The story: Iran's struggle with deep-seated corruption has come to the fore with a reported scandal at the Endowments and Charity Affairs Organization. A daughter-in-law of the powerful state entity’s chief is said to have been renting a sprawling property overseen by the organization for a nominal monthly fee.

Amid a public outcry and heated reactions on Iranian social media, the organization has said its head was not involved in the deal and that the property was lawfully let before he took over.

The scandal has raised questions about oversight at state bodies that answer to the supreme leader. At the same time, there are speculations of...