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by Marion D.S. Dreyfus


Covering the NY City Bar review course
"What you need to know about Shariah-compliant finance & Islamic commercial law"

Date: Thursday, 18 September 2008, 6- 9 pm; Q&A ended: 9:20 pm

Venue: ABA, 42 West 44th St.,
Continuing Legal Education wing,
2nd floor small conference room

Background on Shariah

Shariah-compliant finance is a system of imposing the 'legal' framework laid out roughly in the Koran to modern-day America and other Western nations' legal and fiancial arrangements. In that it forbids traditional interest for a variety of schemes and structures that substitute earned 'profit' for 'risk-taking in partnership with investors and lenders,' it is essentially an end-run around the West's usual means of making a profit upon the loaning of money, or purchasing of real estate or other instruments, for a set time period. Because the deals so structured are highly complicated arrangements that must go through a maze of lawyers and legal Shariah scholars supposedly expert in both Western finance and koranic law, they necessitate a lengthy interregnum to be finalized. Further distancing from Western financing comes from the koranic injunctions against investments in "impure" or haram industries: Pork or pork products; gambling; alcohol; prostitution or other sex work. The industries that might associate with such involvements become untouchable, unaccessible to these Shariah-compliant financing deals — but the West is rife with interlocking industries that are not hermetically sealed, one from the other, making parts of legitimate business investments — say, scrap metal, or clothing, or agrarian concerns — beyond the reach of such deals. The needle is constantly moving, making the feasibility of such financial dealings thorny in the eyes of the 'experts' burdened with approving such deals.

Because each of the green-lighted financing deals accepted for imprimatur among the Gulf States/Mid-Eastern countries selling these instruments must take a portion of the costs involved for " charity" they call zakat, and these "charities" can be defined all over the map as help for widows and orphans all the way to significant support for pro-terrorist associations and factions, the entire tissue of investment runs seriously afoul of the US Constitution, which sensibly regards such involvement in bolstering terrorism against the West with a jaundiced eye, terming such support and split fealty treason.

The famous Gordon Gekko pronunciamiento in the film Wall Street, invoking to his Market colleagues that "greed is good," forms the basis of new courses attempting to explain and elucidate how Shariah financing 'works' for lawyers and entrepreneurs interested in the good rate of return they expect to extract from such deals. There are billions of dollars to be made out there, and the authors of this course and others like it are well aware of the income potential of these murky deals. But the course toward such financing are littered with a profound lack of transparency, partnership control, remuneration unalloyed with problem support, major conflicts of interest among industries, the small cadre (under 200 in toto) of so-called Shariah scholars, and the quite pronounced possibility of arrest should adverse circumstances (support for other governments, non-vetted causes and groups sponsoring terror) connected with these deals come to light. The risk of arrest for treason in any and all such deals is a constant, though the seminar at the ABA failed to make even the airiest reference to conflicts with the US Law and the Constitution.

This précis is the residue of one such continuing legal education course, offering 3.0 credits in advanced continuing legal education (CLE), at the American Bar Association on NYC's West 44th Street. Unnerving to anyone who knows the compass of carefully manicured and manufactured "safety" involved in these events, one was amazed that the convened six speakers and the moderator failed to define Shariah law altogether, failed to make the connection between the Koran, Mohammed and the clear effort to provide a frightening backdoor alternative to normative Western law both here and abroad.

Adopting this system of financing offers the real problem of undermining the primacy of Western and Constitutional Law.

Among the many handicapping elements involved in this ancient and primitive system: There is no dual oversight by non-Muslim individuals and corporate entities. There is no insurance. There is no guarantee that money, property or goods will be restituted. And the bedraggled skirts of koranic and Shariah law also drags in the specter of stoning for adultery, cross-limb amputation for theft, abhorrent female cliteridectomies (illegal in the West, called female "circumcision") for all women, debarring of choice in sexual options (death by hanging to homosexuals), and the re-disenfranchisement of women (in many cases: voting, freedom of education, freedom of speech, freedom of religion, right to work, drive, spend their own money, legal standing).

Unmentioned: the delicate, never-defined exclusion of Jewish or Israeli enterprises or persons from such systemic and tortuous legal finagling and linguistic wrangling. Just as a recent colleague confided to me, after her attempted trip to Dubai ended in a two-week stalemate at the border because "they suspected she is Jewish" (she is a beautiful, Catholic Argentinian), her failure to be admitted to the country was never spelled out directly to her, but came down through her friend, who was apparently not Jewish-looking, and also Catholic. Such racial and ethnic insensitivity to the 'stubborn Jew or infidel' is woven intimately into the fabric of the Koran and its latter-day adherents, making involvement in such instruments an unwitting (or witting) adjunct to significant anti-Semitism and anti-Zionism.

