Trouble Brewing for AIG and Federal Government: Constitutional Challenge of AIG Bailout Allowed to Proceed
ANN ARBOR, MI – Proclaiming that times of crisis do not justify departure from the Constitution, Federal District Court Judge Lawrence P. Zatkoff allowed the lawsuit against Treasury Secretary Timothy Geithner and the Federal Reserve Board challenging the AIG bailout to proceed. The lawsuit was filed last December by the Thomas More Law Center, a national public interest law firm based in Ann Arbor, Michigan, and attorney David Yerushalmi, an expert in security transactions and Shariah-compliant financing.
In his well-written and detailed analysis issued yesterday, Judge Zatkoff denied the request by the Obama administration’s Department of Justice to dismiss the lawsuit. The request was filed on behalf of Treasury Secretary Timothy Geithner and the Federal Reserve Board – the named defendants in the case. In his ruling, the judge held that the lawsuit sufficiently alleged a federal constitutional challenge to the use of taxpayer money to fund AIG’s Islamic religious activities.
Richard Thompson, President and Chief Counsel of the Thomas More Law Center, commented, “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. Shariah law is the same law championed by Osama Bin Laden and the Taliban. It is the same law that prompted the 9/11 terrorist attacks on our soil that killed thousands of innocent Americans. We won this skirmish. But the war to stop the federal government from funding Islam and Shariah-compliant financing is far from over.”
In its request to dismiss the lawsuit, the DOJ argued that the plaintiff in the case, Kevin Murray, who is a former Marine and a federal taxpayer, lacked standing to bring the action. And even if he did have standing, DOJ argued that the use of the bailout money to fund AIG’s operations did not violate the Establishment Clause of the First Amendment. The court disagreed, noting, in relevant part, the following:
"In this case, the fact that AIG is largely a secular entity is not dispositive: The question in an as-applied challenge is not whether the entity is of a religious character, but how it spends its grant. The circumstances of this case are historic, and the pressure upon the government to navigate this financial crisis is unfathomable. Times of crisis, however, do not justify departure from the Constitution. In this case, the United States government has a majority interest in AIG. AIG utilizes consolidated financing whereby all funds flow through a single port to support all of its activities, including Sharia-compliant financing. Pursuant to the EESA, the government has injected AIG with tens of billions of dollars, without restricting or tracking how this considerable sum of money is spent. At least two of AIG’s subsidiary companies practice Sharia-compliant financing, one of which was unveiled after the influx of government cash. After using the $40 billion from the government to pay down the $85 billion credit facility, the credit facility retained $60 billion in available credit, suggesting that AIG did not use all $40 billion consistent with its press release. Finally, 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.” These facts, taken together, 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, warranting dismissal inappropriate at this stage in the proceedings."
The lawsuit, which was filed in December of last year in the U.S. District Court for the Eastern District of Michigan, is a constitutional challenge to that portion of the “Emergency Economic Stabilization Act of 2008” (EESA) that appropriated $40 billion in taxpayer money to fund and financially support the federal government’s majority ownership interest in AIG, which engages in Shariah-based Islamic religious activities that are anti-American, anti-Christian, anti-Jewish.
According to the lawsuit, “The use of these taxpayer funds to approve, promote, endorse, support, and fund these Shariah-based Islamic religious activities violates the Establishment Clause of the First Amendment to the United States Constitution.”
The lawsuit was brought on behalf of Murray, a former Marine who served honorably in harm’s way in Iraq to defend our country against Islamic terrorists. Murray objects to being forced as a taxpayer to contribute to the propagation of Islamic beliefs and practices predicated upon Shariah law, which is hostile to his Christian religion. He is being represented by Thomas More Law Center Trial Counsel Robert Muise and by David Yerushalmi, an associated attorney who is an expert in Shariah law and Shariah-compliant financing, as well as general counsel to the Center for Security Policy.
According to the lawsuit, through the use of taxpayer funds, the federal government acquired a majority ownership interest (nearly 80%) in AIG, and as part of the bailout, Congress appropriated and expended an additional $40 billion of taxpayer money to fund and financially support AIG and its financial activities. AIG, which is now a government owned company, engages in Shariah-compliant financing which subjects certain financial activities, including investments, to the dictates of Islamic law and the Islamic religion. This specifically includes any profits or interest obtained through such financial activities. AIG itself describes “Sharia” as “Islamic law based on the Quran and the teachings of the Prophet [Mohammed].”
With the aid of taxpayer funds provided by Congress, AIG employs a “Shariah Supervisory Committee,” which is comprised of the following members: Sheikh Nizam Yaquby from Bahrain, Dr. Mohammed Ali Elgari from Saudi Arabia, and Dr. Muhammed Imran Ashraf Usmani from Pakistan. Dr. Usmani is the son, student, and dedicated disciple of Mufti Taqi Usmani, who is the leading Shariah authority for Shariah-compliant finance in the world and the author of a book translated into English in 1999 that includes an entire chapter dedicated to explaining why a Western Muslim must engage in violent jihad against his own country or government. According to AIG, the role of its Shariah authority “is to review our operations, supervise its development of Islamic products, and determine Shariah compliance of these products and our investments.”
An important element of Shariah-compliant financing is a form of obligatory charitable contribution called zakat, which is a religious tax for assisting those that “struggle [jihad] for Allah.” The amount of this tax is between 2.5% and 20%, depending upon the source of the wealth. The zakat religious tax is used to financially support Islamic “charities,” some of which have ties to terrorist organizations that are hostile to the United States and all other “infidels,” which includes Christians and Jews.
The Holy Land Foundation for Relief and Development, an example of an Islamic “charity” that qualifies for receipt of the zakat, was recently convicted by a federal jury for providing millions of dollars to Islamic terrorist organizations. As a direct consequence of the taxpayer funds appropriated and expended to purchase and financially support AIG, the federal government is now the owner of a corporation engaged in the business of collecting religious taxes to fund interests adverse to the United States, Christians, Jews, and all other “infidels” under Islamic law.Click here to read Judge Zatkoff's entire ruling.