The Iranian regime’s support for international terrorism predates the establishment of the Islamic Republic itself. In the 1960s and 1970s, while in exile in Iraq and in France, the Ayatollah Ruhollah Khomeini formulated his ideas about the need for a radical Islamic transformation in his home country, Iran, and of subsequently “exporting” this system of government throughout the Middle East and beyond.²  In keeping with this thinking, Khomeini’s manifesto, Islamic Government, extolled the virtues of “a victorious and triumphant Islamic political revolution” that would go on “to unite the Moslem nation, [and] to liberate [all] its lands."³ 

When the Ayatollah and his followers swept to power in Tehran in the spring of 1979, this principle became a cardinal regime priority. The preamble of the country’s formative constitution, adopted in October 1979, outlines that the country’s military henceforth “be responsible not only for guarding and preserving the frontiers of the country, but also for fulfilling the ideological mission of jihad in God's way; that is, extending the sovereignty of God's law throughout the world.”⁴  These words were backed by concrete regime action, with Khomeini consolidating the country’s various radical militias into an ideological army known as the Islamic Revolutionary Guard Corps (IRGC, or Pasdaran), tasked with promoting his revolutionary message abroad, with violence if necessary.

The three-plus decades since have seen a consistent regime commitment to international terrorism. In the early years of the Islamic Republic, Iran is known to have ordered, orchestrated or facilitated a series of terrorist attacks in the Middle East, among them the 1983 U.S. Embassy and Marine Barracks bombings in Beirut, Lebanon; as well as abortive coup attempts and bombings in Bahrain, the United Arab Emirates and Kuwait.⁵  These activities, and the rationale behind them, were reinforced by the outcome of the country’s bloody eight-year war with Iraq, which strengthened its belief that radical proxies could serve as an attractive, low-cost substitute for direct military action. As a result, the principle of “exporting the revolution” remained a vibrant element of regime policy following the death of Khomeini in 1989. In the decade that followed Khomeini’s death, the Islamic Republic bankrolled assassinations and terrorist acts on foreign soil, aided the infiltration of countries in Europe, Africa and Latin America by radical Islamic groups, and assisted irregulars in international conflict zones.⁶ 

In the aftermath of the September 11, 2001 terrorist attacks, the Islamic Republic chose to dramatically strengthen its links to international terrorism, redoubling its support for Hezbollah in Lebanon and Palestinian rejectionist groups, expanding its footprint in the Palestinian territories, maintaining at least low-level links to the al-Qaeda network, and becoming heavily involved in the bankrolling of radical militias (both Shi’ite and Sunni) in post-Saddam Iraq.

This support for terrorism, while ideologically driven, is rooted in pragmatism. While Khomeini’s Islamic Revolution was a distinctly Shi’a one, in the more-than-three decades since its establishment, the Islamic Republic has embraced a more universalist conception of its international role, aspiring to serve as the vanguard of Islamic revolution worldwide.⁷  The Iranian regime today funds a broad range of both Sunni and Shi’a groups throughout the greater Middle East and beyond. The critical determinant appears to be the degree to which these movements and organizations can reinforce Iran’s leading role in the “Shi’a revival” now taking place in the Muslim world, and their shared animosity toward the West, most directly Israel and the United States.

The scope of this investment is enormous. U.S. officials have estimated that the Islamic Republic boasts “a nine-digit line item in its budget for support to terrorist organizations.”⁸  Before the outbreak of the “Arab Spring” in early 2011, that figure is believed to include more than $200 million per year for its principal terrorist proxy, Hezbollah;⁹  $20 million to $30 million annually for Hamas, $2 million a year for the Palestinian Islamic Jihad, and, at least until recently, upward of $30 million a year for Iraqi insurgents.¹⁰  These sums encompass direct financial assistance, training, logistics, arms and political support. (It is not yet apparent what effect, if any, the "Arab Spring" fervor has on Iran’s budgeting for support of international terrorism).

