Roots of Corruption

ROOTS OF CORRUPTION

A Look at the Key Obstacles to Our Progress in Iran

The urgent need for Ethical, Legal, and Economic Renaissance in Iran

By Freydoon Khoie · October 21, 2026

Introduction

Corruption is not merely the theft of money from a country’s treasury. Corruption is the theft of a nation’s future, the greatest obstacle to progress, the destruction of justice, the humiliation of merit, and the elimination of trust between the people and their government.

Iran, the land of one of the world’s oldest civilizations, today faces a crisis whose consequences have extended far beyond the economy, governance, and administration, and have penetrated universities, scientific institutions, hospitals, courts, industries, markets, commerce, and even the simplest everyday relationships among citizens and even with other countries. Corruption has become part of Iranian culture.

When citizens are forced to pay bribes to obtain their fundamental and basic legal rights, when students can purchase university degrees, when manufacturers can counterfeit the names and trademarks of other companies, and when political connections replace merit and government positions can be purchased, we are no longer confronting a collection of isolated corrupt practices that are found even in Switzerland. Rather, we are talking about a profound national crisis in the rule of law, social ethics, the country’s economic structure and indeed the very prosperity and future of our nation.

Nevertheless, to understand the roots of this devastating disease, we must examine Iran’s history over the past several centuries fairly and with documentary evidence. Corruption did not begin with the Islamic Republic, although the political and economic structure established after the 1979 catastrophic Revolution has indeed exacerbated corruption and created new conditions for the concentration of power, distribution of economic privileges, lack of accountability, and consequently the expansion of organized crime state.

Part One

A Historical Examination of the Roots of Corruption in Iran Over the Past One Hundred Years

1. The Qajar Dynasty Era and the Beginning of Pahlavi Rule: The Legacy of Personal Rule and the Sale of Privileges

During the Qajar period, the feudal system of landlords and peasants, the absence of a modern administrative apparatus, the profound absence of financial oversight, the sale of government positions, and the acceptance of bribes in exchange for granting economic concessions such as oil, gas, minerals, and ports to foreign powers were among our country’s fundamental problems.

Under such a system, no boundary existed between the personal property of rulers and public lands and national assets. Political power and control of the state apparatus became a source of personal wealth for the king and rulers, while citizens possessed no effective power or means to hold those in authority accountable — a 3,000-year-old problem that has continued to this day.

Finally, after three thousand years of a ruthless feudalist rule, a number of conscientious patriots decided to end the nightmare and launched the Constitutional Revolution of 1906 that represented the first attempt to change the situation by drafting a constitution, designed to create a parliament that represented the people, and a government elected by the people that had a public budget, and legal limitations on the arbitrary powers of the king and government officials.

However, the absence of a culture of political and social freedoms, the lack of a literate and educated public, widespread illiteracy, the absence of effective executive institutions, and political instability and chaos in the court prevented the realization of the historic and decisive ideals of the Constitutional Revolution.

The utterly corrupt, opiated, incompetent Qajar kings could no longer rule and it was time for change in the new 20th century. The British colonialists, who were deeply worried about protecting their Colonial Crown Jewel of India, were worried about the rise of the Russian Bolsheviks, the radical members of the social democratic Party led by Lenin to wake up the sleepy peasants in Iran, and lent their support to a very competent and courageous army colonel, Reza Khan, to bring about the change needed in Iran. Remnants of the rotten Qajar dynasty were finally removed by Colonel Reza in 1921 and he was crowned the new King in 1925.

During the reign of King Reza, who was neither corrupt nor addicted to opium like all the previous Qajar Kings, the foundations of a centralized government, a national property registration system, administrative institutions, and a modern judiciary were developed.

These developments limited a small portion of the conditions that had enabled traditional corruption. However, the extreme concentration of power and the absence of independent oversight, particularly regarding land acquisitions and the accumulation of wealth among those close to power, known as the “Thousand Families,” created new problems.

