How Iran's Revolutionary Guards Learned to Love the Nuclear Deal

IRGC commander-in-chief Mohammad Ali Jafari. Wikimedia Commons/Siamak Ebrahimi

They’re ready to profit from a more open economy.

Iran watchers have had a hard time predicting whether the Joint Comprehensive Plan of Action (JCPOA) agreed to by Iran and six world powers (the United States, Great Britain, France, Russia, China and Germany) on July 14, 2015, would withstand a challenge from the Iran’s unsatisfied internal actors, namely, the so-called Principlists and the Islamic Revolutionary Guards Corps (IRGC), a parastatal organization considered to be the steward of the nuclear program.

In my previous analysis, I explained how dissatisfied external players—Israel, Saudi Arabia and Egypt—have offered guarded acceptance of the deal, but reserved the right to reevaluate their decision should Iran fail to comply with the deal. This article attempts to explain whether the JCPOA would face serious challenges by disgruntled internal players.

The JCPOA has split Iran’s negotiated political order, which scholars define as a loose and changing alliance of state and parastatal elites. The Normalizers—a coalition of pragmatic conservatives headed by Ayatollah Akbar Hashemi Rafsanjani and President Hassan Rouhani, who argued that, in spite of its desirability, the cost of pursuing a bomb is too high, and urged a rollback in exchange for sanctions relief and reintegration into the community of nations—managed successfully to implement the deal on January 16, 2016.

But the hard-liners known as nuclear Principlists—a coalition of extreme elements in the Revolutionary Guards and the Abadgaran circle, associated with Mahmoud Ahmadinejad, which advocates Iran’s nuclear sovereignty, a thinly disguised call to leave the NPT in order to pursue an overt nuclear-weapons program—remain determined to test the agreement. Divisions over the JCPOA are expected to persist, but there is no immediate indication that the Principlists and IRGC hard-liners are ready to reject it out of fear of a “snapback” mechanism in the nuclear pact, which promises to reinstate sanctions if Iran violates the deal.

From its inception, Iran’s nuclear program was staunchly defended by the Revolutionary Guards, a military organization considered to be the steward of the nuclear project. The organization viewed the nuclear arsenal as a protective umbrella for the regime’s efforts to export its particular brand of Islamism. As such, the guards served as a spoiler on the few occasions when the pragmatists in the regime tried to negotiate a deal with the international community. The spoiling act reached its peak under President Ahmadinejad, who showered the IRGC with rewards for their loyalty to the nuclear vision.

Even after severe sanctions were imposed on Iran, the IRGC seemed to stick to its spoiler role, denouncing President Rouhani and his team of nuclear negotiators in the harshest possible terms. Some analysts have concluded that the IRGC is willing to suffer the direct economic consequences of the sanctions rather than giving up the nuclear program. Others believed that, having made an alleged fortune from sanction busting, the guards were highly unlikely to support any accommodation with the international community.

This theory lost ground, however, when the guards, in a surprising shift, lined up behind the nuclear agreement. References to “Rouhani the traitor” disappeared from IRGC-linked media and Major General Mohammad Ali Jafari, the guards’ commander-in-chief, expressed indirect support for the deal by praising the Supreme Leader’s position. Due to the Revolutionary Guards’ history of hard-line nuclear nationalism, the tilt toward pragmatism came as a surprise, especially as the guards had shown no concern for the consequences of imposed sanctions on the population.

This reversal has prompted a search for new explanation. An increasing popular suggestion is that the IRGC is more interested in its economic ventures than in promoting the nuclear project. Unlike previous theories, the new account is based on empirical data, making its validity reliable.

The IRGC was transformed from a military organization into a leading economic and political entity during the presidency of Akbar Hashemi Rafsanjani (1989–97). Rafsanjani facilitated the guards' involvement in economic activities with the hope that it would in turn support the regime in national crises. Through Rafsanjani’s privatization policy, the guards took control of several confiscated companies and established the Khatam al-Anbiya Construction Headquarters, in which it set up several companies in the industrial, agricultural, mining, road construction, transportation, and import and export sectors.

When Mahmoud Ahmadinejad came to power on a Principlist ticket, his government dramatically increased support for the guards. More than half of his cabinet members were either IRGC veterans or people with ongoing ties to the organization. The guards were awarded hundreds of no-bid government contracts and billions of dollars for construction and energy programs.

Nowadays, hundreds of the Iranian companies that seem to be private in nature are in fact run by IRGC veterans. Therefore, the organization’s economic enterprises include a broad network of members, rather than a single official or centrally administered organization identifiable to economists as a “pyramid ownership structure.” There is a large amount of companies, and subsidiaries that own shares of other companies.