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Saudi-led Gulf Squabble Spells Trouble for Obama?

The Obama White House and the world media are pre-occupied with Russian President Putin’s grab of the Ukrainian autonomous province of Crimea. There are undertones of “Back to the Future”- meaning a possible return to Cold War era geopolitics with Russia.

Despite that overriding ruckus there was a less well publicized series of events in the Persian Gulf region among members of the Gulf Cooperating Council (GCC). Does this spell trouble ahead for President Obama’s Middle East policies?

At the GCC meeting on March 5th in Riyadh, Qatar was effectively isolated by “sisterly” Sunni Arab states. The Emir of Qatar, a member of the GCC, has been prominent in supporting financial aid and assistance to Muslim Brotherhood (MB) affiliates in Egypt under Morsi, Hamas in Gaza and the Syrian Opposition Council, one of whose leaders is a dual American Syrian citizenLouay Safi.

Virtually on the heels of the squabble at the GCC gathering, Saudi King Abdullah announced decrees on Friday, March 7th. They listed the MB as a terrorist organization along with several AQ affiliates in Syria and Iraq, as well as Shia terrorist groups in North Yemen and in the oil rich Eastern Province. The latter are backed by both Iran’s Qod Force and Hezbollah. This should present problems and potential conflicts of interest for President Obama’s senior National Security advisor Robert Malley and White House Chief of Staff Denis McDonough. Both of these men espouse outreach to the MB, Iran and proxies, Hezbollah and Hamas.

This train wreck about to happen has been in development since the July 3, 2013 ouster by Egyptian Gen. al-Sisi of President Morsi in Egypt. Morsi was a former leader of the Muslim Brotherhood endeavoring to create a Sharia compliant constitution with him as Emir. Egypt’s interim government in December 2013 outlawed the MB. This week an Egyptian court went after Hamas, the Gaza affiliate of the MB banning activities in Egypt. Following, the ouster of Morsi, Saudi Arabia and several of members of the GCC provided upwards of $12 billion in financial assistance to the interim Egyptian interim government. The stage now appears set for Gen. Abdel Fateh al-Sisi to run as the country’s President, a harkening back to the days of Gamal Abdel Nasser and the possible return of military autocracy in Egypt.

The flashpoint for the GCC isolation of Qatar was the notorious aged Egyptian MB preacher Yousuf al Qaradawi who had been in exile in Qatar before temporarily returning to Egypt in February 2011. He issued Fatwas for the reconquest of Al Quds (Jerusalem) and preached anti-Semitic hatred to crowds in Tahrir Square. In a January 2009 broadcast from Qatar, al Qaradawisaid about Jews: “kill them, down to the very last one.” While in Doha, Qatar he steadfastly refused to participate in annual International Interfaith Conferences.

A news report by Radaw noted the isolation of Qatar by “sisterly” Sunni Arab states because of the mischief of al Qaradawi and sanctuary provided by the Emir:

The Arab states of the lower Gulf are engaged in the latest and potentially most serious of their periodic family squabbles, which this week provoked three of them to withdraw their ambassadors from tiny Qatar.

The Qatar government expressed regret and surprise at Wednesday’s decision by the “sisterly countries” of Saudi Arabia, United Arab Emirates and Bahrain, but said it did not plan to retaliate by pulling out its own envoys.

All four states, together with Kuwait and Oman, are members of the GCC.

The official reason for the diplomatic spat is Qatar’s alleged failure to live up to a recent commitment not to interfere in the internal affairs of fellow GCC states.

The three conservative states are particularly distressed that Qatar continued to provide a platform for Yousuf Al Qaradawi, a Qatar-based Egyptian cleric, to use his fiery sermons to attack Saudi Arabia and the UAE despite Riyadh’s threat to freeze relations unless he was silenced.

The scope of King Abdullah’s terrorist designations was reported by Al-Jazeera:

Saudi Arabia has listed the Muslim Brotherhood as a terrorist organization along with two al-Qaeda-linked groups fighting in Syria.

The decree against the Brotherhood, whose Egyptian branch supported the deposed Egyptian president, Mohamed Morsi, was reported on Saudi state television on Friday.

Egypt in December listed the Brotherhood as a terrorist organization, prompting the arrest of members and associates and forcing the Islamist group further underground.

