A lawsuit was filed in 2008 on religious grounds, claiming the government should not have bailed out AIG because the insurance giant sold financial products specifically tailored to Islamic principles.
The lawsuit says AIG sells Takaful insurance, which is based on communal assistance that has been accepted by some Islamist religious officials.
U.S. Magistrate Judge Mona Majzoub is scheduled to hear arguments Feb. 8.
In May, U.S. District Judge Lawrence Zatkoff denied a request to dismiss the lawsuit at an early stage, saying the case raises questions about whether the government is promoting religion. (here)
Earlier this morning I updated Atlas readers on this government-sanctioned subversion: USG Urges Judge to Bar Geithner Deposition in AIG Sharia Lawsuit.
The US government is trying to cover up Geithner's blatantly illegal activity by barring Geithner's deposition?
GC Baxter and Geithner both testified last Wednesday that they did not put the screws down on the AIG counterparties, because it would have been unethical and illegal to do so. But how in the world did they come to the conclusion that they could illegally acquire 80% of AIG when the FRBNY had already (and legally) acquired 100% of AIG’s assets as secured collateral? It was a pure power grab to wrest total and absolute control—and one for which they all knew they had no legal authority to do straight up, which is why they used the Trust artifice.
Whether the court should grant Plaintiff’s motion to compel Defendant Geithner’s deposition insofar as the depositions of the Rule 30(b)(6) deponents respectively designated by the Defendant Board of Governors of the Federal Reserve System (“Fed”) and Defendant Geithner, in his capacity as Secretary of the U.S. Department of the Treasury (“Treasury”), have demonstrated that Defendant Geithner, both in his previous position as the president of the Federal Reserve Bank of New York (“FRBNY”) and in his current capacity as the Secretary of the Treasury, is uniquely situated to testify about how and why American International Group, Inc. (“AIG”) was the recipient of funds both from the Fed and from the Treasury—the very funds that are at issue.
Please download this PowerPoint presentation for a deeper understanding of what is transpiring:
''Secretary Geithner is uniquely situated to testify as to the mechanics and rationale of the government's bailout of AIG, including decisions related to the expenditure of federal funds,'' wrote the plaintiff's lawyer, David Yerushalmi.
David Yerushalmi is a lawyer specializing in litigation and risk analysis, especially as it relates to geo-strategic policy, national security, international business relations, securities law, disclosure and due diligence requirements for domestic and international concerns.
Here is David Yerushalmi's letter to SIGTARP - The Office of the Special Inspector General for the Troubled Asset Relief Program ("SIGTARP") was established by the Emergency Economic Stabilization Act of 2008 ("EESA").
Dear Mr. Barofsky:
I am an attorney who has worked in the securities litigation arena for more than 25 years and I also serve as General Counsel to the Center for Security Policy, a highly-respected think tank in Washington, D.C., headed up by former Reagan administration official Frank Gaffney, which focuses on matters of national security. I have cc’d Mr. Gaffney on this email.
In this capacity, I am representing Kevin Murray in a First Amendment/Establishment Clause case against the Fed and the Sec. of the Treasury in his official capacity as head of the Treas. Dept. We have alleged that the takeover of AIG by the US Government encourages, promotes and indeed sustains AIG’s advocacy of Shariah-Islamic insurance products worldwide in violation of the First Amendment. The government filed a motion to dismiss which was denied. I have attached that opinion. Currently, we are in the throes of discovery and awaiting the court’s ruling on our motion to compel Secretary Geithner’s deposition, which was necessitated by the fact that the Fed and Treasury Rule 30(b)(6) deponents either testified inaccurately or feigned ignorance (no surprise to you I am sure). I have attached our Motion to Compel and our companion Response to the government’s Motion for Protective Order.
I write to you today because in the course of our discovery investigation, we effectively uncovered a fraudulent artifice which allowed the Fed/FRBNY and the Treasury (using TARP funds) to accomplish that which it could not accomplish legally at the time (pre-EESA)—the acquisition of 77.9% of AIG’s equity and voting rights. We discovered this because we were looking at “standing” issues relative to the Fed/FRBNY funds provided to AIG under the Credit Facility approved in the latter half of Sept. 2008. But, what we learned was quite simply astounding.
The FRBNY wanted more than just a standard debt deal; it wanted absolute control and ownership of AIG. But, it was illegal for the FRBNY to hold equity and the Treasury Dept. did not yet have the legislative authority, later granted under EESA, to do so. But this didn’t stop then-President Geithner or his general counsel Thomas Baxter. They crafted the AIG Trust to accomplish the same goal. But the Trust was transparently invalid and illegal for two fundamental reasons: One, the FED maintained absolute control over the Trust’s existence, its terms, and the Trustees through Section 1.03 of the Trust Agreement. This, as we explain in our Response papers attached, invalidates the trust; yet the government continues to speak about this as an “independent” Trust.
Two, the Fed/FRBNY could not take legal title to the equity but neither could the Treasury Department during this pre-EESA period. So, the FRBNY named the U.S. Treasury (in the Trust Agreement) as the beneficial owner. But again, as our Response papers point out, it is elemental trust law that a beneficiary must be a person or entity that can actually hold title. While the Treasury Department can hold title, the U.S. Treasury can no more hold title than a bank account – because that is what it is. You can deposit funds or assets into a depository account but the account cannot have “ownership” because it has no more authority to do so than a tree log. But, the FRBNY had to conceal the fact that this transaction was really for the benefit of the Treasury Department (something the Treasury Dept’s Rule 30(b)(6) deponent conceded under oath (also provided in our Response papers), because the Treasury department had no legal authority. And, even if it did, as under EESA a few months later, to grant the federal government voting rights would be to create a Gordian Knot of conflicts-of-interest, which is why presumably the legislation seeks to avoid the government from taking both the equity and exercising voting rights. But, at the time of the AIG Trust, there was absolutely no legislative authority for the Treas. Dept to take control of AIG. Yet, this is what the purportedly Trust accomplished.
In the world of finance, and you certainly know this as well as I, if you seek to accomplish an illegal financial transaction (“specified unlawful activity”) through false means (the Trust structure), you are in violation of federal anti-money laundering statutes (18 USC § 1956). I have attached a ppt presentation my office has prepared for oral argument in our case (although the criminal violation is not at issue insofar as we don’t have standing to raise it). Since this artifice included TARP funds, you, in your capacity as the SIGTARP, do. Please feel free to use this material as you deem best.
I will be in Washington, D.C. on Tuesday meeting with some Congressional leaders on this point, and would be more than willing to discuss this in greater detail.