America for Sale

Dr. Rachel Ehrenfeld and Alyssa A. Lappen
Human Events | April 1, 2008

As the U.S. and Western markets plummet and the U.S. dollar continues its free fall, sovereign wealth funds (SWF) gobble up prime financial institutions, industries and real estate in the U.S. and the West. Given concerns regarding the political influence of such wealth, the U.S. Treasury, together with Abu Dhabi and Singapore, on March 20 signed an “Agreement on Principles for Sovereign Wealth Fund Investment.”

“SWF investment decisions should be based solely on commercial grounds, rather than to advance, directly or indirectly, the geopolitical goals of the controlling government,” according to the joint statement and accompanying policy principles. Feebly attempting to enforce this standard, it declared: “SWFs should make this statement formally as part of their basic investment management policies.”

Meanwhile, the International Monetary Fund (IMF) Board of Directors on March 21 endorsed an SWF work agenda to develop—in coordination with them and the Organization for Economic Cooperation and Development (OECD)—“a set of voluntary best practices.”

The pretense surrounding most international agreements matches the deceitful promotion of Middle Eastern SWF investments and Islamic banking as “ethical and socially responsible.”

In fact, “Islamic banking defies the separation between economics and religion,” according to USC King Faisal professor of Islamic Thought Timur Kuran.

Globally, SWFs now hold some $2 to $3 trillion and are expected to reach $6 to $10 trillion “within five years.” Incredibly, IMF Monetary and Capital Markets director Jaime Caruana expects the planned “best practices” to “cover issues of public governance, transparency, and accountability principles” and “help ease concerns about SWFs in recipient countries and contribute to an open global monetary and financial system.”

High oil prices are responsible for the enormous growth of most SWFs, including those in the Middle East. According to a new the Asian Banker research group, “the world’s 100 largest Islamic banks have outpaced conventional banks with an annual asset growth rate of 26.7 per cent—nearly $350 billion—in assets.”

In addition to huge political and economic influence such wealth carries, and in contrast with IMF wishful thinking, Middle Eastern SWFs also seek to impose the strangulating governance and eventual bondage of Islamic laws—not “ethics” or “social responsibility” as they advertise.

Middle East sovereign funds include bans on trade with Israel, despite U.S. laws prohibiting such boycotts and World Trade Organization (WTO) regulations requiring all member nations to allow free trade with each other. Yet, Middle East wealth so dazzles Western governments, including the U.S, that they readily ignore the Islamic nations’ illegal boycott. While these funds for now only target Israeli products, ultimately Western industries and economies will also endure dire effects.

The U.K. Trade and Investment (UKTI) website openly notes, “Saudi Arabia imposes no foreign exchange controls and no other restrictions on the repatriation of profits or capital by foreign investors,” except a strict ban “against transactions with Israel.”

The UKTI website also warns British businessmen of similar prohibitions in the United Arab Emirates (UAE), Bahrain, Kuwait, Qatar and Oman, among others, against goods “manufactured in Israel.”

The growing U.S. and European financial crisis gives Islamic banking and shari’a finance proponents increasing leverage over Western markets and economics. In reality, their acquisitions of ever-larger stakes in U.S. and Western strategic financial and other assets, amounts to economic warfare against the West.

They lure U.S. and Western investors into high-rate sukuk or al-ijara Islamic bonds, which they claim are “alternative” Islamic finance instruments that supposedly avoid usury, but use Western structured finance tools— “some of the most complex ever created.”

Shari’a instruments transform liquid, traceable cash flows from interest-bearing debt into illiquid assets. They resemble “portfolio insurance” that caused the 1987 crash, and the mortgage-backed bonds behind the 1994 bond-market bust that eviscerated $1 trillion in value—then some 10% of the U.S. bond market. Those collapses damaged many huge pension funds, municipalities and institutional investors, and killed off several hedge funds.

Shari’a economics’ dubious ethical and financial values nevertheless continue attracting Western bankers and academics. In a March 5, 2008 missive to international business leaders, for example, Caux Round Table (CRT) global executive director Stephen B. Young even suggests that Islam Hadhari (“civilizational Islam” based on shari’a law, as promoted by the Muslim Brotherhood) can resolve America’s conflicts with the “Muslim ummah” (nation).

Young believes “Islamic Banking would … bring modern forms of private sector led economic development into Muslims societies,” ushering them into the “industrial and post-industrial revolutions,” by constructively blending “rational economic considerations with Qur’anic piety.” Yet he relies on a 2006 script by Malaysia’s Prime Minister Dato’ Seri Abdullah bin Haji Ahmad Badawi.

But “Islamic economics is an invented tradition,” writes USC’s Timur Kuran. “Neither classical nor medieval Islamic civilization featured modern style, much less Islamic banks.”

