IRAN REGIONAL PRESENCE OFFICE DUBAI: WINDOW ON IRAN - MAY 6,

S E C R E T SECTION 01 OF 03 RPO DUBAI 000187

NOFORN
SIPDIS

E.O. 12958: DECL: 5/6/2019
TAGS: PREL PGOV ECON IR
SUBJECT: IRAN REGIONAL PRESENCE OFFICE DUBAI: WINDOW ON IRAN - MAY 6,
2009

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CLASSIFIED BY: Ramin Asgard, Director, Iran Regional Presence
Office, DOS.
REASON: 1.4 (b),(d)

1. (S/NF) Election Update - Let's Make a Deal: During a May 5
meeting with IRPO Officers, a Tehran-based businessman who
travels regularly to Dubai detailed several important
backstories for the upcoming presidential elections. (This
contact is a former IRGC officer who was based in Khuzestan
during the Iran-Iraq war and who then went on to serve as a
senior official at the Bonyad-e Shahid.):



- Why Khatami Withdrew: Providing background on Khatami's
withdrawal, source said that Khatami was heavily pressured to
withdraw by the Supreme Leader. This pressure came after
Khatami's three provincial campaign trips revealed his broad
support, which took a vocal and decidedly anti-regime tone at
his campaign rallies at Yasuj, Yazd, and another provincial
capital. (Such provincial populations were considered the
stronghold of Ahmadinejad's conservative support base.) Based
upon assessments of domestic political dynamics, an IRGC
internal report assessing the impact of a Khatami candidacy
concluded that Khatami would likely prevail in the first round
of the presidential elections (by getting over 50 percent of the
vote),and that the IRGC and other internal security forces
would be unable - in contrast to their successful dissent
control during Khatami's first presidency - to quell the
anti-regime sentiment this outcome would unleash. Khatami
reportedly agreed to withdraw, but with Rafsanjani's solid
support, he was able to extract a concession from the Supreme
Leader for doing so - namely, that the SL would not support
Ahmadinejad for the election.



- An Ahmadinejad Loss May Spell the End of the Supreme Leader:
Despite the deal reported above, it is still widely speculated
that the SL will support AN behind the scenes. Given that AN's
sole remaining source of senior-level support is the SL, if the
SL provides him quiet support and he loses, this contact
concluded that the SL's grip on power would be hurt enough for
Rafsanjani to step in and use his position on the Assembly of
Experts to dismiss him (and likely replace him with a leadership
council.)



- Larijani Floats Threat to Run to Ensure Brother Takes Over
Judiciary: Ali Larijani, the powerful speaker of the Majles
reportedly threatened to challenge AN directly by entering the
presidential race if his brother, Sadegh Larijani, is not
appointed to replace Ayatollah Shahroudi once the Judiciary
Chief's term expires in two months.



- Karroubi Offers Terms Upon Which He Would Withdraw: Reformist
presidential candidate Mehdi Karroubi is reportedly in
negotiations with reformist frontrunner Mir Hossein Moussavi to
withdraw, allowing the consolidation of reformist votes, under
the condition that he is able to secure four cabinet positions
(reportedly to include the Ministry of Interior) for his allies.




2. (S/NF) Comment: These machinations, based upon reasonably
reliable, confidential insider information, suggest significant
political maneuvering underlies what now appears to be a
straightforward two person race between AN and Moussavi. Such
horse-trading offers some insight into why candidates without
strong prospects for victory enter and remain in the race -
perhaps merely to secure political concessions for themselves or
key political allies. Such concessions for eventual withdrawal
can only grow in value if they survive the Guardian Council
vetting process.




3. (S/NF) Is the IRIG Changing its Tone on Cultural Diplomacy?:
An IRPO contact with direct access to the IRIG invited IRPO
Deputy Director to discuss cultural exchanges and other public
diplomacy programs with Iran on April 24. The contact, who was
aware of deputy director's travel to Washington for the Iran
Watcher Conference and wanted to meet before his departure,
said the IRIG "had no problem" with US cultural exchange
programs and then offered five suggestions for expanding
people-to-people contacts between the US and Iran. They were

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relaxed visa requirements, promoting partnerships between
Iranian and US universities, sponsoring Iranian cultural events
in the US, encouraging tourism in both countries, and finding
the right partners for cultural exchange programming.
Elaborating on his final suggestion, he implied that cultural
exchanges may go more smoothly if the USG worked with the IRIG
directly, rather than those "who are motivated by profit." Our
interlocutor said that mutual understanding between people in
both countries could help to resolve the political differences
between the two governments. IRPO Deputy Director said the
arrests of Roxana Saberi and others, like the Alaei brothers,
contradicted the message of greater cooperation. On Saberi, our
contact said that her case would be resolved soon, and on
potential danger to participants in future exchanges, he said
their security was assured. Comment: Our interlocutor was
positive, except for grumbling about the difficulty in getting a
visa, and the conversation was absent any rhetoric equating
exchanges to "velvet revolution." If he was conveying a message
on behalf of the IRIG, then it suggests a new receptiveness in
Tehran to cooperation in this sphere. As the Iranians are fond
of saying, however, changes in actions more than words will be
necessary.




