Tag Archives: banking

Sharia Law Gains Foothold in US

Last week, Judge Lawrence P. Zatkoff, a federal district court judge in Michigan, dismissed a constitutional challenge to the U.S. Government’s bailout of AIG, which used over a hundred million dollars in federal tax money to support Islamic religious indoctrination through the funding and promotion of Sharia-compliant financing (SCF). SCF is financing that follows the dictates of Islamic law.

The challenge was brought by the Thomas More Law Center (TMLC), a national public interest law firm based in Ann Arbor, Michigan, and co-counsel David Yerushalmi, on behalf of Kevin Murray, a Marine Corps veteran of the Iraqi War. TMLC filed a notice of appeal immediately after the ruling and will be seeking review of the decision in the U.S. Court of Appeals for the Sixth Circuit.

Richard Thompson, President and Chief Counsel of TMLC, commented: “Judge Zatkoff’s ruling allows for oil–rich Muslim countries to plant the flag of Islam on American soil. His ruling ignored the uncontested opinions of several Sharia experts and AIG’s own website, which trumpeted Sharia-compliant financing as promoting the law of the Prophet Mohammed and as an ‘ethical product, ’ and a ‘new way of life.’ His ruling ignored AIG’s use of a foreign Islamic advisory board to control investing in accordance with Islamic law.”

Continued Thompson: “This astonishing decision allows the federal government as well as AIG and other Wall Street bankers to explicitly promote Sharia law ? the 1200 year old body of Islamic canon law based on the Koran, which demands the destruction of Western Civilization and the United States. This is the same law championed by Osama bin Laden and the Taliban; it is the same law that prompted the 9/11 Islamic terrorist attacks; and it is the same law that is responsible for the murder of thousands of Christians throughout the world. The Law Center will do everything it can to stop Sharia law from rearing its ugly head in America.”

The federal lawsuit was filed in 2008 against Secretary of the Treasury Timothy Geithner and the Board of Governors of the Federal Reserve System. It challenges that portion of the “Emergency Economic Stabilization Act of 2008” (EESA) that appropriated $70 billion in taxpayer money to fund and financially support the federal government’s majority ownership interest in AIG, which is considered the market leader in SCF. According to the lawsuit, “The use of these taxpayer funds to approve, promote, endorse, support, and fund these Sharia-based Islamic religious activities violates the Establishment Clause of the First Amendment to the United States Constitution.”

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 $70 billion of taxpayer money to fund and financially support AIG and its financial activities, $47.5 billion of which was actually distributed to AIG. AIG, which is now a government owned company, engages in SCF, 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 publicly describes “Sharia” as “Islamic law based on the Quran and the teachings of the Prophet .”

With the aid of taxpayer funds provided by Congress, AIG also employs a “Shariah Supervisory Committee.” According to AIG, the role of its Sharia authority “is to review our operations, supervise its development of Islamic products, and determine Shariah compliance of these products and our investments.”

Shortly after filing the complaint in 2008, attorneys for the Obama administration’s Department of Justice (DOJ) asked the court to dismiss the lawsuit on behalf of the named defendants. In a written opinion issued in May 2009, the judge denied the request, holding that the lawsuit properly alleged a federal constitutional challenge to the use of taxpayer money to fund AIG’s Islamic religious activities.
In its request to dismiss the lawsuit, DOJ argued that the plaintiff, Kevin Murray, who is 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….

Following this favorable ruling, the parties engaged in discovery. During discovery, TMLC took depositions, acquired numerous sworn affidavits from AIG and many of its subsidiaries, and acquired thousands of documents. This voluminous evidence was filed with the court in support of TMLC’s motion for summary judgment—a request that the court enter final judgment in its favor because there is no genuine issue of material fact and TMLC should prevail as a matter of law.

On January 14, 2011, the court reversed its earlier position and ruled against Plaintiff Murray, claiming that there was no evidence presented of religious indoctrination, and if there were such evidence, the indoctrination could not be attributed to the federal government and besides, the amount of federal money that was used to support SCF—$153 million—was “de minimus” (minimal) in light of the large sum of tax money the federal government actually gave to AIG—$47.5 billion.

