Islamist 'Trojan Horse' In Pentagon, Expert Says

Federal authorities say a high-level Muslim Pentagon aide, who led a campaign to silence a Pentagon intelligence analyst for taking a hard line against Islam, is running an "influence operation" on behalf of U.S. Muslim groups fronting for the radical Muslim Brotherhood.

Hesham H. Islam (left), Muslim aide to the deputy secretary of defense, with Muslim military chaplain Abuhena M. Saifulislam (right)

Hesham H. Islam, a special assistant to deputy Defense secretary Gordon England, recently criticized Maj. Stephen Coughlin, one of the military's leading authorities on Islamic war doctrine, for making the connection between the religion of Islam and terrorism.

After Islam lodged complaints, Coughlin's contract with the chairman of the Joint Chiefs of Staff at the Pentagon was not renewed.

Islam also was upset with briefings Coughlin recently prepared for the U.S. military warning that major U.S. Muslim groups were fronting for the Muslim Brotherhood, a worldwide jihadist movement based in Egypt.

Islam, who was born and raised in Egypt, is heavily involved with one of the groups – the Islamic Society of North America, which U.S. prosecutors last year named as a member of the U.S. branch of the Muslim Brotherhood and an unindicted co-conspirator in a major terror-funding case.

Islam has persuaded his boss, England, to conduct various outreach with ISNA, including hosting the group's leaders in the Pentagon and speaking at its annual convention.

Speaking during ISNA's 2006 opening ceremonies, England proclaimed, "There is no contradiction between the peaceful religion of Islam and America's values and principles."
Coughlin reached the opposite conclusion in a 329-page report submitted to the National Defense Intelligence College, in which he warns that Islamic law sanctions violence. That finding, among others, has put him at odds with Islam, whom England describes as "my personal close confidante."

"I take his advice," England said, "and I listen to him all the time."

WND has learned that Islam is closely associated with a Muslim military chaplain trained at a radical Islamic school that federal agents raided after 9/11 in connection with terror-financing.

As WND reported, the chaplain, Abuhena M. Saifulislam, studied Islam at the Graduate School of Islamic and Social Sciences in Virginia.

Recently declassified FBI documents reveal its sister organization, an Islamist think tank known as the International Institute of Islamic Thought, or IIIT, is involved in a Muslim Brotherhood conspiracy to wage a cultural and political jihad to eventually take over America from within – most notably, through infiltration of government agencies.

Islam works closely with Saifulislam (Arabic for "sword of Islam") on Pentagon outreach projects involving Middle Eastern embassies and the so-called Wahhabi lobby in Washington.
"He's a Muslim brother," an FBI official said of Islam. "He's a bad actor. He's well-positioned to be where he is, and that doesn't do us any good."

He also said Saifulislam is "definitely Muslim Brotherhood," while noting that Islam "is a lot smoother than Saifulislam," who as a chaplain at Gitmo lobbied for special meals and other privileges for al-Qaida detainees.

The official hastened to add that, at this point, belonging to the Muslim Brotherhood is not criminal, and neither Defense Department employee is the subject of a formal counterterrorism or counterespionage investigation. Both men have refused interviews, and the Pentagon had no comment.

However, the FBI official warned that the Muslim aides are part of a conspiracy by Muslim Brotherhood fronts to run "influence operations" against the U.S. government.

"Their M.O. is to make nice for the very purpose of penetrating us," he said, "and we just roll over for them, at least at the top levels."

He says England, who also recently dedicated an Islamic prayer center at Quantico on the advice of Saifulislam, is blind to the threat.

"England doesn't know it's an influence operation that's been laid at his door," he said. "His lack of awareness is irresponsible."

A senior U.S. official who has met with England says he was not even aware that a convicted terrorist and al-Qaida fund-raiser created the Pentagon's Muslim chaplains corps.
Adurahman Alamoudi, a Muslim Brotherhood leader and founder of the American Muslim Council, placed Muslim chaplains throughout the military. He is now in jail on charges of terrorism. However, most of the chaplains he trained and sponsored are still in their current positions.