The historical lesson of this period is clear: administrative modernization without independent oversight and the rule of law is insufficient to prevent corruption.

2. The Reign of King Mohammad Reza: Economic Development Accompanied by Corruption Within the Circles of Power

During the 1950s, 1960s, and 1970s, Iran witnessed the expansion of higher education, industry, infrastructure, international trade, and the middle class. However, the government still had no serious program to combat corruption.

As oil revenues increased — amounts and details that the government never transparently reported to the nation — particularly following the oil price surge of 1973, the volume of government contracts and foreign purchases suddenly increased dramatically. The absence of transparency encouraged greater corruption among government officials.

This economic expansion created new investment opportunities, but at the same time, the culture of corruption provided fertile ground for nontransparent commissions, abuse of political connections, commercial monopolies, and the acquisition of special privileges.

Corruption within certain circles of the royal court, the administrative apparatus, and commercial networks connected to political power became one of the subjects of public criticism during the final years of Pahlavi rule.

As a real example, in the early 1970s, when I was a young entrepreneur, after several years of managing two large factories in Alborz Industrial City, I established my own consulting engineering company.

I was advised that obtaining a license from the Planning and Budget Organization required connections with members of the royal family.

An intermediary appeared who introduced me to Prince Shahram, the son of Her Highness Princess Ashraf. He agreed to facilitate obtaining the necessary license from the Planning and Budget Organization in exchange for 25 percent of the shares of my company.

Nevertheless, in our historical assessment, we must distinguish between the country’s genuine development and the abuses committed by those in power.

Undoubtedly, we cannot disregard the industrial and educational achievements of that period under Prime Minister Hoveyda’s government, just as we cannot deny the existence of political and economic corruption.

The fundamental problem was the lack of sufficient independence of oversight institutions, freedom of the press, and the ability to effectively hold the highest-ranking officials accountable.

At that time, the late King even established the Imperial Inspectorate Organization, whose purpose was to combat corruption.

However, as long as corruption was widespread within the royal family itself, establishing an Imperial Inspectorate to fight corruption was more of a joke than a major and decisive undertaking.

3. The Catastrophic Revolution of 1979 and the Establishment of the Strange and Bizarre Islamic Government: Officially Transforming Political Power into Economic Privilege for the Clerical Class

Although the 1979 Revolution succeeded under slogans that included social justice, combating corruption, supporting the poor and disadvantaged, and fighting discrimination, in practice it demonstrated one of the historical contradictions of Islamic government.

A government that claimed it would eradicate corruption instead made systemic corruption widespread and gradually established structures in which access to political power and economic resources became deeply intertwined, institutionalizing corruption.

The summary executions on the rooftop of the residence of the newly arrived, accursed Khomeini were intended to instill fear and terror in the hearts of the people.

These executions, followed by the flight of thousands of senior civilian and military officials and the illegal confiscation of the assets of a vast number of those who had served in the Imperial Government, together with the establishment of various large economic foundations, the expansion of revolutionary institutions, restrictions on free competition, and the creation of economic privileges for politically connected and protected groups known as “insiders,” led to the concentration of wealth and power and an enormous exponential growth in corruption.

In subsequent decades, as a result of the rise to power of the class known as the triangle of mullahs, tea boys, and thugs, the flight of a large segment of the country’s intellectuals and elites, the transformation of our economy into a state-controlled and quasi-state-controlled economy, the establishment of a multiple-exchange-rate currency system, restrictions on foreign trade, the transfer of confiscated properties and industries to regime insiders, and the expansion of economic activities by military and security institutions, the situation deteriorated further.

It resembled the invasion of a foreign occupying army far more than a revolution by the people, of the people, and for the people.

The foolish and even idiotic behavior of the accursed Khomeini and his associates, which brought upon the nation the American and international sanctions, effectively opened the floodgates of widespread corruption.

By increasing hidden transactions and making formal banking exchanges difficult, these sanctions created new opportunities for non-transparent intermediaries and rent-seeking, transforming the entire national economy into the swamp it has become today.

