Are Taxpayers Forced to Administer Shariah Law?

by Seth Mandel
October 13, 2010

http://www.weeklyblitz.net/1033/are-taxpayers-forced-to-administer-shariah-law

There were several reasons more than 40 percent of Americans opposed the U.S. government's takeover of American Insurance Group (AIG) in September 2008.

One of the more common reasons was that the $85 billion bailout set the stage for a federal intrusion into the financial sector that made the public nervous about setting such a precedent.

But the bailout also did something that--once it came to light--many Americans found even more troubling. The government's takeover of AIG gave the taxpayers ownership of the world's leading provider of shariah-compliant finance.

Shariah-compliant finance enables participants to have their money invested in ways that are fully permitted under strict Islamic law. Collecting or paying interest, for example, is forbidden. Additionally, a shariah-compliant investment will avoid any business that engages in activity forbidden to Muslims.

The major pitfall that emerges on interest avoidance was explained by National Review's Andrew McCarthy.

"Because sharia bars interest (although it permits 'profits' that Islamic authorities, in their infinite wisdom, deem reasonable), [shariah-compliant finance] requires that investments be constantly monitored and that any interest payments be purged," McCarthy writes. "This is done by skimming off a percentage that is then channeled—at the direction of the advisory board—to an Islamic 'charity.' Of course, as no one knows better than the Treasury Department, many such charities are merely fronts for the financing of terrorist organizations. This is not an accident. When Sheikh Qaradawi speaks of 'financial jihad' as an Islamic obligation, he's not kidding: In Islamist ideology, funding those who 'fight in Allah's cause' — e.g., Hamas — is one of the eight categories of permissible zakat, the Muslim obligation of almsgiving."

So an otherwise harmless investment may--in some cases certainly will--result in taxpayer financing of terrorist activity.

But what about the second main component of shariah-compliant finance, that of enabling investors to avoid supporting businesses that violate Islamic law? It turns out that this facet of the issue is problematic on two levels.

First, the funds could not support a church or synagogue, but could support a mosque or an Islamic center. This would seem to be a clear violation of the First Amendment's establishment clause, as understood by the Supreme Court.

Second, such investment can be used as a way to advance jihad against those same American taxpayers in whose name and on whose dime the transactions are being done.

As David Yerushalmi explained to FrontPage: "Shariah authorities themselves tell us that Shariah is a holistic and indivisible whole and that you cannot carve out 'business law Shariah' from any other of its constituent parts, like the law of jihad. And, you can see this in that part of Shariah called civil law or fiqh al-muamalat. According to Shariah, AIG cannot invest its takaful funds in a business that might rent space to a church, because that would violate the principle of not supporting any religion other than Allah's. Further, AIG may invest its funds in a military armament factory for Muslim armies but not US or infidel armies. In other words, these laws which seemingly have nothing to do with business concerns or ethics but rather everything to do with theo-political concerns apply as forcefully to Shariah-compliant finance as the laws on interest. And, of course the reason for this we know because the Shariah authorities tell us: Shariah makes no distinction between religion, law, politics and war. It is all subsumed under Allah's law called Shariah."

Furthermore, there is an overarching difficulty inherent in a Western system that privileges Islamic jurisprudence in its financial transactions. It must--as AIG does--employ Muslim leaders to monitor its compliance with shariah law. In AIG's case, this has led to the wrong people being entrusted with the task.

"For example," Yerushalmi says, "AIG employs Mufti Imran Usmani, who is the son, student and disciple of Mufti Taqi Usmani, the very authority who sat on the Dow Jones Islamic Index Shariah advisory board for almost 10 years beginning in 1999 and who wrote a book and had it translated into English also in 1999 which called on western Muslims to rise up and engage in violent jihad against the West."

Yerushalmi is representing Iraq War veteran Kevin Murray in a lawsuit alleging that AIG's shariah-compliant finance violates the establishment clause. The suit has already survived a motion to dismiss.

Murray recoiled in disgust upon returning from battle against radical Islamists to find his nation funding those anti-American efforts back home. He has good reason for that reaction--it is difficult to imagine how such actions can be defended. The fact that the federal government will defend those actions at all, however, gives the American public a good indication of how we got here in the first place.

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