With this as background, I attended the ABA seminar on how to manage Shariah-compliant financing. Expecting some mention of the legal and constitutional tangle, the human rights abuse record, and the lack of originator oversight as to ultimate use of the "charity" segments of each deal--3%-to-5% of every millions or billions in such SCF investment.  


Because of Ramadan, the chairman announced/apologized for the lack of "substantial" food, meat or fish, at the 7 pm snack break. Muslims are not permitted to eat during the day during the entire month-long sweep of this holiday. There were two fresh fruit platters (pineapple, raspberries, black grapes, honeydew, cantaloupe, watermelon); two platters of Christmas-style sprinkle-half-decorated plain cookies; Coffee, decaf (no tea); Poland Spring in bottles; Coke, Diet Coke and 7-Up in cans.


Manual of 185 pp; certificate of attendance (3 CLE credits); Installment Sale Law (Articles 1-17), 4 pp; questionnaire on presentation. I graded the evening between Fair and Poor. Most of the 60-plus attendees did not fill out or turn in the questionnaire.

Moderator: Program chair: Robert E. Michael


Abed Awad — adjunct law professor, Rutgers Law School, Newark, NJ

Yusuf Talal Delorenzo — convert to Islam, self-professed Chief Shariah Officer, Shariah Capital Inc. Haymarket, VA

Bernard K. Freamon — Professor of Law Program for the Study of Law, Seton Hall Law School, Newark, NJ

Michael T. McMillen — Fulbright & Jaworski LLP, Washington, DC

Allen Merhej — Norton Rose LLP, London, UK


Presentation began at 6 pm. After three speakers, a break was called, before nightfall. In the small ancillary hall in which this took place, no one prayed; no shoes were removed; no one in the audience was observing Ramadan (as opposed to panelists, several of whom seemed to be observing it). This was not a Muslim audience. Their knowledge of Shariah, accordingly, was sketchy to nonexistent. All the more reason, one would think, for the panelist to fill in many of the aspects of Shariah that were unknown to the American attendees. The subtitle of the presentation, after all, was "What you need to know about Shariah-compliant finance and Islamic commercial law."

Apparently, that "what you need to know" does not encompass the realities of American law, constitutional trespass, or the ins and outs of how Islamic law slams women, children, homosexuals, or those who run afoul of any segment of the Koran.


The attendees were all lawyers, male and female, well dressed and serious. They were also largely passive, seemingly accepting whatever was told them by the speakers.

Although the initial discussion did mention "the Prophet" (Mohammed, 8th century) a number of times (Abed Awad), as a rationale for Shariah, no mention of the Koran was made throughout the evening. Slides went by quickly on the screens, and the usage of Arabic terms for various financial instruments was quickly dropped, not explicated. People taking notes looked frustrated.

Speakers did not take questions until the very end, after 9 pm, when many audience attendees had left. About 20 or fewer remained for the 15-minute question-and-answer session.

The second speaker mentioned that "over 400 such deals have been made" since the introduction of this system. (Since the SCF system has been in place close to 20 years or so, 400 is not very impressive, but later speakers noted, "You may not realize how many deals now are Shariah-compliant. There are more than you know, but it just doesn't come out.")

The last presentation, which was the most intricate, as it explained the various forms of sukuk and murahaba bonds, financial instruments or real-estate structuring deals, was presented quickly --and confusingly-- by the presenter with the heaviest Arabic accent, Allen Merhej. I canvassed a few lawyers nearby if they could pursue such arrangements with clients, given the talk we had just heard. Consensus: Not at all.

One question asked about the "time value of money" which had not been referenced during the presentations. Chairman Robert Michael waved it off vaguely, agreeing that such a concept did have value in Western law, but it really did not come into play in this Shariah system.

Four questions were meat-and-potato queries on creating a deal. My questions concerned one screen (McMillen's) that read: "Welcome the opportunity — be cooperative with this — otherwise, you will be forced to use this system." I said that that bulleted point sent a chill down my spine. It was explained that the swelling numbers of deals would make NOT working with SCF "almost impossible."

When I noted that currently 70% of the world's Muslims do not want to go the Shariah route, Freamon ardently replied, "That is true, but during the 1990s, 90% of Muslims rejected SCF." We were supposed to be persuaded by this logic.