Far from developing Islamic and economies, shari’a law has overall retarded them. “To one degree or another, most of today’s 56 predominantly Muslim countries are economically underdeveloped,” Kuran writes.

Islamic finance deliberately promotes fundamentalism and anti-Western behavior throughout the Muslim world, rather than suppressing it, he argues. Neither have shari’a finance proponents in the West considered its economic effects—promotion of gender discrimination, replacement of secular law and schools with Islamic law and schools, and its institutional suppression of scientific investigation.

In December 2007, Bourse Dubai, the world’s first and largest Islamic equity exchange, bought 20% of NASDAQ, the biggest U.S. electronic stock market, and “rebrandedâ€ it as part of Dubai’s company. The Bourse also got NASDAQ’s 28% of the London Stock Exchange (LSE). In addition, Qatar acquired a 24% LSE stake, giving the two Gulf nations control over nearly 52% of the London exchange. On March 15, Iran, which now dominates the leading 100 Islamic banks — followed by Saudi Arabia, Malaysia and the UAE –announced plans to list $90 billion energy holding company on Dubai International Financial Exchange, (DIFX), which is wholly owned by Bourse Dubai.

To counter the Shari’a financing takeover of America, the FTSE CSAG Terror-Free Index Series and Conflict Securities Advisory Group, yesterday launched a new index that screens out some 600 companies doing business with Iran, Sudan, Syria and North Korea. The U.S. government designates these states as sponsors of terrorism. However, the major Shari’a finance institutions are in Saudi Arabia, the UAE and other Gulf states—all funders of radical Islamist and terrorist groups worldwide, and none designated by the U.S. or screened by the new index.

The one who pays the piper calls the tune, goes the saying. Considering the strategic purchases of Middle Eastern sovereign wealth funds and the traps built into shari’a financing, the U.S. and the West may soon be dancing to an unfamiliar—and strategically damaging—Islamic tune.

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Terror’s financiers

U.S. oversight needs to improve

By Rachel Ehrenfeld and Alyssa A. Lappen
Washington Times | Jan. 17, 2008

The antiquated Securities and Exchange Commission’s computer system prevents investigators from safeguarding U.S. market integrity. “It’s like working with one hand tied behind their backs,” Republican Sen. Chuck Grassley commented about the Dec. 17 release of the Government Accountability Office (GAO) report he’d initiated — “SEC: Opportunities Exist to Improve Oversight of Self-Regulatory Organizations.” Why can’t the government with the world’s most advanced computer technology and capabilities equip its agencies with state-of-the-art systems allowing them to better monitor markets and transactions, including illegal activities?

In response to the GAO criticism, SEC Chairman Christopher Cox acknowledged, “additional information-technology changes such as these may help the [SEC] enforcement staff to effectively analyze trends, manage current caseloads and focus areas of investigation.” But all federal officials — not just at the SEC — should worry about much more than insider trading.

Take terror financing. So far, no U.S. official at any level, including presidential candidates from both parties, has publicly addressed how radical Muslim groups and Islamic terror organizations raise major sums to facilitate the murder of Americans in Afghanistan, Iraq and elsewhere, among other things.

Two years ago, President Bush denounced “the murderous ideology of the Islamic radicals [which] is the great challenge of our century.” But U.S. dependency on Middle East oil made the Saudis and their Gulf neighbors rich beyond their wildest dreams. Saudi funding propagates global Islamist extremism that former CIA Director James Woolsey describes as “the soil in which al Qaeda and its sister terrorist organizations are flourishing.” The September 11 commission awarded the government an A- for its “vigorous efforts against terror financing,” both in 2003, and again in its October 2005 progress report.

In fact, government efforts thus far have apparently targeted the wrong funding sources. The vast Middle East sums feeding the global spread of radical Islam and jihad have not diminished. Yet, our government tells us, the Saudis and their neighbors are U.S. allies.

Such disinformation, combined with outdated monitoring technologies and systems, contributes to continuing government failure to secure U.S. financial institutions, economic stability and national security.

Government agencies have long warned of the federal failure to properly monitor and impede funds flowing to terrorist organizations. These include several GAO reports and a May 21 IRS report criticizing government ability to identify charities favored by radical Muslims to fund terrorism.

“The IRS provides only minimal assurance that tax-exempt organizations potentially involved in terrorist activities are being identified,” it says. Furthermore, the report recommends that the IRS and other agencies “develop and implement a long-term strategy to automate the process… to identify potential terrorist activities related to tax-exempt organizations.” Another major issue slipping under the radar concerns the growing influence of petrodollars on U.S. economic institutions, banks, markets and government agencies.

Due diligence currently available identifies the routine and obvious risks associated with Western market participants. However, growing Islamic banking and Shariah-compliant industries promote themselves as hot new financial markets in which to invest. The attraction for U.S. and Western banks and investors is the $1 trillion and rising annual Saudi and Gulf state oil revenues.

