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Jewish World Review Oct. 23, 2007 / 11 Mar-Cheshvan 5768 Shari'a-friendly investments By Caroline B. Glick
http://www.JewishWorldReview.com |
Monday the verdict in the largest terror finance case in US history was read in a
Texas courtroom. The case against the Holyland Foundation for Relief and Development
and five of its principal leaders — which ended in a mistrial — was predicated on
the interconnection between terrorism and international finance. The five men were
accused of financing Hamas by transferring millions of dollars to organizations in
Judea, Samaria and Gaza that served as distributors of charitable or zakat
contributions to Hamas members and entities.
Perhaps the greatest problem with the term "war on terror" is that it confuses both
the public and those charged with prosecuting the war on all levels about the nature
of the enemy we face. The jihadists who seek to dominate the world in the name of
Islam are not merely involved in violent activities. Organizations like Hamas,
Hizbullah and al-Qaida devote the majority of their efforts to spreading the message
of jihad by proselytizing fellow Muslims through propaganda, educational and welfare
activities. These actions are vital for building popular support both for their
terror activities and for their larger political goals.
Essential to the aims of the jihadists is the Muslim sacrament of zakat. Zakat, one
of the pillars of Islam, requires Muslims to donate 2.5 percent of their incomes to
charity. As the indictment in the Holyland Foundation case showed, most of the money
that the five defendants transferred to Hamas was transferred through zakat
committees in Palestinian cities in Judea, Samaria and Gaza. These committees then
transferred the monies to Hamas terrorists, their family members, political leaders
and terror cells.
LABELING the Holyland Foundation a terrorist entity and freezing its funds was one
of the first concrete actions that the Bush administration took in the aftermath of
the September 11 attacks. The move was a turning point in the US perception of the
nature of terror organizations.
If until September 11 the US related to terror groups as essentially cell-based
armed groups, since the attacks on Washington and New York, curbing terror funding
has been a central pillar of the US war effort. And targeting supposedly charitable
organizations registered in the US, which like the Holyland Foundation served as
conduits for money laundering and terror financing was one of the first courses of
action that the Bush administration embarked on in its campaign against the global
jihadist network.
The targeting of these organizations has been strongly criticized by self-styled
Muslim civil rights organizations which protest the government's actions by claiming
they are anti-Muslim. Some of the main organizations that have adopted this line
were themselves identified as unindicted co-conspirators in the Holyland Foundation
case. Specifically, the Council on American-Islamic Relations and the Islamic
Society of North America, which both US government agencies and the US media have
treated as credible groups were named in the Holyland indictment as unindicted
co-conspirators with Hamas's US front group.
THE ESTABLISHMENT of charitable front organizations is merely one of many ways in
which jihadist groups have raised funds. Today terror analysts fear that a new means
has been found to skirt anti-terror laws and finance terror while rendering the
financial systems of the West vulnerable to Islamic manipulation and control. The
fear is that through the burgeoning presence of Shari'a-compliant investment houses,
jihadist groups and financiers will be able to raise enormous sums of money to fund
their nefarious activities aimed at global domination.
Islamic clerics tout Shari'a-finance as one of the central components of Islam. But
this is untrue. Shari'a economics did not exist until the founders of the Muslim
Brotherhood Maulana Abul Ala Mawdudi and Sayyd Qutb invented it them in the 1940s
and 1950s. As Alex Alexiev explained in a recent paper on the subject published by
the Center for Security Policy in Washington, DC, the purpose of Shari'a economics
was to mobilize Muslim support for radical Islam by promoting Muslim exclusivity and
separatism. That is, the purpose of Shari'a finance is religious and political, not
financial.
Shari'a finance became a significant factor in the Muslim world in the aftermath of
the 1973 OPEC oil embargo which raised Arab oil revenues a hundredfold in under a
decade. The first Shari'a-compliant banks were established in 1975 with the opening
of the Saudi-controlled Islamic Development Bank and the Islamic Bank of Dubai.
Today the International Monetary Fund estimates that there are some 300
Shari'a-compliant banks operating in some 75 countries. Arab estimates place the
number at 400. Close to a trillion dollars are under Shari'a-compliant management.
ASIDE FROM these Shari'a-based financial institutions in the Islamic world, the new
trend in the West is for Western financial institutions to offer Shari'a-compliant
investment opportunities. So excited is Britain, for instance about the financial
benefit to be gained by attracting oil-rich Islamic investors that in January
Britain's Treasury Minister Ed Balls announced his government's intention to turn
London into the center of global Islamic finance.
