First amendment suit against AIG bailout

[Volokh, Eugene]

I've read the Complaint, and it seems to me that, once one strips away
the "Islam is bad" arguments -- arguments that surely don't advance the
Establishment Clause claim -- one has the theory that the government may
not invest in any company that, in part of its operations, provides
products that are tailored to a particular religious faith, and that may
be accompanied by donations to religious charities.
 
Thus, if the government wanted to bail out (or just buy stock in, for
instance for state employee pension investment purposes) a food
processing company that produced kosher products and donated some money
to Jewish-specific charities -- a way of better wooing Jewish customers
-- that would be an Establishment Clause violation.  Likewise if the
government invested money in a company that, among other things, ran
investment funds that sought to attract conservative Christian investers
by promising not to invest in (say) hospital chains that perform
abortions and that donated to religious causes.
 
That can't be right, either under a Lemon primary purpose / primary
effect theory or an endorsement theory, for the obvious reasons that the
primary purpose here is to make money (or perhaps to lose as little
taxpayer money as possible), the primary effect of the government action
is to help AIG compete effectively by providing Muslim customers with
what they want, and no reasonable person would assume the government is
endorsing Islam by including AIG and all its subdivisions in the bailout
package.
 
The only possible objection that is even theoretically plausible is that
the government would be too entangled in the religious decisions of the
company, for instance because government officials would end up
supervising the programs.  But on the facts this just doesn't seem to be
so; the operational decisions related to these religiously themed
products and programs are made by the company, not the government, and
the Board of Directors consists of private-sector people, see
http://investing.businessweek.com/research/stocks/people/board.asp?symbo
l=AIG.  Or am I missing something?

Eugene

________________________________

	From: religionlaw-bounces at lists.ucla.edu
[mailto:religionlaw-bounces at lists.ucla.edu] On Behalf Of Ed Brayton
	Sent: Monday, December 15, 2008 9:15 PM
	To: 'Law & Religion issues for Law Academics'
	Subject: First amendment suit against AIG bailout
	
	

	The Thomas More Law Center filed suit on behalf of a Michigan
resident alleging that the recent bailout of AIG violates the
establishment clause because it invests public money in the insurance
company, one of whose subsidiaries markets Takaful insurance to Muslims.
This is an insurance policy that operates like mutual insurance except
that it forbids investments in companies that produce things like
alcohol, pornography or tobacco. You can see the complaint here:

	 

	
http://www.thomasmore.org/downloads/sb_thomasmore/DepartmentoftheTreasur
y-Complaint.pdf

	 

	The complaint strikes me as little more than anti-Muslim
boilerplate. A press release sent out declares that this investment in
AIG amounts to "promoting and financing the destruction of America using
American tax dollars." The complaint contains claims like these which
seem legally irrelevant at best and downright silly at worst:

	 

	3. As our history reveals, this Nation was founded upon values
that acknowledge the importance of religion, respect for the right of
conscience, and respect for the free exercise of religion. These values,
which are Christian values, are enshrined in the religion clauses of the
First Amendment.

	 

	4. The Shariah-based Islamic religious practices and activities
that the government-owned AIG engages in--activities that are funded and
financially supported by American taxpayers,including Plaintiff, who is
forced to contribute to them--are antithetical to our Nation's values,
customs, and traditions with regard to religious liberty, religious
tolerance, and the proscriptions of the First Amendment. These
government-funded activities not only convey a message of disfavor of
and hostility toward Christians, Jews, and those who do not follow or
abide by Islamic law based on the Quran or the teachings of the Prophet
Mohammed, but they also embody actual commercial practices which are
pervasively sectarian and which disfavor Christians, Jews, and other
"infidels," including Americans.

	 

	"It is clear, " said (TMLC executive director Richard) Thompson,
"oil money is purchasing the sovereignty of the United States and
whatever loyalty to America these greedy financial institutions,
corporations, and universities have left.  It's up to the American
people to take back their country from those who so easily betray its
interests."

	 

	I would expect this lawsuit to be dismissed, but I'm curious to
hear what the experts on the list think about it.

	 

	Ed Brayton

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