Then again, like many other “innovative” products, the “ethical” and “socially responsible” Middle East and Islamic banking and investment market present many new risks not currently addressed either by their proponents or by regulatory agencies, much less due diligence services now available.

These markets and products lack transparency and Western accounting. Frequently, their documentation and offering statements do not disclose information required by federal laws and banking regulations. Furthermore, this market is increasingly governed by radical Islamic clerics whose provenance is unknown to the Federal Reserve Board, U.S. and international equities and bond ratings agencies, index providers and other insufficiently educated market participants and facilitators.

Data-mining software is available in the market today. But it lacks the ability to also analyze social and political networks and identify terrorist links. An important new program will shortly be available to fill that gap. It will also aid collection, processing, investigation, discovery, data-sharing and reporting intelligence.

The government needs this technology to stop terror financing. And businesses need objective consultants with regional expertise, language skills and access to the latest software to fully meet their “know you customer” and disclosure regulations.

Businesses that fail to take these extra precautions are liable to suffer major losses, market dislocations and possible prosecution for material support of terrorism.

Shari’a Finance: Cordless Bungee Jumping

by Alyssa A. Lappen
Pajamas Media | Dec. 18, 2007

Despite flashy headlines extolling Shari’a finance (Islamic banking) and Wall Street bankers jumping into the market, don’t follow. It’s like bungee jumping without a cord—or following lemmings over a cliff.

[12/18/2007 update: The banking industry has a short memory. In 1955, Citibank established the Saudi American Bank in Jeddah and added a Riyadh branch in 1966. But on February 12, 1980, Saudi Arabia confiscated Citibank’s business by royal decree, changed its name to Samba, and forced America’s premier bank to accept a subservient role, staffing its old bank–with a promise not to take any profits. That was shari’a law in action.]

Shari’a is “the path of Allah,” Nizam Yaquby told October conference-goers. But the purportedly “ethical” and “socially responsible” investing supports neither environmentalism nor “renewable” growth.

A 20th century construct, without basis in Islamic history, it often funds destruction. This “invented tradition” empowers Islamic radicals, writes USC King Faisal Professor of Islamic Thought, Timur Kuran, in Islam and Mammon: “Neither classical nor medieval Islamic civilization featured banks in the modern sense, let alone ‘Islamic’ banks’.”

Consider its downside risks.

With 19.99% of Nasdaq in hand, Bourse Dubai, the Dubai International Financial Exchange (DIFX) parent—certified for Islamic “purity”—by Bahrain’s Accounting and Auditing Organization for Islamic Financial Institutions (AAIOFI)—now plans to “rebrand” America’s international over-the-counter market as Nasdaq-DIFX.

What does this mean for presumably “unIslamic” Nasdaq companies (like Israeli generic drug giant, Teva)? Supposedly, Bourse Dubai will be “restricted to 5 percent voting rights” in Nasdaq. But in anticipation of Nasdaq-DIFX’s “rebranding,” DIFX named four new board members.

Boards of directors generally call the shots.

Meanwhile, Citigroup is receiving a second-generation, $7.5 billion Islamic-cash-bailout from the ultra-conservative United Arab Emirates (UAE) sheikdom, Abu Dhabi.

Its initial, 1991 Islamic-rescue followed billions in bad loans, single-quarter losses of $855 million, and U.S. Federal Reserve Board concerns about Citibank’s potential failure.

Suddenly, Citi’s then-Middle East business chief, Shaukat Aziz—fresh from seven years in Riyadh hobnobbing with Saudi Prince Alwaleed bin Talal—convinced the latter to trade $600 million for shareholder-rights, Bangladesh’s Depardes reported in June 2004. He now has 3.6%. Aziz later headed Citicorp Islamic Bank, and maybe initiated Citi’s supposedly prospering Shari’a finance business.

But who controls whom? Today, doubling as Pakistan’s Finance and Prime Ministers, Aziz supports “Shariah compliant banking,” which the State Bank of Pakistan (SBP) in 2005 strategically planned to promote “as a parallel system.” He’s discussed its potential with Bahraini Bank Alsalam CEO, Yousif Taqi.

Likewise, bin Talal wants to dominate U.S. businesses. Rather than boycott, “Arabs …stand more to benefit from maintaining trade ties with the US because the trade balance … is in our favor,” he told Saudi Arabia’s Arab News daily on May 1, 2002.

Both men’s ideas fit the 1928 cloth of Muslim Brotherhood founder Hassan al-Banna, whose disciples tailor-made it into shari’a finance—specifically to supersede Western banks, markets and democracies through “parallel economic” and financial institutions. It rests on shari’a—the 7th Century Qur’anic legal code developed by Mohammed’s followers—which clerics consider one, indivisible package, by definition seeking global Islamic supremacy and law.

