Posts Tagged ‘Shariah Finance Watch’

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5-year anniversary of Money Jihad

October 12, 2014

Five years ago today, the first post of this blog was published.

Since then, Money Jihad has blown the lid off connections among Islamic charities including the Zakat Foundation and Muslim Hands, the close financial relationship between Islamic Relief USA and Islamic Relief Worldwide in Britain, and partnerships between Islamic Relief and the Turkish front charity IHH.

Money Jihad has also documented the relationships between sharia banks and terrorist financing—relationships which were previously only discernible through scattered evidence and rumors.

On top of that, this blog has exposed information that was known in Somalia and Bangladesh about terrorist financing in those countries that had never been reported before to Western readers. On several occasions, this blog has helped give voice to dissidents and expatriates from those and other nations who have shared their knowledge about financial mischief in their home countries with Money Jihad to reach a wider audience.

None of this would have been possible if it weren’t for some wonderful people and organizations. Special thanks to Shariah Finance Watch and Creeping Sharia blogs for putting Money Jihad on the map in the first place. Individual thanks go to the vice president at the Center for Security Policy Christopher Holton, human rights activist Puneet Madaan, and American Center for Democracy fellow Ilan Weinglass who have each done a great deal to expand the reach of this blog.

Without additional support and engagement by 1389 Blog, The Counter Jihad Report, EuropeNews, BlazingCatFur, and other counter-jihad blogs—all wonderful blogs in their own right—in addition to news sites Free Republic, American Thinker, FrontPage Mag, The Washington Free Beacon, The Washington Post, and International Business Times, this blog would never have reached the level of influence or readership that it currently enjoys.

Then there’s the vibrant community of readers, sources, jokers and curmudgeons on Twitter! This whole endeavor would be much quieter and boring without them. A special thanks goes out to all-star Twitter users Rushette, El Grillo, MeanKitteh, Sal, Michael, Jackie, Zac, Jack, and FRamabama for all the support and the wealth of information and insights they provide.

Twitter also allows Money Jihad to mutually follow and connect with noted leaders of the counter-jihad movement including author Tarek Fatah, Act for America organizer Brigitte Gabriel, former Navy officer Dr. Zuhdi Jasser, author Diana West, author Dr. Mark Walia, Gatestone Institute president Nina Rosenwald and terror analysts Patrick Poole and Ryan Mauro. TV stars Roseanne Barr and David Boreanaz have helped too (seriously); and prominent financial crimes experts including anti-money laundering reporter Colby Adams; finance and security analyst Tom Keatinge; anti-money laundering attorney Christine Duhaime; Wall Street Journal risk & compliance reporter Rachel Louise Ensign; terrorism and terror finance expert J.C. Brisard; author Jeffery Robinson; fellow financial crime bloggers Helen Gorman and Eric “Mr. Watchlist” Sohn; and a host of certified public accounts, trade and sanctions lawyers, certified fraud examiners, and certified anti-money laundering specialists.

Thanks also to Rachel Ehrenfeld, Robert Spencer, and Kenneth Rijock. The insights and expertise in their writings have helped shape the perspective of this blog.

Now, friends and readers, it’s time for a two-week break. Hasta luego!

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Illicit finance news: suggested reading

February 21, 2013

Shariah Finance Watch writes that the latest sanctions by Treasury against the leader of Al Qaeda in North Africa are “purely political theater”… more>>

• World traveler Richard Chichakli, the Syrian-American who helped Viktor Bout run guns to Hezbollah, seeks bail. Australian judge: “Bit of a flight risk, aren’t you?” more>>

• Need to get a supply shipment to Afghanistan?  On your way, be sure to dock in Bandar Abbas, Iran, just like the Americans.  Starr asks, “Why is the United States Subsidizing Iran?”  more (or here)>>

• If Mazaheri thought he could smuggle a 70 million dollar check, what else has Iran’s former central bank chief gotten away with?  Ken Rijock investigates… more>>

• One man’s search for Noah’s ark could help bankrupt terrorism… more>>

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Sharia bank conducts fraud, predatory lending

December 6, 2012

“Ethical finance” swindles 300 herdsmen and farmers

A sharia lender and his associates are under investigation for defrauding 300 Nigerian farmers and ranchers.  As Shariah Finance Watch wisely notes, countries with growing sharia finance sectors are often the same countries experiencing an increase in violent jihad.  SFW continues:

And as has also often been the case, that push has been associated with fraudulent activity.

