Ayatollah Khamenei’s vast funds

By Danielle Wiener-Bronner
November 13, 2013

Iranian officials manipulate laws to maintain Ayatollah’s assets, China’s plenary communique fails to impress market, and looting starts as victims struggle to survive in typhoon-torn Philippines. Today is Wednesday, November 13, and this is the World Wrap, brought to you by @dwbronner.

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Bending the rules. In his time as Iranian supreme leader, Ali Ayatollah Khamenei oversaw the massive expansion of Setad – a property-seizing firm founded in 1989 as a temporary way for the Ayatollah to appropriate assets from “enemies of the state” for charity. Under Khamenei, Setad grew to a $95 billion operation that secured his economic power, often using suspect means:

To make Setad’s asset acquisitions possible, governments under Khamenei’s watch systematically legitimized the practice of confiscation and gave the organization control over much of the seized wealth, a Reuters investigation has found. The supreme leader, judges and parliament over the years have issued a series of bureaucratic edicts, constitutional interpretations and judicial decisions bolstering Setad. The most recent of these declarations came in June, just after the election of Iran’s new president, Hassan Rouhani. The thinking behind this painstaking legal effort is unclear… the legal machinations served several purposes. The decrees enabled Setad to beat back rival institutions seeking to take property in the name of the supreme leader. A ruling on the constitutionality of privatizations smoothed Setad’s expansion beyond real estate and into owning and investing in companies.

Though Khamenei has said he welcomes oversight, Setad’s growth and practice tell a different story. According to a six-month Reuters investigative report, Setad has seized land from minority Baha’is and others, and ensured that Khamenei can avoid Western nation-backed sanctions.

Underwhelmed. China’s markets were not impressed by the communique that emerged from a secret four-day reform-setting meeting. Its attendees, members of the Communist Party’s Central Committee, did not propose altering a financial system that prioritizes state-owned firms, but said that the market should have a “decisive” role in economic growth.

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China reform watchers will have to wait.

The committee promised results by 2020. A more detailed account of the meeting’s conclusions is supposed to appear next week. The meeting generally sets reform goals for the current administration, and local media were expecting a more structured plan to emerge.

Typhoon looting. Typhoon Haiyan is prompting panic in survivors who need food, water, and medicine. Looting turned deadly on Wednesday as victims ransacked shops and warehouses for supplies.

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Aid to Typhoon-hit Philippines arrives as looting turns deadly.

Officials have confirmed 2,275 deaths and 84 missing, contradicting earlier claims by local officials that estimated the death toll at about 10,000. But aid workers think the lower, official numbers might not be accurate. “Probably it will be higher because numbers are just coming in. Many of the areas we cannot access,” said Secretary General of the Philippine Red Cross Gwendolyn Pang. The Red Cross estimates that 22,000 are missing. Click through for live updates, more images, and information on how to help the victims.

Nota Bene: Palestinian President Mahmoud Abbas reports that his peace talks delegation has resigned.

Standouts:

Carbon investment - Switzerland proposes monthly paycheck for every living Swiss. (New York Times Magazine)

Fit ride free - Moscow now offers free subway rides to any passenger who does 30 squats. (Wall Street Journal)

Universally misunderstood - Huh? means huh? in every language. (The Atlantic)

Craft call - Domestic disturbance call placed over couple building IKEA furniture. (Time)

Catacomb - Oldest big cat fossil found in Tibet. (BBC)

From the File:

  • IAEA reports no radical change in Iran’s nuclear program.
  • Syrian Kurds make fresh military gains after declaring self-rule.
  • Sectarian divisions deepen in Yemen.
  • Deflation threat in Europe may prompt investment rethink.
  • Japan passes law to launch reform of electricity sector.
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