It is “financial jihad,” explained Yusuf Qaradawi, the Muslim Brotherhood’s sharia compass — and the man Feisal Rauf, the brains behind the proposed Ground Zero mosque, admires as “the most well-known legal authority in the whole Muslim world today.” It was 2002 and Qaradawi, who endorses suicide bombing and the targeting of American personnel operating in Islamic countries, was giving a lecture on the need to use the international financial system to support Islamist goals — like Hamas’s war to destroy Israel.
The financial jihad has now achieved its greatest coup so far: It has co-opted the U.S. government as a partner. In fact, if you would like to see a contributor to the jihad, have a look in the mirror. Thanks to the Obama administration, every one of us is complicit. The bailout bonanza made each of us an owner of American Insurance Group (AIG). Under the stewardship of its real CEO, Treasury Secretary Timothy Geithner, AIG proudly runs the world’s most lavishly funded sharia-compliant insurance business — and it is desperately trying to convince a federal court in Michigan that no one should have a problem with that.
Sharia-compliant finance (SCF) is now a thriving American industry. Sharia is Islam’s authoritarian legal framework. It aspires to control not merely spiritual life but all aspects of society, including economic matters. The purpose of SCF is to advance that mission in two important ways.
First, SCF legitimizes the incorporation of sharia into our legal system, despite the fact that many features of Islamic law are anti-constitutional. That is, once sharia governance is accepted in principle, Islamists shrewdly figure the skids are greased for imposing sharia tenets on other aspects of our national life (e.g., domestic relations, employment matters, criminal law, etc.). Second, because sharia is a discriminatory system, SCF promotes Islamist ideology and enriches Muslims at the expense of non-Muslims by controlling investments and “purging” interest.
Companies that practice SCF, including AIG, retain advisory boards of sharia experts. These boards, which often include Islamist ideologues, tell the companies which investments are permissible (halal) and which are not (haram). AIG’s “Shariah Supervisory Committee” includes a Pakistani named Imran Ashraf Usmani, who is the son and student of Taqi Usmani, a top cleric (a “mufti”) and a globally renowned sharia-finance authority. The mufti is author of a book that features a chapter urging Muslims in the West to engage in jihad against the countries in which they live.
In the insurance business, those who purchase policies pay premiums, which insurers like AIG then invest. To be sharia-compliant, investments must not be made in enterprises Islam forbids, e.g., finance (because it makes money off interest, which sharia prohibits), pork, gambling, alcohol, etc. Sounds harmless enough . . . except forbidden enterprises would also include businesses that support or otherwise work with the U.S. armed forces. Islamists consider our military to be an “infidel force” that is “at war with Islam.”
Because sharia bars interest (although it permits “profits” that Islamic authorities, in their infinite wisdom, deem reasonable), SCF requires that investments be constantly monitored and that any interest payments be purged. 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 American company that practices SCF is, wittingly or not, advancing the jihadist agenda: It will deny financing to enterprises that help our military combat terrorists while running the risk that its sharia advisers will steer funding to those same terrorists. That aside, the portrayal by President Obama and others of zakat as “charitable giving” is a misconception. According to the most influential Islamic authorities, zakat can be given only to Muslims. It is not an extension of one’s hand to the world’s most needy; it is an insular duty to fortify the ummah, the notional Islamic nation. Consequently, the purging of interest is nothing more than a redistribution of wealth from non-Muslims to Muslims.
Like many bad ideas, SCF was vigorously promoted by the academy, particularly Harvard under then-president Lawrence Summers (former Clinton Treasury secretary and now National Economic Council director) and law-school dean Elena Kagan (Obama’s recently confirmed nominee to the Supreme Court). The Harvard scholars behind SCF were Samuel Hayes of the business school and Frank Vogel, director of the law school’s “Islamic legal studies” program. In 1998, Vogel and Hayes co-authored the seminal SCF textbook, Islamic Law and Finance: Religion, Risk, and Return.
The book relates that “the structure of Islamic finance is firmly rooted in the Qur’an and the teachings of Muhammad.” SCF, unabashedly, is the promotion of Islam. Its “central tenets” lie in “the religious law of Islam concerning commercial dealings.” Its advisory boards are there “to review all proposed transactions for conformity with religious law.” Indeed, the authors concede, “the raison d’etre for the practice of Islamic finance is undeniably religious.”
Moreover, given that Islam is not merely a religion but a comprehensive social system that rejects the separation of the spiritual realm from secular matters, SCF is necessarily a political mission. Hayes and Vogel state without apology that “the surge in Islamic banking and finance is part of the much larger phenomenon of Islamic reassertion.” SCF is “an assertion of religious law in the area of commercial life, where secularism rules almost unquestioned throughout the rest of the world.” It quite intentionally challenges both “the presumption that modern commercial mores are per se more efficient or otherwise superior” and “the secular separation of commerce from consideration of religion and piety.”
That is a big problem for AIG under Uncle Sam’s management. The First Amendment’s Establishment Clause has been construed to bar government action (including government underwriting of action) that is “pervasively sectarian.” Under our jurisprudence, the state is forbidden to act if its “secular purposes” are “inextricably intertwined” with a “religious mission,” as the Supreme Court put it in Bowen v. Kendrick (1988). SCF is Islamic proselytism, and our law prohibits the “active involvement of the sovereign in religious activity” — so said the high court in Lemon v. Kurtzman (1971).
The Thomas More Law Center has filed a lawsuit against Secretary Geithner and the Treasury Department, seeking to shut down AIG’s SCF business while that business is owned by the taxpayers. In response, the Obama administration has hilariously denied that SCF is really an “Islamic religious activity.” Someone will need to break that news to Professor Hayes, the guy who wrote that “the raison d’etre for the practice of Islamic finance is undeniably religious.” When the Treasury Department co-hosted a Harvard SCF seminar less than two years ago, it chose none other than Hayes to preside.
Treasury also counters that the public money used for AIG’s SCF programs is trivial. That is specious. Geithner has committed $70 billion of our money to AIG. Of this amount, the lawsuit has demonstrated that nearly $1 billion was poured directly into AIG’s SCF businesses, and billions more are available for diversion. How much public money is actually promoting sharia finance may be impossible to say with certainty. AIG jointly operates many of its branch offices, using consolidated accounting and non-segregated bank accounts. Neither the government nor AIG has ever issued any regulations or created any firewalls to prevent American taxpayer money from underwriting SCF activities.
The Obama administration could have suspended AIG’s promotion of sharia finance in order to protect constitutional norms. But, of course, if it were interested in constitutional norms, it would neither be running private companies nor embracing Islamists and their law. So congratulations: You get to fund the jihad, while the jihad gets to target you.
– Andrew C. McCarthy, a senior fellow at the National Review Institute, is the author, most recently, of The Grand Jihad: How Islam and the Left Sabotage America.