I asked about the absence in the 3-hour presentation of any mention of jizz'yah, zakat or who makes the decisions on "cleansing" or "purifying" loans or deals that had gone afoul of strict compliance. I was (falsely?) assured that "the individual decides" what gift or monetary amount to cede to make up for the bad compliance of a deal so structured. Delorenzo, in his apparently signature methodical, sluggish singsong, offered a figure of 3% to 4% in total to be removed for "cleansing" or "purification." His presentation offered no slides, only a cajoling narrative of how much he enjoyed working in this arena, and how many deals are going forward using this "logical" and "reasonable" system of investment. "It makes sense," he repeated several times.

As presented, however, such deals seem to be excessively complicated by the need for scholars to agree, the shortage of Shariah scholars worldwide, the potential for conflicts of interest, since many companies had by necessity to share the few scholars available, and such borrowed scholars formed 'teams' to expedite deals — though they allowed as how such deals were very time-consuming and difficult to negotiate and complete — as well as the trickiness involved in avoiding interest and the appearance of interest or simple "profit" without making sure "everyone in the deal was experiencing risk" to ensure a profit that was "earned." They acknowledged the anomaly of Islamic 'banks,' when they did not fulfill any of the normal processes of Western banks, but they got around this with complex matrixes of partnerships and cosigners. Deals are now more complicated than they were at the start of the SCF initiative, and finance in general has become more complicated globally.

To my question, the elements cited as to jizz'yah and zakat, and where the money removed for the banking or originating institution went, were sloughed off and vaguely waved away by the panel. Since the first seminar I attended 6 months ago on this issue said very definitively that all such decisions are made by the Arab/Muslim side 'partner/s,' not the individual or outsider investing, I was skeptical as they told me that "investors can decide where they want to place their 'purification' monies." Further research needs to be done on this issue to establish veracity of this assertion on decisioon-maker on 3%-5% of total investment.

Observation on audience reaction: A lawyer passed me his (US House of Representatives, gold-leafed) card, stating, "Well said! Check out my boss' website — you will see you are of like mind."

(contact:) Hal Weatherman, chief of staff, US House of Representatives,
Rep. Sue Myrick, 9th Dist. North Carolina, 6525 Morrison Boulevard,
Ste 402, Charlotte, NC 28211;
704 362 1060; (f) 704 367 0852 ;

Nothing about the Constitution or treason or sedition was noted, since there were no opposing presenters or spokesmen.

Q&A was 15 minutes, post-9 pm, after a 3-hour presentation; most attendees were out the door before they began.

Editor's Note:

The United States Treasury held a workshop Thursday, November 6th, to train U.S. government personnel in Shariah-Compliant Finance (SCF). The Unity Coalition for Israel (UCI -- held a press conference that day to point out the many dangers implicit in adopting SCF in U.S. financial institutions.

Shariah-Compliant Finance is only one aspect of Shariah Law. Shariah imposes restrictions on every aspect of Muslim life. It requires non-Muslims to live as dhimmis and be treated as second-class citizens in a brutal and demeaning way. It mandates discrimination against women and non-Muslims, demands the murder of homosexuals, adulterers and apostates, and requires violent Jihad against all "infidels" including Christians, Jews, Buddhists and others. It is also characterized by such barbaric practices as beheadings, female genital mutilation, amputations for petty crimes, and martyrdom and suicide bombings - all perpetrated in the name of Allah.

Shariah Law is seditious because it calls for the violent overthrow of governments like that of the United States and the replacement of democratic constitutional law with its own theocratic code. It seeks to establish Muslim rule around the globe. Shariah is violently practiced in Afghanistan, Iran, Sudan and Saudi Arabia, some of the most oppressive regimes in the world.

How does SCF work? Shariah financed profit derives its monetary interest from returns on investment in companies that must be purified by donating a portion of their profits to charity. "Charities" that receive these donations are selected by Shariah experts who are members of an oversight Board. There are allegations that some of the profits support major Muslim organizations suspected of having ties to terrorism. Indeed, recipients such as the Holy Land Foundation, the Benevolence International Foundation and the Global Relief Foundation were closed in December 2001 for allegedly supporting Islamic terrorism.

Some analysts are concerned that Islamic banking will open Western financial institutions to help further the broader Islamic agenda. It can mean the gradual imposition of the repressive Shariah Islamic Law across America. How can we justify Western bankers promoting practices that would institutionalize and legitimize such action?

The Unity Coalition for Israel strongly recommends that no action be taken to impose Shariah-Compliance Financing on the United States financial system.

Marion DS Dreyfus is a British-born journalist, author and travelor, with interests in Middle East politics, medicine and emerging technology. Contact her at


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