Robert Muise, Senior Trial Counsel for TMLC, commented: “Based on the incredible amount of evidence presented, much of which DOJ could not refute , and in light of the strength of the court’s prior ruling, we expected the court to ultimately rule in our favor and hold that the federal government violated the U.S. Constitution by using federal tax money to fund Islamic religious activities. As soon as we read the court’s adverse opinion, we filed an immediate appeal.”

In addition to the court’s remarkable claim that $153 million in tax money is “de minimis, ” the court stated the following: “In the absence of evidence showing that AIG’s development and sale of SCF products has resulted in the instruction of religious beliefs for the purpose of instilling those beliefs in others or furthering a religious mission, Plaintiff has failed to demonstrate that a reasonable observer could conclude that AIG has engaged in religious indoctrination by supplying SCF products.”

In the court filings, however, TMLC presented overwhelming and un-rebutted evidence from experts and AIG itself to demonstrate that AIG, with the direct support of the U.S. Government, was engaging in religious indoctrination. Specifically, in addition to AIG’s own description of its Islamic financing as based upon Sharia and Sharia in turn described as “Islamic law based on Quran and the teachings of the Prophet (PBUH), ” AIG promotes Sharia and SCF as a way to proselytize non-Muslims through an “ethical product” and a “new way of life.” Indeed, in the U.S. Government’s filings in the case, it admitted that SCF involves “a theological proposition.”

Muise concluded: “Apparently, the court does not believe that the federal government violates the U.S. Constitution when it provides $153 million in taxpayer money to support Islamic religious activities. This is certainly more than the ‘one pence’ James Madison warned about when he helped craft the First Amendment, and I am sure this decision is news for all of the Christian and Jewish organizations and businesses that are prevented from receiving a dime of federal tax money to support their religious activities.”

The appeal is expected to take at least a year to complete.

From Thomas More Law Center January 19, 2011 email.

Ohio Banking; Federal Reserve Beige Book of Economic Conditions

This is the last day of the Beige Book reports. During the past four days, the retail, manufacturing, transportation, energy, and construction sectors have been covered. Today, the banking sector report of the Cleveland Federal Reserve Bank folows.

In general, bankers reported that commercial loan demand was stable or showed modest growth since our last survey. A few bankers commented that although loan originations are up, outstanding balances have declined. We also heard reports from some large banks that lending to small businesses is increasing. On the consumer side, conventional loan demand remains soft, although several of our contacts told us that they are beginning to see early signs of growth. Direct and indirect auto lending continues to show strength, while some weakening was observed in the use of home equity lines of credit. Interest rates for business and consumer credit were stable. Many of our contacts said that demand for residential mortgage refinancing has slowed due to the rise in interest rates. New-purchase mortgage originations remain weak. Core deposits continue to grow, with most of the growth occurring in non-maturing products. Credit quality was characterized as either stable or showing a slight improvement, especially for business applicants. Delinquency rates are stable or trending down. Staffing levels have shown little change during the past few weeks; however, several bankers reported that they are considering hiring during 2011.

Small Business Lending Fund Update

The U.S. Department of the Treasury (Treasury) is expected to soon release the criteria small banks must meet in order to participate in the $30 billion Small Business Lending Fund (SBLF) created by the NSBA-supported Small Business Jobs and Credit Act.

Meanwhile, Sens. Mary L. Landrieu (D-La..), chair of the U.S. Senate Committee on Small Business and Entrepreneurship, and George LeMieux (R-Fla.) recently sent a letter to Treasury Secretary Timothy Geithner, urging swift implementation of the SBLF and the State Small Business Credit Initiative, which was created by the same legislation.

NSBA echoes this call for immediate implementation. The SBLF has been on the drawing board for long enough. It is high time that it be deployed. America’s small businesses still are struggling through a destructive credit crunch and the realization of the SBLF stands to help the situation.

According to an internal poll conducted by the Independent Community Bankers of America (ICBA), nearly a quarter (24 percent) of their 5,000 community-banks members planned to utilize the SBLF. This means 1200 community banks stand poised to increase their small-business lending.

