Episode 667: Auditing ISIS : Planet Money What happens when ISIS takes over your city? Today on the show: We meet a man who lived in ISIS controlled territory. He talks about paying taxes, where he kept his money and a $50 candy bar.

Episode 667: Auditing ISIS

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When I first started out as a radio reporter, I was assigned to cover the City Council. And the worst thing about covering the City Council was the municipal budget. It was just hundreds and hundreds of pages of incomprehensible numbers - income, expenditures, property taxes, the amount that they brought in from parking tickets. I swore that I would never go through a budget again, until we got a document here at PLANET MONEY that is completely fascinating. And it is a municipal budget. But it was smuggled out of Syria.

AYMENN AL-TAMIMI: The title is, rough draft of the operation of the project of the administration of wealth.


This is Aymenn Al-Tamimi. He's a fellow at the Middle East Forum. And he got his hands on this budget. It's basically a municipal budget for an area that's controlled by ISIS.

SMITH: By the terrorist organization.

VANEK SMITH: And it shows where they get their money, how they spend their money. It breaks everything down.

SMITH: And one of the fascinating things about this document and about ISIS in general is how bureaucratic it is. There's a couple of higher-ups CC-ed here on the memo. And at the bottom is the ISIS equivalent of a confidential stamp.

AL-TAMIMI: Oh, it says uncirculated. So it wasn't meant for distribution to the public.

VANEK SMITH: They don't necessarily what you and I talking about it.

AL-TAMIMI: Of course they don't want us talking about it (laughter).

VANEK SMITH: The budget is from a province called Deir ez-Zor in eastern Syria. It's been largely controlled by ISIS for more than a year.

SMITH: The budget's a few typed pages. There's some writing in beige-colored tables. It looks like it was made on an old version of Microsoft Word. It's all written in Arabic. But when it gives the money figures, they are all in U.S. dollars.

AL-TAMIMI: Income in this budget is all given in U.S. dollars.

VANEK SMITH: The budget is in dollars?


VANEK SMITH: That's so surprising. I mean, don't they really strongly - I mean, isn't their whole thing...

AL-TAMIMI: Yeah, I know they hate the U.S. dollar. I know they hate it. But they can't get around the fact that it is, like, the international currency of the world.


VANEK SMITH: Hello, and welcome to PLANET MONEY. I'm Stacey Vanek Smith.

SMITH: And I'm Robert Smith. ISIS kills innocent people. ISIS destroys life. ISIS destroys property. But when ISIS takes control of a town, they don't burn it down completely. Economical life there goes on. People still buy food. People still pay taxes.

VANEK SMITH: Today on the show, we take apart one budget from one month from one province controlled by ISIS. And we talk to a former resident there about how he kept his money, how he paid his taxes and about what is probably the most expensive candy bar in the world.

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VANEK SMITH: So this budget we have comes from Deir ez-Zor. It's this wealthy area in eastern Syria. The capital city has couple hundred-thousand people. There's a lot of agriculture in the area, livestock. There's a university, big oil fields.

SMITH: We looked at pictures online. And the city really was beautiful. The Euphrates River flows right through the downtown.

VANEK SMITH: Mohammed Kedderer (ph) grew up in Deir ez-Zor. When ISIS invaded, he was working in an advertising agency in the city making billboards and pamphlets for local businesses.

MOHAMMED KEDDERER: It was wonderful life. I've remember that my wedding took three days.

VANEK SMITH: Your wedding took three days?


VANEK SMITH: It was a big party.

KEDDERER: Yes, a big party and it was really wonderful life.

VANEK SMITH: Mohammed is out of ISIS territory now. He spoke with us from a safe location. But he was there when ISIS took over. And he says when that happened, everything changed. ISIS took over the administration of the city. It put its own police and military in place. It killed thousands of people. Mohammed says it was horrible.

KEDDERER: For example, my wife didn't go out of my house for six months.

VANEK SMITH: Mohammed was able to keep his job at the advertising agency, but business was not good. All of the shops in his city closed. No one was really buying ads. And he went from making $300 a month - which is a good salary in Syria - to about a hundred dollars a month. Though, he says, he was actually lucky; most people in the city lost their jobs entirely.

SMITH: Almost overnight, the economic picture of Mohammed's city changed. And you can see this in the secret budget that got smuggled out. The budget's for one month, from January of this year. And the total expenditure is $5,587,000 a month. ISIS is spending a lot of money in this town. But when you look at what they're spending their money on, you don't see a lot of parks or schools or libraries. What you see is that the money goes toward mostly controlling the population, to the army and to the police. Forty-four percent of the budget goes to paying the salaries for ISIS fighters. That's almost $2.5 million.

VANEK SMITH: What that meant for Mohammed and the other residents of Deir ez-Zor was that ISIS members were the only people in town with money to spend. And the soldiers all get paid in U.S. dollars.

SMITH: And that sort of created its own economy, its own shops, its own markets.

