Special Report: Iran expands shrines and influence in Iraq
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[December 02, 2020]
By John Davison
KERBALA, Iraq (Reuters) - In September, a
senior Iranian commander made an unannounced visit to one of Shi'ite
Islam's holiest sites in the southern Iraqi city of Kerbala.
Hassan Pelarak, a top officer in the Revolutionary Guards' elite Quds
Force, had recently been sanctioned by the U.S. for weapons smuggling.
He was checking in on a construction project led by a firm he owns
together with other Revolutionary Guards, a foundation linked to Iran's
Supreme Leader. This foundation too is under U.S. sanctions.
The vast, $600 million expansion at the Imam Hussein shrine, which is
revered as the place of martyrdom of the Prophet Mohammed's grandson,
will swell the capacity of what is already the world's largest annual
pilgrimage, dwarfing the Hajj to Saudi Arabia's Mecca. It is the biggest
development at the shrine in 300 years.
An Iraqi worker at the site sent Reuters pictures of Pelarak, wearing a
hard hat and sporting a blue surgical mask, having his temperature taken
before entering. The visit, confirmed by an Iraqi employee of the
foundation, was not reported by Iranian or Iraqi media. But his visit
was not unusual. Pelarak and other Guards commanders overseeing the
project freely drop in, workers say, and are given quick tours by the
exclusively Iranian companies and engineers they have contracted to
carry out the work.
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Qassem Soleimani, the late Quds Force commander who spearheaded Iran's
military and political strategy across the region, was filmed touring
the project in 2018, 18 months before he was killed by a U.S. drone
strike. His successor, Esmail Ghaani, made an unannounced visit to the
shrine two weeks after Pelarak, said an Iranian source in Kerbala.
Day and night, Iranian labourers fill in a 40-metre deep,
50,000-square-metre crater next to the shrine with steel girders and
cement brought from Iran. The multi-storey buildings they are erecting
will contain ablution stations, a museum and a library. Millions of
predominantly Shi'ite pilgrims from across the Islamic world will access
the Hussein shrine via a large road tunnel.
It is one of the largest of the multi-million dollar projects that the
Revolutionary Guards-owned Kawthar foundation (Kowsar in Persian) is
leading to develop religious tourism in Iraq and Syria – with more in
the pipeline.
For this report, Reuters paid five visits to the Kerbala project site,
examined public information from the shrines and companies and
interviewed at least 20 Iraqi and Iranian workers, engineers,
businessmen, religious and political officials. The examination reveals
how Iran's close involvement in religious tourism is bringing Tehran
soft power and cementing a presence in Iraqi religious centres that are
the nexus of Shi'ite regional influence.
Control of shrine development also deepens trade ties and is a target of
potential economic opportunity for Iran: Religious tourism is worth
billions of dollars a year in Iraq, the second-largest earner of revenue
for the country after the oil sector.
"Iran has long penetrated the Iraqi deep state," said Bangen Rekani, a
former Iraqi housing minister with knowledge of the projects.
Increasingly, he said, "Iranians use their soft power and religious
ties, which can be more important than political ties."
Iraq's government grants religious projects special privileges,
including tax exemptions on imports of Iranian cement, steel and other
materials. According to multiple sources, many of these goods are
brought into Iraq ostensibly for shrine development but are then sold
elsewhere in the country. Reuters couldn't determine the extent of this
trade, which helps counter Western sanctions on Iran.
The development of Shi'ite shrines is being spearheaded by Iran's Holy
Shrines Reconstruction Headquarters, a body set up by Supreme Leader
Ayatollah Ali Khamenei and run by the Revolutionary Guards' appointees.
In March, Washington sanctioned the Headquarters and Kawthar, its
Iraq-based engineering wing. Pelarak was among officials targeted. The
Americans alleged the Headquarters and Kawthar were involved in "lethal
aid" to proxy militias in Iraq and Syria, intelligence activities and
money laundering. A Treasury spokesperson told Reuters that Iran sought
to expand its influence and exploit Iraqi financial and business
sectors.
Khamenei has condemned U.S. sanctions as an attempt to destroy Iran's
economy and overthrow its ruling system. Reuters sought comment for this
article from the Iranian government, the Revolutionary Guard, its
engineering wing Kawthar and Pelarak, but didn't receive a response. An
Iraqi government official said he couldn't comment about Kawthar's
activities in Iraq because he didn't have details, a remark echoed by a
spokesperson for the Iraqi state body that administers religious sites.
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A spokesman for the Hussein shrine, Afdhal al-Shami, told Reuters that
Iran's involvement was needed because "Iraq's economy is such that we
can't undertake a project like this on our own."
