Egypt controls 59.86 percent of MIDB, split evenly between the state-owned National Investment Bank and Misr Insurance Company, which is partially owned by the state. Iran's 40.14 percent share in MIDB, worth about $80 million, is held by the Iran Foreign Investment Company. The IFIC is the investment arm of Iran's Oil Stabilization Fund, a sovereign wealth vehicle that generates profits for the Iranian government, with investments in the Middle East, Africa, South America, and beyond.

Tehran created the stabilization fund in 1999 to help insulate it from the gyrations of the oil market. When oil was up, the regime threw money into the fund and invested it through the IFIC. When oil was down, Iran withdrew money from the IFIC's investments to make up the shortfall. In the face of severe international sanctions, Iran has been withdrawing heavily of late. This August, when it became clear that the stabilization fund enabled the Iranians to resist international sanctions, the U.S. Treasury Department placed it on the Iranian Transactions Regulation (ITR) list, an administrative designation that made it unlawful for Americans to do business with the company because it is "wholly owned by the Government of Iran."

The Iranian regime looks to exercise similarly direct influence in the MIDB. The bank's website reveals that one of four members Tehran named to the board is "Dr. Davood Ebrahim Danesh Jafari." More commonly known as Davud Danesh-Jafari, he was Iran's minister of economy and finance affairs under Iranian President Mahmoud Ahmadinejad from 2005 to 2008.

The IFIC may now be positioning the Egyptian bank as a vehicle to circumvent international sanctions. In 2009, as the international community began to discuss ways to punish the Islamic Republic for its illicit nuclear program, the bank transferred $50 million to Iran, according to the government-controlled Tehran Times.

Then, as the U.S., European Union, and UN enacted sanctions on Iran in July of this year, the same state-owned paper reported IFIC managing director Mehdi Razavi announcing that the MIDB would open its first official branch in Iran. This enables Iran to make unfettered transfers. Egypt's cooperation implies that the two nations' economic ties are only going to deepen, despite the clear U.S. and UN desire to stop exactly these kinds of deals.

Egypt, one of America's closest allies in the Middle East and the recipient of more U.S. foreign aid than any country in the world save Israel, is certainly not planning on becoming a rogue state allied with Iran. If nothing else, the quiet nature of this economic cooperation suggests Egypt would prefer to remain in good U.S. graces. But Egypt is clearly hedging between Iran and the U.S. Egyptian President Hosni Mubarak's regime is likely concerned about growing Iranian influence in the region. Perhaps the decision makers predict that U.S. influence will wane after leaving Iraq, or perhaps they simply see an opportunity for a profitable joint venture.