The Iran File is a weekly intelligence summary that synthesizes events from the past week and forecasts what to expect in the future.
Shahroudi’s Death leads to Rising Stocks for two Potential Supreme Leaders
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Forecast: The death of Expediency Discernment Council (EDC) Chairman Ayatollah Mahmoud Hashemi Shahroudi and the ensuing events will likely affect two individuals’ chances to succeed Ayatollah Ali Khamenei as Supreme Leader. Khamenei appointed current Judiciary Chief Ayatollah Sadegh Amoli Larijani as Shahroudi’s replacement in the Guardian Council and the EDC. Former presidential candidate Hojjat ol Eslam Ebrahim Raisi may take Larijani’s place when his term as Judiciary Chief ends in the summer of 2019. Raisi’s possible installation as Iran’s next Judiciary Chief may place him in a better position to succeed Khamenei as Iran’s next Supreme Leader.
Shahroudi’s death allowed Larijani to consolidate power. Shahroudi’s *death on December 24, 2018 was no surprise. He had been sick for some time and absent from EDC sessions since July 2017. Many in the West considered Shahroudi to be one of the frontrunners to succeed Khamenei as Iran’s Supreme Leader. Khamenei quickly *appointed Larijani, who is the brother of Parliament Speaker Ali Larijani, to replace Shahroudi in the EDC and as a jurist on the Guardian Council, thus enhancing the power he already holds as head of one of Iran’s co-equal branches of government (alongside the executive and the legislature). Larijani continues to serve as Iran’s Judiciary Chief and is also a member of Iran’s influential Assembly of Experts, the legal body responsible for dismissing and appointing the Supreme Leader. Larijani also contributes to important national security decisionmaking through his seat on the Supreme National Security Council (SNSC).
Larijani finds himself in a remarkable position after his appointment to succeed Shahroudi. He can heavily influence the ratification of legislation passed by his brother in the Parliament as a member of the Guardian Council, while also ruling on legislative disputes between Parliament and the Guardian Council, by virtue of his seat on the EDC. Larijani's position on both quasi-legislative bodies has already influenced the ratification of key Financial Action Task Force (FATF) legislation intended to foster a more attractive and transparent business environment in Iran for foreign banks and investors. The EDC *ratified a revised parliamentary bill regarding counter-terror financing in Iran on January 5, after months of objections from the Guardian Council and the EDC’s Supreme Supervisory Council. The ratification comes on the first day that Larijani chaired the EDC and before the FATF-imposed February 2019 deadline for Iran’s compliance.
Larijani’s past may work against him during successorship deliberations when Khamenei eventually dies, despite their closeness. Larijani was born in Najaf, Iraq to Iranian parents. Larijani’s birthplace may be problematic from the public’s perspective even though Iran’s constitution does not mandate that the Supreme Leader be born in Iran. Anti-Arab sentiments, particularly anti-Iraqi sentiments, among Iranians have been noticeably high recently. Iranians have participated in anti-Iraqi protests in southwestern Iran and castigated Iraqis online after *reports of Iranian-backed Iraqi fighters traveling to Iran to wed Iranian women and to visit brothels. Larijani may not be an ethnic Arab, but his birthplace may negatively affect his chances at successorship. The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) also designated Larijani for human rights abuses against Iranians on January 12, 2018, after widespread anti-regime protests took place in Iran. Larijani was also the target of protests in Kashan, Esfahan Province on December 30 during the Dey Protests, which may be indicative of greater popular discontent with him as a political leader in Iran. Larijani’s designation and birthplace are not automatic disqualifiers to become Supreme Leader, although they can certainly work to his detriment during the succession process.
Khamenei will reportedly appoint Raisi as Iran’s next Judiciary Chief, putting him back in strong contention for supreme leader succession. Rumors that Raisi, the current head of the powerful Mashhad-based Astan Quds Razavi, will replace Larijani in the Judiciary started well before Shahroudi died. Raisi has *not denied this possibility. He holds considerable legal and jurisprudential experience, having served as both Iran’s Prosecutor General and as the Justice Minister before Khamenei *appointed him to lead Astan Quds Razavi in March 2016. Raisi is a close ally of Khamenei and has already made moves to prepare for his possible appointment to lead the Judiciary. Raisi appointed a new deputy, Reza Fatemi Amin, at Astan Quds Razavi to replace his now special assistant Morteza Bakhtiari on January 1. Raisi may have appointed Fatemi so that he would then become the de facto head of Astan Quds Razavi were Raisi to leave for the Judiciary, possibly with the intention of taking Bakhtiari with him. It is unclear when exactly Khamenei will appoint Larijani’s replacement. Larijani’s second five-year *term is set to end in summer 2019. Khamenei may designate Raisi as Larijani’s successor very soon, and may possibly boost his clerical rank from Hojjat ol Eslam to Ayatollah. This promotion in clerical status could place him in better contention for supreme leadership, possibly even ahead of Larijani. Raisi’s appointment would be a turnaround for a man who had been rumored to be hot in the running to replace Khamenei before his embarrassing defeat at the hands of Hassan Rouhani in the last presidential election. The ascension of either Larijani or Raisi to Supreme Leader will prove worrisome for U.S. interests considering what we know about both. We should not expect to be happy at the prospects of either succeeding Khamenei.