The Wall Street “Sheikh-Up”

Jonathan Schanzer, writing in FrontPageMagazine.com, describes the marriage of American Corporation’s need for money and the Arab possession of a surfeit of it. The result is the Arabs are acquiring a large share of Corporate America.

[..] How might this harm America? If any of these investors, or a bloc of investors, gains enough controlling shares of a company, they can exact a dangerous influence. This might include the insistence that a corporation’s activities are halal, which would mean jettisoning business interests that include: banks charging interest; firms that are either based in Israel or are working with the Jewish state; firms developing weaponry used in Iraq, Israel, Afghanistan or other Middle Eastern states; casinos and other gambling companies; businesses that involve pork products; alcohol distillers and bottlers; publishers that release books critical of Islam; and even entertainment companies that could offend Muslim sensibilities or appear incompatible with Muslim values.

There is also the fear that Middle Eastern investors could force U.S. companies to provide charitable donations to questionable Islamic charities. As Frank Gaffney notes, once an investment becomes subject to shari’a, at least 2.5 percent of the proceeds are donated to zakat, or charity. Of course, many corporations contribute to charities as a way to give back to the community. But most of the world’s Islamic charities are unregulated or are of unknown repute. The U.S. Treasury department continues to uncover illicit charities that provide funds to terrorist organizations worldwide. Thus, there remains a danger that the earnings of U.S.-based businesses would begin to send funds to questionable Islamic charities rather than regulated U.S. charities at home.

There is also a question of whether our new Middle Eastern partners seek the long-term success of the world financial system, upon which most Westerners rely to grow wealth and ensure a comfortable retirement. Indeed, Wahabbists – among which many Saudis and Emiratis can be counted – have little interest in the long-term viability of the U.S.-anchored world financial system. Wahabbists, in fact, seek to destroy the current world system and to return to the world to a time and place in which Islam reigns supreme. Buying out the U.S. stock market would be an easy way to destroy it from within.

Of course, the fear of foreign interests controlling our business interests runs counter to the notion of a free market economy. Indeed, U.S Treasury officials have even warned against a protectionist backlash that could harm cash flows to the U.S. during a volatile time. But Treasury officials may be working under the mistaken assumption that our new financial partners are ultimately as invested in the world financial markets are we are. Difficult financial policy decisions lie ahead.

Jonathan Schanzer, a former Treasury intelligence analyst, is Director of Policy for the Jewish Policy Center and author of Al-Qaeda’s Armies: Middle East Affiliate Groups and the Next Generation of Terror.