NSBA joins Landrieu and LeMeiux in urging Treasury to expedite the realization of the SBLF and State Small Business Credit Initiative.

Source: NSBA, December 7, 2010

Sabbath Discussion : National debt and divine justice

By Daniel Downs

The national debt was $10.6 trillion. According to Rep. Steve Austria, the national debt will increase another $1.1 trillion as a result of recent stimulus-bailout legislation. If we add the previous $800 billion bank bailout legislation, a more accurate figure is $2 trillion raising the national debt to $12.5 trillion. The Government Accounting Office (GAO) reports that foreign ownership of the national debt was around 30 percent. But at the beginning of the year, it increased to over 50 percent. If that were not bad enough, the Congressional Budget Office reports that Congress will spend $1.2 trillion more than it will receive this year. Again, if we add the recent stimulus bill, the numbers climb to over $1.7 trillion more than last year and all of it on credit. The U.S. government not only owes around $6 trillion to foreigners, the two largest creditors being Japan and communist China, but Congress intends to spend $2.1 trillion more than it can repay. When we compare the national debt to the total national economic productivity or Gross Domestic Product (GDP), which is estimated at a little over $14 trillion, it becomes apparent that politicians assume they have right to spend nearly all of the people’s wealth on credit.

Sadly, America is a debtor nation. As we will see, this type of compulsive spending for the cause of secular, socialist, and global agendas is a curse of divine justice. The following then is what the penmen of God had to say about this matter.

One of the more pertinent illuminations of ancient wisdom comes from the writer of Proverbs, who many scholars believe King Solomon was its author. King Solomon wrote:

Do not be among those who become guarantors of debt. (Pro. 22:26)

The federal government is a guarantor of student loans, bank loans, business loans, mortgage loans, loans to foreign governments, and other types of loans. For decades, the federal government has been bailing out bank and Wall Street because of bad lending practices to corporations and foreign governments. It is part of the purpose of the Federal Reserve, federal deposit insurance, and federal loan guarantee programs. Taxpayers have been footing the bill without even realizing it. Maybe now it will be understood that working taxpaying Americans are ultimate bailing out all these rotten practices for the benefit of those in power. As Austria has pointed out, the average Joe or Juanita benefits little. It should be apparent that profit over people is not working well for most Americans.

It is important to note that the Hebrew word used for debt in the above verse refers to interest bearing loans. In the modern vernacular, the proverb could be rewritten thus: “Do not be among those who guarantee interest bearing bank or payday loans for anyone.”

The law of Israel prohibited loans with interest. At the same time, the law also required society to give loans to the needy or poor. According to the laws governing credit and debt, all outstanding loans to fellow citizens had to be canceled every seven years. Only loans to foreign nations or foreign individuals were exempt from God’s law of debt forgiveness. (Ex. 22:25; Deut. 16:1-11)

If the covenant people were faithful to covenantal law, God promised a specific kind of blessing: they would become creditor to the world but not a debtor. However, if they did not follow God’s law, the Jewish nation was promised judgment. One aspect of the promised judgment was that they would become debtors and foreigners would consume their productivity. (Deut. 28:44, 33, 38)

Right now, foreigners either through financial debt or through an on-going international trade imbalance consume over 50 percent of economic productivity of Americans. By importing more foreign goods and services than exported, more of working America’s wealth goes to foreigners. What America exports more than it imports is military related goods and services. Yet, that too is more allusion than reality. For example, Congress gives Israel $2 billion in aid for the purpose of Israel using most, if not all, of it to purchase military equipment like airplanes from American companies like Lockheed. That $2 billion is part of the public debt borrowed to fulfill the aforementioned allusion. It is taxpayers funding the purchase of weaponry for the sole benefit of only a few Americans.

