On March 10, Iran’s Supreme Leader Ayatollah Ali Khamenei met with a group of elderly clerics from the Assembly of Experts—Iran’s equivalent to the Vatican’s College of Cardinals. A few days earlier, on February 26, elections for the body had seen household-name hardline candidates routed and the number of moderates in the assembly nearly triple. That morning, sitting in a small hall with whitewashed walls, an animated Khamenei had something particular in mind: he wanted to speak about his successor.

The assembly, established in 1983 and made up of 88 senior Shia clerics, was created with two key functions in mind: to oversee the leader’s performance and to choose his successor. This morning, they were convened to discuss the latter. The 77-year-old Khamenei turned to his audience and made his basic, but powerful pitch to the clerics, including those reelected for another eight-year term. I will not be around forever, he said, but “a supreme leader has to be a revolutionary.” “Don’t,” Khamenei implored, “be bashful” when it comes to choosing the next man.

The loaded remark, and the insinuation that some of the gathered figures lack a revolutionary zest, was a shot at the man sitting next to Khamenei, the 81-year old Ayatollah Ali Akbar Rafsanjani. The two men, friends and rivals for more than half a century, had cut a historic deal in 1989, the last time Iran had to go through a succession process, to propel Khamenei to the top job.

But today they stand for two very different visions for Iran, and there is slim hope of another deal between them. In other words, an unprecedented tug-of-war might be in the offing; Khamenei and Rafsanjani, symbolizing the status quo versus the promise of reform, each see the succession process as a both a pivotal juncture for their country and their individual legacies.

Iran's Supreme Leader Ayatollah Ali Khamenei waves to the crowd in the holy city of Qom, 75 miles south of Tehran, October 19, 2010. Reuters

FRIENDS, BUT RIVALS

Khamenei’s March remarks can be seen as the opening salvo in a brewing power struggle. The Islamic Republic has only gone through a succession process once before, in 1989, when Khamenei became supreme leader after Ayatollah Ruhollah Khomeini’s death. That turned out to be a highly protracted affair, spanning at least five years, and involving plenty of intrigue and turns and twists that ended up shaping Iranian policies at home and abroad. The present succession process is likely to be even more beleaguered by intra-regime personal and factional competition.

No other two men know more about that process than Khamenei and Rafsanjani. Both were in their early 40s when they ascended to top positions through close personal association with Khomeini. They began as collaborators and co-founders of the Islamic Republican Party, the vehicle that by 1981, had centralized political power in the hands of the clergy following the fall of the pro-U.S. and secular Mohammad Reza Pahlavi, the Shah, in February 1979.

The Khamenei-Rafsanjani partnership rested on one principal platform: neutralizing common rivals. In the first few years of the revolution, the two men spearheaded efforts to sideline, expel, and even kill political opposition that stood in the way. Among others, in November 1979, they engineered the downfall of the moderate first post-Shah government of Prime Minister Mehdi Bazargan.

Later, in the summer of 1981, Khamenei and Rafsanjani colluded to bring about the downfall of the Islamic Republic’s first popularly elected president, Abol-Hassan Bani-Sadr. They defamed him as a liberal who was looking to keep Iran in the American orbit. Together they planned and executed a theatrical impeachment vote in the parliament that prompted Bani Sadr to flee the country.

In those years, the two men’s relationship was balanced by the fact that both lacked religious credentials, which meant that the top job, which was nominally reserved based on seniority in the Shia religious establishment, was off limits. The other balancing factor was Khomeini himself, who deliberately perpetuated rivalries within the Islamist regime. He would play Khamenei and Rafsanjani against each other to keep himself at the pinnacle of power. But Khamenei and Rafsanjani were soon on a collision course.

In the period leading up to Khomeini’s death in June 1989, it was Rafsanjani who saw his powers expand. As the speaker in the parliament from 1980, he turned the body into a key center of power. This came at the expense of the presidency, which was occupied by Khamenei after October 1981.

In October 1984, when rumors about the health of the ailing Khomeini mounted, Khamenei sought to secure more powers for the presidency while the old man was still alive. Khamenei above all wanted to become Khomeini’s deputy commander in chief, a powerful role at a time when Iran was at war with Iraq but a post that Rafsanjani held and was not about to surrender.

