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Tavakoli Turns Her Fire From Crony Capitalists to Muslim Fundamentalists

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Janet Tavakoli is a bona fide expert in structured finance and credit derivatives, and her command of this arcane field is matched by her outspokenness on the moral implications of the conflicted or exploitative behavior of large financial institutions.

She referred to one former SEC chair as “the antichrist of investor advocacy,” to cite one colorful example, and in the aftermath of the financial crisis has railed with similar candor against financial executives she has blamed for attempts to privatize gains while socializing losses.

The Chicago-based consultant has followed the money trails connected to MF Global’s Jon Corzine or JPMorgan Chase’s Jamie Dimon and exposed them; she has examined the Sarbanes-Oxley and Dodd-Frank acts and lambasted them.

Now Tavakoli has focused her scrutiny on the subject of fundamentalist Islam and terrorism in a new book born of her personal experience living in Iran immediately before and after the start of the 1979 Revolution that replaced the Shah of Iran’s regime with one espousing Islamic principles. It was there that she left her Iranian husband behind and launched her career as a financial derivatives expert.

The book is titled “Unveiled Threat” because, says the self-described “lapsed Catholic” in an interview with ThinkAdvisor, a woman who refuses to submit in the world of fundamentalist Islam “is an unveiled threat, especially if she knows how to follow the money.”

Specifically, what prompted you to leave Iran?

The Islamic Republic. Fundamentalism is inextricably bound with government in any Islamic republic.

Here are just two mainstream examples familiar to U.S. citizens. In Iran, a non-Arab country, Shias (around 15% of all Muslims are Shia, but most Iranians are Shia) have their version of an Islamic republic. In the Kingdom of Saudi Arabia, the Sunnis (including Wahhabis and Salafis) have another version. Take a look at the flag of Saudi Arabia. Green is the color of Islam. The calligraphy is the profession of the faith, and it is underscored by a sword. I should add that Sunnis and Shias don’t get along; it is no surprise that Muslims are killing each other; the battle has raged for centuries.

Radicalism is not a Muslim fringe movement; it is mainstream, contrary to politically expedient statements made by former President Bush and President Obama. According to the CIA World Factbook, less than 1% of U.S. citizens are Muslim, yet our presidents acted as apologists without giving proper context to the issues.

The Shah’s Iran was known to be a modernizing society. Did you feel social pressure to veil yourself, actually or virtually?

Upper-class women in the cities felt no such pressure under the Shah.

After the Islamic revolution, the compulsory veiling of women was an outward symbol of everyone’s rights disappearing; men’s rights disappeared, too. But on the topic of women’s rights, Iran rolled back the marriage age to nine (from sixteen with parental consent) before upping it to 13, and now there’s pressure to roll it back to nine. Fathers can marry adopted daughters. In Saudi Arabia, the marriage age is nine. The so-called justification is that Mohammed married a pre-pubescent child and had sex with her when she was just nine. (He was polygamous and had other wives who were adults.) There is nothing morally superior or modest about veiling. On the contrary, to me it symbolizes a very immodest stripping of human rights.

When it comes to adult men, if they aren’t connected with the fundamentalists, they are on shaky ground. The judiciary is a branch of the Ministry of Intelligence. The new ruling class used Sharia law as a cudgel against the former ruling class of males. Non-fundamentalist men felt enormous pressure. This is true today. Notice how some of ISIS’ captives converted in the vain hope of better treatment.

What was it like to be an American in a country with memories of the CIA’s role in ousting Mohammed Mossadegh?

Iranians viewed Mossadegh as a democratically elected secular leader overthrown by the U.S. and Britain. It came up in conversation frequently. Then look what happened. We helped the Shah, a despot, grab power, and he was replaced by an even worse despot who wrapped atrocities in a religious narrative.

What were you able to learn about fundamentalist Islam by following the money?

