It sure would have been nice if these same concerns were shared by our shameful US Treasury Department, which held seminars on Shariah-Compliant Finance after Secretary of State Condoleezza Rice raised these issues…
These are the exact issues that we and other opponents of Shariah-Compliant Finance have raised for years, yet Wall Street and federal regulators remain oblivious to the threat.
The article below from The Telegraph in Great Britain quotes a British Foreign Office director as describing Al Qaeda as a “money making machine,” due to Al Qaeda in the Islamic Maghreb’s practice of ransoming hostages for money. Evidently, Italy, Spain, Austria and Switzerland have all paid such ransoms to the Jihadist terrorist organization.
This article gives us an opportunity to point out that Al Qaeda doesn’t just get its money from kidnapping. In fact, the reality is that Al Qaeda gets its money from a variety of sources.
One source is zakat. Zakat is a form of tithing in Islam whereby all Muslims who are able to do so must share 2.5% of their wealth. Often zakat payments are made to Islamic charities (many of which have been tied to terrorism):
http://www.shariahfinancewatch.org/blog/2009/04/18/shariah-approved-islamic-charities-found-to-fund-terror/
How do we know that zakat funds Al Qaeda?
All one has to do is to go back to the 2004 9/11 Commission Report for authoritative statements on the subject:
http://www.9-11commission.gov/report/911Report.pdf
From page 170 of the report:
Al Qaeda and its friends took advantage of Islam’s strong calls for charitable giving, zakat. These financial facilitators also appeared to rely heavily on certain imams at mosques who were willing to divert zakat donations to al Qaeda’s cause.
Al Qaeda also collected money from employees of corrupt charities. It took two approaches to using charities for fundraising.One was to rely on al Qaeda sympathizers in specific foreign branch offices of large, international charities–particularly those with lax external oversight and ineffective internal controls, such as the Saudi-based al Haramain Islamic Foundation. Smaller charities in various parts of the globe were funded by these large Gulf charities and had employees who would siphon the money to al Qaeda.
In addition, entire charities, such as the al Wafa organization may have wittingly participated in funneling money to al Qaeda. In those cases al Qaeda operatives controlled the entire organization, including access to bank accounts. Charities were a source of money and also provided significant cover, which enabled operatives to travel undetected under the guise of working for a humanitarian organization.
From page 372 of the report:
Charitable giving, or zakat, is one of the five pillars of Islam. It is broader and more pervasive than Western ideas of charity–functioning also as a form of income tax, educational assistance, foreign aid, and a source of political influence. The Western notion of the separation of civic and religious duty does not exist in Islamic cultures. Funding charitable works is an integral function of the governments in the Islamic world. It is so ingrained in Islamic culture that in Saudi Arabia, for example, a department within the Saudi Ministry of Finance and National Economy collects zakat directly, much as the U.S. Internal Revenue Service collects payroll withholding tax. Closely tied to zakat is the dedication of the government to propagating the Islamic faith, particularly the Wahhabi sect that flourishes in Saudi Arabia.
Traditionally, throughout the Muslim world, there is no formal oversight mechanism for donations. As Saudi wealth increased, the amounts contributed by individuals and the state grew dramatically. Substantial sums went to finance Islamic charities of every kind. While Saudi domestic charities are regulated by the Ministry of Labor and Social Welfare, charities and international relief agencies, such as the World Assembly of Muslim Youth (WAMY). are currently regulated by the Ministry of Islamic Affairs. This ministry uses zakat and government funds to spread Wahhabi beliefs throughout the world, including in mosques and schools. Often these schools provide the only education available; even in affluent countries, Saudi-funded Wahhabi schools are often the only Islamic schools. Some Wahhabi-funded organizations have been exploited by extremists to further their goal of violent jihad against non-Muslims.
In other words, Islamic charities have played an integral role in Al Qaeda’s funding structure, and in some cases Islamic charities have also played an operational role for Al Qaeda. Furthermore, the system of zakat has laid the foundation for violent jihad through the promotion of Wahhabi (Salafi) Islam, the religion of Al Qaeda.
This is relevant to Shariah-Compliant Finance, because zakat is part and parcel of Shariah-compliant financial institutions. They both pay zakat themselves and, in some cases, facilitate zakat payments for investors. At least one such entity, Bank al Taqwa, was designated a terrorist entity by the US Treasury Department and shut down back in 2001.
With charities funding other charities, oversight would be difficult under most circumstances. But, because there is no real international oversight of zakat and Islamic charities, there is virtually no way for investment firms or their clients to perform anywhere near adequate due diligence to determine the final destination and disposition of zakat funds.
