By Mehdi Jedinia, Iran -- source: Institute for War & Peace Reporting (IWPR)

Protests by the Green Movement, the reformist opposition in Iran, may have faded from the streets of Tehran, but President Mahmoud Ahmadinejad is now at loggerheads with a new opponent, a long-established party of religious conservatives.

Habibullah Asgaroladi, former secretary-general of the Motalefeh party, is considered as the godfather of the party. (Photo: Hossein Golia, Mehr News Agency)

In formal terms, the Motalefeh party is still allied with Ahmadinejad, having backed his campaign for re-election last year. But the conflict between them is becoming ever more apparent.

The conflict is being played out indirectly, in the form of strife between the bazaar merchants who support the conservative Motalefeh party and the Ahmadinejad government. But there have also been more direct hostile exchanges between the president and the party. Ahmadinejad has dismissed Motalefeh as a relic of the past that is irrelevant in the modern world.

Hezb-e Motalefeh-ye Eslami (the Islamic Coalition Party), to give it its full current name, was founded in 1962 and its supporters in Iran's bazaars helped fund the return and ascent to power of Ayatollah Ruhollah Khomeini in the 1979 revolution.

When Ahmadinejad first stood for election in 2005, Motalefeh members initially backed his rival Ali Larijani and later former president Akbar Hashemi Rafsanjani, as he emerged as the stronger candidate. It was only when Rafsanjani and Ahmadinejad entered a second-round run-off, and it became apparent that the latter was the preferred choice of Supreme Leader Ayatollah Ali Khamenei, that Motalefeh swung behind him.

In last year's election, Motalefeh again supported Ahmadinejad, but that did not mean the relationship was rosy. The party's founding father and former leader, Habibullah Asgaroladi, subsequently made an attempt to mediate between Green Movement leaders Mir Hossein Moussavi and Mehdi Karroubi and the Supreme Leader - and was harshly criticised by Ahmadinejad allies for his pains.

Nor has the party received much in return for its electoral support. The Ahmadinejad has assiduously kept Motalefeh members away from positions of power, so that it is largely marginalised in government apart from a pocket of supporters among middle-ranking staff at the foreign ministry.

Asgaroladi addresses the party's 2009 congress. (Photo: Hossein Golia, Mehr News Agency)

Motalefeh itself is divided internally over the question of continued support for Ahmadinejad. A younger faction is keen to back the president to the hilt, on the grounds that the Supreme Leader favours him. But many veterans - in a party founded in tradition and conservatism - would like to see him go, but are not saying so openly since there is no one else they see as a viable successor.

They are critical of government economic policies that has made domestic business and international trade more difficult for the merchant class. Perhaps surprisingly given Ahmadinejad's reputation abroad, they have also accusing him of showing insufficient respect for religious values. For example, when Ahmadinejad remarked that he did not back a renewed police crackdown on women whose dress strays from the prescribed form of hejab, Motalefeh's secretary-general Mohammad Nabi Habibi said that if the comment had come from someone from the opposition, they would have been arrested and prosecuted.

The main focus of their anger, though, is that Ahmadinejad has worked so hard to keep Motalefeh out of the positions of power that were once its by right. He prefers to bring in his own people and rely on their loyalty rather than on the older heavyweights of the Islamic Republic.

The relationship continues to sour. Mohammad-Nabi Habibi, the party's current secretary general, has repeatedly criticised the Ahmadinejad administration over the past few months.

The feeling is mutual. Before last year's presidential election, Ahmadinejad told Motalefeh leaders that their endorsement of him was worthless, as their party was not popular enough to deliver significant numbers of votes.

The two-week strike in July that shut Tehran's Grand Bazaar and spread to markets in Tabriz, Mashhad and Hamadan was the most extensive industrial action seen in Iran since the revolution. The merchants' protest was in response to a government plan to impose higher taxes on them and subject their accounts to greater scrutiny. After protracted negotiations, the government partially retreated and the Society of Islamic Guild and Bazaar Associations, the prime mover behind the strike - and closely linked with Motalefeh - was able to claim it had ended the strike on its own terms. (See Tehran Merchants in Showdown With Government for more on the strike.)

But the government was not about to give up so easily. Shortly before the month of Ramadan in early August, there was an upsurge in official inspections of the traditional guilds that run the bazaars as well as of individual merchants. In July, 39,000 cases of breaches of trading regulations were brought against them, and hefty fines were imposed for alleged profiteering.

The government campaign drew a fierce riposte from the guild association's head, Ahmad Karimi Isfahani, who said these actions were illegal and politically-motivated.

Some analysts dismiss Motalefeh as something of a dinosaur, a party of old-style conservatives and merchants who have little influence beyond the bazaar and are heading for extinction in the new politics and economics of modern Iran.

Such predictions are premature, though, as the party still has many influential members and retains areas where it wields substantial economic and cultural clout.

To name but a few, Motalefeh counts among its members and allies Ali Akbar Velayati, a former foreign minister who is now top adviser to the Supreme Leader on international affairs; Ayatollah Abbas Vaez Tabasi, head of the Astan Qods-e Razavi Foundation which has assets of 15 billion US dollars and dominates business and economic life in Khorasan province; influential parliamentarians like deputy speaker Shahabeddin Sadr and Mohammad Reza Bahonar; former judiciary chief Ayatollah Mohammad Yazdi; and Mohsen Rafighdust, formerly chief executive of the wealthy Mostazafan Foundation.

Motalefeh also has effective control of the Imam Khomeini Relief Foundation, the largest charity in the Middle East and also the Islamic Economic Organisation, which comprises 1,200 trusts and quasi-banks that issue loans to the public. Together with the Revolutionary Guards Corps, Motalefeh members hold controlling shares in several companies including the Rezvan industrial corporation, a gas pipeline project in South Pars, and even a software company called Ada-Afzar.

Nor should one forget the enduring influence of the bazaar traders in every major Iranian city. In addition to actual trading, they handle much of the financing for trade, and have been the dominant force in Iran's Chamber of Commerce, Industries and Mines for the past 30 years.

President Ahmadinejad and his government have made some attempts to chip away at Motalefeh's sphere of influence, with limited success. Two years ago, the government demanded that the loan trusts, which provide interest-free lending across the country and are collectively a significant financial player, should shift to central bank control. But in the end a quiet agreement was reached that the Islamic Economic Organisation would remain in charge of them.

Ahmadinejad has also tried to wrest control of the Islamic Azad University, a giant non governmental network of educational institutions with campuses across Iran. In political terms, he had double reasons for doing so - his foe Rafsanjani wields a lot of influence there, and its president for the last three decades, Abdullah Jasbi, is a former Motalefeh advocate and is close to Asgaroladi. (See Battle of Wills Over Top Iranian University.)

Motalefeh leaders spoke out against Ahmadinejad's campaign to seize control of the university, the president hit back, saying the party's members were old and not up to the challenges of the modern world.

Thus, Motalafeh's formal alliance with Ahmadinejad in Iran's ruling establishment is weakening day by day. As long as Supreme Leader Khamenei supports Ahmadinejad as president, Mutalefeh has no choice but to live with him, as was the case in last year's election. But the tensions are already out in the open and will undoubtedly carry on growing.

About the author: Mehdi Jedinia is an Iranian journalist in Washington. He was formerly editor-in-chief of the English-language daily Tehran Times and the Persian-language Tehran-e Emrooz. 

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