"The Islamic chaplains who serve were trained by a known terrorist," said terrorism expert Steve Emerson.

Emerson says Islam, like Alamoudi, has invited "subversive" elements into U.S. military headquarters.

"Hesham Islam is an Islamist with a pro-Muslim Brotherhood bent who has brought in groups to the Pentagon who have been unindicted co-conspirators," he said.

Emerson said a "Trojan horse" of subversives and potential spies have penetrated deep inside the Pentagon, and they are now bearing fruit with the ouster of Coughlin. Sources say Islam has high security clearance.

A former Pentagon colleague of Coughlin described Islam as a "gatekeeper," who at a minimum, is blocking candid discussion of the religious nature of the threat posed by Muslim terrorists. Such action, William Gawthrop says, thwarts the U.S. war effort, because it denies military brass and rank-and-file the information they need to effectively fight the Islamist enemy.

"We still do not have an in-depth understanding of the war-fighting doctrine laid down by (the Muslim prophet) Muhammad, how it might be applied today by an increasing number of Islamic groups, or how it might be countered," Gawthrop told WND.

He says Coughlin was trying to bridge that gap before being pushed out.

Supporters of the respected contractor say Islam had a direct hand in his firing. They say that on Jan. 3 Coughlin was told his contract, which ends in March, would not be renewed because his message had become too "politically hot."

They say that in a meeting late last year between Coughlin and a member of England's staff, which Islam unexpectedly attended, Islam asked Coughlin to "soften his message" regarding Islamic war doctrine. Coughlin refused.

Islam was heard referring to Coughlin as a "Christian zealot with a poison pen." The conflict resulted in his contract being terminated.

A well-placed Pentagon insider described it differently, however. Islam and Coughlin were present at the briefing, but there was no direct confrontation between the two. It was not until Hesham returned to England's office suite that he remarked that Coughlin had a "poison pen."
"He clearly doesn't like him," the source told WND.

Also, Coughlin was let go in part because his contract was up, and at $440,000, it was too steep to justify renewing, the insider says. And though he had written a 329-page thesis on the subject, he was not effective at briefing the J-2 intelligence staff of the Joint Chiefs.

"He's brilliant, and he knows his stuff, but he couldn't teach it," the source said. "It went over everybody's head."

Still, England has not properly vetted his long-time aide, Islam. "Gordon is so trusting of this guy because he's worked for him for so long," the same official said. "But he's got questionable contacts, and he (England) needs to have his antennae up."

The Financing of the West - Through Shari'a Law

... Digging Deeper and Deeper Down the Hole! ...

The very expectations of glittering shari’a finance (Islamic banking) profits hypnotize financial institutions, securities exchanges, and banks--and there are few regulatory or monitoring protections against abuses. So why did United Arab Emirates (UAE) government IP address 92.97.131.110 send some 30,000 to 40,0000 spam messages on December 8, 2007, soliciting Islamic finance clients among U.S. citizens and small businesses?

“Need assistance,” the spam asks, soliciting inquiries to islamicfin@gmail.com, registered to Emirates Telecommunications Corporation at UAE’s federal domain authority.

Maybe gorging on U.S. strategic assets increases UAE appetite--even though, the lower stocks go, the more prime U.S. investment companies Middle East investors scoop up. Maybe UAE spammers may want to lasso U.S. credit crunch victims desperate for cheaper home or small business loans.

Let's hope U.S. consumers and U.S. presidential candidates--unlike those U.S. financiers falling like flies before UAE sheiks--will carefully scrutinize the entire Islamic banking scam.
The UAE email solicitation purports that Islamic finance provides four “attractions:”

* Good alternative source of funds
* Risk perceptions of Islamic financiers
* Off-balance sheet financing
* Preferred mode of financing for certain corporate (sic) and individuals

Many grave secular risks accompany shari’a’s growing foothold in Western markets.

