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U.S. News and Commentary



Monday
Jul202009

The peculiar advantage of sharia financing in America, starting with AIG

Could advocacy groups use financial tools to manipulate the US lending market? The group Hizb ut-Tahrir met in Illinois to address a theme 'The Fall of Capitalism and Rise of Islam.'

AIG enjoyed a mega-bailout courtesy of the US taxpayer, but a lawsuit filed in December 2008 in the U.S. District Court for the Eastern District of Michigan addresses a peculiar practice in financing. The lawsuit was filed by Kevin Murray who is represented by legal counsel David Yerushalmi and the Thomas More Law Center (Richard Thompson and Robert Muise). The suit posits a constitutional challenge to that portion of the ‘Emergency Economic Stabilization Act of 2008’ (EESA) that appropriated $40 billion in taxpayer money to fund and financially support the federal government's majority ownership interest in AIG, which allegedly engages in Shariah-based Islamic activities.

In September, 2008, my column Five things I didn’t know about Fannie Mae and Freddie Mac disclosed a Freddie Mac news release touting expanding financing opportunities for Muslim Homebuyers in January, 2005. The release said the “Islamic home financing…is sharia compliant.”

If a government sponsored enterprise offered this option to Protestants, Catholics or Jews in the US, there would be an outcry.

The lawsuit filed by Murray May 26 prompted Judge Lawrence P. Zatkoff, of the US District Court for the Eastern District Court of Michigan, to deny the U.S. government's motion to dismiss the lawsuit filed by Kevin Murray.

A release from the Center for Security Policy said: “The government filed its motion to dismiss making two arguments. One, Mr. Murray, as a former combat Marine, practicing Catholic, and taxpayer, did not have standing to even bring this lawsuit. Two, even if he did have standing, the government acted in buying AIG without any intent to promote or become involved in religious questions.”

The government’s motion of course is not based on logic. Where in the US Constitution does it examine ‘intent’ when spelling out the limitations of the federal government regarding religion? We can’t have a manger scene in the public square but we can tailor lending and use US taxpayer dollars to accommodate a specific religion?

Coincidentally Fox News reported on Monday: “Roughly 500 members of Hizb ut-Tahrir — a global Sunni network with reported ties to confessed 9/11 mastermind Khalid Sheikh Mohammed and Al Qaeda in Iraq's onetime leader Abu Musab al-Zarqawi — met inside a Hilton hotel in Oak Lawn, Ill., to host ‘The Fall of Capitalism and the Rise of Islam.'"

The week before that conference, the Center for Security Policy reported, “[T]he Board of Supervisors of Fairfax County, Virginia are poised to make a momentous decision. After a hearing tonight, the Supervisors could well accede to demands by the House of Saud to change the name of their jurisdiction to Faisal County, in recognition of the contributions the late Saudi king and the virulent strain of Islam promoted by his government in Northern Virginia and elsewhere.”

The writing is on the wall for those who choose to read it. If extremist groups want capitalism to fail, is our financial system devising means of advancing an ideological cause such as that endorsed at the Illinois Hizb ut-Tahrir conference?

Richard Thompson president and chief counsel of The Thomas Law Center spoke to us by phone about Murray’s lawsuit. Thompson said, “The next step will be scheduling a meeting with the judge to go over the discovery schedule. Government is trying to short-circuit that discovery schedule. We want to get a lot of information about what was going on behind the scenes.”

Sharia financing has its own set of standards, but any fees must include a percentage of profit going to Islamic charities, the practice of zakat—a tax obligatory for all Muslims, usually around 2.5 percent of a person’s annual income.

Thompson pointed to the United Kingdom. “We’re seeing what’s going on there.” Thompson said in England, there are approximately 85 Sharia courts operating in secret.

Meanwhile a statement on the Devon Bank website, the bank that announced in 2005 it would begin “selling its Islamic home financing products to Freddie Mac,” points out a benefit for Sharia-compliant deals. The website says, “Devon Bank offers Islamic financing services designed to avoid conventional interest common in traditional banking products.”

The US taxpayer is an unwitting participant and enabler of that practice. Did this practice impact the lending meltdown? At the moment, no government entity can or will answer this question. Most major media haven't even asked any questions.

 The peculiar advantage of sharia financing in America, starting with AIG
by Kay B. Day
The US Report, Jul. 20, 2009

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