Iran's Khamenei condemns officials over bank scam

Mon Oct 3, 2011 10:58am EDT

Related Topics

* Supreme leader weighs into embezzlement blame game

* Lawmakers call for high-level sackings

* Ahmadinejad under pressure

TEHRAN, Oct 3 (Reuters) - Iran's supreme leader criticised the government on Monday for failing to prevent a $2.6 billion embezzlement, weighing into the political blame game over the biggest bank fraud the Islamic Republic has ever seen.

In his first comments on the case that has prompted calls for senior politicians to be sacked, Ayatollah Ali Khamenei said officials had defied his instructions to stamp out corruption.

"I gave strong advice to the country's officials in recent years about combating economic corruption," Khamenei said in televised comments. "They welcomed my advice but, if correctly implemented, the recent economic corruption ... would not have occurred."

The scandal , where well-connected businessmen appear to have siphoned off a fortune , has shocked Iranians who are facing constantly rising prices, a sluggish economy and stubborn unemployment. In response to public opinion, the prosecutor in charge has said culprits could be executed.

The head of Iran's biggest bank, state-owned Bank Melli, resigned and reportedly fled the country over the affair and some politicians have called for the central bank governor and economy minister to be fired in what has become a partisan blame game ahead of a parliamentary election next March.

Eleven members of parliament, enough to begin an impeachment procedure, have signed a letter accusing the government over the fraud, the semi-official Mehr news agency reported on Monday.

That adds to pressure on President Mahmoud Ahmadinejad who was already under fire from hardline conservatives who accuse him of being in the thrall of a "deviant current" of advisers trying to undermine the authority of Khamenei and the clergy's role in the Islamic Republic.

The hardline Kayhan newspaper said the mastermind behind the fraud had links with Ahmadinejad's chief of staff, Esfandiar Rahim Mashaie.

The publisher of another conservative daily Siyasat-e Rouz speculated that some of the stolen money was given to the "deviant current" for use in the parliamentary election campaign.

The judiciary said the scam involved an Iranian investment company fraudulently securing bank loans on a massive scale.

Ahmadinejad has denied any government wrongdoing and has urged the judiciary to pursue the case vigorously. At least 19 arrests have been made so far. (Reporting By Mitra Amiri)

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