Israel Matzav

Sunday, April 10, 2011

Can the US own an organization that does Shari'a financing?

It's been nearly 30 years since I had a Constitutional Law class, but I would have thought this case would be a slam dunk.

Three years ago, the United States bought a controlling interest in AIG Group because it was 'too big to fail.'

AIG has a subsidiary that conducts Shari'a finance. Shari'a finance requires that
a certain percentage of the subsidiary's operating revenues be donated to Islamic-approved charities. Some of those charities may support jihad, which means the conduct of 'holy war' against 'infidels' (i.e. non-Muslims).

In order to determine which charities are Islamic-approved, AIG's subsidiary must employ Shari'a law experts (Islamic religious authorities) who act as the determiners of what is Islamic-law approved and what is not.

The United States has a clause in the first amendment to the constitution that prohibits Congress from making any law with respect to the establishment of religion.

The establishment clause has generally been interpreted to prohibit 1) the establishment of a national religion by Congress, or 2) the preference by the U.S. government of one religion over another. The first approach is called the "separation" or "no aid" interpretation, while the second approach is called the "non-preferential" or "accommodation" interpretation. The accommodation interpretation prohibits Congress from preferring one religion over another, but does not prohibit the government's entry into religious domain to make accommodations in order to achieve the purposes of the Free Exercise Clause.

Can the US government via AIG hire Islamic scholars to decide to which Islamic charities donations may be made? I would think not. But the US District Court for the Eastern District of Michigan apparently determined that it could because the percentage of AIG's Shari'a compliant activities is de minimus. (That reminds me of those who say that we need not worry about Islamic terrorists because out of a billion Muslims in the world, 'only' 10% support terrorism - that's not very comforting, is it)? The case is now up on appeal before the US Court of Appeals for the Sixth Circuit. This is an excerpt from a brief filed by Z Street as amicus curiae (friend of the court).

The central difficulty posed by the United States government’s involvement in shariah financing is the precise content of the requirements, and by the fact that they are enforced by shariah authorities, who are paid to do so by AIG, and by the role of AIG – and hence the role of the United States, as controller and de facto owner of AIG – in determining what these requirements are and in enforcing these requirements. Because the United States is the majority owner of AIG, these religious authorities paid by AIG are effectively employed by the United States of America, to make decisions about religious law.

That involvement is particularly troubling because one of the decisions that must be made is how to allocate a certain share of the profit earned by AIG’s activities – profit that is owned by the shareholders of AIG and that would, absent this requirement of religious law, be paid to AIG’s owner, the United States. Even beyond that, however, the district court’s findings make clear that religious authorities, paid by AIG, are making decisions under religious law about whether a particular project is or is not “unislamic.” Slip op. at 6.

Amicus takes no position on whether, in acquiring a controlling interest in AIG, the United States intentionally sought to take control over these questions of shariah law. But the fact of the United States’ immersion into – or at least, its ownership of – these problems cannot be disputed. The United States controls a majority of the stock of the company that pays these people to perform this particular, indisputably religious, job, pursuant to which assets and funds owned by AIG’s shareholders are allocated, distributed, or withheld pursuant to the dictates of religious law. So far as the record shows, and so far as Amicus is aware, the United States maintains a majority interest in no other corporate entity, of any kind, which directly employs persons who interpret and enforce any religious law governing the allocation of assets owned by the United States.

Finally, this Court should proceed with an awareness that the precise contours of Islamic law may – depending on who interprets it – explicitly demand the promotion of both jihad, or violent military struggle against any non-Islamic regime, and, separately, the promotion of Islam.

Read the whole thing. Those who missed it may also want to watch the Glenn Beck show about Shari'a law that I showed this past week here.

Labels: jihad, jihad with money, Murray v Geithner, Sharia law, Z Street