There was an important article recently in Gulf News regarding how the Islamic Finance Industry is dependent on Sharia Scholars rather than an institutionalized approach (http://gulfnews.com/business/markets/islamic-finance-must-move-from-personality-to-institutionalisation-1.1002786). From their perspective, this is an issue because the current crop of scholars is aging and maintains a tight control of the knowledge required to oversee the vast pools of wealth forming. From our perspective, however, a personality-driven approach (where rules can be interpreted in a variety of ways but the scholars word is final) is much more problematic than that. What if a scholar happens to believe in economic jihad and would like to see Sharia Compliant investments used to destroy Western financial institutions?
Who are the scholars who oversee the estimated $1 trillion? The article lists them:
These scholars, Nizam Yaquby (Bahrain), Mohamed Elgari (Saudi Arabia), Abdul Sattar Abu Ghuddah (Syria), Mohammad Taqi Usmani (Pakistan), Mohammad Daud Bakar (Malaysia), Hussain Hamid Hassan (Egypt/Dubai), Yusuf Talal Delorenzo (US/Dubai), and others, are the ‘gatekeepers’ of the industry.
Now, consider the following quote from Alex Alexiev in National Review (http://www.nationalreview.com/blogs/print/223869):
Consider the board chairman of the Dow Jones Islamic Index (IMANX), one Mufti Taqi Usmani. Mr. Usmani is widely reputed to be one of the world’s top experts on sharia finance. Whatever his stockpicking abilities may be, they are dwarfed by his jihadist credentials. A key executive of Pakistan’s prominent Deobandi jihadist factory, the madrassa Darul Karoom Karachi (currently headed by his brother, Rafi Usmani), Taqi Usmani has openly advocated jihad by Muslims in the West, and just last month again publicly endorsed suicide bombing and the Taliban.
It is true that Usmani is perhaps the best-known and most influential Sharia Finance scholar. It is also true that he has made some very clear statements that he would like to overthrow capitalism and the West. Some of the things that scholars can do include determining how Sharia Compliant funds can be invested. For example, scholars allowed Sharia Funds to begin the Islamic equivalent of short selling in late 2007 just before the market collapsed (http://shariafinance.blogspot.com/2007/10/arboon-ijara-and-delorenzo-fatwa.html). Another form of control comes from the designation of where participants can place their required charitable giving (known as zakat). Key scholars appear to believe that a significant portion of those charitable gifts should be used to fund Jihad in one form or another (http://www.shariahfinancewatch.org/blog/2012/04/15/icna-zakat-for-jihad/).
Sharia Finance Watch had an important post on this issue recently which is excerpted below:
Shariah-Compliant Finance Too Dependent on A Few Scholars;
Real Possibility of Racketeering in Support of Terrorism
On April 6, 2012
The fact is, a relatively few Shariah scholars sit on multiple Shariah advisory boards. No matter how much the financial jihadis want to deny it, this presents a conflict of interest, especially where scholars sit on the boards of competitive financial institutions.
But it may even go beyond that–to a sinister aspect of Shariah finance. The Shariah advisors get to decide where zakat (tithing) payments go. They also decide where “purification” payments go.
We haven’t covered “purification” in some time, so we will take the opportunity to do so now. Purification is the process by which proceeds earned in a Shariah finance transaction or entity that are deemed “haram” (unislamic or not in compliance with Islamic law) are disposed of. This can happen when an account inadvertently earns interest, which is forbidden. Or it can happen if a company that a Shariah fund invests in enters into a haram business, such as pork processing. Under purification, the proceeds from the haram activity or transaction must be donated to Islamic charities to “purify” the funds. The Shariah scholars designate those Islamic charities.
This brings the possibility of racketeering to mind as a few Shariah scholars sending zakat and purification money to Islamic charities leads to the real possibility of terrorist financing, since no fewer than 80 Islamic charities have been implicated in funding terrorism and one of the world’s most prominent Shariah scholars, who happens to sit on several Shariah financial advisory boards, Sheikh Yusef al Qaradawi, heads up the Union of Good, an umbrella group of 53 charities based out of Saudi Arabia. The Union of Good has been designated a terrorist entity by the US Treasury Department.
Now, when you combine these facts with the idea that investments themselves can be used as weapons (including through naked short selling as described in the book, Secret Weapon) and the fact that Sharia funds have at least $1 trillion, it becomes clear how important the Sharia scholars have become. The risk is that some honest hard-working individuals without Jihadist intention unwittingly support Islamic Financial products as an expression of faith or multicultural support, unaware that their money is funding an attack on our very way of life.