A federal judge in Michigan has declined to dismiss an ex-Marine's lawsuit that insurance giant AIG is using tax dollars to promote Islamic Sharia law and charities that may be funneling money to terrorist organizations.
Just when you thought the government's massive bailout of AIG couldn't get more complicated or controversial.
The facts of the case "raise a question of whether the government's involvement with AIG has created the effect of promoting religion and sufficiently raise Plaintiff's claim beyond the speculative level," U.S. Dist. Judge Lawrence P. Zatkoff ruled.
The judge's ruling, a surprise to many legal scholars who think the suit will never go to trial, adds a troubling religious dimension to an already troubling economic crisis. It also shines a spotlight on Sharia-compliant financing, a growing part of the $1 trillion Islamic banking industry.
Sharia, or Islamic law, encourages trade and investment, but bans interest and prohibits investments in certain areas such as gambling, alcohol, pornography, abortion, human cloning, conventional banks or insurers, and most forms of entertainment. Under Sharia, making money from money, such as charging interest, is usury and therefore not permitted. Western banks and investment companies have established Sharia-compliant accounts overseen by imams and Islamic scholars.
According to the lawsuit, filed by the conservative Christian Thomas More Law Center, at least a portion of AIG's $40 billion federal bailout has been used to support Sharia-compliant financial products. The suit claims that violates the First Amendment's establishment clause. "It is outrageous that AIG has been using taxpayer money to promote Islam and Shariah law, which potentially provides support for terrorist activities aimed at killing Americans," Richard Thompson, President and Chief Counsel of the Thomas More Law Center, said in a statement.
The federal judge hasn't ruled on the merits of the case, but he did acknowledge that "at least two of AIG's subsidiary companies practice Sharia-compliant financing, one of which was unveiled after the influx of government cash." He also noted "That after the government acquired a majority interest in AIG and contributed substantial funds to AIG for operational purposes, the government co-sponsored a forum entitled "Islamic Finance 101."
Many legal experts doubt that such actions constitute a violation of church (or mosque) and state.
"The government no more cares about advancing Sharia through the AIG bailout than my local Ralphs supermarket cares about advancing kosher laws by selling products that are certified kosher," UCLA law professor Eugene Volokh, who expects the case to be thrown out, wrote in his Volokh Conspiracy blog.
Robert Tuttle, constitutional law professor at George Washington University, told Fox News that he doubts the case will go to trial: "The question is whether the government has funded religion, not whether the religion is good or bad that the government has funded. Then the next question is whether the government is responsible for what AIG has done. I can't imagine any court saying, under existing law, that the government will be responsible for what AIG does."
Anti-Islam conspiracy theorists will have a field day with this one, regardless of what happens to the lawsuit. But the case does raise some interesting questions about the application of Sharia law in western democracies and economies.
Are companies that pursue religious clients endorsing that religion? Can and should every faith group have its own financial products? Can democracy accommodate any aspect of Sharia? Could capitalism survive without interest?
For now, I'll go with On Faith panelist and Interfaith Alliance chief Welton Gaddy's bottom line on Sharia in the West: "If a conflict arises between American law and religious laws, the Constitution prevails."
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