Islamic State rakes in financing
Treasury official says militants still raising millions
Terror group “amassed wealth at unprecedented pace.”
WASHINGTON — The Islamic State still generates tens of millions of dollars per month in illicit income despite a U.S.-led effort to cut the financing streams that have helped turn the once - obscure militant group into a terrorist organization unlike any previously seen, a senior U.S. counterterrorism official said Thursday.
U.S. and allied airstrikes have pounded small oil refineries that the Sunni militants had captured in eastern Syria, slowing but not halting their ability to process and sell smuggled oil and petroleum products at discounted rates on the black market in neighboring Turkey and elsewhere.
But in Iraq, U.S. financial officials say dozens of local bank branches remain free to transfer money in and out of cities and towns controlled by the militants, giving them some degree of access to financial systems.
In his first public comments on the U.S. effort, David Cohen, the treasury undersecretary for terrorism and financial intelligence, said Islamic State has “amassed wealth at an unprecedented pace,” including taking in at least $20 million in ransom this year.
With the exception of some state - sponsored groups, Islamic State is “probably the best funded terrorist organization we have confronted,” he said, and stopping it will take time.
“We have no silver bullet, no secret weapon to empty ISIL’s coffers overnight,” Cohen said, using an alternate acronym for Islamic State. “This will be a sustained fight, and we are in the early stages.”
The slow progress on the financial front comes as the Obama administration has defended its 10-week-old military operation. More than 600 airstrikes, including more than a dozen on Wednesday and Thursday, have yet to dislodge the militants from major cities or areas in Syria or Iraq.
Speaking at the Carnegie Endowment for International Peace, Cohen said Islamic State raises tens of millions of dollars a month from the sale of stolen oil, ransoming of kidnap victims, theft and extortion in areas it rules, and to a lesser extent, money from donors in Persian Gulf nations.
Although precise figures are impossible to obtain, U.S. investigators estimated that Islamic State earned about $1 million a day from oil sales beginning in midJune, when the group’s military blitz through western Iraq vastly expanded its territory and its access to oil fields and refineries.
Coalition airstrikes and other efforts since August have “begun to impair” those sales, Cohen said. The International Energy Agency last week said the group’s ability to produce, refine and smuggle oil had been “significantly hampered.”
Treasury and State department officials met last Friday with representatives of 20 nations and organizations in an attempt to financially isolate and undermine Islamic State, as well as its allies in the al-Qaidalinked Al-Nusra Front, and its ostensible enemies in Syrian President Bashar Assad’s government.
In addition to selling oil and refined petroleum products directly to middlemen and smugglers in Turkey, Islamic State has sold oil to Kurds in Iraq for resale in Turkey, Cohen said. “And in a further indication of the Assad regime’s depravity, it seems the Syrian government has made an arrangement to purchase oil from ISIL.”
U.S. military planners have held back from disabling or destroying Iraqi pipelines, refineries and other facilities because the government in Baghdad still hopes to push the militants out and doesn’t want to have to face making expensive repairs to the electrical grid and oil facilities.
Islamic State “has not only established a safe haven but has determined it is going to run a war economy and not destroy the financial infrastructure in doing so,” Juan Zarate, who was deputy national security adviser for combating terrorism under President George W. Bush, said in a telephone interview.
“This presents a real complication for the Treas-
BALAD, Iraq — Dizzy, vomiting and struggling to breathe, 11 Iraqi police officers were rushed to a government hospital 50 miles north of the capital last month. The diagnosis: poisoning by chlorine gas. The perpetrators, according to the officers: Islamic State extremists.
The chlorine attack appears to be the first confirmed use of chemical weapons by Islamic State on the battlefield. An Iraqi Defense Ministry official corroborated it.
It is one of three crude chlorine attacks that Iraqi forces say have occurred since the extremists seized Iraqi territory this summer, though details on the other incidents remain sketchy. ury because you obviously want to deny ISIS the use of those bank branches and finances but you don’t want to strangle all the economic activity for the people living in those territories,” he said.
Still, Cohen said Islamic State’s territorial ambitions are a financial burden.
Iraqi provinces now under the group’s sway were slated to receive more than $2 billion in budget subsidies from the Iraq government this year, a largesse that “far outstrips” Islamic State revenues, he said.
“What this means is that ISIL cannot possibly meet the most basic needs of the people it seeks to rule,” Cohen added.