Another voice of ancient wisdom and enlightenment was the priestly prophet Isaiah. During an earlier stage of his preaching for God, what appears to have been a message addressed to the whole world is recorded in chapter 24 of the book by his name. The following are a few excerpts relevant to our discussion:

“Behold, the Lord lays the earth waste, devastates it, distorts its surface and scatters its inhabitants. And the people will be like the priest, the servant like his master, the maid like her mistress, the buyer like the seller, the lender like the borrower, the creditor like the debtor. The earth will be completely laid waste and completely despoiled, for the Lord has spoken this word…. The earth is also polluted by its inhabitants, for they transgress laws, violated statutes, broke the everlasting covenant. Therefore, a curse devours the earth and those who live in it are held guilty…. So it will happen in that day, that the Lord will punish the host of heaven on high, and the kings of the earth on earth.” (Isa. 24:1-3, 5-6a, 21)

Isaiah probably had in mind the law of credit and debt when he wrote that God was going to waste the earth and cause it to be despoiled. (24:3) This divine punishment will be the result all inhabitants polluting the earth. The earth becomes corrupted because of the perpetual violations of the eternal covenant and its laws. (v. 4) Because all people are as guilty as the next guy, all would experience what God means by making the earth completely laid waste. (v5) The peculiar result is stated by the prophet this way: “The buyer will be like the seller, the lender will be like the borrower, and the creditor will be like the debtor.” (v 2)

Many scholars, Jewish and Christian, claim the eternal covenant refers only to the 663 laws written in the books of Moses or Torah. This is not the case. The eternal covenant began with Adam and his sons. It was perpetuated through Noah, later though Abraham, expanded to a national model of society through Moses and Israel, expanded again with the priesthood and the royal bloodline of David, and more fully completed through Jesus of Nazareth and his disciples. The moral law of the eternal covenant is still in effect today just as it was when most of the laws of the American colonies and later the states and the nation conformed to it.

What makes the prophecy of Isaiah so interesting is the fact that it has been happening in our lifetime. For example, most workers today produce goods and services that they or others within their companies sell. All workers in turn buy things they want or need from other sellers. Seller and buyer are virtually the same.

Okay, it could be rightly argued that it has always been the case since ancient times. Not so with banking, which didn’t exist universally? In banking, depositors lend their money to banks often believing that they will earn more money through interest. This belief is erroneous because banks only pay interest rates near the inflation rate. Bank CDs pay little over the inflation rate as well. Therefore, banks only allow depositors to keep the same value of their original loans also called deposits. Banks take the depositors loans and lend to borrowers at higher interest rates in order to make a profit. Depositors are very kind people because they lend money to needy bankers so that they can earn a living without having to do much strenuous labor.

We can apply the same to the national debt. Taxpayers hold the gigantic public debt in the federal government who lends to as well as borrows from the American people and from foreigners. Government borrows by exchanging paper bonds of specified value for money of equal value with a promise to repay at set interest rate, which rate is usually a little more and sometimes less than the inflation rate. As with depositing wealth in federal banks, lending wealth to the government is not very profitable, especially for individuals. It is an allusion because the feds inflationary program consumes any real profit. The actual beneficiaries are institutions of government and corporations. (By the way, Federal Reserve Banks, Fannie Mae, and Freddie Mac are unconstitutional and illegal corporations, and so are any other institutions incorporated by the federal government. The records of the Constitutional conventions prove it. Their existences are monuments to criminal acts against the Supreme Law of the Land.)

Another golden nugget of ancient enlightenment reveals the likely outcome of unethical and lawless financial acts against God’s eternal covenant. As it was written by the author of Proverbs:

“The borrower becomes the lender’s slave.” (22:7)

To whom then is the America enslaved? Is the imperial government enslaved to both the global agenda of its politicians as well as to foreigners? Are we the people really free? Are we not more like indentured servants to a corrupt government, corporate powers, and foreigners? Consider that foreigners now own a significant percentage of all industries and physical capital. Moreover, federal and state governments have seriously considered leasing our highways to foreigners to fund their transportation departments.

Isaiah 24 also sheds light on Revelation 13. When the beast or anti-Christ arises, he will gain control over the global economy. When this global dictator does, all–both buyer and seller–will become truly equal. They both will be subservient to him. None will they be able to buy or sell without giving allegiance to this dictator and his politics of change. Here is secular egalitarianism at its worst.

This is the end result of a globalized economy regulated by a unified world government fostered by world socialists on Capitol Hill, in state government, corporations, and universities of America. It is part of the divine judgment and the eventual end to their grand schemes whether called secularism or socialism or globalism or democracy.