The scope of Iran’s support of violent Islamism is global in nature, and so is its reach. In recent years, it has included:

• Rebuilding Hezbollah in Lebanon.  The month-long war between Hezbollah and Israel that took place in the summer of 2006 marked a turning point in the relationship between the Islamic Republic and its principal terrorist proxy. The Lebanese militia emerged from the conflict intact, but with a decimated arsenal and depleted military capability, and the Iranian regime has made reconstitution of the group a major priority. Today, as a result of this assistance, Hezbollah is estimated to possess some 50,000 artillery rockets and short-range missiles, making it the gravest immediate threat to the security of the State of Israel.¹¹
• Interference in Iraq. In the wake of Saddam Hussein’s overthrow in 2003, Iran made a major effort to expand its influence on the territory of the former Ba’athist state. It did so directly, through political support and funds to major Iraqi Shi’a political parties, and indirectly via the creation of an elaborate network of training compounds, safe houses and transit routes that have been used by the Iranian regime to train, equip and insert Iraqi militants into the fight against Coalition forces.¹²  Since 2008, however, this effort has suffered significant setbacks, as the Iraqi government has moved against Iranian-supported Shi’a militias (such as the al-Mahdi Army of firebrand cleric Moqtada al-Sadr).¹³  None of this, however, means that Tehran has ceased its involvement on Iraqi territory—or halted its attempts to alter Baghdad’s political trajectory. U.S. officials have noted that Iranian activities in Iraq, although now more sporadic and indirect, remain a source of serious concern to the Iraqi government and other regional neighbors.¹⁴ 
• Suporting insurgent activity in Afghanistan. As Iranian activity in Iraq has diminished, its activism in Afghanistan has risen. Currently, the Islamic Republic serves as a significant source of support for the Taliban in Afghanistan in their fight against the U.S.-led Coalition and the fragile government of Hamid Karzai in Kabul. According to the U.S. Department of State, the IRGC Qods Force, Iran’s premier paramilitary organization, in the past provided elements of the Taliban with training in “small unit tactics, small arms, explosives, and indirect fire weapons.”¹⁵  The Iranian regime also is implicated in the provision of Iranian-made armaments such as antipersonnel and anti-tank mines.¹⁶  Through these avenues, analysts say, the Islamic Republic is attempting to exert leverage over the West as the United States and Europe contemplate more serious penalties for the Iranian regime’s nuclear effort.¹⁷  This activity is so pervasive that Britain’s Foreign Office Minister, Alistair Burt, publicly condemned it as “hypocritical, two-faced and highly dangerous.”¹⁸
  
• Influencing Palestinian politics. The unexpected electoral victory of the Hamas movement in the Palestinian Authority (PA) in January 2006 ushered in a new era for Iranian influence in the Palestinian Territories. Iran was instrumental in assisting the group’s subsequent hostile takeover of the Gaza Strip in June 2007, and continues to provide the group with “training, weapons, and money,” expanding its ability to strike Israel and facilitating the further radicalization of Palestinian politics.¹⁹  Iran is also known to support other Palestinian rejectionist groups, such as the Palestinian Islamic Jihad (PIJ) and (to a lesser extent) the Popular Front for the Liberation of Palestine-General Command (PFLP-GC).²⁰  Most recently, as the Palestinian Authority government of Mahmoud Abbas moves toward a unilateral declaration of independence, the Iranian regime has accorded the PA much-sought-after international recognition, even as it has pressed for a continuation of resistance against Israel.²¹ 
• Foreign subversion. The overthrow of Saddam Hussein's regime in 2003 removed the Islamic Republic's chief conventional adversary and provided the Iranian regime with unexpected opportunities to project influence into the Persian Gulf. The years since have seen a steady growth in Iranian religious and sectarian activism, spurring mounting fears among Iran’s Sunni neighbors of the emergence of a destabilizing “Shi’a crescent” with Iran at its helm. Iran’s influence has been amplified by the steady advances of its nuclear program, broadening the Islamic Republic’s strategic reach and ideological appeal among the Middle East’s Shi’ite communities. Over the past four years, Iran has waged an intensifying campaign of foreign subversion in Egypt,²²  Morocco,²³  and Yemen,²⁴  among other places.

