Federal judge spikes challenge to AIG rescue

PORT HURON (AP) -- A federal judge in Michigan has dismissed a lawsuit challenging the bailout of American International Group on religious grounds.

An Ypsilanti man claimed the United States should not have bailed out AIG because the insurance giant sells international financial products specifically tailored to Islamic principles. But after more than two years of litigation, a judge said last Friday that such products are not a result of direct government action and represent just a fraction of AIG's revenue.

U.S. District Judge Lawrence Zatkoff in Port Huron says the bailout is not an "excessive entanglement with religion." He says it's not comparable to tax dollars going directly to a church or religious institution.

An Ann Arbor law group that takes cases on behalf of Christian causes says it will appeal.

Published: Tue, Jan 18, 2011