Is the AIG Bailout Unconstitutional?

Kevin Murray, ex-marine and U.S. tax-payer, just can’t be heard, as he was denied standing by the 6th U.S. Circuit Court of Appeals in Cincinnati in June — a ruling the Supreme Court has just let stand. Murray’s case is against the government, particularly the U.S. Department of Treasury, in regard to the TARP bailout of AIG (NYSE:AIG) and AIG’s religious affiliation.

Murray intended to argue that the TARP bailout of AIG was unconstitutional as AIG has 5 subsidiaries that promote and practice Shariah in 4 different countries, including the United States. He would argue this puts the bailout at odds with the Establishment Clause of the First Amendment, arguing the bailout is not in line with the separation of church and state.

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Despite more than $153 million of bailout funds — previously tax-payer money — going to AIG’s Shariah-compliant subsidiaries, the courts did not grant Murray standing to argue his case over the purportedly unconstitutional use of his taxes, claiming, “the (law) does not contemplate the use of federal funds to support religious activities,” though a conference entitled “Islamic Finance 101” was sponsored by the Treasury Department and held shortly after the department became interested in AIG.

As Murray was blocked at the highest judicial level, it remains to be seen if he will get a chance to argue his case.

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