With wife-beating, stoning women, dismembering thieves, hanging homosexuals, supremacist ideology and an annual head tax (jizya) on non-Muslim subjects—shari’a also commands Muslims to fund jihad (financial jihad—al Jihad bi-al-Mal). As in Qur’an 61:10-11, “strive for the cause of Allah with your wealth and your lives….” and Qur’an 49:15. “Financial Jihad [is]…more important…than self-sacrificing,” says Saudi cleric and Muslim Brother Hamud bin Uqla al-Shuaibi.

The 1982 Muslim Brotherhood document, “Towards a Worldwide Strategy for Islamic Policy”—discovered by Swiss police in November 2001 and known as the Project—maps al-Banna’s plan. His successors, and author MB spiritual leader Yusuf Qaradawi, Swiss authorities say, order Muslims to engage “economic institutions adequate to support the cause financially” in directives covering roughly 14 pages, headlined “departure points.”

Elsewhere, Qaradawi decrees, “‘holy war’ is an Islamic duty… [F]ighting…is the Way of Allah for which zakat must be spent.” His 1999 “Fiqh az-Zakat” describes the “‘most deserving’ zakat and jihad, to rebuild Islamic society and state and to implement the Islamic way of life in the political, cultural and economic domains.”

Itself now partly owned by bin Talal, the Wall Street Journal in November 2007 ironically noted the tragedy that bad management and “blundering U.S. monetary policy” had again left Citigroup prey to Arab sheiks. Citi got its cash transfusion by granting “only” a 4.9% “minority stake—and no board seats—magically for 0.1% under the 5% necessitating U.S. Federal Reserve Board approval.

The Fed should intervene anyway—given the avid and ongoing, apparent UAE observance of zakat and jihad directives from Muslim Brotherhood leaders like Qaradawi:

The UAE banks wired most of the funds for the 9/11 attacks.

In 2006, UAE donated $100 million to house Palestinian Authority prisoners and suicide bombers’ families, named for the late father of the current UAE president, who over 30 years donated millions to PLO, Hamas and Islamic Jihad terror.

Hamas in July 2005, thanked Al-Nahayan’s “sisterly UAE” for its “limitless [financial] support,” and “aid for our Mujahid,” in other words, Hamas jihadist “charitable societies.”

The Palestinian Authority in May 2005 itemized millions of additional UAE U.S.-dollar aid, including $3 million paid directly to the Al Aqsa Intifada Fund.

UAE president Sheikh Khalifa Bin Zayed Bin Sultan Al-Nahayan’s late, terror-financier father also “owned the infamous [global] Bank of Commerce and Credit International” (BCCI)—which bilked depositors of billions before being shuttered in 1991; funded terrorist groups, states and projects like Hezbollah, al Qaeda, Syria, Iran and Pakistani nuclear bomb manufacturing; and was created “to help the world of Islam, and [as] the best way to fight the evil influence of the Zionists,” as noted by Rachel Ehrenfeld in Evil Money (Harper Collins, 1992, pp. 160, 164-5, 169-70).

In October 2007, Dubai violated World Trade Organization (WTO) rules—banning the Israelis from the Federation of International Freight Forwarders and Customs Clearing Agents world congress. Dubai Ports World and its government holding company prohibit trade with Israel.

In 2003, the UAE established a federal agency specifically to collect zakat on government tax revenues from “companies listed on the Dubai Financial Market and Abu Dhabi Securities Market… oil-producing companies and branches of foreign banks,” obviously including U.S. oil companies and banks. This year alone, the UAE zakat tax agency collected an estimated $13.5 billion.

In what dark corner are U.S. legislators, Fed and securities market regulators asleep?
__________
Alyssa A. Lappen, a Senior Fellow at the American Center for Democracy, is a former Senior Editor of Institutional Investor, Working Woman and Corporate Finance, and a former Associate Editor of Forbes.

Lies of the Nixon Center

Whitewashing the Muslim Brotherhood
by Alyssa A. Lappen
FrontPageMagazine | Nov. 15, 2007

On the wall over my desk hangs an amusing trophy from the late, disgraced former President, Richard M. Nixon, whose lies about Watergate ultimately forced him from office. I framed Nixon’s letter–extolling secretive textile magnate Roger Milliken as one of America’s greatest businessmen–beside the May 1989 Forbes piece in which I also reported on the suitcases of cash Milliken gave to both Nixon presidential campaigns.

On October 19, 2006, I encountered a liar rivaling Nixon–ironically then a “senior fellow” at Washington’s Nixon Center. Also then a consultant to ABC News and the U.S. Defense Department (DOD), Alexis Debat appeared at New York University Law School’s Center on Law and Security on an “expert” panel on the Muslim Brotherhood. Debat claimed he was writing “a book on the Muslim Brotherhood,” reportedly with an enormous, indirect DOD grant, through the Center for Strategic and Budgetary Assessments (CSBA) headed by former DOD analyst Andrew Krepinevich.