Khamenei’s shot at Rafsanjani failed, a public personal humiliation he is unlikely to have erased from him mind. The two men resorted to criticizing of each other in the state-run media, forcing Khomeini to intervene to calm the situation. In August 1985, Khamenei was again humiliated when, as president, he was unable to pick his own prime minister and Mir Hossein Mousavi, an ally of Rafsanjani, was forced on him for a second term. Khamenei held Rafsanjani responsible and, in a speech in parliament, made it clear that Mousavi was not his choice and that he was unable to do anything about it. Khomeini, in whose ear Rafsanjani whispered the loudest, had stated that selecting anyone but Mousavi as prime minister would be “tantamount to betraying Islam.”

The Khamenei-Rafsanjani rivalry might have been kept from the public, but it never went away. Declassified cables show that even Western intelligence agencies had this fight on their radars, and were watching closely as Khamenei and Rafsanjani each sought to mobilize support in the ranks of the Iranian armed forces should the fight to succeed Khomeini be fought on the streets.

Akbar Hashemi Rafsanjani delivers the opening speech during the biannual meeting of the assembly in Tehran, September 22, 2009. Caren Firouz / Reuters

CONVENIENT POLITICS

Despite all this, as Khomeini’s health declined in early 1989, Khamenei and Rafsanjani revived the mutually beneficial partnership that had worked so well immediately after the fall of the Shah. Rafsanjani would subsequently come to regret this decision, but it was he who orchestrated for the 49-year-old mid-ranking cleric Khamenei to succeed Khomeini. It was an example of supreme political expediency.

In a videotaped session in the Assembly of Experts, Rafsanjani claimed that Khomeini had told him to “look no further than Khamenei” in choosing the next leader, thus securing Khamenei the top job. To this day, there is only Rafsanjani’s word to corroborate this claim, but he won on the day. As part of the pact, Rafsanjani moved to the presidential palace, but only after the president’s powers were considerably strengthened, measures that were formally enacted in a July 1989 constitutional referendum.

For the next eight years as president, Rafsanjani was arguably the stronger man in Iranian politics. He mapped out a new foreign policy course, including attempts to seek some sort of detente with the United States and Tehran’s Arab rivals, including Saudi Arabia, and faced little opposition from Khamenei. At home, he set in motion the “reconstruction era,” an economic agenda that included liberalization and financing numerous major projects through international borrowing. Again, Khamenei mostly consented although it is still uncertain how much was due to a lack of choice.

But Khamenei was not content with merely being a symbolic supreme leader. He wanted to be another all-powerful Khomeini. Twenty-seven years later, Khamenei can claim to have outmaneuvered his on-and-off ally and rival, but he has been unable to extinguish Rafsanjani’s influence or the many secrets he frequently threatens to reveal.

Not only is he a key powerbroker in the Assembly of Experts, but the shrewd Rafsanjani has transformed himself into the godfather of the reformist and moderate factions in the Islamic Republic. He openly calls himself the principal enabler behind the moderate government of Hassan Rouhani, and he frequently hurls himself into fights against the moderate president’s hardline opponents. In these battles, he believes he is winning; Rafsanjani’s sense of confidence about the future was on vivid display on the May 3 cover of Shargh, a top reformist newspaper. It simply ran a quote by Rafsanjani, “Now I can die peacefully.”

But can he? Khamenei’s speech on the March 10 and the jab at those lacking revolutionary credentials signals his fears about Rafsanjani’s ability to engineer his succession, the same way Rafsanjani brought Khamenei into power in 1989. And Khamenei has fired the first shot. Leading up to the last elections for the Assembly of Experts in February, Rafsanjani and his allies had launched a campaign to elevate the candidacy of Hassan Khomeini, a 43-year reformist-leaning grandson of Ayatollah Khomeini. He was rejected by the Guardian Council, the regime’s vetting filter, which is answerable to Khamenei and needs to approve all candidates seeking elected office. The reasons given for Hassan Khomeini’s rejection were hardly convincing—including his age, even though younger candidates made the selection—but the younger Khomeini and his allies took it on the chin. The Rafsanjani circle knows better than giving pretexts for all-out assaults on them by Khamenei and the security services, including the Revolutionary Guards, which he controls. In tolerating Khomeini’s failed bid to enter the Assembly of Experts the Rafsanjani network lost a round but the race for the top job is still on.

From the vantage point of these two elders of the regime, the succession process is about much more than politics, though, including ensuring that their families and closest political allies are protected from retribution once they have left the stage.

One thing is for sure, the timing—Iran is set to rejoin the global economy and reestablish relations with the West after years of animosity—adds greater significance to the current power struggle. This juncture will determine the ideological direction of the Islamic Republic and could transform Iran politically, economically, and socially given the different worldviews of the country’s two dominant political camps.