U.S. Moves To Lock Up ISIS's Abundant War Chest

President Obama plans to slow the momentum of an extremist group that has seized much of northern Iraq. The group has funds that will permit it to sponsor attacks that could be aimed at the West.

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RENEE MONTAGNE, HOST:

Its MORNING EDITION from NPR News. Good morning. I'm Renee Montagne.

LINDA WERTHEIMER, HOST:

And I'm Linda Wertheimer. Yesterday President Obama announced his plan to slow the momentum of a Sunni extremist group that has seized much of Northern Iraq over the past week. He is sending U.S. advisors to help Iraq fight the group known as the Islamic State of Iraq and Syria or ISIS. Among his concerns, the group is not only overrunning cities but is amassing a war chest that will permit it to fund attacks that could be aimed at the West. NPR's Dina Temple-Raston reports.

DINA TEMPLE-RASTON, BYLINE: Why is the Islamic State of Iraq and Syria's ability to make money so worrisome? President Obama put it this way in the White House briefing room yesterday.

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PRESIDENT BARACK OBAMA: If they accumulate more money, they accumulate more ammunition, more capability, larger numbers. That poses great dangers not just to allies of ours like Jordan, which is very close by, but it also poses, you know, a great danger potentially to Europe and ultimately the United States.

TEMPLE-RASTON: U.S. intelligence individuals are trying to unravel ISIS's finances to stop the flow of cash into its coffers. They say the group manages most of its financial network from Syria. In their words, it's a kind of "Mad Max"-meets-"The Sopranos" operation. ISIS makes most of its money from a combination of oil sales, extortion and taxes levied against people who live in areas they control.

PATRICK JOHNSTON: This is sort of how they've always done business. One of the really interesting patterns is how money circulates within the group.

TEMPLE-RASTON: That's Patrick Johnston from the RAND Corporation, and just like in "The Sopranos," he's found that the local ISIS members act as the muscle, getting local businesses, both large and small to pay protection money. And then the local members then make sure the main organization, the group now steamrolling its way through Northern Iraq, gets its cut.

JOHNSTON: All the kind of local branches are the subsidiaries, agreed to send 20 percent of all their revenues up to what was called the general treasury.

TEMPLE-RASTON: The general treasury is at the top of the organization. Here's just a short list of their business interests; extortion and border tolls, $8 million a month; oil sales to the Assad regime and Turkish energy brokers, as much as 20 million a year. Another lucrative enterprise - kidnapping foreign reporters and aid workers - that brings in another 30 million annually. The Treasury Department is also working to identify front companies ISIS has set up across the Middle East. Estimates on the size of the group's war chest vary, but in the wake of a raid on Mosul's central bank this week which yielded hundreds of millions of dollars, officials say ISIS could be sitting on a $2-billion war chest. And while a lot of it has gone to funding attacks and paying fighter salaries and buying weapons, they are also buying loyalty, something that worries Georgetown University terrorism expert Bruce Hoffman.

BRUCE HOFFMAN: In any walk of life, money is power. And money gives you influence and at least the ability to persuade people to do things they might not otherwise have done.

TEMPLE-RASTON: Right now Hoffman says ISIS appears to be spending the money on solidifying its position in the areas where it has control.

HOFFMAN: We already saw that it could be one of the most ruthless, bloodthirsty terrorist entities in Syria but was giving out free ice cream, was holding tug-of-wars, certainly distributed bread to control the flow of oil, let's say, acting as what we normally associate with the behavior of governments.

TEMPLE-RASTON: Which hints at ISIS's real goal, setting up an Islamic state that stretches across the Middle East. In other words, ISIS isn't just using the money to blow things up, though it's doing that, too. Instead it's spending reserves to woo local communities to their cause. Dina Temple-Raston, NPR News.

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