Since January 2011, with the onset of the so-called “Arab Spring,” Iranian activity in this sphere has intensified. Iranian officials have been quick to take credit for the anti-regime sentiment sweeping the region, and have depicted it as the belated product of the Ayatollah Khomeini's successful Islamic revolution in 1979. As a result, they have said, the “Arab Spring” marks the start of an “Islamic awakening” in which the Islamic Republic will inevitably play a leading role.²⁵  And Iran has backed these words with concrete action. Ongoing unrest among Bahrain’s majority-Shi’ite population—and allegations of Iranian complicity—elicited a crackdown by Bahrain’s ruling al-Khalifa family,²⁶  culminating in the mid-March incursion by a Saudi-led Gulf Cooperation Council security force intended in part as a hedge against Iran’s asymmetric influence.²⁷  Iran likewise has been accused of aiding the regime of Bashar al-Assad in Damascus in suppressing the domestic protests currently underway in Ba’athist Syria.²⁸  Overall, observers say, a new “Cold War” is now underway between Riyadh and Tehran, as each country struggles to achieve ideological primacy in the shifting geopolitics of the region.²⁹

While “exporting the revolution” was and remains a persistent regime objective, involvement and investment on the part of the Iranian population in this pursuit is far from universal. There is little empirical data to suggest that ordinary Iranians share the depth of their regime’s commitment to the exportation of radical Islam. To the contrary, terrorism funding in Iran remains an elite—rather than popular—undertaking, directed through state institutions rather than non-governmental organizations, and overseen at an official, not a grassroots, level.

At times, Iran’s involvement in the support of radical groups abroad has served as a significant bone of contention between the Iranian regime and its population. In the wake of Hezbollah’s summer 2006 war with Israel, for example, Iran’s extensive financial support for Lebanon’s Shi’ites became a domestic flashpoint, with ordinary Iranians publicly questioning—and condemning—their government’s skewed strategic priorities.³⁰

Nevertheless, certain issues remain popular rallying points for the regime, chief among them the Israeli-Palestinian conflict. In a June 2007 survey of popular opinion within the Islamic Republic carried out by the polling group Terror Free Tomorrow, nearly two thirds of Iranians surveyed support financial assistance to Hamas and the Palestinian Islamic Jihad, although a far smaller number deemed this to be an important regime priority.³¹  Hezbollah receives the same level of identification on the Iranian “street,” as do Shi’a militias in Iraq.³²  This support, however, appears to be more rhetorical than operational, with little or no direct involvement of ordinary Iranian citizens in either the financing or operations of these groups, or of the governmental agencies that aid and abet them.

Support for radical Islamic causes is eroded by Iran’s complex ethno/religious composition. Although the country is overwhelmingly (98 percent) Muslim and predominantly (89 percent) Shi’a, ethnically Persians hold only a razor-thin majority (51 percent) in Iran’s population of almost 78 million. The remainder is Azeri (24 percent), Gilaki and Mazandarani (8 percent), Kurdish (7 percent), Arab (3 percent), Luri (2 percent), Baluchi (2 percent), Turkmen (2 percent), and a range of other minorities,³³  many of whom are systematically discriminated against by the Islamic Republic and feel little or limited allegiance to it. The base of support for Islamic radicalism—and other governmental priorities—in Iranian society is further eroded by the regime’s persecution of religious minorities, which according has created “a threatening atmosphere for nearly all non-Shi'a religious groups” in the Islamic Republic.³⁴ 

Social and economic malaise has similarly served to dilute identification with regime ideals and principles. The Islamic Republic was severely impacted by the 2008-2009 global economic crisis, and has since been burdened by unsustainable federal spending. Inflation remains severe, currently pegged at some 14.2 percent.³⁵  Unemployment is likewise rampant, officially estimated at 10 percent³⁶  but unofficially estimated at close to double that figure.³⁷  This has been compounded by widespread and severe underemployment in various sectors, caused by a chronic shortage of viable job opportunities—and an acute failure on the part of the Iranian government to create more. Related social indicators present an equally bleak picture. According to the United Nations, a fifth or more of Iran’s population of nearly 78 million currently lives under the poverty line.³⁸  Prostitution is similarly out of control, forcing Iranian authorities to contemplate a range of remedial measures, from “temporary marriages” to sanctioned brothels known as “chastity houses.”³⁹  Drug addiction is also rampant, fueled by the widespread opium trade taking place in neighboring Afghanistan; in 2005, the United Nations estimated Iran to have the highest rate of addiction in the world, with nearly three percent of the country’s population addicted to opiates.⁴⁰  These factors have contributed to increasingly vocal discontent with the regime on the part of ordinary Iranians. In a 2008 opinion survey of Iranian attitudes, the Foundation for the Promotion of Democracy in Iran found that nearly 60 percent of all respondents believed Iran to be headed in the “wrong direction.”⁴¹ 

