Proponents of Shariah-Compliant Finance like to refer to it as a form of “ethical” investing, especially in efforts to get non-Muslims to invest in Shariah-Compliant products.
Many of the decisions associated with Shariah compliance are made by clerics, sheikhs, muftis and others collectively known as “shariah scholars.”
The problem with this premise is that Shariah compliance does not in fact provide any security against fraud, waste and abuse. This fact is illustrated by the curious case of the missing $430,000 from the Islamic Center of Washington.
It seems the Iranian-born business manager says that the money was paid out to snitches, informants and women close to the Saudi imam of the center. The imam claims that the business manager absconded with the money by funneling it through payments to a gardener.
I don’t know which side to believe in this case, but I will say that, having driven by the place just last week, it’s got a small yard. If they paid $430,000 to their gardener over any period shorter than 20 years, then there was definitely some monkey business going on. I know any number of 15 year old males who would do that work for minimum wage–and supply their own lawn mower.