Saudi Arabia also listed Jabhat al-Nusra, which is al-Qaeda’s official Syrian affiliate, and the Islamic State of Iraq and the Levant (Sham) (ISIS), which has been disowned al-Qaeda, as “terrorist organizations”.

It also listed Shia Huthi rebels fighting in northern Yemen and the little-known internal Shia group, Hezbollah in the Hijaz.

Early in February, 2014, Ayman al Zawahiri at Al Qaeda Central announced that the global Islamic terrorist group had no association with ISIS, instead providing support for the Al Nusrah front fighting against the Assad regime in Syria.  ISIS however has rampaged across the Anbar province in neighboring Iraq overtaking the Sunni town of Fallujah.

About the same time as the AQ ISIS declaration, King Abdullah had announced new counterterrorism policies that were directed against so-called reform movements in the Saudi Kingdom. The Washington Post  reported the new law “states that any act that ‘undermines’  the state or society, including calls for regime change in Saudi Arabia, can be tried as an act of terrorism.” This Saudi law appears  to be in violation of human rights taken for granted in the West, but clearly viewed as seditious in the autocratic and Sharia compliant Wahhabist Kingdom.

These latest Saudi initiatives could have significant implications for the Obama Administration and Secretary Kerry. Kerry is endeavoring to fashion an Israel- Palestinian final status agreement and resolution of the 37 month civil war in Syria.  We noted earlier the presence of Louay Safi as spokesperson for the Syrian Opposition Council at the recent Geneva II plenum talks. Safi was Research Director at the northern Virginia- based MB supported International Islamic Institute of Thought. Moreover, he was also Leadership Development Director at the MB front, the Islamic Society of North America, an unindicted co-conspirator in the 2008  Federal Dallas  trial and convictions of leaders of the Holy Land Foundation. The Muslim charity group had been accused of funneling upwards of $35 million to MB affiliate Hamas. Safi was also invited by the US Army Chief of Staff to lecture troops on Islam at Fort Hood in early December 2009 following the massacre perpetrated by Maj. Nidal Hassan a month earlier. Clearly, Safi’s rise to prominence in the Syrian Opposition Council is indicative of the MB controlling presence.

White House Chief of Staff Denis McDonough and senior National Security Aides were present at the May 2012 meetings of the Brookings Doha Center in Qatar. They were engaged in outreach to MB officials from Egypt, Tunisia and other Arab states and facilitated assistance to ousted President Morsi. Obama Appointments of MB members, especially Department of Homeland Security Assistant Secretary for Policy, Arif Alikhan and Senior Advisory board member Mohamed Elibiary have been problematic. National Security Advisor Malley was a former Middle East foreign policy aide to President Clinton during the failed 2000 Camp David Israel-Palestinian negotiations between former Israeli PM Ehud Barak and the late Yassir Arafat. Malley had accused Israel of nixing the agreement, when it was evident that Arafat had purposely sabotaged it. Malley went on to become head of the Middle East and North African program of the International Crisis group and later advised then Senator Obama and was part of the President’s transition team. He holds views that may further complicate Administration Middle East policies.  Malley propounded speaking with terrorist proxies Hamas and Hezbollah as well as the MB. Malley, was recently appointed to the National Security Council. He has the portfolio for Israel -Palestinian peace talks and the Iran nuclear P5+1 diplomatic initiative.

Now that Egypt and Saudi Arabia have designated the MB as a terrorist group, would the Obama Administration dare follow their lead? How Messrs. McDonough, Malley and Secretary of State Kerry will contend with a plethora of problems arising from efforts by the Egyptian government and now the Saudi led GCC targeting the MB is a ‘puzzlement’.

EDITORS NOTE: This column originally appeared on The New English Review.

Sharia Compliant Finance in America

Yesterday’s New York Times Business Day Section had a major article reporting  on Shariah Compliant Finance, “Islamic Banks, Stuffed with Cash, Explore Partnerships in West.”  In late October 2013, we posted on the Iconoclast  about cheerleading that UK Prime Minister  David Cameron gave at the London meetings of the World Islamic Economic Forum  extolling the virtues of making the City,  “the unrivaled Center for Islamic finance.” In that post, we drew attention to some of the demonstrable problems that  the UK had encountered over the past five years accommodating  “Islamic Economic Imperialism,” the term  used by Christopher Holton, Vice President for Outreach at the Washington, DC-based Center for Security Policy and editor of Sharia Finance Watch.

