Shariah Finance

Allen Reed
December 2008

The real estate market has crashed. The stock market has crashed. The banking sector is in shambles. Unemployment and underemployment is rising. There’s a liquidity problem making it difficult for companies to obtain necessary capital to expand their businesses and thereby increase employment. The US borrows over $700 billion a year from China and we end up transferring that money to the Saudi’s and the Middle East in the form of petro-dollars, also reaching $700 billion a year. It’s an interesting number as the federal government just agreed to spend $700 billion in taxpayer’s money to “fix” the current problems. But will it?

Before we can answer that question, we have to answer a slightly different question. What is the problem that needs to be fixed? Is it sub-prime lending? Is it redistributive economic policies? Is it a lack of competitiveness with our overseas competition? Is it corrupt Wall Street “insiders” and “speculators”? Is it corrupt CEO’s of our major companies? Is it the oil industry? Or is it something else? The answer is not something most Americans want to hear nor are they prepared to deal with. But when it hurts, it’s probably the truth.

The biggest long-term problem facing the American economy right now is Shari’ah Finance. What is that you may ask? “It is a new weapon in the arsenal of what might be termed fifth-generation warfare.” (1) Shari’ah is Islamic law and its purpose is to institute Allah’s will in society. The goal is to control the world in the name of Islam because the world belongs to Allah. It is derived from the Qur’an and the Hadiths (the sayings and actions of Mohammed also known as the traditions). Under Shari’ah all Muslim possessions are simply held in trust for the Allah. (2)

Financial Jihad

Financial jihad, or the funding of jihad, is directly addressed in several places in the Qur’an. “You … should strive for the cause of Allah with your wealth and your lives.” (3) “The (true) believers are only those who … strive with their wealth and their lives for the cause of Allah.” (4) This is extolled by the spiritual leader of the Saudi Muslim Brotherhood (MB) Hamud bin Uqla al-Shuaibi when he stated “Financial Jihad [is] … more important … than self-sacrificing.” One of his students is now the grand mufti in Saudi Arabia. (5) Another MB spiritual leader from Qatar, Yusuf al-Qaradawi (one of the most prominent Sunni scholars today) expanded this by stating in May 2002, “collecting money for the mujahideen was not a donation or a gift but a duty necessitated by the sacrifices they made for the Muslim nation.” (6)

The most current version of Shari’ah Finance was created by radicals like Sheikh Qaradawi. He says, “I like to call it Jihad with money, because God has ordered us to fight enemies with our lives and our money.” (7) But, you ask, isn’t Shari’ah equivalent to Islamic law? Yes it is, but Islamic law is not “law” as we think of it. It is a series of rules to institute Islam and once instituted, control those under its power. These rules include the suppression of women, the killing of those who freely choose to leave Islam, the killing of homosexuals, the rejection of and suppression of all alternative forms of worship, and jihad as an individual’s obligation to institute Shari’ah.

But it does not stop there. If you criticize Shari’ah, then you are not truly a Muslim and must be eliminated. There are several fatwas, or binding religious decrees, that state this clearly. For examples of fatwas, go to http://www.pilcrowpress.com/pdf/common_word.pdf. Appendix B starting on page 47 has a series of fatwas that address relations between Muslims and non-Muslims. Who then practices Shari’ah? The governments of Saudi Arabia, Iran, Sudan, to name a few, as well as the Taliban and al Qaeda are all regimes that are based upon Shari’ah.

Naturally you ask what this has to do with the American financial crisis? In the current crisis, our financial institutions need an influx of money. Where is the money coming from? Much of it is coming from Saudi Arabia, Kuwait, the UAE, and other Middle East countries. What does that have to do with jihad or Shari’ah?

Now we have gotten to the real question. When Saudi, UAE, and other Middle East organizations, or their front organizations, purchase shares of American financial institutions, they are doing it for the reasons stated above, and more. If they have the ability to obtain a controlling share of stock, which may be as low as 20 or 25%, they can then influence the lending policies of that institution. Through these mechanisms, Shari’ah financial laws are instituted and thus, our financial sector falls under the control of Islam. If one can control the finances, one can control the economy at large. It is a slow, quiet process through which America willingly gives away its freedom for money in the short-run, not even realizing that in the long-run, Shari’ah itself will determine how and where all monies will be spent. And where will that be? The financing of jihad as has already been seen above.

Europe and Shariah Finance Laws

Is this just the paranoid ranting of a right wing zealot? Maybe. But then let us look at Europe to see if there is any evidence that it may actually be true. It may just be that this model has been used there.

In 2006, the Swiss Banking Institutions were threatened by Accounting and Auditing Organization for Islamic Financial Institutions (AAIOFI). The AAIOFI told the Swiss that they had to adhere to Shari’ah finance laws. Of course the Swiss laughed at this idea as Shari’ah finance is antithetical to western banking practices. However, when the Saudi’s and their friends moved to pull their multi-trillion dollar holdings out of the Swiss Banks, the Swiss held an emergency session and adopted the platform put forward by the AAIOFI. Today, the once secure Swiss bank accounts we have all heard about, are now reviewed by 5 Shari’ah experts from the AAIOFI to make sure that all transactions comply with Shari’ah and that all companies receiving finances from these institutions is in compliance with Shari’ah.

