Some rumours about scandalous affairs in Tehran municipality were around at least two years before he was put on trial. He was one of the key supporters of President Mohammad Khatami's first presidential election campaign which lead to Khatami's landslide victory (1997). After Mohammad Khatami's victory, a power struggle started within the political establishment of Iran between the reformists and conservatives of the Iranian government. Karbaschi was put on trial on grounds of embezzlement and was sentenced to time in prison.
Karbaschi was a driving force for many new modernization efforts. As the Mayor of Tehran he started the first Iranian full colour newspaper, Hamshahri. Also, he is the manager of Ham-Mihan, a new reformist newspaper published in Tehran. This newspaper was forced to stop publishing twice. Once in the collective ban of almost all reformist newspapers in 2000 and again in July 2007 after a very short period of publication.
