What is Shariah Finance?

Shariah Banking is essentially the Iranian banking system which was installed between 1978-83 under the newly empowered oppressive Shariah Islamic regime of Khomeini and Ahmandinejad. Under the Shah, Iran was a moderate secular Islamic country where women were highly educated and an important part of the society. Khomeini and Ahmahdinejad changed all that. They replaced secular law in all aspects of society with Shariah Islamic Law INCLUDING THE BANKING SYSTEM.

Up until then, the entire world (including the Islamic world) practiced western banking as we know it today. The religious, politically-driven Iranian Mullahs enforced Shariah law throughout the country, including in the banking system. These extremist Mullahs had oversight of banks, becoming powerful forces in the Iranian Shariah banking system. This continues today. Every business, including the banks, had to pay a tax, known as "zakat" (arabic for charity) which supported the supremacy of the Iranian Shariah regime. Mullahs rejected investments in  western industries of any kind that might "corrupt" the new Shariah Islamic way of life. This meant no investment in western books, TV, film, no investment in Western Defense, no construction of Christian, Jewish or other non-Islamic houses of worship, no productiion of non-Islamic goods or services, no pork, no alcohol, no gambling. 

Iran was the first entrant into the Shariah Finance market and continues to be one of the few countries in the world which mandates Shariah banking exclusively. Therefore, Shariah Banking is essentially Iranian Banking. Iranian banking is best known for its investment in terrorism, since the top ten banks in Iran have been found to fund terrorism by our U.S. Government.  This investment in terrorism is made through charitable contributions made by banks directly or indirectly through the cash flows of the Shariah investments themselves.

As in Iran, any bank who offers Shariah Investments must 1) hire Shariah Imams or Mullahs to oversee control of investments, 2)  invest in industries that support Islam and avoid investment in industries that strengthen western culture, power or ideals, and 3) create Shariah bonds and mutual funds or insurance products that direct certain profits directly into "zakat" or Shariah Approved Charities. The problem is that the definition of "charity" or "zakat" according to Shariah Islamic Law includes the clothing and feeding of soldiers of Jihad, in addition to supporting mosques, education centers or any programs which will strenghten the supremacy of Shariah Islamic Law around the globe. The leading industry in Iran is oil extraction, and it is not surprise that Shariah mutual funds are over-weighted with oil companies versus western mutual funds. 

Iranian or Shariah banking was a near flop from 1983 - 1999 because muslims in the Middle East were reluctant to put their money into banks controlled by Mullahs or Sheiks who reign under oppressive Shariah Islamic Law. It wasn't until the late 1990's when western banks like Citiank, HSBC, and others helped developed the Shariah banking industry with the hopes of capturing the $500 billion to $1 trillion of oil wealth generated each year by Middle East governments.

Shariah Banking, also known as Islamic banking or Shariah Compliant finance,
is a powerful economic tool of Shariah-Islam, disguised as a harmless religious method of investing for Muslims. Western investment firms like Citigroup, HSBC, Dow Jones, UBS, and AIG have created Islamic banks within their corporate structures, hiring Shariah Authorities or Imams to manage this new entity with full discretion. Their ultimate goal is to create a global Islamic nation (umma) wherein both Muslims and non-Muslims are under Islamic sovereignty. These Shariah “scholars” use all forms of Jihad (aggressive and stealth) to further their goal. Shariah Finance is the most insidious and effective form of stealth Jihad.

The growth and momentum of the $1 trillion dollars nascent Islamic banking market, growing at a rate of 20% a year, is driven by the promise of billions of dollars of annual oil revenues each year from the middle east, looking to be invested, and the billions of dollars of profits it represents. This market was formally created in the 1970’s by the Muslim Brotherhood to harness new Middle East oil wealth to benefit the vision of radical Islam, more correctly known as Shariah-Islam.

What is missing from this market is a true assessment of the risks of this market and lack of full disclosure; in other words; investments are being sold into the marketplace with only half the facts being told. In legal terms, this is securities fraud. Poor due diligence (no one kicking the tires), weak transparency and incomplete disclosure is the formula for every market meltdown, our global markets have experienced from Enron, to Madoff to the Sub-Prime Mortgage meltdown. Shariah Islamic Banking market is likely to be the next global and American economic disaster, but with a Jihad, terror financing and human rights abuse twist.

The marketing materials of firms like Citibank, UBS, Barclays, HSBC, AIG, and Blackstone Finance focus on two seemingly harmless details of “Islamic” investing 1) limited "interest income" and 2) un-Islamic banned “sin” industries of alcohol and gambling. Therefore, investment firms describe Shariah finance as “interest-free,” “ethical,” and “socially responsible” investing. Shariah mutual funds, Shariah bonds, Shariah insurance products and Shariah hedge funds are being created.

Here are the facts that are missing and not being told to investors, shareholders and American customers of the banks and insurance firms using American dollars to build this new Shariah market:

There is no disclosure about these additional issues:

  • Shariah Finance has imbedded mechanisms which funnel Zakat and Purification dollars to Shariah-approved charities. The definition of Zakat includes the clothing and feeding of terrorists and other expenses of Jihad;
  • The connection between Shariah, Jihad, the Taliban, and Iran;
  • The numerous other “un-Islamic Industries” for which Shariah investment is forbidden, including: products or construction that benefits Christianity, Judaism, Buddhism, Hinduism, Protestantism, or any other non-Islamic religion; any project that promotes equal rights for women or gays, western defense industries and western books, films, TV, and radio;
  • Shariah authorities’ commitment to world dominance and Jihad, even against liberty-minded Muslims;
  • Shariah-compliant investments are complicated but legal "derivatives" that re-label "interest income" as "rents" or "profits." The Obama administration has labeled "derivatives" as "toxic assets". These instruments triggered the economic collapse of 2008 and created the need for the taxpayer-funded $3 trillion of bank bailout.
Shariah Finance is being promoted as “ethically responsible,” “culturally respectful” Islamic religious investments. However, Shariah Law is the written doctrine that connects the Taliban, Al-Qaeda, Iran and Saudi Arabia. It mandates violent Jihad, stones women, forces young girls to marry and calls for the death of Muslims who leave the faith. And Shariah dollars are spent to create an Islamic economy devoid of western culture, health and welfare services for gays, businesses to empower women, and any religious service, product or real estate project (other than Islam). Is this “ethically responsible”?

There are members of Congress who have expressed concern about this market. So far, the SEC and US TSY is looking the other way, mired in our current economic crisis. See the FACT Sheet for more. Click on the map to see where Shariah Finance is growing.