U.S. Taxpayers Wrongly Own Company That Has Shari'a-Compliant Subsidiary, Lawsuit Alleges

December 19, 2008 - 5:10 PM
A former Marine who served two terms in Iraq is suing to block the U.S. Treasury Dept. from directing money towards troubled AIG, which taxpayers purchased in September. It's subsidiary, AIG Takaful Enaya, must comply with Islamic law.

A Muslim woman, wearing prescribed religious covering, sifts through trash at a garbage dump in Baghdad. (AP photo)

(CNSNews.com) - Should U.S. taxpayers have control over a financial company that offers insurance and investments that must comply with the same Islamic system of laws that guided al-Qaeda terrorists in Iraq -- and on 9/11? 

Not if a former U.S. Marine gets his way. 

Attorneys for Kevin Murray, who served two tours of duty in Iraq, filed suit last week in federal district court in Michigan, saying that the government-owned AIG – the American International Group -- owns a Shari’a-compliant subsidiary. That represents an unconstitutional government infringement on religion, according to Richard Thompson, president of the Thomas More Law Center. 

“As long as they were a private company, (AIG) certainly had every right to own a Shari’a-compliant subsidiary,” Thompson told CNSNews.com.But Thompson, who is representing Murray, said when the government acquired AIG, which has operations in more than 130 companies, it also acquired AIG Takaful Enaya, a subsidiary headquartered in Bahrain that provides a range of Shari’a-compliant insurance products for the Islamic world.

“As soon as they became a federal entity, then the Establishment Clause applied -- and the Establishment Clause prevents the government from promoting and financing a specific religion,” he added. 

The lawsuit demands that Treasury Secretary Henry Paulson direct U.S. bailout money away from AIG unless it divests itself completely from any branch that deals with Islamic finance.

In September, the U.S. Treasury gave AIG $85 billion and the Federal Reserve injected more than $62 billion – for a total of $150 billion – in exchange for a near-80 percent equity stake in the company, essentially taking over the troubled insurance giant.

The issue became all the more prominent because on Dec. 1, AIG’s Risk Specialists Companies, Inc., a subsidiary of AIG Commercial Insurance, announced it was introducing a "Takaful Homeowners Policy," the first of what is anticipated to be several Shari’a-compliant insurance products aimed at the U.S. market.

The products were being offered in conjunction with AIG Takaful Enaya.
 
“A government-owned company is now promoting a specific religion -- Islam,” Thompson, a religious rights attorney, said. "That's unconstitutional."
 
Thompson says Shari'a, which is guided by Islamic principles which include mandated global “jihad” – or “holy struggle” against "infidels" – is the same law that guided Islamic terrorists on Sept. 11, when they flew hijacked airliners into the World Trade Centers, the Pentagon and the Pennsylvania countryside. 

Shari'a-compliant financial companies must agree to send 2.8 percent of their revenue to Islamic charitable groups, he added. Some of those, in recent years, have been shown to be  
 
“Should federal taxpayer money be used to ultimately finance terrorist activities?” Thompson asked.
 
The 1,200-year-old system of Islamic laws covers every facet of life, prescribing everything from flogging to unmarrieds who engage in sex to chopping off the hands of thieves to death for “apostates” – those who try to leave Islam.
 
AIG spokesman Peter Tulupman told CNSNews.com that his company “was not commenting” on the lawsuit or the company's Shari'a-compliant subsidiary.  
 
Treasury Department spokeswoman Jennifer Zuccarelli, meanwhile, also did not comment to CNSNews.com.