You may say, ah but that’s Europe and we’re America. Let’s look at September 2007 when Bourse Dubai attempted to buy 20% of NASDAQ. Sen. Charles Schumer (D, NY) said, “Governments have political considerations.” His colleague Sen. Bob Bennett (R, UT) said, “Dubai is making a purchase on the open market of an asset that’s for sale. What’s wrong with that?” Nothing. Of course, Bourse Dubai’s Islamic influence in the heart of the American financial structure could have some effect. Remember, Bourse Dubai is the first Shari’ah compliant stock exchange in the world and requires that all companies listed on the exchange are Shari’ah compliant as well. But that shouldn’t worry us as we already have the Dow Jones Islamic Index started in 1999 which is Shari’ah compliant. (8) According to the same article, the authors continued, “Sharia banking differs from standard banking in two main ways. First of all banks and customers are not allowed to profit from interest payments – termed “usury” in the Koran. “We have to find different forms of investment opportunities, as you can’t have a savings account [which increases through interest payments],” explains Christoph Meier from UBS.” (9)

To expand on this idea, UBS, Switzerland’s biggest bank, took steps to be the first western bank to openly operate under Shari’ah law. “By setting up Noriba bank in Bahrain, UBS has opened up Swiss banking to Muslims who want to use Shari’ah banking practices,” financial expert Gian Trepp told swissinfo. Switzerland already houses a number of financial institutions which operate according to banking principles set out under Sharia law, such as the Kanz bank in Geneva, which was founded in 1998. (10)

Shariah Compliant Financing and the United States Treasury Department

It doesn’t stop there either. Even the Treasury Department is taking steps to become Shari’ah compliant. Frank Gaffney wrote in the Washington Times on November 4, 2008, about “Islamic Finance 101” class being at the Treasury’s headquarters building in Washington, DC. It was described as a “seminar for the policy community” and was co-sponsored by Harvard Law School’s Project on Islamic Finance. As Gaffney points out, Deputy Secretary of the Treasury Robert Kimmitt was recently in the Gulf region to solicit the Arabs to invest some of those 100’s of billions of petrodollars back into the US economy. Certainly if they would be willing to do that, we could adopt certain aspects of their banking system that seems to be working so much better than ours right now.

Remembering that $700 billion bailout, the Troubled Asset Relief Program (TARP), we might want to consider instituting some of these Harvard promoted Shari’ah compliant banking ideas on our financial industry. Since Freddie and Fanny have been nationalized, and the Treasury has taken control of at least 17 banks, what is to stop the Treasury from using the power of $700 billion to coercively require the rest of the industry to submit to those principles learned in “Islamic Finance 101”? The answer is nothing.

England and Canada permit Islamic courts for family law cases in their countries, allowing such things as polygamists getting welfare for each of their wives despite UK laws forbidding polygamy. Islamic “communities” are permitted to exist within our own borders and are not required to assimilate into society. Why not submit our entire financial industry, the engine of our economy, to Shari’ah? Will we learn in time?

It is kind of like Esau and Jacob. Jacob thought long-term. Esau sought only to take care of his immediate desires. As such, Esau sold his birthright to Jacob for a bowl of stew. America is selling its birthright for a barrel of oil and a quick influx of cash so we can keep running away from the God who gave all we have anyway. Remember the words of the enemy. “A universal Islamic banking system is a jihad worth pursuing to abolish this slavery [to the West].” (Malaysian Prime Minister Mohamed Mahathir, 2002 in Kuala Lumpur.)

Any one have accounts at:

Citibank
HSBC
Dow Jones
Standard & Poor's
UBS
Barclays
Goldman Sachs
Deutsche Bank
Wachovia
Lloyds of London
Morgan Stanley
JP Morgan Chase
Blackstone
Blackrock
Millennium Hedge Fund
Ospraie Capital Hedge Fund
Paulson & Company
Arcapita, Inc. (previously Crescent Capital)
BNP Paribas
Guidance Residential
Zweig-DiMenna

Welcome to jihad.

Footnotes:
1. Colonel Thomas X. Hammes, USMC, the Sling and the Stone: On War in the 21st Century (Zenith Press, 2006)
2. Qur’an 57:2 and Sahih Bukhari, vol. 4, bk. 53, no.392.
3. Qur’an 61:10-11
4. Qur’an 49:15
5. “His students included a number of important Saudi religious leaders, including the current grand mufti. Al-Shuaibi published religious edicts supporting the Taliban regime in Afghanistan, including the destruction of the Hindu statues, as part of jihad against the infidels. He religiously justified al-Qaeda’s attack on the U.S. in September 2001 and gave religious legitimacy to the suicide attacks against Israel carried out by Palestinians. In October 2001, bin Laden cited al-Shuaibi when he spoke of his justification for killing Jews and Christians.” Jonathan D. Halevi, “What Drives Saudi Arabia to Persist in Terrorist Financing? Al-Jihad bi-al-Mal. – www.jcpa.org/jl/vp531.htm June 1, 2005.
6. Intelligence and Terrorism Center at the Center for Special Studies, www.Intelligence.org.il/Eng/sib/2_05/funds_g.htm
7. Article by Joy Brighton. She is a former Wall Street trader and consultant and now is an expert for ACT for America.org.
8. “Swiss Banks Set Sights On Muslim Customers”, Hansjorg Bolliger and Sally Mules, posted by IslamBank, http://tyo.ca/islambank.community/modules.php?op=modload&name=News&file=article&sid=1032.
9. Ibid
10. http://en.wikipedia.org/wiki/Dow_Jones_Islamic_Index

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