Masquerading as a Sorbonne Ph.D. and former French Defense Ministry adviser, Debat simultaneously made the most preposterous claims. “Let’s stop hyperventilating about the Muslim Brotherhood,” he said, adding, “I hear the same things in a [British] church as I hear in a mosque”–despite frequent, recurrent incitements emanating from Islamic mosques, centers and schools, including myriad tapes, textbooks, and other media.

“Islam is a source of enlightenment,” Debat said, calling the Muslim Brotherhood “chiefly a ‘political movement, not a party,”–a “liberation” movement, and a “highly pragmatic” prospective “leader in Egypt.”

As was obvious from his foolish remarks, Debat was no Muslim Brotherhood “expert.” Indeed, in September 2002 Agence France Presse had reported, the French Defense Ministry never employed Debat in any capacity–a fact further corroborated by terror expert Jean Charles Brisard, in a Sept. 26, 2007 email. Moreover, Debat never received a Sorbonne Ph.D.

Responding to my Oct. 23, 2006 American Thinker report, Debat falsely complained of “misquotes and distortions,” which I easily refuted. NYU’s Center for Law and Security didn’t publish a recording–which would have been too embarrassing.

Events quickly put the lie to Debat’s nonsense, as my colleague Patrick Poole noted in February 2007. Continue reading “Lies of the Nixon Center” →

Shari’a finance

by Alyssa A. Lappen
FrontPage Magazine | Nov. 14, 2007

In October, Abu Dhabi Prince Nahayan Mabarak al-Nahayan advertised his ultra-conservative sheikdom’s openness “in this age of globalization,” and having had world trade “from ancient times” by welcoming 100 world-class Jewish intellectuals to the United Arab Emirates (UAE) second biennial “Festival of Thinkers.” The UAE higher education minister controls 90%-plus of UAE crude and natural gas reserves–and wants good press for planned UAE cultural, science, technology and education institutions.

Also in October, shari’a finance gurus lobbied U.S. bankers at two Islamic finance conferences “to access more Islamic investment opportunities” and create more shari’a compliant products and new Islamic banks. Shari’a is “the path of Allah” explained “scholar” Nizam Yaquby obliquely at first, the Oct. 24 and 25 “Islamic Finance in North America” meeting, thus convincing many U.S. bankers that Islamic economics dates to Muhammad.

However, accepting “shari’a finance” is like swallowing double-edged swords. U.S. politicians, businessmen and regulators should scrutinize–and disclose–the diplomatic and economic weapons that costly oil bestows on erstwhile allies. Muslim clerics consider shari’a–the 7th century Qur’an-based legal code developed by Muslim jurists after Muhammad–one indivisible package, including wife-beating, stoning women, hanging homosexuals, dismembering thieves, supremacist ideology–and funding terror. And shari’a clashes with secular, Constitution-based U.S. laws.

Moreover, Islamic finance is an “invented tradition” empowering Islamic radicals, writes University of Southern California King Faisal Professor of Islamic Thought, Timur Kuran, in Islam and Mammon: “Neither classical nor medieval Islamic civilization featured banks in the modern sense, let alone ‘Islamic banks’.” Muslim Brotherhood founder Hassan al-Banna concocted the idea in the 1920s to unite Muslims in one global Islamic nation (umma).

Finally, Federal Reserve Board officials admit to not understanding shari’a finance. For example, “[W]e are certainly in no position to take a stance on issues of shari’a interpretation,” said New York Federal Reserve executive vice president William Rutledge on April 19, 2005 to the Arab Bankers Association of North America (ABANA).

The Muslim Brotherhood designed dogma and Islamic finance to spread shari’a–seeking ultimate global supremacy over daily life, individual, political and religious freedom. Shari’a mandates that Muslims fund jihad (financial jihad–al Jihad bi-al-Mal). Qur’an 61:10-11, “strive for the cause of Allah with your wealth and your lives….” And Qur’an 49:15, “(true) believers are only those who…strive with their wealth and their lives for the cause of Allah.”

“Financial Jihad [is]…more important…than self-sacrificing,” says Saudi Islamic cleric and Muslim Brother Hamud bin Uqla al-Shuaibi. Muslim Brotherhood spiritual chief Yusuf Qaradawi decrees, “Declaring holy war…is an Islamic duty… [F]ighting…is the Way of Allah for which zakat [charity] must be spent.”

In 2006, UAE donated $100 million to house Palestinian Authority prisoners and families of suicide bombers–and honor UAE president Sheikh Khalifa Bin Zayed Bin Sultan Al-Nahayan, whose late father, over 30 years contributed millions for PLO, Hamas and Islamic Jihad terror. On July 27, 2005, Hamas thanked Al-Nahayan’s “sisterly UAE… for its ‘limitless [financial] support’,” and “aid for our Mujahid,” in other words, Hamas jihadist “charitable societies.”

