Several months before Khomeini's death, however, he dismissed his officially designated successor, Ayatollah Hossein Ali Montazeri, and ordered a constitutional review. The review aimed to remove the "marja" requirement, which would allow a "mujtahid" to become leader. Unfortunately for Khamenei, who was neither a "marja" nor a "mujtahid," Khomeini died and the Assembly of Experts appointed Khamenei as his successor before the revised constitution was ratified, leaving the appointment in question.

Creating a New Generation of Politicians

Khomeini's charisma and authority enabled him to exercise power without an established bureaucracy, but Khamenei was aware of the essential differences of his circumstances and leadership. Since the revised constitution gave much more authority to the president than did the original, Rafsanjani exercised more power than his predecessor, but Khamenei still tried to expand his authority at Rafsanjani's expense. From the outset, he created a colossal bureaucracy through which to maintain power.

One important part of this effort was to take control of existing agencies. He overcame his lowly standing among veteran Islamic Republic officials and within the clerical establishment by making use of his connections in the Ministry of Intelligence and in the Islamic Revolutionary Guard Corps (IRGC). During the eight-year Iran-Iraq war, then president Khamenei developed ties with these institutions, which were expanding their authority beyond the security sphere, becoming involved in economic activities as well. The end of the war and the return of commanders to their cities allowed Khamenei to create a power base outside of conventional political institutions.

Khamenei succeeded in recruiting young, loyal politicians by bringing military commanders and intelligence agents into the political arena. Among the figures who emerged from Khamenei's circle were Ali Larijani, the speaker of the Majlis, Said Jalili, the secretary of the Supreme Council for National Security, Mahmoud Ahmadinezhad, the president, Ezzatollah Zarghami, the head of state radio and television, and Mohammad Forouzandeh, the head of the Oppressed Foundation. These appointments essentially converted organizations like the IRGC into economic-political-military-intelligence conglomerations responsible only to the leader.

By bringing in a new generation of politicians and gradually marginalizing the veteran Islamic Republic officials who were not willing to work for him, Khamenei concentrated power under his authority. He became head of all three branches of the government and the state media, as well as the commander-in-chief of all armed forces, including the police, the army, and the IRGC. In the process, he has transformed the clerical establishment from a traditional religious institution into an ideological apparatus and government proxy. As leader, he also controls the country's most lucrative institutions, such as the Imam Reza Shrine and the Oppressed Foundation. He has used the funds they generate to advance a political agenda both inside Iran and abroad, building dozens of centers, foundations, and Islamic banks with political, cultural, social, and economic missions.

House of the Leader

In addition to taking over existing agencies, Khamenei also began building up his personal office or "house." Traditionally, the head of a religious authority's office was either a son or a prominent cleric; for example, Khomeini worked from his home, receiving information and issuing orders primarily through his son, Ahmad. In contrast, Khamenei created an extensive bureaucracy and transformed the "house of the leader" into a vast and sophisticated institution, with thousands of employees working in different departments.

Since his sons were too young, and prominent clerics were unwilling to take the position, Khamenei chose a low-ranking cleric, Mohammad (Gholam Hossein) Mohammdi Golpayegani, to lead his office. Not surprisingly, Golpayegani also had a strong intelligence background. He was one of the founders of Iran's intelligence service and served, among other positions, as the intelligence ministry's deputy on parliamentary affairs under Khomeini.

Khamenei also reached into the intelligence services for other significant appointments in the house of the leader. For example, he selected Asghar Mir Hejazi, another founder of the intelligence service, as the head of his intelligence department. Mir Hejazi began his career as a commander in the Committee of the Islamic Revolution (a post-revolutionary military organization parallel to the police that was later disbanded), and served as a deputy in the intelligence ministry's international affairs office before moving over to Khamenei's office. The appointments of Golpayegani and Mir Hejazi were also significant because, though low-level clerics, neither came directly from the seminary, a departure from Khomeini's practice.

Khamenei turned the house of the leader into a focal point of power. It is not only the de facto headquarters of Iran's armed forces, but also the actual headquarters of the intelligence ministry, the coordinator of the three branches of government, and the manager of economic matters, especially of the supreme leader's organizations. It also oversees the Leader's Army (Sepah Vali-e Amr), a special military unit of 21,000 soldiers under the supervision of the IRGC, responsible for the security of the leader's house.

Foreign Policy Institutions

To direct Iranian foreign policy, Khamenei created new committees and entities under his control, with the Foreign Ministry relegated to mostly administrative issues. These offices also drew on Khamenei's military connections. For example, the Military Advisors Center consists of former high-ranking IRGC and army commanders, such as former IRGC commander-in-chief General Rahim Yahya Safavi, former army commander-in-chief General Ali Shahbazi, and former head of police Hedayat Lotfian. The Supreme Council for the National Defense (SCND) also plays an important role. The secretary of the SCND is formally appointed by the president but in reality is chosen by the leader. Khamenei also has other trusted advisors, such as Ali Akbar Velayati, who served sixteen years as the minister of foreign affairs. Velayati was Khamenei's first choice for prime minister in 1982 but failed to gain parliamentary approval and instead became foreign minister under Mir Hossein Moussavi (a candidate in the upcoming presidential election).

Not Omnipotent, but Most Powerful

In the traditional monarchic despotism of Iran, the shah or king was not omnipotent; he was forced to balance power with other social authorities such as clerics, landlords, and tribal heads. Such rulers used the royal court to establish and maintain their preeminence in all aspects of governance. Following Khomeini's revolutionary break with this tradition, Khamenei has reproduced this prerevolutionary, patriarchal structure of political leadership.

During his twenty years in power, Khamenei has managed to overcome his initial obstacles and transform the conventional house of religious authority into a bureaucratic powerhouse. As a result, Iranian decisionmaking is no longer shared, as it was in the last years of Khomeini's life, especially with regard to war. The house of the leader makes the main decisions today, whether political or military, domestic or foreign policy related, and Khamenei is the principal decisionmaker. Khamenei relies more on his own hand-picked men when making major decisions than on elected members of government. Khamenei readily admits that he has the final say on foreign policy issues. As his advisor Ali Akbar Velayati wrote last year, "a European asked me recently 'Who rules Iran?' The response is clear. If something is related to strategic and fundamental issues, according to the constitution, which was approved by a referendum, the leader has the final say."

The United States must keep in mind the authority of the leader as it begins a new approach to dealing with the Iranian regime. While President Mahmoud Ahmadinezhad is the public face of Iran, the real power lays with Khamenei, a skilled behind-the-scenes operator. Finding a way to directly engage Khamenei, while not letting him hide behind the more visible president, will be a critical challenge for Washington in the months ahead.