The consequence of these catastrophes was that, in many sectors, economic success was no longer, and still is not, dependent solely on entrepreneurship, innovation, competence, merit, product quality, or healthy competition. Instead, access to licenses, preferential foreign currency, government contracts, and political connections became the determining factors. This is precisely where the fundamental distinction between individual corruption and structural corruption lies.

In individual corruption, a person violates the law. In structural corruption, institutions of power can administer laws, licenses, and public resources in ways that distribute economic privileges to favored networks.

4. Iran’s Position in International Corruption Indexes

Iran’s Position in the Global Corruption Rankings

The Corruption Perceptions Index published by Transparency International is one of the recognized instruments used to measure the perceptions of experts and businesspeople regarding corruption in the public sector.

Accordingly, in the 2025 report, Iran received a score of 23 out of 100 and ranked 151st among 180 countries, placing it among the world’s most corrupt countries.

Of course, this index does not measure the actual amount of every bribe or embezzlement, and it should not be regarded as definitive statistics on corruption-related crimes. Nevertheless, Iran’s low standing in these assessments demonstrates the depth of concern regarding the integrity of governance and the lack of accountability.

Widespread corruption must not be attributed to the culture or inherent character of the Iranian people. A large segment of Iranian society is itself the victim of the fundamental corruption of the Shiite clerical class, its economic monopolies, and the weakness of law enforcement.

Part Two

The Penetration of Corruption into Every Aspect of Iran’s Social and Economic Life

5. Administrative Bribery: When Citizens Must Pay Illegal Bribes to Obtain Their Legal Rights and Services

One of the most destructive consequences of structural corruption is the normalization of bribery in relations between citizens and the administrative apparatus and throughout society.

Expressions such as “tea money,” “sweets money,” “under-the-table payments,” and “special fees” are sometimes used in everyday language to conceal the illegal nature of a bribe.

Areas particularly vulnerable to corruption include:

• Municipalities and the issuance of building permits, changes in land use, and construction density approvals.
• Tax offices, customs authorities, and licensing organizations.
• Police and law enforcement institutions.
• Courts, enforcement of judgments, and the judiciary.
• Hospitals and healthcare facilities.
• Registration offices, real estate transactions, and the allocation of government land.

Within this structure, an honest citizen faces two unjust choices: either pay an illegal fee or wait months, and sometimes years, to obtain a lawful entitlement.

Of course, determining the precise extent of bribery within each institution requires extensive investigations and the collection of independent data. Not every employee of these institutions can necessarily be considered corrupt.

6. Grand Corruption: Foundations, Oil and Government Contracts, and Wealth Beyond Oversight

One of the most important problems in the economy of the current Islamist regime that is collapsing soon, is the expansion of enterprises operating at the intersection of the state, public institutions, foundations, and structures connected to the deeply corrupt political power.

Academic research on the economic foundations of the Islamic government has identified weak accountability and the complexity of their oversight structures as major problems in Iran’s political economy.

When an economic institution has access to political power, public financial resources, and monopolistic privileges, but is not subject to effective and independent oversight, fair competition even survival becomes impossible for the private sector, and is forced to become corrupt and part of the system.

Under such circumstances, the emergence of corruption networks in company transfers, public tenders, banking facilities, imports, exports, and oil contracts inevitably increases.

7. Aghazadeh Privilege: Replacing Merit with Family Connections

In a healthy economy, the child of a worker and the child of a minister must enjoy equal rights before the law and equal opportunities in competition for economic and educational advancement.

However, in a system where political and family connections can facilitate access to wealth and power, meritocracy suffers profound damage.

The phenomenon known as “Aghazadeh” privilege, or the privileges enjoyed by the children and relatives of powerful officials, becomes corruption when individuals exploit the positions of their relatives to obtain illegal privileges, contracts, loans, licenses, appointments, and even immunity.

No person should be condemned merely because of family ties to government officials, just as no person should be exempt from accountability because of those same relationships.