UAE’s Bourse Dubai stock exchange recently requested approval to buy control of NASDAQ, 52% of London’s Stock Exchange (LSE) and 47.6% of OMX (Nordic exchange)–ten months after Bahrain’s Accounting and Auditing Organization for Islamic Financial Institutions (AAIOFI) certified its “Islamic ‘purity’,” designating it the world’s first “shari’a compliant” market.

AAOIFI’s members and shari’a board include Saudi Arabia’s Dallah Al-Baraka Group, al-Rajhi Banking & Investment Corporation and Kuwait Finance House–all implicated in al Qaeda and other terror funding, according to former national counter-terror coordinator Richard Clarke. Other board members are the Islamic Development Bank, also known as the Bank of the Intifada for funding families of suicide bombers, whose principal owners are Saudi Arabia, Iran, Lybia and Egypt, and not one, but two U.S.-sanctioned terror states, Sudan and Iran. Islamic finance experts consider AAOIFI fatwas standards to which all shari’a banks and products, even in the U.S., must adhere. But UAE’s showcase Bourse on Oct. 22, 2007 denied its Islamic “purity” to the Partnership for New York City.

Dubai banned Israel’s delegation from the October Federation of International Freight Forwarders and Customs Clearing Agents world congress. Dubai Ports World and its government holding company prohibit trade with Israel. UAE banks wired most funding for the 9/11 attacks. Saudi Arabia boycotts Israel, despite promising in 2005 to stop, before joining the World Trade Organization (WTO).

Shari’a designates lying “one of the ugliest and most disgusting of sins.” Alas, lying is “permissible”–even encouraged–in innumerable circumstances. Sufi Imam Abu Hamid Mohammed ibn Mohammed al-Ghazzali (1058-1111) instructed followers, if one could achieve a praiseworthy “aim by lying but not by telling the truth, … [it is] obligatory to lie if the goal is obligatory,” according to Nuh Ha Mim Keller’s Reliance of the Traveller.

Imposing shari’a–by proselytizing (da’wa) or jihad war–is obligatory.

U.S. banking and investment laws guarantee individual property rights, require full disclosure, and prohibit criminal or terrorist activities. Western bankers and businessmen, however, oblivious to shari’a and financial jihad history, clamor for Muslim petrodollars (supposed surpluses from overextended Middle Eastern exchanges) pouring into U.S. markets.

Former Goldman Sachs trader and Birthright Israel supporter Daniel Och, for example, plans to sell 9.9% of Och-Ziff Capital Management to Dubai International Capital, which on Nov. 6 also acquired Europe’s biggest diagnostic imaging company from Britain’s Bridgepoint private equity fund.

But DIC chief executive Sameer alAnsari sits on the board of Palestine Children Relief Fund, a U.S.-based Palestinian “charity” reportedly tired to the shuttered Holy Land Foundation, Global Relief Foundation, and the International Islamic Relief Organization (IIRO)–which have all been federally investigated for funding Muslim Brotherhood terror groups al Qaeda, Egyptian Islamic Jihad and Hamas.

Buyers and sellers, beware.

Alyssa A. Lappen, a former senior editor of Institutional Investor, Working Woman and Corporate Finance, is a senior fellow at the American Center for Democracy. Her website is https://www.alyssaalappen.org.

Tithing for Terrorists

Financing Jihad
by Rachel Ehrenfeld and Alyssa A. Lappen
National Review Online | Oct. 12, 2007

“Governments have political considerations,” said senior N.Y. Senator Charles Schumer, upon learning in September that Bourse Dubai intends to buy 20 percent of NASDAQ. Republican Senator Bob Bennett of Utah countered, saying, “Dubai is making a purchase on the open market of an asset that’s for sale. What’s wrong with that?”

Senator Bennett is correct — buying portions or all of NASDAQ is perfectly legal. Moreover, no changes could be made to NASDAQ regulations without Securities and Exchange Commission (SEC) approval. But of concern is Bourse Dubai’s Islamic influence in the heart of the U.S. markets and economy. And the deliberate United Arab Emirates (UAE) devaluation of the dollar since December 2006 is vastly increasing their purchasing power.

Bourse Dubai began operating as the world’s first fully shar’ia-compliant stock exchange, in December 2006. Sharia compliance requires companies traded to also be sharia-compliant, and establishes a special tax on all the others to “purify” them.

The Islamic “purity” (Tazkiya) of Bourse Dubai was approved by the sharia board of the 1991-Bahrain-registered and based Accounting and Auditing Organization for Islamic Financial Institutions (AAIOFI). The AAIOFI laid the groundwork for the global Islamic financial network and regulates all Islamic financial organizations and products, including Bourse Dubai.