4. (C) Iran Fears Cross-Border Links Between Baloch Groups:
According to an Iranian security analyst with direct access to
IRGC officers, Iranian authorities are increasingly concerned
that the deteriorating situation inside Pakistan could create
sanctuaries for Jundullah militants and/or opportunities for
direct cooperation between Jundullah and Pakistani Baloch
insurgents. While instability in Afghanistan has been the norm
for decades, the analyst contended, Tehran is scrambling to
prepare for the possibility that Pakistan may weaken to the
extent that its territorial integrity could be challenged by
separatist groups, including the Balochistan Liberation Army,
with subsequent spill-over into Iran's Sistan Va Balochistan
province. He noted that the while the BLA has so far confined
its operations to Pakistan, it is officially committed to the
creation of a Greater Balochistan comprised of Baloch people now
living in Pakistan, Iran and Afghanistan. The analyst asserted
that the April announcement that the responsibility for fighting
terrorists in the eastern part of the country was transferred
from regular armed forces and police units to the IRGC is the
cornerstone of Tehran's efforts to prepare for the fall-out
should Pakistani insurgents feels sufficiently emboldened to
attempt operational coordination with Baloch militants inside
Iran. He said that IRGC officials are also determined to
further enhance border security through the completion of a
border wall, the digging of trenches, and the provision of
better equipment to forces deployed on Iran's eastern border.




5. (S/NF) Prominent Human Rights Lawyer Sits Down with IRPO:
The lawyer, in private practice in Tehran and Golestan, has
defended human rights activists, student activists, and several
banned newspapers. He said that Tehran General Prosecutor Sa'id
Mortezavi is more powerful than Judiciary Chief Ayatollah
Shahrudi due to his direct relationship with Supreme Leader
Khamenei. He does not expect the change in judiciary chiefs
this summer to change the dynamic. The lawyer approaches each
of his cases differently; sometimes he will speak to the press
while at other times he believes a quieter strategy is more
beneficial. He said his personal relationship with Mortezavi
also helps - he believes that Mortezavi respects him because he
was jailed before the Revolution for political activity. Cases
also depend on which organization made the initial arrest; he
said being detained by the judicial police is worse than the
MOIS or LEF. The lawyer has been invited by several prominent
universities in the U.S. to speak on the human rights situation
and was in Dubai to apply for a visa. He had no first-hand
insight into Roxana Saberi or Ehsa Momeni's cases but predicted
Saberi's sentence would be substantially reduced. He made the
following points:



- The Iranian government is most concerned about the student
movement, the women's rights movement, and the labor movement.
He characterized the student movement as strong, particularly at
Tehran University, Amirkabir University, and Iran University of
Science and Technology and said there are links between the
student movement and the labor movement.


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- The IRIG is increasing its pressure on human rights and
political activists in the run-up to the presidential election
but has relaxed pressure against the general population.



- Golestan province leans reformist, in part because the
Friday Prayer Leader in the province, Seyyed Kazem Nourmofidi,
is a reformer. Ayatollah Khomeini appointed Nourmofidi to his
position in 1979.


6. (S/NF) Another View on the "Year of Reforming Consumption":
By declaring this the "year of reforming consumption," Supreme
Leader Khamenei is telling the Majles that it should consider
legislation to reform Iran's subsidy programs, an Ivy-League
educated professor of economics at the American University of
Sharjah (please protect) told IRPO econoff in a recent meeting.
In his speech the SL carefully avoided endorsing AN's subsidy
reform plan, the legislation for which is still pending before
the Majles, although the Majles removed funding for the plan
from this year's budget. The academic contends that the SL is
in favor of price increases for select items like water and
electricity, and in favor of government rationing programs, but
he is opposed to the broad price liberalization and direct cash
payments that are key parts of AN's proposed legislation.
Khamenei favors a larger government role in reforming
consumption, and not the smaller role that the cash payment
plan, which would give lower-income Iranians cash to spend on
goods as they choose, would prescribe. Comment: This analysis
of the SL's Nowruz speech is notable both for its nuance as well
as its focus on economic policy differences between SLK and AN.
IRPO has previously reported on several defeats that the Majles
dealt AN on economic policy, and if the academic is correct, the
Nowruz speech can also be interpreted as an attack on AN's
policies.




7. (S/NF) Armenian MP Comments on Politics and the Economy:
The main issue in June's presidential election will be who can
better manage Iran's economy, while personal freedoms will be of
secondary importance, according to Robert Beglarian, one of two
representatives of the Armenian community in the Majles.
Beglarian is serving his second term in the Majles, after
working for many years in the Ministry of Economic Affairs.
Beglarian also commented that Majles Speaker Ali Larijani has
been a better manager of the Majles than former Speaker Haddad
Adel, but that the current Majles is less active than the
previous one. On economic issues, Beglarian thinks that the
emphasis on the private sector in presidential candidate Mir
Hossein Mousavi's economic program should be interpreted as an
attack on the strong role of the IRGC in the economy. Beglarian
asserted that the value-added tax (VAT),which spawned protests
in several cities last fall, is currently being collected, and
he is scheduled to give a seminar on the VAT in Esfahan.
Comment: The views of a current member of the Majles are
always of interest, but his assertion that the VAT is currently
being collected contradicts reporting from other IRPO contacts,
although some Iranian press reports have said it may be
implemented later this year.
ASGARD