With wife-beating, stoning women, dismembering thieves, hanging homosexuals, supremacist ideology and an annual head tax (jizya) on non-Muslim subjects--shari’a also orders Muslims to fund jihad (financial jihad--al Jihad bi-al-Mal). As in Qur’an 61:10-11, “strive for the cause of Allah with your wealth and your lives….” and Qur’an 49:15. “Financial Jihad [is]…more important…than self-sacrificing,” says Saudi cleric and Muslim Brother Hamud bin Uqla al-Shuaibi.

Consider the four purported advantages.

First, the Saudi-favored shari’a finance “alternative,” as noted in FrontPageMagazine earlier, is a 20th century construct without basis in Islamic history--and often funds destruction. It’s an “invented tradition” empowering Islamic radicals, writes USC King Faisal Professor of Islamic Thought, Timur Kuran, in Islam and Mammon: “Neither classical nor medieval Islamic civilization featured banks in the modern sense, let alone ‘Islamic’ banks…”
Muslims expect “humanitarian” Islamic finance to buy their “reward in the Hereafter.”
Conversely, Americans expect alternative “ethical” and “socially responsible” investing to build human rights in southern Sudan, common shareholder rights, and good corporate governance and transparency--terms not in the shari’a finance lexicon.

Then take “risk perceptions of Islamic financiers.”

Evidently bankers have forgotten to whom the advantage of this second bogus UAE-invoked “attraction” accrues: Citibank’s Islamic financiers in 1955 launched its Saudi American Bank subsidiary in Jeddah and in 1966 opened a Riyadh branch--without presenting due diligence on the risks of operating under shari’a law, which include sudden confiscation. So Citibank discovered in 1980, when the Saudis seized SAB by royal decree, denied Citi any future profits, and ordered the bank to train Saudis staffers.

Likewise, the “risk perceptions of Islamic financiers” apparently aided criminals at the Bank of Credit and Commerce International (BCCI), which was founded as an Islamic bank. BCCI perpetrated the largest fraud in banking history, costing depositors and investors at least $21 billion before U.S. prosecutors closed it in 1991. BCCI was also established “to help the world of Islam, and [as] the best way to fight the evil influence of the Zionists,” as Rachel Ehrenfeld noted in Evil Money (Harper Collins, 1992, pp. 160, 164-5, 169-70). Thus under UAE president Sheikh Khalifa Bin Zayed Bin Sultan Al-Nahayan’s late, terror-financier father, BCCI funded such “alternative” organizations, states and projects as Hezbollah, al Qaeda, Syria, Iran and Pakistan’s nuclear bomb manufacturing.

And Islamic banking's third “advantage”--its off-balance sheet financing--most readily explains its fourth: the domain's preference by “certain corporate (sic) and individuals.”
But even the Finance and Accounting Standards Board (FASB), which sets standards for the self-regulated accounting industry, would agree with a Government Accountability Office (GAO) report released in December 2007, calling for more and better market and banking oversight--not less.

And that includes leashing the downside risks in off-the-books financing. Hundreds of billions of dollars in subprime mortgages caused the current global credit crisis, which is ravaging global equities and bond markets, and could slice $6 trillion from U.S. home values and take years to resolve.

In the 30 years since Bank of America technology and an 8.5% BOA mortgage-backed “pass-through” spawned a landmark market innovation--securitization--underwriters transformed trillions of dollars in claimed cash flows on illiquid assets into increasingly liquid, traceable securities. Collateralized debt obligations (CDOs) made mortgage-backed and other complex lending securities so liquid that in the 1980s, U.S. brokerage firms practically sold them on street corners.

During that 1980s securitization boom, the Muslim Brotherhood heavily used the new Western financial technology to develop MB founder Hassan al-Banna's shari’a banking invention. Today, Islamic financial institutions also manufacture “special purpose entities” (SPEs)--the same kind that coincidentally helped destroy Enron. Naturally, Islamic financial engineers renamed the prickly SPEs “special-purpose vehicles (SPVs)”--legal devices to “restructure interest-bearing debt, collecting interest [as] rent or [a] price mark-up.”

