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Alireza Sepahi Line

“Speaking of school benefactors; “good deeds” is a popular and reputable term in ethics and morality that no one worries about hearing or practicing it. But can this same phrase become a basis and cause for abandoning good deeds and cause concern in society?”

In a society where statistics are mostly non-transparent and provide a fertile ground for any kind of economic corruption, and where there is an escape route for justifying, legislating, and sanctifying illegal activities, the response can be positive.

Origin and foundation of concern.

According to repeated incidents that have recently occurred in our dear country and the increasing trend of various forms of corruption and embezzlement among officials, affiliates, and influential individuals, as well as the invention of various measures to cover up large-scale thefts, I, as a journalist, have the right to be concerned and to look with a skeptical eye at the intentions of some philanthropists, industrialists, holding companies, landowners, and known and unknown wealthy individuals.

In the midst of all this, it is not doubtful that the matter of education and support for official and non-official leaders is a sacred and commendable task. However, when we see in the current difficult economic and social conditions that the private sector is competing with the government sector – which, according to the law and its official duty, should focus on building and renovating schools and educational institutions for the young generation of our country – it convinces us, experienced and content, to put aside our optimistic view and warm encouragement and instead feel a little worried.

Is it possible – as it is said from unofficial sources – that experienced and knowledgeable opportunists and pretenders cannot use such a clean path to bypass the tax system and engage in money laundering?

Just recently, I read from Mohammadreza Hafezi (head of the Society of Benefactors for Building Schools in the Country) who spoke at a gathering of benefactors for building schools, that: “We now have 650,000 benefactors for building schools inside the country and 1,000 benefactors for building schools outside the country.” He also said that: “In other words, half of the schools have been built with the efforts of benefactors and today three decades have passed since the activities of benefactors.”

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Photo of Sarmashq News

Besides the question of whether we have such a sincere and active volume of benefactors in the field of school construction, then where do the government budgets and the abundant revenues of this oil-polluted country flow? It must be said and known that in such conditions, the existence of makeshift and dilapidated schools in deprived areas such as Sistan and Baluchestan, Lorestan, Kurdistan and other regions, is a reflection of which deficiency and where does the work of all this benevolence lag behind? Should we not be concerned that there may not be a genuine will in this matter? And should we not be worried that alongside the superficial behavior of some benefactors, school construction may be a cover for the unfortunate act of money laundering?

What is money laundering?

Economists define this term as follows: Money laundering refers to a cycle in which income that is primarily obtained through illegal and illicit means enters the official economic cycle, thereby giving this money a legitimate nature. Now, if this income enters the country’s economic activities in a way that its origin cannot be traced, money laundering takes on a more serious meaning. In simpler terms, money laundering is the process of concealing the origin of unhealthy money.

This is something that is common in the official definitions of our country regarding illegal incomes and suspicious money and normalizing the origin and place of their acquisition. However, when a wealthy and greedy person chooses to use the path of philanthropy or any socially acceptable means to accumulate wealth, the issue takes on a new form and appearance. In a society where, due to constant slogans and easy access, some official institutions cover up the ugliness with holy garments, money laundering in the guise of charitable school-building can be seen as a difficult and distant issue.

Even true believers and intelligent individuals will not believe that a person would seek goodness by buying money and legitimacy for themselves through building schools. See how Molavi Hafez Mehdi Nahetani (one of the reputable Sunni Friday prayer leaders) uses what expressions to praise the school-building benefactors among reporters: “The presence of benefactors in building schools and helping with knowledge and education is a transaction with God.”

He emphasizes that: “The example of these people is like someone who sows one grain of wheat and gets seven ears, each ear containing a hundred grains of wheat or more.”

Given such wonderful interpretations and valuable religious deductions, can a person who may have malicious intentions and is possibly looking for an opportunity to launder money easily ride the wave and increase their wealth tenfold, while also being at ease knowing that this event will be seen as a natural and valuable process and even be praised by others?

Tax exemption; a legal gift.

It is clear that the amount of these sentences, with the involvement of the people of Makran in the good cause of school building, does not pose a problem, and they are very willing and determined to shift their focus and attention from unnecessary matters towards the truly beneficial cause of school building and development of scientific and educational infrastructure of the country. However, the unclear atmosphere and constantly changing laws provide a fertile ground for corruption, which can turn the efforts of a good cause into products of evil.

For example, please note that a few months ago (I believe in December 2016), the representatives of the people in the National Assembly agreed that the expenses of all non-governmental individuals and entities in the construction, development, completion, and equipping of educational spaces should be considered as acceptable tax expenses. Of course, this issue had been raised before as well.

The approved resolution is as follows: “The cost of all non-governmental individuals and entities in the construction, development, completion, and equipping of educational spaces, dormitories, libraries, and sports halls affiliated with the Ministry of Education, which is carried out within the framework of the approved plan of the Provincial Planning and Development Council, is considered as an acceptable tax-deductible expense with the confirmation of the Organization for Development, Renovation, and Equipping of Schools in the country.”

Is this gift legal, can it not open the door for illegal tax evasion for donors? Apparently, the answer is yes.

Just recently, Mohammad Reza Pourabrahimi, the head of the Economic Commission of the Parliament, who was present in a television program with Mohammad Hossein Abedo Tabrizi (advisor to Abbas Akhoundi, Minister of Housing and Urban Development and former head of the Stock Exchange Organization), reported some strange information about money laundering in charities.

According to the website’s editorial, although the statistics presented by Pourabrahimi have not yet been fully examined, a superficial look at the issue raised by the head of the parliamentary economic commission shows that there is a trend of using charity organizations to evade taxes and money laundering.

Pourabrahimi emphasized in this interview that: “There are 6000 charities in the country, some of which are the owners of the largest airlines in the country, and there is not even a financial report from them. As a result, a group of seemingly charitable people use charity tools and work for tax evasion and as a result, they neither pay taxes nor can their money laundering be stopped.”

The last word; Iran, paradise of money changers.

Over the past decade, Iran has consistently been among the one-fourth of countries in the world with the worst financial corruption. According to calculations by the Financial Action Task Force, the most important international organization for combating money laundering, 32 countries in the world are in the red zone for money laundering, and Iran is one of them. The report on Iran’s economic situation published by the former Planning Organization between 2003 and 2012 also shows another aspect of this issue. According to this report, the share of intermediary and brokerage activities from total loans has been two to three times higher than the share of the agricultural sector and one and a half to two times higher than the share of industry and mining.

To understand the story correctly, at the end of this writing, a review of the case from the perspective of a knowledgeable economist can give us more confidence and understanding. What you are reading here is a summary of the opinions of Dr. Albert Baghizian, a professor of economics at the University of Tehran, who had said in an interview with the Fararu website:

“When people witness money laundering in a society, they become distrustful of the financial system; because money laundering causes instability and disruption in financial markets. Money laundering also weakens the private sector and the economy of the country, and leads to the spread of fraudulent activities in the economy, causing people to no longer pursue legitimate means of income. Money laundering can also contribute to tax evasion and promote corruption in the country. Those who engage in money laundering identify individuals to carry out their illegal activities under the guise of the law, leading to an increase in social deviance in society. This action also leads to income inequality, as some individuals (money launderers) avoid paying taxes and increase their wealth and income. Money laundering also disrupts government economic policies; for example, if the government wants to reduce liquidity or expand production, money launderers can cause a recession in production markets by entering into speculative or commercial sectors, making government economic policies less effective. To combat money laundering, serious measures must be taken.