The Nigerian Economic and Financial Crimes Commission (EFCC) is investigating the whole affair as detailed below, but what it looks like is a classic Shariah finance scam in which people are fooled into taking out “interest free” loans and are charged hefty fees for those loans.

In other words, these Shariah-compliant loans may not charge interest, but they are anything but “free.” In fact the charges customarily exceed what interest charges would be, but, because they are not interest, they get around Shariah usury laws. This is a scam that has not been limited to Nigeria. Many financial institutions across the world identify their Shariah loans as “interest free,” which amounts to fraud…

OPERATIVES from the North-East zonal office of the Economic and Financial Crimes Commission (EFCC) in Gombe have commenced investigations into allegation of fraud levelled against a branch manager of a first generation bank, a traditional ruler and Sharia court judge over agricultural loans and illegal detention of about 300 herdsmen and farmers in Shira and Giade Local Government areas of Bauchi State.

The commission moved to investigate the allegation following a petition written to it by communities in the two local government areas, which it received on October 24, 2012, on agricultural loans amounting to millions of naira, which was allegedly disbursed to the herdsmen and farmers in the two council areas by the Shira branch of the bank.

Read it all at Shariah Finance Watch.

For newer readers, this case should serve as an example of the unintended consequences of the Islamic prohibition on interest.  Money has a “time value;” in other words, money now is worth more than money later.  But this basic economic fact is denied by the religious edict of Islam.

Western economists refer to that difference between money now and money later as interest.  Islamists refer to it as riba, which means the same thing in Arabic as scum, asthma, or other types of unnatural growth or swelling.

But it is Islamic economics itself that is unnatural.  The result is all kinds of exotic loan structures and predatory policies designed to eliminate the appearance of charging interest.  But without charging interest, there is little incentive for bankers to provide capital to borrowers.  The sharia bankers create their own incentive by adding complicated fees and repayment schedules to loans.

The result here?  Confused farmers and goatherds.  So much for “ethical” finance.

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67 sharia finance institutions in your backyard

July 6, 2012

Shariah Finance Watch has compiled an updated and invaluable list of institutions that actively enable or conduct sharia financial activities in the U.S.

Find out if your bank made the list at SFW’s post here.

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Holton to Congress: Currently no disclosure or transparency standards for zakat, sharia products

June 17, 2012

Chris Holton, vice president at the Center for Security Policy and editor of Shariah Finance Watch, recently briefed staff members from ten Congressional offices on sharia-compliant finance.  During a question and answer period, staffers showed particular interest in the lack of disclosure and transparency requirements on Islamic finance.

One questioner asked Mr. Holton whether, even after all the new financial regulations of Sarbanes-Oxley and Dodd-Frank, there are still truly no reporting requirements for banks to disclose whether they have sharia portfolios and where their zakat expenditures are directed.  You’ve got to listen to the answer during three minutes of powerful audio from the the briefing:

In an era where nearly every single aspect of the U.S. financial sector is taxed, regulated, and scrutinized, it is remarkable that banks are not required to tell investors whether the products marketed to them as “ethical” are actually sharia products, that the banks do not have to disclose what charities receive zakat from the Islamic bank divisions and sharia boards, and or even such basic information as whether the bank has a sharia division.

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Exposing the overpaid, incestuous sharia boards

April 30, 2012

An important article comes our way from the Spears Wealth Management Survey.  A few stunning quotations:

  • “The most in-demand shariah scholars are paid $2,000 a day”
  • “Some scholars charge around $1,000-$1,500 per hour of consultation — in addition to an annual bonus of between $10,000 and $20,000 per board seat”
  • “Remuneration for a fixed shariah board membership can exceed $200,000 a year plus fees”
  • “The top twenty shariah scholars in the world hold between fourteen and 85 board memberships each”
  • ‘The top ten scholars in the world make up 40 per cent of all board memberships”
  • The top five scholars “make up around 25 per cent of the entire boards across the globe”
  • “The top two scholars share 51 per cent of their board memberships”

Read it all.  As Shariah Finance Watch has pointed out for a long time, the sharia advisers are paid quite the pretty penny.  But this piece really puts that in black and white, and points many of the broader flaws of governance in the sharia finance industry.