Part Three

The Collapse of Scientific, Academic, and Commercial Ethics: The Most Dangerous Legacy of Systemic Corruption

8. Corruption in Higher Education: When Degrees Replace Knowledge

Perhaps one of the most dangerous forms of corruption is its penetration into universities and institutions responsible for educating and training skilled professionals. Financial corruption can destroy the assets of one generation, but academic corruption can destroy the ability of several generations to rebuild their country.

Recognized examples of this damage include:

• The buying and selling of theses and scientific papers: When a master’s thesis, doctoral dissertation, or research article becomes a commodity that can be bought and sold, the credibility of academic qualifications is weakened.
• Academic plagiarism: Using the research, theories, writings, or data of others without proper and honest acknowledgment is not only a violation of academic ethics but also damages the rights of honest researchers.
• Degree obsession and questionable qualifications: Granting privileges or employment positions based on qualifications whose authenticity or academic quality has not been properly verified creates opportunities for abuse.
• Unqualified appointments: Whenever political affiliation, personal connections, or the payment of bribes outweigh academic competence in selecting university administrators and faculty members, university independence suffers serious damage.
• Cheating in examinations and admissions: Selling examination answers, manipulating grades, and illegally interfering with university admissions violate the rights of deserving young people.

We must distinguish between the existence of these phenomena and claims that they are widespread in every university.

Of course, Iran still possesses outstanding and honest professors, students, physicians, engineers, and researchers. Yet it is precisely this valuable human capital that suffers most from academic corruption and sadly, many of them migrate. A country in which academic degrees can be purchased cannot claim scientific progress merely by increasing the number of its graduates.

9. Intellectual Property Theft: From Copyright Infringement to Counterfeiting Trademarks

Corruption in Iran’s economy is not limited to bribery and embezzlement.

Another manifestation is the disregard for intellectual and industrial property rights. In modern economies, intellectual property is as important as ownership of land, factories, or buildings. Books, software, inventions, industrial designs, manufacturing formulas, trademarks, and artistic works are the products of human effort and investment. No society can expect creativity to flourish while disregarding the rights of the creators of others’ works.

A. Unauthorized Copying of Software, Books, and Cultural Products

The unauthorized reproduction and distribution of copyrighted software, books, films, music, and other protected works can reduce the legitimate income of their creators and weaken or destroy incentives to invest in producing original content.

Iran has domestic laws protecting authors’ rights, including the law enacted in 1969. However, the principal issue is the scope of those protections, their effective enforcement, and their compatibility with the international intellectual property system. It must be recognized that lawful use, openly licensed works, and works whose legal protection periods have expired are different from copyright infringement.

B. Counterfeiting Labels and Trademarks

One of the most troubling practices in certain markets is the unauthorized use of the names, logos, packaging, and labels of reputable domestic or foreign companies. For example, a product of unknown quality may be manufactured but sold under the label of a respected international company.

Such conduct may involve several simultaneous violations: trademark infringement, consumer deception, unfair competition, and, in some cases, threats to public health. Perhaps most importantly, it destroys our country’s reputation, credibility, and the respect it receives from the international community.

The danger is considerably greater in products such as automobile parts, electrical equipment, medical devices, pharmaceuticals, and food products. Placing a counterfeit label on an inferior industrial component may cause not only economic losses but also accidents and the loss of human lives.

C. The Destruction of Trust and Respect in International Trade

When an Iranian manufacturer or exporter fails to properly respect trademarks, standards, and the rights of others, the damage is not limited to that particular transaction. Fraudulent behavior can harm the reputation of the entire Iranian export market and products made in Iran.

Conversely, thousands of Iranian manufacturers who produce genuine, high-quality products deserve a system that protects their reputation and legal rights.

A country cannot demand international respect for its own inventions and brands while disregarding the legal rights of inventors and brand owners in other countries.

