Structural Corruption in Prisons: The Hidden Economy, Forced Labor, and the Role of the IRGC, Judiciary, and Prisoners’ Cooperative Foundation
Prisons in the Islamic Republic are not institutions of rehabilitation; they are integral components of the regime’s machinery of structural corruption. As documented in earlier reports, the judiciary’s institutionalized misconduct becomes even more visible inside prisons in the form of forced labor, economic exploitation, drug networks, black-market trading, and the systematic conversion of prisoners into profit-generating assets for the Islamic Revolutionary Guard Corps (IRGC), the Prisoners’ Cooperative Foundation, and prison security officials.
This fifth report demonstrates how institutions legally tasked with ensuring justice instead operate prisons as multilayered economic hubs an arrangement that would not be possible without the direct involvement of the IRGC, the Khatam-al-Anbia Construction Headquarters, the Prisons Organization, and entities under the Office of the Supreme Leader.
1. Mechanisms of Corruption in Prisons: Institutions and Key Actors
1.1. The IRGC and Khatam-al-Anbia Headquarters
The IRGC plays a central role across multiple layers of the prison economy:
- Securing major contracts in which prisoners serve as the primary labor force;
- Operating stone-cutting, construction, agricultural, and service contracts in Isfahan, Shahin-Shahr, Mahmoudabad, and Greater Tehran;
- Running production workshops inside prisons such as Qezel Hesar and Fashafuyeh;
- Penetrating prison “security units,” thereby enabling the controlled import of narcotics and illicit goods.
Khatam-al-Anbia, as the IRGC’s main economic arm, receives numerous contracts formally signed through the Prisoners’ Cooperative Foundation, while the actual workforce consists of detainees compelled to work under coercive conditions.
1.2. The Prisons Organization: From Governance to Policy-Driven Exploitation
Two senior officials define this structure:
Mohammad-Mehdi Haj-Mohammadi – Former Head of the Prisons Organization
In a public statement carried by regime-controlled media, he declared:
“Prisoners are a cheap labor force, and private-sector employment of prisoners is a win–win situation.”
This official admission exposes the institution’s central role in forced labor and systemic exploitation.
Gholam-Ali Mohammadi – Current Head of the Prisons Organization
He has continued the same approach expanding workshops, approving new contracts, and deploying prisoners in hazardous work environments without insurance, safety safeguards, or minimum labor protections.
1.3. The Prisoners’ Cooperative Foundation: The Economic Core of the Network
Rahim Motahharnejad, Managing Director of the Prisoners’ Cooperative Foundation, has publicly acknowledged that:
- The Foundation operates at 760 production units across the country.
- controls 14,500 hectares of land adjacent to prisons;
- runs 1,100 retail outlets.
- and markets goods under the “Hami” brand produced by detainees.
Only 20 percent of prisoners’ wages is returned to them.
The remaining 80 percent flows to the Prisons Organization, the Cooperative Foundation, and contracted entities constituting a legalized form of modern forced labor.
1.4. Prison Directors and Security Deputies
Qezel Hesar Prison
Verified documentation indicates that the Deputy Director of Qezel Hesar ran the primary drug-distribution network inside the facility, selling narcotics at discounted prices to foster dependency and generate daily profits.
Greater Tehran Prison (Fashafuyeh)
Prison administrators organize forced-labor workshops and compel prisoners to work through threats of disciplinary transfer, placement in high-risk wards, or denial of furlough.
Prison Security Units (IRGC-linked)
Several official media reports confirm that security personnel were involved in smuggling narcotics into prisons, directly linking IRGC-aligned units to internal corruption networks.
2. Documented Facts from State-Controlled Media
This section strengthens the report’s evidentiary foundation by citing information documented in official regime outlets.
2.1. Fars News Agency – “60% Prisoner Employment”
Fars repeatedly reported that over “60 percent of prisoners” are engaged in prison workshops. Framed as an achievement, this figure in fact confirms the extensive scale of forced labor.
2.2. IRNA – Workshops in Qezel Hesar and Greater Tehran
IRNA published reports on the expansion of workshops—carpentry, metalwork, agriculture, and livestock farming—where prisoners constitute the core labor force.
2.3. ISNA – Forced Labor and Drug Smuggling by Staff
Independent ISNA reports confirmed that:
- prisoners work in construction and private workshops;
- certain prison employees were involved in bringing narcotics into facilities;
- in one case, several kilograms of narcotics were seized from an on-duty officer.