If you read the 9/11 report, it states the Saudis, among others, funded terrorism. There is a theory that Saudi Arabia, among others, funded the fellows who formed ISIS to advance the Wahhabi agenda on the Arabian Peninsula, but their monsters went rogue and formed their own Wahhabi-based caliphate. Saudi Arabia got its start by using the Wahhabi ideology as a recruitment tool, and the Saudis are not keen to see upstarts dethrone them. There can only be one caliphate, so Gulf governments have a keen interest in pushing back the new challengers, before the so-called caliphate gains more traction.

You write about having been at the World Trade Center during the first bombing attempt in 1993. What did you learn from your experience, and what did U.S. security officials fail to learn from that same experience?

After the bombing, a 1996 investigation showed one of the terrorists, Ramzi Yousef, discussed a plot to fly a plane into CIA headquarters. Yet, the United States did not initiate better border control, better scrutiny of visas to catch phonies, and better tracking of visa holders to catch malefactors.

Are Western values and those of the Islamic Middle East fundamentally irreconcilable?

Let’s look at the Islamic states that are key for Sunnis and Shias. In Iran, political opponents are tortured and burned, women and children are abused, men are at the mercy of a corrupt judiciary, and the Shia Ayatollah Vaez-Tabasi calls for perpetual holy war. In the Kingdom of Saudi Arabia, home to Mecca, the Wahhabi Grand Mufti Abdul Aziz Al-Asheikh issued a fatwa to destroy all churches of other faiths (apparently including Shia mosques) on the Arabian Peninsula. In Saudi Arabia, you cannot build any house of worship other than a mosque. The king holds four of his adult daughters captive for speaking up about women’s rights. Those are just two examples, but I mention them first, because these Muslim clerics are at the top of the food chain in their respective sects of Shia and Sunni Muslims.

Fundamentalism only works for the fundamentalist cronies. I can’t imagine why anyone would want to recreate that model in a free Western society; non-fundamentalist Muslims flee for a reason. Fundamentalists follow pure Islam and view those who don’t as apostates, heretics, or lapsed Muslims; fundamentalists say there’s no such thing as a moderate Muslim. The fundamentalists are correct. This is an imperfect but apt analogy: a Catholic who doesn’t accept the pope as the leader of the Church is not, by definition, Catholic.

These are not free societies, and, the suggestion that the U.S. or any free society should accommodate Sharia law is nonsense. No free society should submit and become less free. We should be alert to any such request, and reject it.

But moderate Muslims say the radicals are extremists who do not represent true Islam. They also say that translators of the Quran misinterpreted the message and that critics take violent passages out of context. What are your thoughts on that?

Most of the world’s 1.2 billion Muslims are not Arabs, and most do not speak Arabic, even though all Muslims — well, those that pray; I know many who do not — say their prayers in Arabic. Many have not even read the Quran. But many Arabs use the Quran and hadiths (sayings and deeds of Mohammed) to justify barbaric Sharia laws and social repression. Arabs are not reading a translation; they read texts in the original words in the original Arabic.

If Muslim cultural organizations want to claim people are misinterpreting the Quran and hadiths — and that Islam teaches peace — then let them give this badly needed education to ISIS, the Islamic Republic of Iran, and the Grand Mufti of Saudi Arabia. That’s just for starters, because there are a lot of other highly placed ayatollahs and mullahs who didn’t get the memo.

As a woman with expertise in following complex money trails, what financial terror links most concern you now? 

We should look at all of the alleged funding connections with Muslim charities, schools and cultural outreach programs. We should also rethink who invests in our mainstream television stations and newspapers and consider that when reading articles.

What are you up to on the business front these days?

Derivatives. It seems foreign sovereign wealth funds are the new “investors” for some interesting securitizations. Everything I wrote in my 2008 book, “Structured Finance & Collateralized Debt Obligations,” still applies today. Our latest wave of so-called financial reform is as effective as the much-ballyhooed pre-bailout Sarbanes Oxley reforms. How did that work out?

I am also an investor in a tech startup to service the Hispanic market. I’ll have more non-fiction coming out in the next year on Wall Street decision making, risk, credit derivatives, and other topical finance issues.

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