US efforts to curb the explosive growth of the Islamic State of Iraq and Syria (ISIS) will be futile if the nation fails to address the diverse revenue streams fueling the terrorist organization, according to a new report released by Homeland Security Chairman Michael McCaul (R-TX).
The report, Cash to Chaos: Dismantling ISIS’ Financial Infrastructure, is based on a ten-month investigation by the House Homeland Security Committee Majority Staff to identify and examine ISIS’ revenue sources and US efforts to counter terrorist financing.
The Committee explored seven key funding pillars: black market oil and gas; black market commodities; antiquities; extortion, taxation, and robbery; kidnapping for ransom; assistance from supporters in permissive Gulf State countries; and emerging fundraising tactics, such as crowdfunding.
“ISIS’ march across the globe is fueled not just by a hateful ideology—but by a constant cash flow,” McCaul said. “We cannot destroy the group without first disrupting its funding streams. Unfortunately, the Obama Administration has failed go after these income sources hard enough, which is why I have proposed several recommendations to put us on a path for success.”
Unlike Al Qaeda and Hezbollah, which rely on external sources of funding, ISIS is primarily self-funding, raising money through a variety of methods, including black market oil and gas sales. The group sells crude unrefined oil directly to black market oil traders, who pay in cash or exchange goods for oil. Trucks transport the oil through criminal-smuggling routes, eventually reaching customers across Syria, Iraq, Turkey, and Europe.
ISIS has achieved enormous success through the sale of oil, with a total revenue of approximately $1 billion dollars in 2015, $500 million of which came from the sale of oil, according to Newsweek.
“ISIS has broken the mold when it comes to raising funds for the group’s long term viability,” the report stated.
ISIS has also profited from the sale of looted antiquities. As previously reported by Homeland Security Today, over the past year, ISIS has embarked on an unstoppable rampage of destruction of some of the greatest ancient sites in the world, including a Baalshamin temple in Palmyra, Syria.
In the wake of this destruction, the Federal Bureau of Investigation warned US art collectors and dealers that artifacts plundered by ISIS had entered the US marketplace. A report by the Government Accountability Office released in August revealed that some of the interviewed art dealers indicated seeing items for sale on the Internet and in galleries.
According to the Committee’s report, US officials once estimated that ISIS was generating $100 million a year from illicit trading of looted antiquities.
Furthermore, ISIS has achieved great success in using online fundraising platforms to generate income. The organization’s followers have exploited online crowdsourcing tools and social media platforms to ask for donations.
To rollback terrorist funding efforts, the Committee recommended the establishment of an interagency task force led by the Department of Treasury in cooperation with social media and tech companies to review the prevalence of terrorist use of social media for financing operations.
Although ISIS has experienced several setbacks on the battlefield, the group’s financing machine continues to run smoothly, putting the US homeland at risk of attack. The Committee recommended that the Departments of Treasury, State, Justice, and Homeland Security collaborate with the Intelligence Community in the creation of a working group to regularly assess and share information on emerging terror financing threats.
Moreover, the United States needs to develop a comprehensive national strategy to combat ISIS’ fundraising tactics and close gaps in global enforcement by working with the nation’s foreign partners to crack down on terrorist financing activities, such as trafficking in cultural antiquities.
“Without more aggressive action, ISIS will continue bankrolling its unprecedented pace of global terror and brutality—keeping America in the crosshairs,” McCaul said.