"Iranians love the shrines. When this money comes in from Iranian
donors, through an official body, that's a psychological boost and good
publicity at home and abroad for the Iranian government," he said in an
interview.
"DOWN TO THE MIRRORS, IT'S ALL IRANIAN"
Iran built power in Iraq after the 2003 U.S. invasion that toppled Sunni
dictator Saddam Hussein and brought rule by Iraq's Shi'ite majority,
especially parties supported by Tehran. The Revolutionary Guards grew a
military-business empire in Iran, then expanded their influence across
Iraq, Syria and Lebanon. They created a corridor to support militia
allies across the region and dominate land borders, overground trade,
and expand their presence at Shi'ite holy places.
But now the Islamic Republic's attempts to expand influence in Iraq are
facing new challenges. Iran is distracted by the coronavirus pandemic at
home and dissent against the political parties and militant groups it
backs in Iraq and Lebanon. Iraq's top Shi'ite cleric, Grand Ayatollah
Ali al-Sistani, has supported calls for political reform and long
opposed foreign interference, including that of Iran. The United States
and its allies are trying to roll back Iranian influence with sanctions,
assassinations of military commanders and a new alliance between Israel,
the United Arab Emirates and Bahrain. For the first time in years, an
Iraqi government, led by Prime Minister Mustafa al-Kadhimi, has sided
with the United States. Kadhimi's appointment was opposed by
Iran-aligned militia groups.
Pelarak's September visit to Kerbala was the latest sign that despite
U.S. pressure on the Revolutionary Guards' activities in Iraq, the
Guards press on with Kawthar's work.
The U.S. Treasury's sanctions in March said Kawthar "served as a base
for Iranian intelligence activities in Iraq, including the shipment of
weapons and ammunition to Iranian-backed terrorist militia groups." An
Iraqi customs official told Reuters Iran did not need Kawthar, an
organisation focused on trade and soft power, to transfer weapons.
"There are other ways of doing that – their proxy militias control the
borders from the Kurdish north to the south of Iraq," he said.
Kawthar carries out shrine development on behalf of the Holy Shrines
Reconstruction Headquarters using a number of specialised Iranian
companies. Kawthar is owned by Pelarak and at least two other
Guards-linked officials, including a Quds Force commander based in the
southern Iraqi holy city of Najaf, according to the U.S. Treasury.
Iraqi traders and officials described how during Iran's economic
downturn Kawthar has become more important because of its grip on
development of religious sites.
"Iran had its eye on shrines since the fall of the (Iraqi) regime in
2003," said Dhiaa al-Asadi, a former lawmaker close to Najaf-born
Shi'ite cleric Moqtada al-Sadr.
The Hussein shrine, visited by up to 50 million pilgrims each year, is
housed within a vast, golden-domed mosque decorated with ornate
entrances, wooden gates and glass – all from Iran, according to former
Iraqi housing minister Rekani and several other government sources.
"Down to the mirrors in the shrines, it's all Iranian," Rekani said.
The faithful eat for free in adjoined dining halls and pray on carpets
while drilling and other sounds of upkeep punctuate an otherwise quiet
reverence.
A Reuters reporter visited a Kerbala hotel leased out by the Hussein
shrine to host engineers working on the project. The hotel lies on a
secured street monitored by cameras. In the reception, a calligraphic
sign commemorates the assassinated Soleimani. Engineers dropped by
reception on their break to collect packed lunches of rice, chicken and
barberries, typical Persian fare. Iranian workers occupy two more hotels
in the city and temporary cabins next to Kawthar's nondescript offices,
which overlook the shrine expansion project.
There, Iranian workers wearing the overalls of the companies contracted
by Kawthar toil next to health and safety signs in Persian. The
engineers in hard hats are often graduates of Shahid Beheshti University
in Tehran, according to an Iraqi contractor working with Kawthar. The
university is on Western sanctions lists for alleged involvement in
nuclear weapons research. Iran's science minister has said its
activities have nothing to do with atomic weapons research.
The construction site, half empty about a year ago, has quickly been
filled with the skeletons of buildings. Pelarak signed a nearly $650
million contract in 2015 with the Hussein shrine for Kawthar to build
the extension, named the Sahn al-Aqila Zeinab, the Courtyard of Zeinab,
Hussein's sister.
The Headquarters lists at least 17 projects it is overseeing at
important shrines in Najaf, Kerbala, Baghdad and the northern city of
Samarra. These contracts are often years-long and worth hundreds of
millions of dollars.