So-called sukuk al-ijara (shari'a bond) issuers sell real estate or assets to SPVs, which capitalize their investment by selling share certificates. In turn, the SPVs then lease back the assets they purchased to the sukuk issuers, collecting principal plus interest, which they pass on to sukuk investors as “rent.” When the sukuk matures, the SPVs sell or return the property to the sukuk issuers.

In short, the supposed “alternative” Islamic finance instruments, which claim to avoid usury, use Western structured finance tools--“some of the most complex ever created.” You got it. Shari’a bankers transform liquid, traceable cash flows from interest-bearing debt into illiquid assets.
How is that more secure for the financial markets?

Actually, financial innovation has sometimes caused market dislocations. Often, the bigger the innovation, the greater the unforeseen consequences--and market declines. Take the role of “portfolio insurance” in the 1987 crash. Or the 1994 bust of mortgage-backed bonds, which wiped out $1 trillion in value--then roughly 10% of the U.S. bond market. That free-fall took down (by several notches) many huge pension funds, municipalities and institutional investors--and also beached a few hedge funds like dead whales.

So how does the complex purported shari'a finance alternative create more security for Western financial markets?

It doesn't. Under “complexities,” the December UAE solicitation for Islamic finance clients admitted, “Shari'a regulations can override commercial decisions.”

The email also noted two other major shari’a finance problems:

* Documentation is not standardized
* Inter-creditor agreements can be complex (emphasis added)

Taking monumental risks does not even eliminate usury. All “Islamic finance today is interest based,” complains Rice University Islamic economics, finance and management chairman, Mahmoud el-Gamal, in the Financial Times. Disparaging Islamic banking as “shari'a arbitrage,” el-Gamal calls it “first and foremost about religious identity.” And the “forefathers” of so-called “political Islam” intended precisely that in their conception of this 20th century financial concoction.

In reality, “innovative” Islamic financial securities involve enormous risks, which may be an intended prong of the Muslim Brotherhood's strategic financial jihad.

Sukuk issues entice investors with yields much higher than Western bonds. While central Western banks orchestrate historic, simultaneous rate reductions to contain losses feared to equal those of the 1986 to 1995 savings and loan crisis, a sukuk index with a mere 3.8 year duration sported 6.2% "coupon" on Nov. 30, 2007. Meanwhile, in mid January, yields were only 2.89% on intermediate Treasuries--and just 5.25% on the Lehman Brothers intermediate U.S. corporate bond index. Only long term U.S. corporate debt yielded more than 6.5%. No wonder sukuk issues have been fully subscribed.

But two key determinants of bond quality remain--the surety of payments for the scheduled life of the loan, and the certainty that, on maturity, investors will recover 100% of their principal.
Simply believing Islamic sukuk to be inherently safer than Western bonds doesn’t improve their quality of their higher interest rates--oops--“rent.” Islamic or not, buying a sukuk makes its purchaser a creditor. And for the same reasons “junk” is synonymous with high-yield bonds, larger returns carry greater risks.

Which says nothing of the dubious underlying “profit and loss sharing” Islamic finance philosophy. Investors should look doubly hard at whether to expect profit or loss when a sukuk matures--that is, whether recouping the loan’s entire “face value” is even in the cards. That might depend on the values of underlying properties or assets at maturity. But then, “Shari’a regulations can override commercial decisions,” and so on.

In 1983, my esteemed colleague, former Forbes senior editor Howard Rudnitsky, warned in a booming real estate tax-shelter market, “heavy leverage involves risks, and if the market turns bad, the top-heavy financing could wipe out the equity. The creditors would get the property back, the syndicator would keep his fees and the investor would get the shaft.” Not to mention the back taxes, interest and penalties if the Internal Revenue Service ruled the enterprise “uneconomic.”The same principles apply here. With or without spam, better, safer and fairer for government and IRS regulators, banks, markets--and investors--to take all finance, unIslamic.