As depicted by Isaiah 24, the eternal covenant will still stand after they have perished from the earth.

Bipartisan Banking Deregulation Produced Current Economic Crisis

Pres. Obama and other politicians blame our current economic crisis on Congressional deregulation of the banking system. A 2008 article published in OpenSecrets.org explains what they mean, why Capitol Hill politicians did it, and who benefited.

The last time Congress seriously debated how to regulate the financial industry, the result was legislation that allowed the nation’s largest banks to get even larger and take risks that had been prohibited since the Great Depression. A look back at that debate, which was over the 1999 Financial Services Modernization Act, reveals that campaign contributions may have influenced the votes of politicians who, a decade later, are now grappling with the implosion of the giant banks they helped to foster.

Looking back at the vote on the 1999 act, and the campaign contributions that led up to it, the nonpartisan Center for Responsive Politics has found that those members of Congress who supported lifting Depression-era restrictions on commercial banks, investment banks and insurance companies received more than twice as much money from those interests than did those lawmakers who opposed the measure.

In 2008, until the U.S. government threw a taxpayer-funded lifeline this month to Wall Street banks drowning in a sea of bad debt, the potential for these financial giants to go under had been dismissed. The banks were “too big too fail.” It was the 1999 legislation, commonly referred to as Gramm-Leach-Bliley (for its sponsors’ names), that cleared the way for these companies to grow so large.

For decades before, the financial industry had been segregated by government regulations dating to 1933, when Congress passed, and President Franklin Roosevelt signed, legislation known as the Glass-Steagall Act. Sponsored by a former Treasury Secretary known as the “father of the Federal Reserve,” Virginia Democrat Carter Glass, and Alabama Democrat Henry Steagall, the law responded to concerns that over-speculation by banks during the 1920s contributed to the stock market crash of 1929 and, in turn, the Great Depression. Commercial banks were taking too many risks with their depositors’ money. Glass-Steagall set up a regulatory wall between investment banking and commercial banking, prohibiting commercial banks from underwriting insurance or securities.

Sixty-six years later, in 1999, the financial services industry succeeded in essentially shattering Glass-Steagall, after putting a number of cracks in the law over the intervening years.

The congressional vote on Gramm-Leach-Bliley in November 1999 was not close. The bill passed handily with bipartisan support in both the House of Representatives and Senate, 450-64 between the two chambers. President Bill Clinton supported the legislation and readily signed it. There were some strong arguments for the bill, chiefly that American banks were too constrained to compete with German and Japanese banks. There was also criticism that the legislation was pushed through too quickly and that it didn’t modernize the marketplace’s regulatory system. Pressing most aggressively for Gramm-Leach-Bliley was Citigroup, which had merged its bank with Travelers insurance company, and needed a change in federal law to keep the giant corporation together.

There was little difference in the money collected by Republicans who supported the bill and those who opposed it; the 255 GOP supporters collected an average of $179,175, while the opponents in their ranks-and there were only five of them-collected $171,890. On the Democratic side, however, there was a wide gulf, as the graph indicates. The 195 Democrats who supported the Financial Services Modernization Act had received an average of $179,920 in the two years and 10 months leading up to its passage, while the 59 Democrats who opposed it received just $83,475.

Many of the Democrats who voted for Gramm-Leach-Bliley are still in Congress, as are many of the Republicans.

The new law paved the way for financial institutions, which were already large, to get even larger, and it put businesses that the nation’s financial regulators had intentionally segregated under the same umbrella once again. Critics of Gramm-Leach-Bliley predicted that if these mega-banks were to ever fail, the impact on the U.S. and global economy would be so great that the public treasury — i.e. taxpayers — would have to rescue them.

Nine years later, Congress is debating a proposal from the Treasury Secretary to assume the bad investments that are weighing down the nation’s financial institutions, at taxpayer expense. And lobbyists representing the financial services industry are trying to once again shape fast-moving legislation to their clients’ benefit.

I wonder how much money Congressional politicians have or will receive for bailing out their profitable benefactors.

Source: OpenSecrets.org, Sept. 23, 2008.