Catastrophe (32 page)

Alert to the opportunity, banks, underwriters, accounting firms, and law firms that wanted in on the action poured tens of millions in campaign contributions into the coffers of candidates running for treasurer or comptroller in order to get special treatment.

But in 1993, a series of scandals led to a crackdown by the Securities and Exchange Commission (back then, it still had teeth). The SEC entered into agreements with the underwriting firms barring campaign contributions to candidates running for offices in which they would have the power to select underwriters. The SEC then codified the agreement into Rule G-37, which barred all underwriters and their employees from conducting bond business in states where they had made campaign contributions in the preceding two years. And, if they made such contributions, they couldn’t underwrite bond issues in that state for two more years.

The flood of contributions and the resultant corruption immediately dried up. A study showed that “the use of negotiated bonds dropped suddenly following the banning of campaign contributions.”
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Reviewing the impact of the new rule, the study estimated that “about one-third of municipal bond issuers [had] acted corruptly” under the old negotiated system and had switched from competitive bidding “to a negotiated [bond] issue in order to gain the opportunity to realize a private gain in the form of campaign contributions.”
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The study’s “rough estimate” was that state and local taxpayers saved $500 million in “real interest costs” in the year after the reform was enacted by curtailing the corruption.
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A private, nonpartisan civic watchdog group, Americans for Limited Government (www.getliberty.org) makes a dramatic proposal: it wants to apply the same rules to no-bid public contracts. If you get a contract from a state or local government without public bid, you can’t donate to any po
litical campaign in that state for two years. And if you have already contributed, you can’t get a no-bid contract for the next two years!

Makes sense, doesn’t it? In one stroke, all of the problems we’ve been discussing in this chapter would go away. Nobody would pay to play!

ALG reports that “an ever growing number of states and municipalities are enacting ‘Pay To Play’ laws that bar or severely limit campaign contributions by state and local contractors, their top executives, and, in some instances, the executives’ spouses and dependents.”
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Keep an eye out for pay-to-play bids in your own state and yell when you see them. Loudly—and to the media. This has to stop.

To keep abreast of developments in your state, go to the ALG Web site, www.getliberty.org. Get involved—help ALG turn off this corruption!

How Our Banks and Investment Firms Are Opening the Door to Shariah Law and Muslim Extremist Domination

There is a worldwide, religiously powered movement to undermine and conquer our Western and American way of life. One of the key tools of this movement is Shariah-compliant financing. It is a practice, orchestrated by Muslim extremists, that is designed to use the oil-generated wealth and economic clout of key Islamic nations to hijack our institutions, our social policies, and, ultimately, our values in the name of Islamic rule.

If this movement continues to gain in power and influence, it will, indeed, be a catastrophe for our way of life.

Meet Sheikh Muhammad Taqi Usmani. He is a prominent Islamic scholar and former justice of the Pakistani Shariah Appellate Court. In 1999, in addition to his Pakistani judicial role, Sheikh Taqi Usmani got a new day job: Dow Jones, HSBC, and many other top financial institutions hired him to advise them on where to invest hundreds of millions of dollars! And this was no short-term trial run: in March of this year, Dow Jones announced its “celebration” of the program’s tenth anniversary (although Usmani recently had to resign).

Unfortunately, Usmani has a bad habit of issuing radical, troubling fatwas—legal opinions about personal and public behavior based on Islamic law that are deemed to be binding on all Muslims, regardless of where they live. Flying in the face of the oft-expressed notion that Islam is a peaceful religion, Sheikh Taqi Usmani has a different position: he urges “that Muslims living in the West conduct violent Jihad against the infidels at every opportunity.”
⁴³⁷

Lest there be any doubt about who those infidels he’s referring to are—
he means us.
That’s right: Sheikh Taqi Usmani advocates killing as many of us as possible, at every opportunity—until we all surrender. He is a man with a mission: to eradicate every religion except Islam. In his book
Islam and Modernism
, he proclaims that, in the West, the “killing is to continue until the unbelievers pay Jizyah after they are humbled or overpowered.”
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Jizyah is a tax collected from every non-Muslim adult living in a Muslim land; the tax is meant as a symbol of subjugation to the Islamic state and laws.

So the sheikh’s intent is to kill as many of us as possible; to tax the rest of us; and to subject the living to Muslim rule, regardless of their own wishes.