Like every Muslim country, the United Arab Emirates (UAE) collects mandatory Islamic charity (Zakat– the Third Pillar of Islam — an annual wealth tax), of about 2.5-percent from Muslim institutions and companies. Being non-Muslims, foreign banks and oil companies theoretically don’t pay Zakat. But foreign banks and oil companies in fact do pay 20 percent of their profits, but rather than Zakat, these mandatory payments are called “tax.”

Zakat we are told, is to help the needy. However, Muslim Brotherhood spiritual leader, Yusuf Qaradawi decrees, “Declaring holy war…is an Islamic duty, and fighting ….is the Way of Allah for which Zakat must be spent.” In his 1999 publication, “Fiqh az-Zakat,” Qaradawi adds,

The most important form of jihad today is serious, purposefully organized work to rebuild Islamic society and state and to implement the Islamic way of life in the political, cultural and economic domains. This is certainly most deserving of Zakat.

And as previously demonstrated time and again, Muslim jihadist-terror organizations are indeed prominent Zakat recipients.

In 2003, the UAE established an independent federal agency collecting Zakat on government tax revenues from “companies listed on the Dubai Financial Market and Abu Dhabi Securities Market…, oil-producing companies and branches of foreign banks.” In 2007 these revenues were estimated at $13.5 billion.

Saudi Arabia, for example collects $18 billion a year in Zakat — which includes the 20-percent flat corporation tax from foreign companies. The Saudis claim that the money collected develops their infrastructure. However, two thirds of Saudi men are unemployed and the infrastructure is crumbling. Yet, since the 1970s, the Saudi government has spent more than $100 billion to build thousands of mosques, Islamic centers and Islamic studies programs in universities worldwide.

On April 30, 2007 the Organization of the Islamic Conference (OIC) — which also initiated Muslim riots after the Danish Mohammed cartoon publications — established the clerical International Commission for Zakat. The ICZ replaces more than 20,000 organizations that previously collected the money. The Islamic clerics’ centralized “expert committee” in Malaysia now supervises and distributes Zakat funds globally. The new committee will shortly distribute roughly $2 billion collected over Ramadan this year to Muslim charities.

Historical Development
The origins of all Islamic economic and financial regulatory organizations, including the AAIOFI’s date back to the 1920s invention of Muslim Brotherhood (MB) founder Hassan Al-Banna, who designed political, economic, and financial infrastructures to enable Muslims to fulfill a key form of jihad mandated by the Koran (Al Jihad bi-al-Mal — financial jihad)—“you… should strive for the cause of Allah with your wealth and your lives….” 61:10-11.

He viewed finance as a critical weapon to undermine the infidels “and…work towards establishing an Islamic rule on earth.” To do that, he understood that Muslims must create an independent Islamic financial system to parallel and later supersede the Western economy.

Al-Banna’s contemporaries and successors (such as the late Sayed Qutb and current Yusuf Qaradawi) set his theories and practices into motion, developing sharia-based terminology and mechanisms to advance the financial jihad — “Islamic economics,” finance and banking.

Early 1930s MB attempts to establish Islamic banking in India failed. Egyptian president Gamal Abdul Nasser shut down the second attempt, in 1964, after only one year, later arresting and expelling the Muslim Brothers for attempts to kill him. Saudi Arabia welcomed this new wave Egyptian dissidents, as did King Saud bin Abdul Aziz earlier waves in 1954 and 1961. Their ideas so appealed to him and his clerics that in 1961, Saud funded the MB’s establishment of the Islamic University in Medina to proselytize their fundamentalist Islamic ideology, especially to foreign students.

In 1962, the MB convinced the king to launch a global financial joint venture, which became the cornerstone and engine to spread Islam worldwide. This venture created charitable foundations, which the MB oversees.

The first were the Muslim World League (MWL) and Rabitta al-Alam al-Islami, uniting Islamic radicals from 22 nations and spinning a web of many other charities with hundreds of offices worldwide. In 1978, the kingdom backed another MB initiative, the International Islamic Relief Organization (IIRO), which with all these “charities” are implicated for funding al Qaeda, the 9/11 attacks, Hamas and others.

These “charities” are used to advance the political agenda set forth by the MB. “I don’t like this word “donations,” Qaradawi told BBC Panorama on July 30, 2006.

“I like to call it jihad with money, because God has ordered us to fight enemies with our lives and our money.”

In 1969, the Saudis convened Arab and Muslim states to unify the “struggle for Islam,” and have, ever since, been the OIC’s major sponsor. The 56 OIC members include Iran, Sudan, and Syria. Based in Jeddah “pending the liberation of Jerusalem,” the OIC charter mandates and coordinates “support [of] the struggle of the Palestinian people…recovering their rights and liberating their occupied territories.”

The OIC charter includes all the MB principles. Its first international undertaking in 1973 was to establish the Islamic Development Bank “in accordance with the principles of the Shariah,” as prescribed by the MB, and launching the fast growing petrodollar-based Islamic financing market. The IDB, more a development than commercial bank, was established largely “to promote Islamic banking worldwide.”