That discontent found its expression in dramatic fashion in the summer of 2009, in the largest episode of unrest in the Islamic Republic’s thirty-year history. The mass protests were catalyzed by the appearance of blatant institutional fraud in the re-election of Mahmoud Ahmadinejad in the country’s June 2009 presidential election. In the weeks after the election, opposition to the Iranian regime gathered momentum, growing to encompass significant cracks in the previously-sound ideological consensus among Iran’s clerical elites regarding the institutions and policies of Khomeini’s Islamic Republic.

The Iranian regime responded with a major campaign to dominate the domestic media, intimidate regime opponents, and purge ideological dissent. These efforts included: tightening of already-strict controls over the Internet;⁴²  targeting of opposition leaders, both secular and religious;⁴³  and intimidation of Iranian opposition activists living abroad.⁴⁴  Since then, the Iranian government continues to suppress signs of domestic dissent. It has clamped down on independent journalists and bloggers, and shuttered numerous opposition media outlets.⁴⁵  It has floated proposals for the creation of a separate, Iran-centric World Wide Web.⁴⁶  Between March 2010 and 2011, the Iranian regime arrested more than 1,250 people “for participating in protests or for their political views.”⁴⁷  And it has intensified its campaign of executions of domestic prisoners, including those incarcerated on political grounds, garnering the dubious distinction of becoming the world’s most active executioner.⁴⁸

Nevertheless, for the moment, the “Green Movement” appears to remain viable, if beleaguered. An official policy of persistent persecution directed at Green Movement activists—most prominently its titular leaders, former Prime Minister Mir Hossein Mousavi and former majles speaker Mehdi Kharroubi—strongly suggests that the Iranian government still believes its opposition to be a viable political force, as well as a threat to the integrity of the clerical state.⁴⁹  This anti-regime current, moreover, appears to have gained in intensity in recent months as a result of the “Arab Spring,” with thousands of protestors demonstrating anew in Tehran and other major cities.⁵⁰  It is unclear as of this writing, however, whether this fervor can and will be sustained in coming months.

Iran’s support for Islamism is channeled through an elaborate infrastructure of institutions and governmental bodies tasked with the promotion of radical Islamic thought and action. These include:

The Islamic Revolutionary Guard Corps (IRGC, or Pasdaran). At home, the Pasdaran, in addition to its professional military duties, has become the guardian of the regime’s ballistic missile and weapons of mass destruction programs.⁵¹  The agenda of Iran’s ideological army, however, is global in scope, and so is its reach. Over the past three decades, the Pasdaran has emerged as the shock troops of Iran’s Islamic Revolution, training terrorist organizations both within Iran and in specialized training camps in places like Lebanon and Sudan, as well as providing assistance to radical movements and terrorist proxies throughout the Middle East, Africa, Europe and Asia via specialized paramilitary units.⁵²  The most notorious of these is the Qods Force, a crack military battalion formed in 1990 and dedicated to carrying out “extra-regional operations of the Islamic Revolutionary Guard Corps”—namely, terrorism and insurgency in the name of the Islamic Republic.⁵³  Since the 2003 ouster of Saddam Hussein, this unit has played a leading role in Iraq as part of what analysts have characterized as an "open-ended, resilient, and well-funded” covert effort on the part of the Iranian regime to extend its influence into the former Ba’athist state.⁵⁴  The Pasdaran also boasts a dedicated intelligence service, the Protection and Intelligence Department, or Hefazat va Ettelaat-e Sepah-e Pasdaran. Founded in 1980, it encompasses three main functions: intelligence in support of Pasdaran military operations; political operations at home and abroad; and support to the foreign terrorist operations of the Qods Force.⁵⁵