D. The Necessity of Reforming Intellectual Property Laws

Following the establishment of a new Liberal Democratic and law-abiding government, Iran must harmonize its intellectual property legal system with international standards. These reforms must include effective protection of copyright, trademarks, inventions, industrial designs, software, and trade secrets.

The Industrial Property Protection Law enacted in 2024 also demonstrates that our country is not entirely without a legal framework. The issue is completing the legal framework and ensuring its reliable enforcement, which becomes impossible when corruption, bribery, and connections with officials are the determining factors.

Cooperation with the World Intellectual Property Organization and consideration of accession to relevant treaties, including the Berne Convention and the WIPO Copyright Treaty, could form part of these reform programs.

10. Corruption in Healthcare and Public Services

Unlike many economic violations, corruption in healthcare can directly threaten human lives.

Informal payments, conflicts of interest in medical equipment procurement, unnecessary prescriptions of medical services, pharmaceutical smuggling, and the nontransparent distribution of healthcare resources are risks against which every healthcare system must establish effective oversight mechanisms.

In a country where patients face financial difficulties in accessing medical treatment, exploiting medical or administrative positions for illegal personal gain represents a serious violation of public trust.

11. Corruption in the Private Sector: Victims Who Sometimes Become Part of the Problem

In an environment where licenses, foreign currency, land, bank credit, and contracts are not distributed through transparent competition and honesty, some private enterprises may resort to informal connections and illegal payments simply to survive. This situation creates a dangerous cycle.

• An honest company falls behind in competition because it refuses to pay bribes.
• A dishonest company obtains special privileges.
• Quality and innovation become less important.
• Ultimately, consumers and the national economy suffer.

We must break this cycle rather than assume that all businesspeople are criminals.

Part Four

The Fundamental Cure for Corruption: A National Program to Cleanse the Structure of Governance

Corruption cannot be eliminated through slogans, moral sermons, theatrical punishments, or the replacement of a few managers.

Curing corruption requires changing the rules of power, transparency of ownership, independence of justice, economic competition, and the free participation of citizens. In short, a New Constitution, and regime change. To expect this current utterly corrupt regime to bring about any degree of reform is like asking Al Capone to reform his mafia organization.

12. Ten Fundamental and Vital Reforms for the Future Iran Following Regime Change and the Establishment of a Truly Elected and Accountable Government

1. Complete Independence of the Judiciary. Judges must make decisions based on law and evidence, not the instructions of political, military, or religious authorities. Specialized anti-corruption courts must be independent, open to the public within the limits of the law — and that law must be secular and common law enacted by the genuinely elected representatives of the people — and must respect the right to defense and fair trial.
2. Complete Transparency of Public Budgets and Assets. All institutions using public resources, including foundations, state-owned companies, and enterprises affiliated with military institutions, must be subject to independent audits and public disclosure of their financial statements.
3. Electronic Government and the Elimination of Unnecessary Administrative Contact. Business licenses, taxation, customs, property registration, and municipal services must be provided through digital procedures, with clearly defined fees and the ability for the public to track applications.
4. A Competitive Economy and Genuine Privatization. Unnecessary monopolies, special privileges, and hidden economic ownership must be dismantled, and those who ordered and carried out abuses must be transparently tried in competent courts of an independent judiciary. The transfer of state assets must take place only through transparent auctions, independent valuations, and public oversight.
5. Restoring the Credibility of Universities. Establishing a national academic credential verification system, combating the sale of theses, verifying the authenticity of research, ensuring university independence, and selecting academic administrators based on merit.
6. Strong Protection of Intellectual Property, Trademarks, and Copyright. Establishing specialized intellectual property court divisions, creating product authenticity verification systems, and effectively enforcing the rights of creators and trademark owners, while guaranteeing the right to appeal and due process.
7. Strong Legal Protection for Whistleblowers. Employees, journalists, and citizens who report corruption in good faith and on the basis of undeniable evidence must receive legal protection against threats and retaliation. And they should even be publicly honored and rewarded so that others will be encouraged to follow their example.
8. Registration of Assets and Conflicts of Interest of All Government Officials. The assets and economic interests of senior officials and other persons covered by the law must be registered and verified by an independent institution, with the necessary information published to ensure public accountability.
9. Freedom of the Press and Access to Information. Investigative journalists and civil society organizations must be supported and protected so they can investigate and publish reports on public contracts, government expenditures, and abuses of power.
10. Rebuilding a Culture of Integrity and Social Responsibility. Education in citizenship rights, respect for the property of others, academic honesty, professional ethics, and social responsibility must begin in elementary school and continue through universities, businesses, and public services.