“[A]n Islamic organization must serve God…and ultimately sustain ….the growth and advancement of the Islamic way of life,” writes Nasser M. Suleiman in Corporate Governance in “Islamic Banking.”

And so it has done — as noted in a 1991 U.S. Library of Congress report on Sudan’s Faisal Islamic Bank, established in 1977 under Sudan’s Faisal Islamic Bank Act, by Saudi prince Mohammed ibn Faisal Al Saud, and initiated and managed by local Muslim Brotherhood members and their party the National Islamic Front. Soon other political groups and parties formed their own Islamic banks. Together, Sudanese Islamic banks then acquired 20-percent of the country’s deposits — providing the financial basis to turn Sudan into an Islamic state in 1983, and promoting the Islamic governmental policies to date.

From 1975 to 2005, the IDB approved over $46 billion in funding to Muslim countries, ostensibly to develop their economic and educational infrastructures, but effected little regional economic impact. Their educational efforts, however, paid huge yields — via the rapid and significant spread of radical Islam worldwide.

Moreover, in 2001 alone, the IDB transferred $538 million raised publicly by Saudi and Gulf royal telethons to support the Palestinian Intifada and families of Palestinian suicide bombers. The IDB has also channeled U.N. funds to Hamas, as documented by bank records discovered in the West Bank and Gaza. And yet the IDB received U.N. observer status in 2007.

The IDB and other Islamic financial successes encouraged MB leaders to formalize al-Banna’s vision. In 1977 and 1982, they convened in Lugano, Switzerland to chart a master plan to co-opt Western economic foundations — capitalism and democracy — in a treatise entitled “Towards a Worldwide Strategy for Islamic Policy,” also known as the Project. MB spiritual leader Qaradawi wrote the explicit document, dated Dec. 1, 1982.

The 12-point strategy includes diktats to “establish the Islamic state and gradual, parallel work to control local power centers…using institutional work as means to this end.” This requires “special Islamic economic, social and other institutions,” and “the necessary economic institutions to provide financial support” to spread fundamentalist Islam.

Consequently, the IDB founded the AAOIFI in 1990. AAOIFI members include the Saudi Dallah Al-Baraka Group, al-Rajhi Banking & Investment Corporation, and Kuwait Finance House; each of its members were implicated in funding al Qaeda and other MB offspring according to Richard Clarke, former counterterrorism chief . The 18 AAOIFI members also include Iran and Sudan, both on the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) sanctions list; Iran is an U.S. State Department-designated terror sponsoring state, too. UAE banks wired half of the funding for the 9/11 attacks

In addition, the “de facto Islamic Central Bank,” the Islamic Financial Services Board (IFSB), was established in 2002 in Kuala Lumpur “to absorb the 11 September shock and reinforce the stability of Islamic finance.” Chairing the organizers’ meeting, then Malaysian Prime Minister Mohamed Mahathir stated, “A universal Islamic banking system is a jihad worth pursuing to abolish this slavery [to the West].”

IFSB members include the central banks of Iran, Sudan, and Syria (all designated state sponsors of terrorism) and the Palestinian Monetary Authority (PMA), which is widely documented since its inception as a terror funder.

According to DAG and Islamic Chamber of Commerce and Industry (ICCI) President Saleh Kamel, more than 400 Islamic financial institutions currently operate in 75 countries. They now hold more than $800 billion in assets — growing 15 percent annually. HSBC, UBS, J.P. Morgan Chase, Deutsche Bank, Lloyds TSB and BNP Paribas, are but a few that offer Islamic banking and sharia-based products to their Western clients — and promote them as “ethical investments.”

Rapidly rising oil prices fill the coffers of Islamic banks, the expansion of sharia economics and financial jihad — threatening the U.S. and entire non-Muslim world, in real-time.

Indeed, shortly after 9/11, Osama bin Laden called on Muslims “…to concentrate on hitting the U.S. economy through all possible means,” going on to say …. Look for the key pillars of the U.S. economy. Strike the key pillars of the enemy again and again and they will….”

The pending NASDAQ acquisition, purchases of over 52 percent of the London Stock Exchange (LSE) and 47.6-percent of OMX (Nordic exchange), and the vigorous expansion of sharia finance, all steadily implement al Banna’s plan to spread and ultimately impose sharia worldwide.

Yet, still unaware of the implications of importing sharia finance, hoards of American bankers will later this month convene at New York’s Islamic Finance Summit at the Helmsley (Oct. 29-30, 2007) — which will focus on “Innovations in Sharia compliant Finance.”

In view of the facts, Senator Schumer has a valid point.

— Rachel Ehrenfeld, author of Funding Evil, is director of the American Center of Democracy, and a member of the board of the Committee for the Present Danger. Alyssa A. Lappen is a senior fellow at ACD.