2.4. Shargh Daily – Protection Officer Caught with Kilograms of Heroin
Shargh reported that a Prison Protection Department officer at Greater Tehran Prison was arrested while attempting to smuggle several kilograms of heroin inside. This remains one of the clearest official acknowledgments of systemic corruption.
2.5. Etemad Daily – Drug Network in Vakilabad Prison
Etemad documented the discovery of a narcotics-distribution ring operated by prison staff inside Vakilabad Prison in Mashhad.
3. Supplementary Verified Findings (Independent Resistance Sources)
Complementing state-media documentation, additional verified data shows:
- In Asadabad Prison (Isfahan), 2,500 prisoners work in IRGC-linked stone-cutting and tile factories.
- In Vilashahr, 500 prisoners are forced into concrete-casting facilities; in Ghal’eh-Shur, 250 prisoners work on projects for the Martyrs Foundation.
- Qezel Hesar comprises more than 15,000 social-crime detainees and several thousand labor-category prisoners compelled into forced labor.
- Greater Tehran Prison functions effectively as an industrial labor camp.
- In Lakan Prison (Rasht), women weave 18-meter carpets valued in the tens of billions of tomans while receiving only about 300,000 tomans per month.
- In Sepidar Prison (Ahvaz), women work in bakeries, kitchens, coffee-packaging lines, and cleaning units for 20,000–50,000 tomans per month.
4. Structural Analysis: The Cycle of a Systemic Corruption Model
Corruption in Iran’s prisons stems from interconnected mechanisms that sustain a self-reinforcing system.
The absence of independent oversight places the Prisons Organization, the Cooperative Foundation, and security units entirely under the authority of the judiciary, the IRGC, and institutions subordinate to the Supreme Leader, enabling unchecked exploitation.
A coordinated institutional alliance links the IRGC, the judiciary, the Cooperative Foundation, and prison administrators: the IRGC receives contracts, the Foundation supplies prisoner labor, prison managers enforce compliance through coercion, and the judiciary ensures a continuous labor pool through harsh sentencing and punitive restrictions. This alignment transforms corruption into the governing logic of prison management.
Complete immunity for perpetrators further entrenches the system. Senior officials, contractors, and security personnel involved in exploitation, trafficking, or black-market activity face no prosecution; cases are dismissed or never initiated. As a result, prisoners become units of profit, generating revenue through forced labor, narcotics networks, and black-market sales.
At the same time, these mechanisms function as tools of social control addiction, forced labor, financial pressure, and threat of transfer suppress resistance and weaken prisoners’ autonomy. This structure demonstrates that corruption within Iran’s prisons is not incidental but an integral component of the regime’s governance model.
5. Conclusion
Under the rule of the Supreme Leader, prisons in Iran have become major centers of economic, security, and structural corruption:
- The IRGC and Khatam-al-Anbia exploit prisoner labor for profit;
- The Prisons Organization legitimizes this system through official policies;
- The Cooperative Foundation manages its financial and contractual infrastructure;
- Prison staff operate drug networks and black markets;
- And the judiciary guarantees impunity and continuity.
This framework is neither reformable nor accidental; it is embedded in the political–economic architecture of the regime. As long as this structure persists, prisons will continue to function as forced-labor camps and underground commercial hubs.
Final Statement: A Documented Picture of Structural Corruption Ahead of International Anti-Corruption Day
The five-part series “Network of Corruption in the Ruling Regime: Structure and Hidden Functions of Power in Iran” provides a documented and integrated analysis of the systemic corruption entrenched in the governance of the Islamic Republic. Far from administrative misconduct, corruption is a mechanism of political survival. Examination of the five axes corruption at the apex of power, major economic corruption, security-linked trafficking networks, judicial impunity, and corruption inside prisons shows a regime operating through a continuous cycle of rent, immunity, repression, and exploitation.
Published in connection with 9 December, International Anti-Corruption Day, this body of work captures only a fraction of the pervasive corruption that has penetrated every level of governance. The human, social, and economic consequences of this system weigh heavily on the lives of millions of Iranians.
We call on the international community, UN human rights mechanisms, and relevant global institutions to recognize that corruption in Iran is not an internal administrative issue but a comprehensive governance model that has destroyed public accountability and threatens the future of an entire nation.
Urgent international scrutiny, monitoring mechanisms, and accountability frameworks are required to confront this entrenched system and support the Iranian people’s pursuit of a society free from corruption, repression, and impunity.