Given the religious rather than financial aim of Shari'a-compliant investing, it
isn't surprising that Shari'a-compliant investments are little more than a word
game. Paying lip service to the Koranic prohibition on interest-based transactions
and risky investments, Mawdudi and Qutb invented various means to cover the fact
that Shari'a-compliant investments involve both interest payments and risk.
UNDERSTANDING that Shari'a-compliant investments are the same as regular
investments, banking and other financial institutions in the West that are naturally
interested in attracting Islamic investors have enthusiastically opened
Shari'a-compliant portfolios. Unfortunately, the banks' enthusiasm is raft with
security and perhaps even criminal implications.
In order for investments to be defined as Shari'a-compliant, they must receive the
approval of Shari'a advisors. Only certain Islamic entities are entitled to issue
religious rulings or fatwas that can recognize investments as Shari'a-compliant.
These entities include the Fiqh Academy in Jedda, Saudi Arabia, which is associated
with the Saudi-dominated Organization of the Islamic Conference (OIC); the European
Council for Fatwa Research, and the Fatwa Council of North America. All of these
entities are associated with the radical pro-jihadist Wahabi and Salafi schools of
Islam adhered to by groups such as al-Qaida and Hamas.
Similarly, the groups that these organizations spawned for the express purpose of
overseeing Shari'a-compliant investments and the people authorized and recognized as
Islamic authorities capable of declaring an investment Shari'a-compliant are
identified with political Islam and, in several cases with terror financing and
support. For instance, radical cleric and jihad ideologue Sheikh Yusuf Qaradawi is
recognized as an expert in Shari'a-compliant investments. So is Sheikh Muhammad Taqi
Usmani.
AS ALEXIEV notes, Usmani is a key official at the radical Deobandi madrassa Darul
Uloom in Karachi, Pakistan. The madrassa has trained thousands of Taliban and other
jihadist cadres. Usmani played a central role in convincing the Pakistani government
to declare Ahmadi Muslims apostates. This determination led to the murder of members
of the sect. Usmani was quoted in the Times of London on September 7 saying that
Muslims in the West "must live in peace" with their societies "until strong enough
to wage Jihad" against their fellow citizens. At that point, he said, they must
fight "to establish the supremacy of Islam."
These radicals, supported by jihad-supporting Islamic institutions constitute an
effective cartel in Shari'a-finance. Each serves as a Shari'a advisor to dozens of
financial institutions. The main problem here is not their personal enrichment -
which is enormous. The problem is that these men determine how to spend the 2.5
percent of revenues that are contributed to charity in fulfillment of the zakat
obligation. With a trillion dollars now invested in Shari'a-compliant investments,
the amount of money available for zakat is staggering.
Islamic financial kingpin Sheikh Saleh Kamel, a Saudi multi-billionaire, founder of
the Dallah al-Baraka Islamic banking group and alleged terror financier recently
suggested - with the full support of Qaradawi - that one central institution be
established that will distribute all zakat contributions from Shari'a-compliant
financial institutions.
As Rachel Ehrenfeld and Alyssa Lappen recently reported in The Washington Times,
their suggestion was adopted as policy when, "On April 30, the OIC…established the
clerical International Commission for Zakat, replacing more than 20,000
organizations that previously collected the money. [The] Islamic clerics' "expert
committee" in Malaysia now supervises and distributes those funds."
On October 24 and 25th, the New York law firm Gersten Savage will host a major
conference in New York on Shari'a-compliant investments.
MANY NEW YORK investment houses, banks and hedge funds have indicated their interest
in expanding their services to include Shari'a-compliant investments. These
organizations should carefully consider the likely moral and criminal implications
of enabling Shari'a advisors associated with radical Islamic theologians and a
foreign body on record for supporting terror, anti-Americanism and anti-Semitism to
determine both the composition of their investments and the utilization of 2.5
percent of the revenues stemming from those investments.
It may work out that by bringing what is essentially a cartel sympathetic to jihad
into their institutions, they will inadvertently be picking up the slack caused by
the shuttering of non-profits like the Holyland Foundation. Like the heads of
Islamic charities, these banks also will be held accountable for their actions.
JWR contributor Caroline B. Glick is the senior Middle East Fellow at the Center for Security Policy in Washington, DC and the deputy managing editor of The Jerusalem Post. Comment by clicking here.
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