ISIS Uses Mafia Tactics to Fund Its Own

Operations Without Help From Persian Gulf

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BY YOCHI DREAZEN-JUNE 16, 2014
When fighters from the Islamic State of Sria and al!Sham "ISIS# stole tens of
millions of dollars from a $an% in Mosul earlier this ear& it wasn't simpl a startling sm$ol of the
collapse of (aghdad's control o)er Ira*'s second!largest cit+ The $ra,en theft was instead a star%
illustration of one of the most alarming aspects of ISIS's rise- the group's growing a$ilit to fund its
own operations through $an% heists& e.tortion& %idnappings& and other tactics more commonl
associated with the mo$ than with )iolent Islamist e.tremists+
In its earl ears ISIS !! li%e the Tali$an and other Sunni militants !! recei)ed most of its funding from
wealth donors in /uwait& 0atar& and other Persian Gulf countries+ 1.tremists in those U+S+ all states
continue to send mone to ISIS& $ut 2merican counterterrorism officials $elie)e that the group now
finances the $ul% of its recruitment& weapons purchases& and attac%s without outside help+ In other
words& e)en if the United States and its allies somehow stopped the flow of mone from the Persian
Gulf to the $attlefields of Ira* and Sria& it would $e too late to pre)ent ISIS from $an%ing enough
mone to fight on for ears+
3The o)erwhelming ma4orit of their mone comes from criminal acti)ities li%e $an% heists& e.tortion&
ro$$eries& and smuggling&3 said one U+S+ counterterrorism official+ 3The're getting some mone from
outside donors& $ut that pales in comparison to their self!funding+3
The e.act amount of mone in ISIS's possession is the su$4ect of intense de$ate among Western
intelligence officials+ 2t the high end& some analsts estimate that the group ma ha)e access to at least
5677 million in cash drawn from $an% ro$$eries& oil smuggling& and old!fashioned e.tortion and
protection rac%ets+ Other analsts $elie)e the num$er is far lower& with one official putting it at
$etween 5877 million and 5977 million+ Those num$ers are mo)ing higher as the group con*uers more
cities on its seemingl ine.ora$le dri)e toward (aghdad and is a$le to loot the local pri)ate and
go)ernment $an%s+ On Monda& ISIS fighterstook the strategicall important town of Tal 2far& adding
to the territor under its direct control+
:alculating the true si,e of ISIS's coffers is complicated $ the lac% of U+S+ intelligence assets in the
areas the group controls in Sria and Ira* and $ the difficult of sorting through the group's
sophisticated propaganda efforts+ In closed!door $riefings on :apitol Hill& senior officials from the
intelligence communit dismissed the initial reports that ISIS ma ha)e stolen more than 5;77 million
from the $an% in Mosul and said those figures were highl e.aggerated+ 3We're tal%ing tens of millions
from Mosul& not hundreds of millions&3 one official said+
1ither wa& ISIS is one of the $est!funded e.tremist organi,ations in the world+ The group's immense
cash holdings& meanwhile& don't paint a full picture of the group's resources+ The Ira*i militar has
largel collapsed since ISIS launched its surprise offensi)e earlier this ear& allowing an arra of ma4or
cities !! including se)eral within stri%ing distance of (aghdad !! to fall into the hands of the insurgents+
The fleeing Ira*i troops left $ehind enormous *uantities of 2merican!donated armored )ehicles&
weapons& ammunition& and other militar supplies+ 2ll of that is now in the hands of ISIS fighters+
<uan =arate& a former assistant Treasur secretar who led the department's crac%down on terrorism
financing& said ISIS was carring out significant amounts of smuggling operations& e.tortion&
%idnapping& and other run!of!the!mill crimes in the growing swaths of Sria and Ira* that it controls+
Foreign donors& he added& were stepping up their support for the group $ecause of its successes against
the hated secular go)ernment of Srian strongman (ashar al!2ssad and the e*uall unpopular Western!
$ac%ed& Shiite!dominated Mali%i go)ernment+
3It's the worst of all worlds- e.ternal funding from wealth outside donors& state sponsorship from
across the Persian Gulf& and the a$ilit to raise large amounts of mone locall&3 =arate said+
ISIS's a$ilit to self!fund its operations comes from its willingness to $lend traditional criminal
techni*ues li%e %idnapping with the lucrati)e smuggling opportunities that come from controlling oil!
rich swaths of land+
2 recent research note from the :ouncil on Foreign >elations concludedthat e)en $efore the group's
con*uest of Mosul& ISIS 3eto!ted t"e# from $usinesses small and large& netting upwards of 5?
million a month& according to some estimates+3
2n 2pril !e$o!t from the :arnegie 1ndowment for International Peace& citing the wor% of Srian
4ournalist Mali% al!2$deh& said that ri)al re$el groups had ta%en control of Srian oil fields in Hasa%ah
and the 1uphrates @alle+ The report said that si. refineries in the $order town of Tal 2$ad were $eing
used to produce diesel and gasoline that was then smuggled into Tur%e+ 2ll told& the report estimated&
the groups could $e ra%ing in 567 million per month in oil re)enues+
ISIS's success at funding its own operations is indicati)e of a $roader trend+ 1.tremist groups
throughout much of the world& particularl 2frica& are $eginning to reduce their dependence on outside
donors+ In a speech earlier this month& Da)id :ohen& the undersecretar of the Treasur for terrorism
and financial intelligence& #"%d the success of Western interdiction efforts meant that terror groups
were increasingl reliant on %idnapping to fund their operations+ 32side from state sponsorship of
terrorism& ransom paments are the greatest source of terrorist funding toda&3 he said+
In the case of ISIS& Western intelligence and counterterrorism officials $elie)e that the group is using
the mone to pa its fighters& $u more weaponr& and $ri$e Sunni tri$al leaders to either openl or
tacitl support their offensi)e against Mali%i+ =arate said the group's $ulging coffers meant that ISIS's
leaders now ha)e the resources& if the chose to use them& to $egin setting up training camps or
command!and!control infrastructure in the areas the control and to loo% for was to e.tend their fight
to other regions and countries+
3This %ind of mone allows them to start thin%ing $igger and $roader& and a$out a long!term strateg
for where the want to go&3 =arate said+ 3That $egins to gi)e them reach& which is reall dangerous+3