December 29, 2008
Exclusive: What You Need to Know About Shariah-Complaint Finance
Editor’s note: Our readers know of the good work conducted by Rep. Sue Myrick’s (R-NC) Anti Terrorism Caucus. Recently, the Anti Terrorism Caucus prepared a background information letter for Members of Congress that describes, in basic terms, Shariah Finance and how it is gaining a foothold in America due to capital investment needs and the desire by businesses to sell to Islamic markets. The letter lays out several problems with Shariah Finance and uses examples to help explain these problems in common business terms; we recommend it highly to our readers. Here it is:
According to experts, the global market for Islamic Financial products in 2008 is worth over $1 Trillion and is expected to grow at 15-20% a year. Islamic financial products are likely to account for 50-60% of the total savings of the world’s 1.2 Billion Muslims in the next decade. The Islamic banking industry’s estimated growth is 20% through 2012.
Right now, about $88 Billion dollars in Shariah Compliant Funds are currently invested in the U.S.Businessmen look at these statistics and salivate over the potential of new markets and increased profits. American financial institutions loaded with liabilities and debt now consider Middle Eastern investors saviors due to the new sources of capital.
Blinded by dollar signs American businessmen are unaware that these Middle Eastern investors are more than happy to accommodate, thanks to the bargain prices they find for American real estate and businesses and thanks to the financial chaos on Wall Street.
They have made moves under the radar and now, for the first time ever, a number of Middle Eastern countries derived more revenue from their investments than from oil and gas.
What American businesses should be aware of is that many are now using their new economic power to force America to change the way it does business to comply with their religious beliefs, which is called “Shariah Compliant Finance.”
Shariah Compliant Finance (SCF) is based on a Shariah Law, which is a politicized and radical doctrine found not in the Koran but in man-made compilations of Muhammad’s life. (In fact, the Koran only says the word “Shariah” once and it isn’t referring to jurisprudence, but is just a word meaning “right path.”)
It doesn’t allow women to leave their house without their husband’s permission, it allows men to beat insubordinate wives, slavery is permitted and legitimate, adultery is punished by death, and homosexuals are to be killed, to name just a few.
Shariah Law is practiced by the most radical of Islamists, but they constantly work to convince much of the Islamic world that it is the one true way to end western culture and return to the proper ways of Islam.
The growth of Shariah followers allows these Islamists to have great economic power—power they are trying to use to co-opt the U.S. and the West. Their plan is to force American businesses to adopt to their backwards financial ideas, which will in turn sanitize their version of Islam and cover up their stone age family laws and human right abuses…the same abuses we saw in Afghanistan under the Taliban.
Currently they are trying to convince businesses that SCF is a safer alternative to the current U.S. economic system because SCF eliminates risk.
What they don’t say is that it also eliminates capitalism. SCF prohibits interest transactions, such as ATM fees or mortgage fees.
It prohibits uncertainty and speculation, such as futures trading.
It is also forbidden to invest or trade with businesses involved in commodities such as alcohol, pork products, and anything Shariah “scholars” deem “haram,” or forbidden.
SCF also requires business/banks who are engaged in Shariah transactions to contribute zakat, or a 2.5% donation to Muslim charity.
While this sounds good, al Qaeda was able to receive between $300 and $500 million from zakat contributors who used a web of charities and front companies to funnel money through Islamic banks.
We have also seen this in the U.S. as zakat was sent to the Holy Land Foundation, which is currently being prosecuted by the Department of Justice, and they in turn sent funds to Hamas.
Perhaps even scarier than a business that becomes SCF and unknowingly sends zakat funds to terrorists, thus causing the complete collapse of that business, is the fact that many countries are using Sovereign Wealth Funds, government funds, to buy up large tracks of real estate and businesses.
For instance, Abu Dhabi, the government, bought a 75% stake in the NYC Chrysler Building. If they decide the Chrysler building must be Shariah compliant, then all ATMs must be removed because they charge interest if you don't have the right bank card.
Also, all business tenants in the building would have to prove they are Shariah compliant and do no business related to futures trading, alcohol or pork products, etc. If they are not Shariah compliant, they could be evicted.
This is just an example, but countries and investors could hire radical SCF scholars to support their right to evict tenets and claim “religious freedoms” to do so.
Businesses should also be concerned that SCF requires a board of at least 3 Shariah scholars to certify their product as Shariah Compliant.
Many of the scholars band together to form groups and agencies and offer their services to businesses, and there are not very many scholars to choose from in the U.S. However, businesses will quickly learn that these scholars don’t merely look at the finished product.
Scholars have convinced businesses in order to be Shariah Compliant, they must certify products starting at the very beginning R&D stages.
These scholars, who could possibly advise a competing business adversary, get to see the businesses’ trade secrets and new products.
Smart businesses would require a non-disclosure agreement, but smart businesses probably wouldn’t know that under Shariah Law, during times of “jihad”, it is acceptable to lie to infidels.
So how do you know they won’t float the secrets to other businesses, or sell trade secrets to other nations? If that weren’t enough, Islamic banks who are Shariah Compliant are also working with “hawala” dealers.
Hawala is a system of informal money exchanges where there are no paper trails, but is built on trust. With no paper trail and no transparency, which looks like much of Wall Street today to the average person, it is extremely easy to do illicit transfers and launder money.
Businesses that have to use the same banks to sell their products and transfer funds back to the US could be getting the dirty money; but they can deal with that later when the FBI shows up.
The NY City Bar Association recently held a class on SCF. The class explained in great detail how Shariah finance works and used the current US financial crisis to promote and push Shariah finance because they said there was no risk involved, which as you can see isn't true.
The problem is this...America is strapped for cash thanks to our financial environment. Banks around the world have been shifting to Shariah compliance to get their funds, but now American manufacturers and businesses are starting to comply with Shariah finance to get Middle East funding and to sell to those markets.
We know this because one of the Islamic finance experts who presented said that he did a similar class in Texas and it was packed out with manufacturers wanting to learn how they can get Middle Eastern investment and how they can sell to them. He also said the Middle East is so rich with funds that either business can adapt to Shariah Finance or it will be forced upon them because of the sheer amount of dollars involved.
It is time we pulled our heads out of the ground and looked at the long-term consequences of our actions and not just see short term profits. Many are working in Congress to investigate Shariah Finance and Shariah Law as threats to our economic and political systems.
To understand Shariah Finance, you must understand that Islamic economic philosophy, formulated by Islamic scholars, applies to all aspects of life; not just religion. So their economic transactions cannot be separated from their religious beliefs, and that is why you must be aware of what they believe and the strings that come with these beliefs.
Andy Polk, author of this letter, is spokesman for the Anti Terrorism Caucus.
Editor’s note: Contact your Representative to find out if s/he is working on this vital issue, and where s/he stands on it. The future of your family and your country is at stake.
Courtesy FAMILY SECURITY MATTERS INC.