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Court Says AIG Bailout Did Not Violate Establishment Clause Despite Offering of Shariah-Compliant Products

By Howard M. Friedman

In Murray v. Geithner, (ED MI, Jan. 14, 2011), a Michigan federal district court rejected an Establishment Clause challenge to the bailout of AIG insurance by the federal government under the Emergency Economic Stabilization Act of 2008.  Plaintiff claimed that because AIG is a leader in offering Shariah-compliant insurance products, the government is using appropriated funds to finance Islamic religious activities in violation of the Establishment Clause. The court concluded, however, that the government had secular purposes that are not secondary to religious purposes, that AIG is not engaged in religious indoctrination attributable to the government, and that the government has not become excessively entangled with religion. It also concluded that Treasury Department activities publicizing and studying Shariah-compliant financial products do not amount to governmental endorsement of religion. The Detroit Free Press reports on the decision. (See prior related posting).

Full post as published by Religion Clause on January 14, 2011 (boomark / email).