The New York Times article noted the mushrooming growth of the  global Shariah compliant  financial market place:

Over the last 30 years, the Islamic financial sector has grown from virtually nothing to over $1.6 trillion in assets, according to data from the Global Islamic Financial Review, an industry publication. The financial crisis has only encouraged the growth. Industry assets grew 19 percent in 2011 and 20 percent in 2012, in contrast to the less than 10 percent growth at non-Islamic banks in most of the world.

Until recently, Islamic banks have largely put their money to work in the Middle East — or, if they invested in other parts of the world, in real estate. Real estate is among the most popular investments under Islamic law, also known as Shariah, because a deal can be structured that does not require interest payments, which are prohibited by Shariah. But as the banks grow larger they are looking for new, more diverse places to put their money.

Coincidentally, Holton, see our March 2013 NER interview with him, sent us a recent video of his presentation on Shariah Compliant Finance at an event sponsored byChildren of Holocaust Survivors of  Los Angeles  (CHSLA) on December 18, 2013, “Shariah Compliant Finance and Jihad with Money.”  Watch the CHSLA presentation of Holton, here.

Holton  made several  telling points to his lay audience. He said that the term Islamic Finance, the term of art used in the international financial and investment banking community, is cover for Shariah compliant finance aimed at perpetrating  stealth Jihad via a sophisticated call to Islam. It connotes so-called “ethical investing”  given compliance with the totality of  Islamic Shariah and Qur’anic doctrine. It is all about using the cover of the greed factor that undergirds capitalism in the West.

He gave some background of Shariah compliant finance going back to the writings in 1940 of Maulana Maududi, the Indian-born Pakistan Islamic scholar, extolling the virtuesof  Islamic Economics as part of an Islamic revival in the 20th Century. There were similar soundings about the benefits of this in the writings of Sayyid Qutb in the 1940’s and 1950’s. Qutb was a member of the Muslim Brotherhood who provided the underpinnings for the Jihadist doctrine that had its manifestation in Al Qaeda. We also note that Hassan al Banna, Egyptian school teacher and founder of the Muslim Brotherhood in 1928 like Maududi and his disciple Qutb, viewed  Islamic Economic Imperialism as a counterweight.Joseph Spoerl in an NER article, “The World View of Hasan al-Banna and the Muslim Brotherhood” noted that al Banna said:

The entire Muslim world is being corrupted by Western decadence: Muslim countries are being flooded with Western capital, banks, and companies. The founding of the Muslim Brotherhood in 1928 is often explained as a reaction against Western imperialism. For Islamic imperialism al-Banna has only the most effusive praise.22 Imperialism to impose Islamic rule on non-Muslims is altogether to the good. Al-Banna is fully aware that Islam was born not only as a religion but also as an imperialistic ideology mandating the conquest of non-Muslims.

Al-Banna began a network of banks in Egypt and elsewhere that met the Qur’anic standards that prohibited  interest payments as usurious.

Holton explains as vast areas of the Muslim Ummah from Morocco in the West through the Arab heartland to South Asia and the Indonesian Archipelago were Western colonial possessions with Western banking commercial and industrial enterprises. There were few independent Islamic countries of note until the post World War Two era  when independence movements swept these areas. It was oil, and especially the 1973 and 1979 Oil Embargoes and the establishment of the OPEC Cartel that suddenly filled the coffers of Muslim autocrats and gave rise to trillions of petro-dollars for recycling.

Holton noted that the current market for Shariah Compliant finance including instruments like Sukuk or Islamic bonds has virtually doubled between  2008 to 2012, from $800  billion to over $1.7  trillion. Given UK PM Cameron’s  announcement at the World Islamic Economic Forum in London in October 2013, the  Shariah Compliant Finance market looks ready to kick into gear with the underwriting of a $324 Million Sukuk sovereign bond issue. Historically, the Iranian Islamic regime since the 1979 revolution has become the largest center of Shariah Compliant Finance. Holton noted that Iranian banks held  the top rankings of  the leading 500 Islamic finance institutions in the annual Islamic Finance Review by the UK-based publication, The Banker.