Why? To ensure the general freedom to preach Islam? No—to show us who’s boss. That
he
is. That his religion is the only religion. And that no other religions should be tolerated. It’s all very clear to him: “If the purpose of killing was only to acquire permission and freedom of preaching Islam,” he says, he would have called on the world to murder the infidels “until they allow for preaching Islam.” But his designs are more far-reaching: “The obligation of Jizyah and along with it the mention of their subordination is a clear proof that the purpose is to smash their [other religions’] grandeur.”
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His rant continues, chillingly: “At least in my humble knowledge there has not been a single incident in the entire history of Islam where Muslims had shown their willingness to stop Jihad just for one condition that they will be allowed to preach Islam freely. On the contrary, the aim of Muslims as declared by them in the battle of Qadsia was, ‘To take out people from the rule of people [i.e., representative government] and put them under the rule of Allah.’”
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By the “rule of Allah,” Sheikh Taqi Usmani is referring to what is often known as Shariah law, the legal framework based on Islamic principles of
jurisprudence that encompasses civil and criminal actions and personal and moral behavior. The sheikh works tirelessly to spread the acceptance of Shariah law wherever possible. And he has been among the leading proponents of extending that rule beyond our churches, synagogues, and mosques to our wallets, bank accounts, and life savings.

In 1987, Sheikh Taqi Usmani was one of the issuers of a fatwa that announced a series of Islamic preconditions for Muslim investment in publicly traded stocks. This was a new concept, and in the intervening years it is one that has taken hold in the United States. And the sheikh, who does not hide his contempt for non-Muslims, has become a leader in what has become known as Shariah-compliant financing.

And, until very recently, he sat on the advisory boards of some of our major financial institutions.

Americans are uniquely vulnerable to paranoia. We have such a wonderful country that we are always worried about the potential that some new conspiracy may be lurking around the corner to destroy or change it. The historian Richard Hofstadter wrote about this phenomenon—and politicians’ efforts to co-opt it—in his influential book
The Paranoid Style in American Politics.
But even paranoids have enemies—and those who want to infect our financial institutions with the virus of Shariah compliance are among our most dangerous opponents.

Shariah law is the basis of the Islamic religion. It regulates what devoted Muslims may and may not do. It prohibits eating pork and drinking alcohol. It stipulates that one must pray five times each day, always facing Mecca. It requires daytime fasting during the month of Ramadan and a visit to Mecca during one’s lifetime. As such, it resembles the Talmudic law that governs Judaism in its comprehensiveness and specificity. Yet its tenets are far more ambitious, even rapacious—at least as interpreted by modern Islamic radicals.

In the late 1990s, investors from the Islamic world—who controlled vast amounts of oil money—began approaching American banks and investment firms, requesting that the companies set up special investment funds to include only industries and companies that eschew any activities prohibited by Shariah law. That way, devout Muslims could be confident that their money would not promote any activity that was inconsistent with Islamic law—such as pork farming or alcohol distribution. Eager to gratify
the every whim of these wealthy foreign investors, many of the most prominent American financial institutions set up Shariah-compliant indices so investors in stocks and bonds could put their money only in companies that did not engage in conduct prohibited by Shariah law. In effect—pardon the pun—they made sure the investments would be kosher.

To guide it in deciding what company stocks and bonds to include in the Islamic Index, Dow Jones and the other firms that have created Shariah-compliant funds have retained a group of Shariah scholars who were fully conversant with the intricacies of the Islamic legal code to form a Shariah advisory board. These scholars set up criteria for Shariah-compliant investments. As Frank Gaffney, now president of the Center for Security Policy and a former official in Ronald Reagan’s Defense Department, describes it: “The issuing company must not be involved in ‘vice industries’ like businesses associated with pork, alcohol, interest income–generating activities, entertainment (such as pornography and gambling) or Western defense industries…. [They must be] engaged in acceptable businesses [and] must not violate the prohibition Shariah imposes on earning or paying interest.”
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(Getting around the interest ban takes some doing, but with a few imaginative euphemisms, even that becomes possible for these funds.)

