Is Treasury’s support of AIG’s Shariah-promoting subsidiaries Constitutional?

How is it possible that the U.S. Government allows AIG to funnel more than $1 billion to companies that promote Shariah–the very Islamic legal system that calls for jihad against apostates and infidels?  

The Law Offices of David Yerushalmi, P.C.– the General Counsel for the Center for Security Policy– together with the Thomas More Law Center, filed a motion for summary judgment on Monday, June 7, 2010, on behalf of Kevin Murray against the Treasury Department and the FED in the federal lawsuit pending in the Eastern District of Michigan. The lawsuit, captioned Murray v. Geithner et al. was brought by attorneys David Yerushalmi and Robert Muise, representing the plaintiff, Kevin Murray, a taxpayer and former combat Marine who served in Iraq. The federal lawsuit alleges that the U.S. government’s takeover and financial bailout of AIG was in violation of the Establishment Clause of the First Amendment.

Specifically, at the time of the government bailout (beginning in September 2008 and continuing to the present), AIG was (and still is) the world leader in promoting Shariah-compliant insurance products. Shariah is Islamic law, and it is the identical legal doctrine that demands capital punishment for apostasy and blasphemy and provides the legal and political mandates for global jihad followed religiously by the world’s Muslim terrorists. By propping up AIG with tax payer funds, the U.S. government is directly and indirectly promoting Islam and, more troubling, Shariah.

In May 2009, Judge Lawrence Zatkoff rejected the government’s motion to dismiss the complaint and later rebuffed the defendants’ efforts to stay the proceeding so the government lawyers could take an extraordinary appeal to the Sixth Circuit Court of Appeals.  The court then set the ground rules for discovery and granted the parties until May 2010 to conduct discovery.

After a year of document requests, depositions of current and former government witnesses, and three separate subpoenas issued to AIG and the New York Federal Reserve Board, Messrs. Yerushalmi and Muise filed Plaintiff’s motion for summary judgment this past Monday, arguing that the undisputed facts demonstrate that the government, through its absolute control and ownership of AIG, and with tens of billions of tax payer dollars, have directly and indirectly promoted and supported Shariah as a religious legal doctrine.  What makes this case all the more egregious is that this doctrine-Shariah-also happens to be the underlying legal and military doctrine animating jihad against the West by Muslims from the Middle East, Asia, Russia, Africa, and even right here at home.  Each and every one of the domestic and foreign jihad terrorists have proclaimed their allegiance to Shariah and its call for “jihad against apostates and infidels.”  Two experts on Shariah, Shariah-compliant finance, and jihad testified at length through affidavits in support of plaintiff’s case. The government could not-and did not-oppose this expert testimony with any contrary evidence.

A year’s worth of discovery uncovered the following facts in addition to what was known from the public record:

• AIG has five wholly-owned subsidiaries which promote and practice Shariah in Saudi Arabia, Malaysia, Bahrain, and the U.S.
• These Shariah-compliant companies employ or otherwise retain the services of Shariah authorities to tell them how to conduct their business according to Shariah, including the Shariah-compliant charities to which these AIG subsidiaries must contribute.
• The government places absolutely no controls on how its billions are used by the Shariah-compliant companies or to whom they support with their “zakat” (‘charitable’) dollars. Moreover, these companies all accept Shariah’s mandate to support jihad with zakat insofar as they abide by the authoritative rulings of the world’s leading Shariah authorities.
• Over one billion taxpayer dollars have flowed through AIG’s headquarters into supporting AIG’s Shariah businesses worldwide.

• The government has actively promoted Shariah and Shariah-compliant finance in many ways and venues:
  • The Treasury Department has published, edited, and updated articles about Shariah-compliant finance, which essentially promote Islamic law uncritically.
  • The Treasury Department has created and staffed a position called the Islamic Finance Scholar-in Residence.  No other religious law is so honored.
  • Published presentations by senior Treasury Department officials lauding Shariah-compliant finance and stating explicitly that the U.S. government “places significant importance on promoting . . . Islamic finance” and has “recently deepened our engagement in Islamic finance in a number of ways,” including a “call[] for harmonization of Shari’a standards at the national and international levels.“
  • After the AIG bailout, the Treasury Department co-sponsored a half-day conference called “Islamic Finance 101” for government policy makers which was in effect a cheerleading program to promote Shariah and Shariah-compliant finance.

Mr. Yerushalmi remarked: “It is one thing that our government felt compelled to bail out AIG after its fortunes were destroyed due to the company’s own recklessness and bad acts. It is quite another thing to use U.S. taxpayer dollars to promote and support AIG’s Shariah businesses-all of which don’t just sell Shariah products to the Muslim world, but actively promote Shariah as the best, most ethical way of life. Indeed, the Shariah authorities relied upon by AIG’s Shariah Supervisory Committees actively promote jihad-and by jihad we mean kinetic war against the infidel West.”

Mr. Muise, senior trial attorney for the Thomas More Law Center and co-lead counsel in this case, made the additional point that “We have not only traced taxpayer money to support Shariah, we have found explicit public statements by senior Treasury officials actually telling the world that it is U.S. government policy to support Shariah in the form of Islamic finance and even ‘call[ing] for harmonization of Shari’ah’s standards.’ Since when is it our government’s position to involve itself in the internal theological debates surrounding religious laws?”

The government defendants also filed a motion for summary judgment arguing that whatever aid was provided to AIG’s Shariah businesses, it was both unintended and de minimus.

Richard Thompson, head of the Thomas More Law Center, added, “It’s outrageous that the federal government is the owner of a corporation engaged in a business with interests adverse to the United States.  We filed this lawsuit not only to defend constitutional principles, but also to defend our national security.  It’s clear we can’t leave the job of protecting America to the Washington politicians.”

The parties will now continue to brief the issue with cross-opposition  and reply briefs and then the court will decide.  Any decision is likely to end up on appeal at the Sixth Circuit Court of Appeals.  If the government loses, it is quite possible the case could be heard by the Supreme Court.

David Yerushalmi has been practicing law for more than 26 years. He is a litigator specializing in securities law, public policy relating to national security, and public interest law. Mr. Yerushalmi is licensed and practices in Washington D.C., New York, California, and Arizona and currently serves as General Counsel to the Center for Security Policy in Washington, D.C., one of the nation’s leading national security think tanks founded by former Reagan administration official Frank J. Gaffney, Jr., and has been Of Counsel and Senior Legal Advisor for Policy Affairs to the Institute for Advanced Strategic & Political Studies (Potomac, Maryland) since 1988.