia Center in Washington
The Rafsanjanis -- who have investments in pistachio farming, real estate, automaking and a private airline worth a total of $1 billion -- are among the best connected and most influential of the families, Takeyh says."

"Rafsanjani, 69, has wielded power since the creation of the Islamic Republic in 1979, when he served on the Revolutionary Council under Khomeini. Rafsanjani gained entry to Iran's political and religious elite early on. He was one of nine children born into a pistachio farming family from the village of Bahraman, near Rafsanjan, a dusty town in central Iran. When he was 14, his parents sent him to Qom, a seminary town on the northern fringes of the Dasht-e Kavir Desert.
Khomeini taught classes there, and Rafsanjani studied Islamic law, morality and mysticism.
""The shah's regime fell in 1979 and Rafsanjani stayed at the center of power. He was a member of the Revolutionary Council, which ordered executions of officials in the shah's regime, Bakhash writes. He was speaker of the Majlis, Iran's parliament, for nine years. He acted as Khomeini's representative on the Supreme Defense Council -- or war cabinet - -during the eight-year war with Iraq. The war ended in a stalemate in 1988, leaving a million casualties. In 1989, Rafsanjani was elected president, replacing Khamenei, the current Supreme Leader."

"In 1997, Haeri testified before the U.S. House International Relations Committee in favor of continuing U.S. sanctions against Iran. ``In every major industry and in every financial activity, you find the Rafsanjani family somehow connected,'' Haeri said."

Mohsen Hashemi, 43, Rafsanjani's oldest son, heads a $2 billion project to build Tehran's subway. Yasser Hashemi, 32, the youngest son, runs a horse farm north of Tehran in the exclusive suburb of Lavasan, where an acre of land costs $2 million. Mehdi Hashemi Rafsanjani, 34, the son whose contact with Statoil led to the police search, was a director at National Iranian Gas Co. and heads the unit that develops compressed natural gas for cars.

``The whole Iranian economy is set up to benefit the privileged few,'' Takeyh says. ``Rafsanjani is the most adept, the most notorious and the most privileged.''

"Mohammad Hashemi, 52, Rafsanjani's younger brother,... says his family is a victim of rumors, gossip and propaganda. ``This is part of the psychological warfare to create a rift between the people and their government,'' says Hashemi, who abandoned his studies at the University of California, Berkeley, in 1978 to join the revolution. He served as Iran's vice president from 1995 to 2001 and headed state radio and television for 13 years. Today, he often acts as family spokesman with the international press."

"Rafsanjani leads the religious organizations that shadow Iran's official government. He's deputy chairman of the Assembly of Experts, which appoints Iran's Supreme Leader, the ultimate political and religious authority. In 1989, the assembly named Ayatollah Ali Khamenei to the post.

Extending His Reach

Rafsanjani also heads the Expediency Council, which sets strategic economic policy and mediates between parliament and the Guardian Council, a 12-member clerical body that oversees parliament. ``He is one of the most powerful men in Iran,'' Ansari says. ``His reputation is that of a Mr. Fix-it.''

Rafsanjani extends his reach through his family. Cousin Ahmad Hashemian is managing director of the Rafsanjan Pistachio Growers Cooperative, which dominates the $746 million pistachio export market, according to the Web site of Iran's Customs Ministry.

Older brother Ahmad, now retired, headed the Sarcheshmeh complex, Iran's largest copper mine. Another brother, Mahmud, was governor of Qom, Iran's most important holy city. Nephew Ali Hashemi, 43, is a member of the parliamentary energy commission that oversees oil and gas policy. Mohsen Rafiqdoust, 63, Rafsanjani's brother-in-law, was Khomeini's driver and head of security when the ayatollah arrived from exile.

Role of Bonyads

One way the Rafsanjanis and other clerical families maintain their grip is through the Bonyad foundations, says Shaul Bakhash, a visiting fellow at the Brookings Institution, a Washington- based research organization.

After the revolution, the Bonyads expropriated assets of foreigners and the former shah's friends, says Bakhash, who has written extensively on Iran and is the author of ``The Reign of Ayatollahs: Iran and the Islamic Revolution'' (Basic Books, 1984).

Companies under Bonyad control account for as much as a third of Iran's economy, he says. The Bonyads don't disclose their accounting or pay taxes; they get subsidized loans and report only to the Supreme Leader, he says. ``The economic power structure is even more opaque than the political system,'' Bakhash says. ``The Bonyads funnel money to senior religious figures for patronage and suspected clandestine activities.''

Links to Terrorism?

The Bonyads have been linked with funding terror organizations, he says. In 1989, Bonyad 15 Khordad offered $1 million to any non-Iranian who carried out Khomeini's charge to kill author Salman Rushdie for writing ``The Satanic Verses'' (Viking Press, 1989), a novel that mocks the prophet Mohammad. Over the years, the bounty has increased to $2.8 million.

Rafiqdoust, Rafsanjani's brother-in-law, headed the biggest Bonyad for more than 10 years, until 1999. The Bonyad Mostazfan and Janbazan, or Foundation for the Oppressed and War Invalids, owns the former Hilton and Hyatt hotels in Tehran; Zam-Zam, Iran's largest soft drink company; Bonyad Shipping Co., a global shipper with offices in London and Athens; and industrial plants and real estate, according to its Web site.

A 2000 World Bank report put the value of BMJ assets at $3.5 billion; Iranian economist Mohammad Jamsaz, a consultant to Iran's Chamber of Commerce, estimates the number is closer to $12 billion. "

http://quote.bloomberg.com/apps/news?pid=email_us&refer=&sid=a7fJPoIAkw5g