Iranian Supreme Leader Ayatollah Ali Khamenei’s more than 28-year rule came to an end on January 23. Unlike his predecessor, Khamenei’s rule was not cut short by nature, nor was it due to an abdication. Khamenei reached the end of his rule as the Islamic Revolutionary Guard Corps (IRGC) publicly humiliated him by disobeying his decree to give up its economic interests.

It is not news that Iranian President Hassan Rohani and the country’s technocratic elites are engaged in a fierce power struggle with the IRGC. This is in preparation for succession after Khamenei. The most important front in the power struggle is economic. The IRGC uses its economic strength to buy political influence and undermine Rohani. The president is trying to roll back the IRGC’s dominance.

Khamenei oscillates between the IRGC and Rohani and the technocrats to preserve the balance of power. The supreme leader needs Rohani and the technocrats to run the government and he needs the IRGC to suppress internal dissent and deter external enemies.

Recently, however, Khamenei provoked a crisis with the IRGC, a dramatic showdown that began with Defence Minister Amir Hatami’s interview with the government-owned daily IRAN published January 21. Hatami said: “Ayatollah Khamenei has tasked the General Staff of the Armed Forces (with) transfer of [ownership] of financial institutions of the Army and the Guards.” This was meant, he added, so that the IRGC “abandoned unrelated economic activities.”

The expression “unrelated” is, of course, a matter of definition but the defence minister specifically said: “We do not consider running of financial institutions as the mission of the armed forces.” This was a clear reference to the parallel banking sector, in particular Mehr Finance and Credit Institution, through which the IRGC manages financial activities.

The IRGC’s response to the decree from on high came after a short delay. On January 23, Esmaeil Kowsari, deputy chief of the IRGC’s Sarallah headquarters, claimed ignorance of Khamenei’s decree.

Sarallah is responsible for Tehran’s security and Kowsari’s remarks to reformist newspaper Etemaad’s website were staggeringly uninformed. “I’m not aware of it and must investigate the details of the issue,” he said.

Even more remarkable was Kowsari’s claim the IRGC had “never entered economic activities.” He said most of their work “is developmental based on the constitution. According to the law, the armed forces must help the government in peacetime”. Kowsari was not the only IRGC commander claiming ignorance of Khamenei’s new policy. It was repeated on January 25 by Mohammad Saleh Jokar, the IRGC deputy for parliamentary affairs, in an interview with Etemaad Online. He said: “I could not find such an announcement and have not seen it… I’m also not aware of the statements of the defence minister.”

For leading IRGC commanders to feign ignorance of Khamenei’s decree is a disastrous blow to the supreme leader’s prestige. It reveals the systemic weakness of the Iranian regime, compared to other political systems.

The Chinese Communist Party forced the People’s Liberation Army out of economic activity in the late 1990s but this seems to be hard going in Iran. Which political party in the Islamic Republic can help Khamenei accomplish his stated intention? Absent such a political party, Khamenei may have to resign himself to the end of an era — that of his time as the supreme leader, in reality, not just in name.