Part Five

A 180-Day Action Plan to Begin the Fight Against Corruption after Regime Change

No government can eliminate corruption rooted in several decades of history within, for example, six months. However, a law-abiding transitional government can establish the institutional foundations for combating corruption during its first 180 days.

All measures involving asset seizures, investigations of individuals, and criminal prosecutions must be carried out in accordance with the law, judicial oversight, and the presumption of innocence. The fight against corruption must never become an act of political revenge. Its purpose must be to restore justice and prevent corruption from recurring.

Part Six

How Do We Measure the Success of the Program?

To prevent the fight against corruption from becoming yet another slogan, its results must be measurable. Iran’s future government must publish the following indicators every three months:

• The government contracts published publicly in searchable form.
• The average time and cost required to obtain administrative licenses.
• The percentage of public institutions with audited financial statements.
• The number of corruption complaints independently investigated and the outcomes of those investigations.
• The degree of genuine competition in public tenders.
• The number of proven cases of academic credential forgery and plagiarism and the results of their adjudication.
• The time required to resolve intellectual property disputes and trademark counterfeiting cases.
• The level of citizens’ trust in the judiciary and public services, measured through independent surveys.

These indicators must be published together with their measurement methodologies, baseline figures, and annual targets.

Conclusion

Iran Needs a Revolution of Integrity

Over the past one hundred years, the Iranian nation has experienced different governments, major economic transformations, revolution, war, sanctions, and numerous social crises. Yet one of the most important lessons of this history is that changing a government, by itself, does not guarantee the end of corruption.

If the structure of power is not genuinely liberal democratic and elected by the people and remains nontransparent; if the judiciary is not truly independent; if the economy remains under the control and monopoly of government and senior officials; and if citizens cannot hold those in power accountable, corruption will continue under new names, new clothing, and new slogans. For this reason, the future Iran must not be satisfied merely with changing individuals, replacing the ruling class, or even changing the constitution.

We must establish a system in which even the most honest head of government cannot abuse power without oversight, and even the most powerful official in the country enjoys no immunity before the law.

In the future Iran, universities must be homes of knowledge, not marketplaces for selling degrees.

Courts must be homes of justice, not places where judicial decisions are bought and sold or where judgments are influenced through connections.

Markets must be arenas of healthy competition in work, commerce, and production, not domains of monopoly and economic privilege.

Trademarks, inventions, and scientific works must be respected by law just like all other legitimate property.

And the government must be the servant of the people, not the master and owner of their lives and property.

We, the people of Iran, are the masters of our government. The government is our servant.

Corruption cannot be eliminated through imprisonment alone; the opportunities for corruption must be removed from the structure of government and society.

People cannot be made honest merely through moral sermons; conditions must be created in which honesty does not place citizens at a disadvantage. Justice cannot be established through slogans about justice; the law must also govern those who hold power.

Iran’s Renaissance will begin when honesty triumphs over deception, merit over connections, law over power, and national interests over personal and factional interests.

This is the Iran that we, at the Liberal Democratic Party, are committed to build for the present and the future generations:

A free, secular, liberal democratic, law-abiding, meritocratic Iran, possessing a competitive and prosperous economy, respected by the international community and renowned throughout the world for its honesty and integrity.

Yes, it can be achieved, if we have the will and unite.

FREYDOON KHOIE
Secretary General
Liberal Democratic Party of Iran