That according to Holton gave rise to providing oversight and clearance of ‘ethical’  Sharia compliant investment that  met the  so-called Qur’anic interest payment prohibitions. That meant turning to Islamic scholars like Muslim Brotherhood preacher Yusuf al Qaradawi in Qatar, Mufti Tami Usmani in Pakistan and others in Malaysia. They became advisors to Western investment groups, such as  al Qaradawi did with Dow Jones that had established an Islamic Investment Index. In the case of Hong Kong Shanghai Bank Corporation (HSBC) initially retained Usmani as Islamic legal  advisor for its Amanah  funds program.  Western investment groups did not care a fig about what Shariah is, what they wanted was someone of alleged Islamic legal background  to certify that the investment was halal. The problem was that there were not many of these Shariah experts around to satisfy the growth of  Islamic Finance and it lead to evident growth problems and conflicts of interest. There was virtually no due diligence let alone disclosures about Shariah doctrine and especially about zakat.

Zakat as we have written in an NER article on the relation to terrorism is the annual tithing of charitable contributions  to Muslim charities. One of the eight purposes of which is support for the way of Allah, Jihad. Holton illustrated the later referencing a Shariah compliant real estate mortgage firm  based in New Jersey, BMI, that prior to 9/11 had zakat funds directed via an offshore Islamic bank  to the Egyptian predecessor of Al Qaeda controlled by Ayman al Zawahiri.

Conflicts have occurred as many of  the limited supply of Islamic scholars have forced Islamic finance investment fund sponsors to employ them among competitive sponsors. He noted that both Al Qaradawi and Usmani had additional problems because of their support for terrorist groups like Hamas in the case of the former and the Taliban in the latter instance. Usmani as Holton pointed out had formed the largest Madrassa in Pakistan that harbored the Taliban. Moreover in the instance of Usmani, when HSBC was advised to cease advisory relations with him, the bank simply resorted to retaining his son. Dow Jones didn’t seem perplexed about retaining al Qaradawi for its Islamic Finance Index, despite Qaradawi’s being barred from entry by the US Government.

One peculiar instance that Holton noted was an American convert to Islam who is cited as an advisor to one of the Islamic Finance groups in the New York Times article, Yusuf DeLorenzo. He is featured reviewing a rail car finance deal for Continental Rail to make sure that the cars to be financed wouldn’t carry pork, alcohol or tobacco. DeLorenzo, Holton points out was born a Catholic raised in Massachusetts, who after a year at Cornell  University left to find his bliss in Islamic Pakistan. He converted to Islam becoming a Shariah scholar and advisor to  President Gen. Mohammed  Zia- al  Haq, arch Islamist,  who perpetrated the  bloody Jihad civil war in former East Pakistan in 1971 that morphed into what is now Bangladesh.

Holton cited examples of US government and major legal education institutions in the US complicit in promotion of Shariah Compliant Finance. In 2008, the Bush Administration had the Treasury Department sponsored a conference in conjunction with the Islamic Finance Project  of Harvard Law School on the topic of Islamic Finance 101. Holton had attended a seminar on the subject at one of the seminars of the Islamic Finance Project at Harvard Law School in which he observed that at best the participants had a nodding acquaintance of the term Shariah. He also interviewed a former Treasury official involved with terrorism finance who had joined HSBC after being fined $1 billion for engaging in illegal transactions with  Iran’s oil program. The person evinced little interest or knowledge about Shariah.

Perhaps the best comment at the conclusion of the New York Times article is by Mr. Ibrahim Mardam-Bey, a group president at  Washington, DC-based  investment firm Taylor-DeJongh. who observed:

That some American businesses were hesitant to take money from Islamic banks, perhaps a byproduct of negative associations with Shariah since the Sept. 11 attacks. But in the Texas deal, and in many others, that tends to fade as the financial possibilities become clear.

“The borrower was a Texan wildcatter who couldn’t spell ‘sukuk,’ ” Mr. Mardam-Bey said. “But at the end of the day when I brought the check he didn’t care if I prayed to Allah. He just wanted the money.”

EDITORS NOTE: This column originally appeared on The New English Review.