In Najaf, Kawthar and the Headquarters have repaired the Imam Ali
shrine's golden dome and facade, and are carrying out a $500 million
infrastructure expansion there too. In Baghdad, they have built ornate
windows at the shrines of two Shi'ite imams and have been repairing a
minaret that is leaning because of swelling groundwater, according to a
shrine official. The Headquarters is also working on an expansion of the
al-Askari shrine in Samarra. This shrine was bombed by Sunni extremists
in 2006, setting off some of Iraq's most violent sectarian bloodshed.
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![](../images/120220PIX/news_t37.jpg)
A worker stands in the construction site of the Sahn al-Aqila
project, a vast expansion to the area adjacent to the Imam Hussein
shrine that will be used to welcome mostly Shi'ite Muslim pilgrims
in Kerbala, Iraq, October 26, 2020. REUTERS/Abdullah Dhiaa Al-Deen
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Pelarak is eyeing more work. He told Iranian semi-official news
agency Fars in August he hoped to carry out an expansion at another
site in Kerbala, the Imam Abbas shrine, part of a plan "agreed by
Iraq's housing ministry" but not yet requested by the shrine. A
spokesman for Iraq's housing ministry said he couldn't comment
because, "there is no accurate information available on this." The
shrine didn't comment.
Several Iranian firms carry out the work, serving as contractors. A
tunnel, foundation and water specialist called Abtaban is working on
the Kerbala project, according to the Revolutionary Guards-linked
Tasnim news agency. Padideh, a civil engineering contractor, and
Mana, a construction firm, are involved in both the Kerbala project
and the development of the Imam Ali shrine in Najaf, according to
Iranian news and company websites. Padideh says on its website it is
aiming to increase its work in the region.
Reuters found no link between these companies and the Guards beyond
the contracts with Guards-run organisations, and the firms are not
under U.S. sanctions. The companies did not respond to requests for
comment.
An Iraqi government official said Kawthar's activities and finances
are not shared with any Iraqi government departments.
A spokesman for the Iraqi state body that administers Shi'ite
religious sites said: "We can't discuss any topics related to the
work of Iranian companies because we do not intervene or have
specific details on their activities. They work in holy cities but
other than that we don't know anything."
Shami, the spokesman for the Hussein shrine, said "if Kawthar has
other activities, we don't know about this." He said he was also
unaware of U.S. sanctions against Kawthar.
SPECIAL STATUS
The Iraqi state funds the initial buying up of private and public
land at the sites through budget allocations to Shi'ite religious
authorities which make the purchase, said Rekani, the former housing
minister.
For the Sahn al-Aqila, part of the Kerbala project, religious
authorities paid some $170 million to buy at least 300 properties,
according to shrine officials. The Hussein and adjacent Abbas
shrines plan to take over more land nearby, the officials said.
Mohammed Musawi, who used to live where the Sahn al-Aqila is being
built and owned two hotels there, said the demolition of his
properties brought a handsome fee but erased his business and a
generations-old family property.
"I didn't want to sell the house, but when the shrine decides to
expand, there's nothing you can do," he said. "People receive a lot
of money to sell, and if they refuse are given a court order."
The shrine paid Musawi and his six siblings nearly $1 million for
their property. He now runs a corner shop and relies heavily on the
pilgrimage business.
After land acquisition, shrine projects are then fully funded by
Iran – ostensibly from donations by devout Iranian Shi'ites and
through charities linked to Shi'ite shrine organisations, officials
at the Hussein shrine said. An Iranian employee of Kawthar, who
declined to be named, said much of the money came from Iranian state
coffers, but he didn't know what proportion. A project costing in
excess of $600 million "can't just come from donations, you need a
state behind that," he reasoned. Other Iranian and Iraqi sources
supported this view.
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Shrine projects get special status under Iraqi law, meaning they are
overseen by the shrine organisations, not by the state. There are
customs exemptions for all materials coming from Iran for religious,
donor-funded projects.
An engineering official at the Hussein shrine declined to say how
much steel, cement, wood and other imports are brought from Iran for
the project. An Iraqi trader who has worked with Kawthar said large
quantities of Iranian steel and cement are imported tax-free under
the guise of shrine projects, but then sold via middlemen onto the
Iraqi market, where prices are higher than in Iran. A senior Iraqi
official with direct knowledge said firms involved in shrine
projects "often order several times the required amount" of building
materials.
Shami, the Hussein shrine spokesman, maintained that it would be
difficult to siphon off goods in this way because they are inspected
by Iranian and Iraqi customs officials then transferred straight to
the shrine's warehouses. He didn't rule out the possibility that
some imports had forged shrine documentation, however. "Everything
is possible in Iraq," he said.
