It’s becoming clearer and clearer that for any Republican politician who hopes to be competitive in the 2012 GOP primary, being seen as even remotely tolerant of Muslims risks being a serious political liability.

Case in point: A new flap involving Tim Pawlenty and the question of whether he ever supported “sharia compliant” mortgages as governor of Minnesota.

This morning, I published a story on the Minnesota Housing Finance Agency, which encouraged companies to offer sharia-compliant mortgages as part of then-Governor Tim Pawlenty effort to expand minority homeownership. Minnesota has a relatively large Muslim population, and the Islamic prohibition against payment or receiving of interest is an obstacle to owning a home for observant Muslims. The initiative Pawlenty supported allowed Muslims a way around this.

This was a relatively innocuous solution to an obvious problem. But Pawlenty’s camp is now pushing back on this story by arguing that, no, Pawlenty never supported sharia-compliant mortgages at all. Pawlenty spokesman Alex Conant emails me this:

This program was independently set up by the MN state housing agency and did not make any mention of Sharia Law on its face, but was later described by critics as accommodating it. As soon as Gov. Pawlenty became aware of the issue, he personally ordered it shut it down. Fortunately, only about three people actually used the program before it was terminated at the Governor’s direction.

Pawlenty shut down the program, allowing only three Muslims to get mortgages! Tragedy averted. Pawlenty’s camp also emailed a statement to Ben Smith that claimed: “The United States should be governed by the U.S. Constitution, not religious laws.”

Of course, this is a complete non-sequitur. The question of sharia-compliant mortgages involves private firms offering culturally specific products to a particular religious group. It has nothing to do with whether or not the U.S. is governed by religious law. We’ve now gotten to the point where paranoia about Muslims requires Republicans to disavow their own beliefs about the appropriate level of separation between church and state.

It’s also unclear whether the Pawlenty camp’s response is historically accurate. When I asked the Minnesota agency that ran the program why it was shut down, spokesperson Megan Ryan didn’t say that Pawlenty closed it because he was worried about sharia. She just said the program fizzled out because the local group they partnered with wasn’t generating enough interest.

What’s really telling here is the speed with which Pawlenty’s camp shut down what they apparently saw as a damaging story, and it’s a shame they’re reacting this way. Even a columnist at the conservative Human Events doesn’t see a problem with sharia-compliant mortgages, seeing it as a sign of the free market at work: “if it satisfies the relevant religious prohibitions, through a voluntary agreement between Muslim customers and banks eager to win their business, and it’s working to everyone’s satisfaction, it’s a fine expression of capitalist principle.”

Exactly. Are we now disavowing capitalism when it creates markets that cater to Muslims?

If you’re a Republican candidate for president, being seen as helping Muslims gain access to the American Dream quickly needs to be disavowed. If the program had actually succeeded, it would have been something Pawlenty could have been proud of.