One cannot read this and still believe mainstream media assertions that sharia finance is somehow more ethical and less risky than conventional finance.  Without even getting into the moral problems of anti-Semitism and jihadist sympathies of the sharia scholars, this sector—from a purely financial standpoint—is hopelessly marred by corruption, shakedowns, conflicts of interest, nepotism, and lack of oversight.  Investors must take note.

I believe this article by Sophie McBain was first published around Apr. 26:

Islamic Finance’s ‘Scholar Problem’: Why Are Shariah Scholars Paid So Much?

Dollars for Scholars

IT MAY BE an unusual career move, but becoming a shariah scholar for an Islamic bank is nice work if you can get it. A quick poll of bankers, lawyers and academics working in Islamic finance revealed unanimous agreement that shariah scholars — who approve every new Islamic banking transaction to certify its compliance to Islamic shariah law — are paid ‘a lot’, but few volunteered figures. Welcome to the opaque world of Islamic finance, and the fledgling industry’s ‘scholar problem’.

Among those who did give figures on shariah scholar salaries, there was considerable variation. Professor Rodney Wilson, a member of the Durham Centre for Islamic Economics and Finance, says that the most in-demand shariah scholars are paid $2,000 a day. Reuters has quoted an unnamed banker as saying that some scholars charge around $1,000-$1,500 per hour of consultation — in addition to an annual bonus of between $10,000 and $20,000 per board seat.

Dr Murat Ünal, CEO of Funds@Work, an investment consultancy and Islamic finance specialist, says that remuneration for a fixed shariah board membership can exceed $200,000 a year plus fees, while advising on a large transaction such as a sukuk (Islamic bond) can generate commission running into millions of dollars. If this still doesn’t sound generous enough, consider that Funds@Work’s pioneering research into shariah scholars and their networks has found that the top twenty shariah scholars in the world hold between fourteen and 85 board memberships each.

There’s a reason for the inconsistency of these accounts: shariah scholar payments don’t have to be made public. And while conventional bankers have found themselves the target of a forceful backlash against bonuses, the quieter but equally insistent voices calling for limits to the influence and payment of shariah scholars struggle to find a platform.

The concerns of those campaigning for changes to the current shariah scholar system are critical to a fast-growing industry, which has the potential to bring millions of Muslims into banking for the first time and which offers a thoughtful critique of mainstream finance. The Islamic finance industry is predicted by Deutsche Bank almost to double to $1.8 trillion by 2016, but its economic potential may never be fulfilled because of its serious governance problems, with power concentrated in a small, ageing and reticent elite.

Read the rest of this entry ?

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Money Jihad’s two year anniversary

October 12, 2011

Woo-hoo!  Having completed Money Jihad‘s second year on the web, we’ve made it well past the “experimental” stage.  It’s hard to believe we started out two years ago (with my first, but not last, rant against Treasury dufus David S. Cohen).  Thank you, dear readers, for visiting and sticking with this blog.  Special thanks to the indispensable Shariah Finance Watch and to Puneet for their support.  The top-shelf Religion of Peace, Het Vrije Volk, and Creeping Sharia have sent us lots of readers as well–it has been greatly appreciated.

Money Jihad has also finally taken a flying leap—into social networking—by launching its own Twitter feed (@MoneyJihad).  I tried to keep it a little hush-hush at first, but Creeping Sharia crept onto our feed, and was kind enough to tweet their whopping 12,000 followers about our existence.  Anyway, that got us going with a few dozen followers off the bat, but the more the merrier!  I’m blasting out links to informative, disturbing, and amusing articles that we don’t have the time or space to examine fully here on the main blog.  Come join the fun!