The firms have had their workers bussed in from Iran even when the
borders are closed, as during the first wave of the COVID-19
pandemic. One Iranian employee of Kawthar told Reuters that when the
borders first closed there were problems getting into Iraq, "but the
Hussein shrine intervened to get exemptions." He estimated there
were around 200 Iranian workers currently, down from 2,000 earlier.
Shami said he didn't know if the shrine had sought travel exemptions
for Iranian workers.
The Iraqi customs official and an Iraqi contractor said Kawthar is
also involved in other infrastructure projects, including energy.
Among these projects, according to the contractor, is a power plant
in Basra. The power plant project was led by an Iranian energy
company called Mapna, which has also been sanctioned by the United
States. Mapna is building power plants in Najaf and Baghdad, as well
as one of Kerbala's largest hotels, a Reuters review of official
filings found. Mapna didn't respond to a request for comment.
A LONG GAME
Workers in Kerbala say they see evidence that U.S. sanctions are
hurting Iran, and Kawthar. The Iranian Kawthar employee told Reuters
he used to take home $1,100 a month, paid in the stable Iraqi dinar,
but since the sanctions kicked in, he gets only around $200 because
he is now paid in the weak Iranian rial. Work on the site for local
Iraqis has all but dried up. An unemployed Iraqi engineering
graduate, who used to get regular labour at the shrine, told Reuters
he now spends his days hoping for work. He struggles to support a
young family.
For the Islamic Republic, its involvement in Iraq's Shi'ite shrines
is a long game. It brings an enduring presence in Shi'ite centres of
power, where Iran hopes to influence the succession of Iraq's most
powerful Shi'ite cleric, Sistani. The Guards are regularly in Najaf,
where Sistani is based. Sistani's office didn't respond to a request
for comment.
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Sistani's edicts sent Shi'ite Iraqis to the polls for the first time
in their lives in 2005, created an amalgam of Shi'ite paramilitaries
to fight Islamic State in 2014, and toppled an Iraqi government last
year. Sistani stands against Iranian and other foreign interference
in Iraq, and opposes the theocratic model of rule by Khamenei. The
Iranian pick to succeed the 90-year-old Sistani died in 2018 in a
setback to the Islamic Republic's plans for Iraq.
Though Iranian influence is resented by large sections of Iraq's
Shi'ite population, religious ties run deep. At the Hussein shrine,
bullet holes from where Saddam's soldiers gunned down Shi'ite rebels
in 1991 are framed. At the time, Iran was a haven for Shi'ite
opposition to Saddam, a Sunni.
The pilgrimage to commemorate Hussein, slain in battle in 680, is
closely associated with the martyrdom of today. Next to images of
Hussein on Iraqi highways are posters of Shi'ite militiamen killed
fighting Islamic State, which counted Shi'ite Muslims among its most
bitter enemies and considered them heretics. Next to them are
pictures of Abu Mahdi al-Muhandis, the godfather of those militia
groups, killed alongside Soleimani by America.
Abu Mahdi and Soleimani featured this year on a banner at one stall
next to the Hussein shrine offering pilgrims free tea and juice, run
by Kawthar employees. Just next to the stall were the flags of
Iraq's Popular Mobilisation Forces, the state paramilitary grouping
dominated by Iran-aligned fighters. At Baghdad's Kadhimiya shrine,
one donation box is for the Forces.
Iran uses its presence to project regional strength to Sunni Muslim
rival Saudi Arabia and bolster its legitimacy at home as a defender
of Shi'ite holy places, said Iraqi officials and Iran experts. Saudi
officials did not comment for this article.
"Iran wants economic, religious and political influence. The best
place to do that is Kerbala and Najaf," said Mohammed Sahib al-Daraji,
a lawmaker on Iraq's finance committee. "Iran is weakened, but it's
stronger than America in Iraq."
Ordinary Iraqis say they find themselves once more in the middle of
the contest between Iran and America. The Iraqi engineering
graduate, who looks older than his 30 years and wears a frayed
baseball cap, resents that the only work he's ever found in his
hometown is run by the Revolutionary Guards. But he also resents
that when U.S. sanctions kicked in, that work began to dry up.
He spends most days looking for menial jobs. When he's bored, he
borrows for his bus fare and travels to Baghdad with other
out-of-work engineers to hold protests demanding jobs and railing
against Iraq's ruling elite - and Iran.
"I'm now working a few days here and there on the shrine project,
whenever I can get it," the worker said. "They've reduced my pay by
half. But I'll work for the Iranians if it puts bread on the table –
what else is there?"
(Reporting by John Davison; additional reporting by Ahmed Rasheed
and colleagues in Baghdad, Parisa Hafezi in Dubai and Bozorgmehr
Sharafedin in London; editing by Janet McBride)
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