Ministry of Intelligence and Security (MOIS). Controlled directly by Supreme Leader Ali Khamenei, the MOIS is used by Iran’s ruling clergy to quash domestic opposition and carry out espionage against suspect members of the Iranian government.⁵⁶  Abroad, the MOIS plays a key role in planning and carrying out terrorist operations on foreign soil, using Iranian embassies and diplomatic missions as cover.⁵⁷  MOIS operatives are also known to operate abroad under unofficial identities—for example, as employees of Iran Air, Iran’s official airline.⁵⁸  The MOIS conducts a variety of activities in support of the operations of Tehran’s terrorist surrogates, ranging from financing actual operations to intelligence collection on potential targets. The Ministry also carries out independent operations, primarily against dissidents of the current regime in Tehran living in foreign countries, at the direction of senior Iranian officials.⁵⁹ 

Ministry of Foreign Affairs. Iran’s Foreign Ministry serves as an important enabler of the Iranian regime’s international terrorist presence. Agents of the Pasdaran and MOIS often operate out of Iranian missions abroad, where they are stationed under diplomatic cover, complete with blanket diplomatic immunity. These agents—and through them Iranian foreign proxies—use the Ministry’s auspices to untraceably obtain financing, weapons and intelligence from Tehran (for example, via diplomatic pouch).⁶⁰

Cultural Affairs Ministry. Supplementing the role of the Foreign Affairs Ministry in exporting terrorism is Iran’s Ministry of Culture and Guidance. Tasked with overseeing the cultural sections of Iranian foreign missions, as well as free-standing Iranian cultural centers, it facilitates Pasdaran infiltration of—and terrorist recruitment within—local Muslim populations in foreign nations.⁶¹  The Ministry is particularly influential among majority Muslim countries like the former Soviet Republics, many of which share substantial cultural, religious and ideological bonds with Tehran. Between 1982 and 1992, the official in charge of the Ministry—and of its role in support of Iranian terror abroad—was Mohammed Khatami, Iran’s future “reformist” president.

Basij. Formed during the early days of the Islamic Republic and trained by the Pasdaran, this militia represents the Iranian regime’s premier tool of domestic terror. During the eight years of the Iran-Iraq war, the organization’s cadres were the Islamic Republic’s cannon fodder, selected to clear minefields and launch “human wave” attacks against Iraqi forces.⁶²  With the end of the conflict with Iraq, the role of the Basij was reoriented, and the organization became the watchdog of Iranian society. Today, it is used by the ayatollahs to quell domestic anti-regime protests and eradicate “un-Islamic” behavior. Their role ranges from enforcing modest dress to gathering intelligence on university students, which is handed over to the regime’s undercover police.⁶³  There are reported to be as many as 10 million registered Basij members, though not all are on active service.⁶⁴  The Basij also plays an important supporting role in Iran’s state sponsorship of terror. It is known to be active in training anti-Israeli forces, including carrying out maneuvers designed to ready Hezbollah and assorted Palestinian militants for guerrilla warfare. One such exercise, in the fall of 2000, reportedly involved some 90,000 men and 20,000 women.⁶⁵

Domestic paramilitaries (guruh-I fishar). Supplementing the role of the Basij are the numerous vigilante or “pressure” groups that are harnessed by the Iranian government. Though officially independent, these gangs actually operate under the patronage of government officials, the Pasdaran or the MOIS, and target internal opposition to the clerical regime.⁶⁶  The most famous is the Ansar-i Hezbollah, which was responsible for fomenting the July 1999 crisis at Tehran University that led to the bloody governmental crackdown on student opposition forces.

Bonyads. These sprawling socio-religious foundations, which are overseen only by Iran’s Supreme Leader, serve as conduits for the Islamic Republic’s cause of choice. Arguably the most important is the Bonyad-e Mostazafan (Foundation of the Oppressed), a sprawling network of an estimated 1,200 firms created in 1979 with seed money from the Shah’s coffers.⁶⁷  Another is the Bonyad-e Shahid (Martyrs’ Foundation), an enormous conglomerate of industrial, agricultural, construction and commercial companies with some 350 offices and tens of thousands of employees.⁶⁸  The sums controlled by these organs are enormous: more than 30 percent of Iran’s national GDP, and as much as two-thirds of the country’s non-oil GDP.⁶⁹  And while many of their functions are legitimate, they are also used by Iran’s religious leaders to funnel money to their pet causes, from financing domestic repression to arming radical groups abroad.