Perhaps that is because, in reality, the funding of violent jihad is actually a requirement of Shariah law. In other words, funding groups like Al Qaeda, Hezbollah and Hamas is as natural under zakat laws as disaster relief is for the American Red Cross.
The most authoritative source for such information is a book which is available on Amazon called “The Reliance of the Traveler, A Classic Manual of Islamic Sacred Law.” That book has a whole section devoted to the rules of zakat, including “THE EIGHT CATEGORIES OF RECIPIENTS.” On page 272, section h8.17, one category is labeled:
THOSE FIGHTING FOR ALLAH
The seventh category is those fighting for Allah, meaning people engaged in Islamic military operations for whom no salary has been allotted in the army roster (O: but who are volunteers for jihad without remuneration). They are given enough to suffice them for the operation, even if affluent; of weapons, mounts, clothing, and expenses (O: for the duration of the journey, round trip, and the time they spend there, even if prolonged. Though nothing has been mentioned here of the expense involved in supporting such people’s families during this period, it seems clear that they should also be given it).
This passage, from this widely-used Shariah text seems to have been written expressly about zakat payments to charities which have funded Al Qaeda, HAMAS, Hezbollah and the Taliban. Note from the passage that such payments are meant specifically for irregular forces who are not part of any army roster, which describes terrorist/guerilla/insurgent groups exactly. Note that they are meant for “Islamic” military operations and not secular groups (i.e. HAMAS and not the Popular Front for the Liberation of Palestine-General Command). Note that such payments are made even if the recipient is affluent…like Osama Bin Laden. And, finally, the families of fighters are to be taken care of, such as payments by Saddam Hussein and Saudi princes to families of Islamikaze bombers in Gaza and the West Bank.
All too often, the destinations of zakat payments are to Jihadists, simply because Shariah mandates it.
http://www.telegraph.co.uk/news/worldnews/asia/afghanistan/8383789/Al-Qaeda-a-money-making-machine.html
AS POWEL SAID ” WE MUST BE MAD “
Posted by shariahfinancewatch on March 20th, 2011
Many thanks to the intrepid Janet Levy for this translation of an article from a German blog dated 18 March…
The Kraken [ed. a type of giant squid – making reference to the tentacles] of Islamic Banking.
A hand full of Sharia-Mullahs watch over the Islamic banking institution. Men like Mohammed Elgari from Saudi Arabia, Abdul Sattar Abu Ghuddah from Syria, and Nizam Yaqubi from Baharain meet in the Sharia Boards of a dozen financial organizations. They are the mighty lords of the Islamic world of finance (see graphic, “The Sharia nework below”).
Yaqubi alone sits in 85 committees, as the research of the Mainz network research Murat Ünal demonstrates. Only five Sharia-Watchmen are seated at a third of all boards. They administer like professionals over insurance, funds, banks or Islamic market indices. Sheik Guddah, for example, sits on the board of all Islamic index funds providers. At the world-conferences in Geneva and London they are the keynote speakers. They are the legal consultants, confessors, and law-givers in one person for bankers. Their specialty: here and there they avert their eyes, such as when Yaqubi preaches in the Baharaini mosques. Three to four percent is what he accepts as “administration fees, something that does not go against the principles of Sharia.”
The Honorariums and rules appear to be all laid out. “There is a shortage of Learned who are prepared to make rulings that banks like.”, as the adviser Tarek El Divany in London says. In other words: The Lords have very secular pronouncements, and no wonder: Millions and Billions depend on their decisions. In this field [of work] there are six-figure gains for board membership for naming a new financial product.
“A show of religious authority, demonstrated by Islamic Scholars”, economist Mahmoud El-Gamal from Rice University in Texas, laments. He has been dealing with this new discipline for ten years. He has a stack of dozens of stories, details of which illustrate the exploitation, dating as far back as the 80’s. All possible sticky bank dealings that should actually be forbidden [under Sharia] get crafted for gain – from leasing to the bonds market-, with an annual growth of up to 25%.
Source: Bilanz
http://www.bilanz.ch/edition/artikel.asp?AssetID=7825
Great graphic on the Shariah Finance Scholar Network:
http://www.bilanz.ch/media/download/BIL_2310_Islam2.pdf
WAKE UP SHEEPIE’S TAKE A LOOK AROUND!
Posted by shariahfinancewatch on March 21st, 2011
View the original article here
Police officers have killed three militants in Makhachkala, Dagestan.