The Shariah advisers must, of course, also examine the “financial statements of companies in which [Shariah-complaint] investments are being made”
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to police their compliance with Shariah law. If they are in violation—if they earn too much from interest or invest in any forbidden activity—they have to be purified by donating to one or more “charities” approved by the Shariah advisers. In addition, Shariah-compliant funds must invest 2.5 percent of the proceeds of the investments they control in these designated “charities.”

That has led to a serious problem. Unfortunately, several of these sanctioned charities are thinly veiled fronts for terrorist organizations such as Hamas and Hezbollah and funnel money to the families of suicide bombers in Palestinian communities and Islamist madrassas in places such as Pakistan.
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Gaffney notes that “three of the largest Shariah-favored charities in the U.S. have since 9/11 been shut down by the U.S. government for providing financial support of terrorism and other pro-jihad conduct.”
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The 2.5 percent tariff that Shariah-compliant funds must donate to “charities” runs into billions of dollars.
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As the flow of Shariah money
increases, it becomes a key source of financing for our enemies—often through cash provided unwittingly by devout, but peaceful, Muslims.

And when a Shariah-compliant fund makes a mistake—say, by investing in a trucking company that one day carries hogs—it must donate additional funds to charity for “purification.” Alexiev explains that an investor’s return from such ill-gotten gains must be “deducted and given to charity by the Shariah advisors. All of this happens before disbursement to the investor, who has no say in the matter whatsoever. Where this money goes is anybody’s guess…. But it doesn’t take a rocket scientist to figure out that a Shariah board is unlikely to contribute to the Boys Club.”
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The Shariah advisers themselves, who determine whether investments are acceptable under Muslim law, are generally Islamist extremists. They have even coined the phrase “financial jihad” to characterize this new form of economic warfare against the “unbelievers.”
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As Alex Alexiev notes, “dozens of radical Islamists are Shariah advisors and financial institutions pay them royally. Some of them sit on as many as two dozen of these boards and make millions of dollars, at least some of which is then donated to extremist causes.”
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Specifically, Alexiev warns that Shariah-compliance advisory boards are peopled by “radical Islamists trained and indoctrinated in the Wahhabi or Deobandi-controlled Sharia faculties in Saudi Arabia, Pakistan, and elsewhere.” These men, he notes, “are the intellectual driving force behind the Wahhabi/Salafi ideology of Islamism and the leading theological enablers of extremism and terrorism.”
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Some estimates suggest that as much as $1 trillion may currently be invested around the world in funds that follow Shariah-compliance rules. As Gaffney notes, “if trends continue…such funds may grow to many times that amount within a few years.”
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Shariah law authorities are now being paid by Dow Jones, Barclays, Standard & Poor’s, HSBC, Citibank, Merrill Lynch, Deutsche Bank, Goldman Sachs, Morgan Stanley, UBS, and others “to determine and assure the compliance of these institutions’ products with Shariah,” according to the Center for Security Policy’s Shariah Risk Due Diligence Project.
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The center cites this list of six “key drivers of this Shariah compliance finance market”:

1. Specialized law firms such as King and Spalding, Patton Boggs, Gibson Dunn, and Gerstyn Savage
   
2. Shariah consulting firms such as Shariah Capital
   
3. Shariah Index Providers such as HSBC, Standard and Poor’s, Dow Jones and FTSE
   
4. Accounting firms
   
5. Software providers
   
6. Global banking institutions such as Barclays, Merrill Lynch, UBS, Deutsche Bank, Morgan Stanley Capital, Citibank, UBS, and Goldman Sachs
   ⁴⁵⁷
   

The Center for Security Policy outlines the requirements that are usually demanded of financial institutions engaged in Shariah-compliant financing:

1. Avoidance of interest charges
   
2. Shared risk between parties
   
3. Avoiding investments in banned industries such as defense, pork, media, banking, alcohol, and insurance
   
4. The appointment of Shariah advisory boards to create and oversee the adherence of investments to Shariah
   
5. An obligatory donation of “tainted” revenue, which must be “purified” and given to Shariah-approved charities
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Alex Alexiev, an expert in Shariah law, notes that the supposed goal of Shariah-compliant financing is “to make it possible for Muslims to conduct financial transactions while observing Shariah prohibitions against lending at interest (
riba
), uncertainty (
gharar
), and forbidden products and activities such as pork, alcohol, gambling, entertainment, etc.”
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