Notably, however, even as Iran remains complicit in the sponsorship of international terrorism, it is itself the target of violent activity by two separate and distinct groups. The first is the Mujahideen e-Khalq (MeK or MKO), also known as the People’s Mujahideen Organization of Iran, or PMOI. The MeK is the most prominent and well-organized opposition group to the ruling Iranian government in existence today.⁷⁰  A guerrilla group of radical Marxist-Islamist ideology, the MeK was established in the 1960s in opposition to the government of Shah Mohammed Reza Pahlavi.⁷¹  Following the overthrow of the Shah, however, the MeK found itself shut out of the Iranian regime’s power structures. By the early 1980s, the organization moved into opposition, and became an active target of the Iranian security forces. As a result, it relocated to neighboring Iraq, which subsequently became its principal source of financial and political support, as well as the organization’s major base of operations in its periodic attacks against the Iranian regime.⁷²  According to the U.S. Department of State, the MeK also assumed a domestic role, assisting the Iraqi government in “suppressing the Shia and Kurdish uprisings in northern and southern Iraq” in 1991 and thereafter playing a part in Iraq’s internal security services.⁷³  In exchange, the regime of Saddam Hussein became the source of all of the MeK’s military assistance, and the bulk of its economic revenue—a situation that would endure until the overthrow of the Iraqi regime by Coalition forces in the Spring of 2003.⁷⁴  During the 1990s, this support was estimated to be some $7 million monthly.⁷⁵  The extent of this support was made public in January 2004, when the Iraqi daily Al-Mada published a list of 270 beneficiaries of oil allocations from the regime of Saddam Hussein.⁷⁶  That list revealed that the MeK had been a major recipient of oil vouchers from the Iraqi government.⁷⁷  All told, the MeK is believed to have received more than 38 million barrels of oil from the Iraqi government in the four years before the U.S.-led invasion of Iraq—theoretically generating profits of more than $16 million.⁷⁸  Since the overthrow of the Saddam Hussein regime, the MeK has occupied a unique role. The group, while still listed as a Foreign Terrorist Organization by the U.S. State Department, signed a voluntary disarmament agreement with Coalition forces in July 2004, in exchange for which the organization has been granted the status of “protected persons” under the Geneva Conventions by the United States.⁷⁹  As a result of that arrangement, its roughly 3,000 members are now sequestered at the group’s Camp Ashraf base in Iraq’s Diyala province, under protection by Coalition forces and subsequently Iraqi military units.

The second, smaller group is the Free Life Party of Kurdistan, or PJAK. Led by Iranian-born German national Abdul Rahman Haji Ahmadi, PJAK is a violent Kurdish nationalist group which has carried out attacks on Iran from strongholds in neighboring Iraq since its formation in 2004. Among the most prominent of these were the organization’s raids on Iranian military installations in March 2006, which cumulatively claimed the lives of some 24 Iranian soldiers.⁸⁰  As of 2008, the organization was estimated to have killed more than 100 Iranian soldiers as a result of its activities.⁸¹  PJAK claims to seek “democratic change” and characterizes its actions as a “defense” against Iranian state repression of its Kurdish minority.⁸²

The Iranian regime has sought to actively combat both of these entities. Regime security forces have clashed repeatedly with members of PJAK, arresting multiple group members as part of ongoing counterterrorism operations.⁸³  They have also actively sought to persecute individuals thought to be affiliated with the MeK, including through the arrest and detention of family members of those now resident in Camp Ashraf in Iraq.⁸⁴  And with the United States now withdrawing from Iraq, Iran has seized the opportunity to press the Shi’a-dominated government in Baghdad for the rendition of MeK members, or at least their ouster from the country. These efforts have met with some success; in April 2011, apparently at Iran’s behest, the government of Iraqi prime minister Nouri al-Maliki launched a major crackdown on the group.⁸⁵  It is currently unclear whether this pressure will result in the lasting eviction of the MeK from Camp Ashraf, where it has been based since the 1980s.