VANEK SMITH: What was it like at the market?

KEDDERER: At the market?


KEDDERER: There are two kinds of stuff - of goods - goods for ISIS members, and there are goods for civilians.

VANEK SMITH: Mohammed says the ISIS soldiers would just throw money around in these crazy ways. He saw one guy pay $50 for a candy bar. And shop owners realized that they could charge crazy prices for things that the ISIS fighters liked. And he describes what ISIS fighters like as fancy things.

SMITH: Western-style products, especially Western-style products containing chocolate.

KEDDERER: Like a (unintelligible), like a Snickers, a Twix, that kind of fancy goods.


KEDDERER: A Twix, Twix...

VANEK SMITH: Like Twix bars? Like, only ISIS fighters get to eat Twix bars?

KEDDERER: Yes because it's expensive.

SMITH: Mohammed says when he would walk through the city, the restaurants would be packed full of ISIS fighters and no one else. They apparently love hamburgers, pizza, kebabs.

VANEK SMITH: And the ISIS fighters buy a lot of bigger stuff too. They like fancy cars. Mohammed says the streets of the city were lined with Dodge Chargers and Hummers and Ferraris.

SMITH: Basically, the stuff that a teenage boy might want.


KEDDERER: They're asking for perfume - French perfume. They are asking for Axe spray, for (unintelligible). They're asking for...

VANEK SMITH: Axe body spray - like, Axe body spray?




VANEK SMITH: For people who are not fighters in the city - for people like Mohammed - this was like a slap in the face, these guys walking around with all this money, buying all these fancy stuff. Meanwhile, the price of all these staples got so expensive that Mohammed couldn't afford to buy a lot of things. He had to stop buying meat for his family. He had to cut back on almost everything.

SMITH: So that is the sort of expense side of the budget. That's what ISIS is spending its money on - basically the fighters and elements of control. But there's the other side of the budget too, which is where does ISIS get all the money to support itself? Where does it get the U.S. dollars? And the budget's remarkable because it goes into exquisite detail about where they get their money. The first big revenue line in the budget - you've probably read about this in the news - is that ISIS sells oil. Oil that used to be sold by the Syrian government is now controlled by ISIS. For the month of January, this province, Deir ez-Zor, got $2,229,000 from oil sales.

VANEK SMITH: Two-million dollars a month sounds like a lot of money. But when we talked to oil experts about this, they were surprised at how little that was. They said when ISIS first took over these oil fields, they were making way more money than that. They were smuggling huge tanker trucks outside of ISIS territory and selling it on the black market.

SMITH: But these days, it's harder for ISIS to smuggle oil over the border. The Western government's basically caught on to them. We talked with Ben Van Heuvelen. He's the managing editor of the Iraq Oil Report. And he says there has been a huge crackdown on the border. Now, instead of tanker trucks, he says a lot of it's done with long hoses that were buried under the border between ISIS territory and Turkey.

BEN VAN HEUVELEN: And then some guy on the Turkish side would sit there and suck on that big garden hose to try to siphon the gas. Another thing that people were doing is they were just strapping drums of oil to sticks and putting them on their backs and walking it over the border in areas where there weren't roads, where there wouldn't be authorities policing the border.

VANEK SMITH: They were attaching barrels of oil to sticks and, like, carrying them like Johnny Appleseed style over the border?

VAN HEUVELEN: (Laughter). Basically, yeah.

VANEK SMITH: That sounds so smalltime to me. Is that - I mean...

VAN HEUVELEN: Well, it does. But if you have a hundred people doing that, and they can make 20 trips in the course of a night, that's actually not an insignificant amount of oil.

SMITH: So we want to get through the revenue side of this budget. All told, oil and gas make out 27 percent of the income for the province. That is not nearly enough money for ISIS to keep paying its soldiers and its police. So they have a bunch of other sort of unique ways of getting money.

VANEK SMITH: And right here in the budget is a word that I have personally never seen before in a municipal budget, confiscations.

SMITH: Confiscations are 44 percent of the revenue for this ISIS province.

VANEK SMITH: It's the biggest part of the budget. And it's basically stuff that they just steal from people, stuff that they take from people who live in their territory.

SMITH: And they are very detailed about what they stole.

AL-TAMIMI: It included 17 houses, 80 cars, 36 trucks, $480,000 in material sums, 180 dunams of land, 1,200 cases of cigarettes and 1,320 sheep and 50 cows.

SMITH: It is stunning both how detailed and, in a weird way, how honest ISIS is about the crimes they're committing.

VANEK SMITH: It's true. They take this weirdly bureaucratic approach to stealing. And one great example of this is antiquities. You've probably heard about ISIS destroying ancient archaeological sites and raiding museums, but they've actually turned ancient artifacts into a huge business - digging up old coins and statues and clay pots and selling them on the black market. And they are very organized about this.

ALLISON CUNEO: And it's amazing because we have - we have receipts. We have photographs that they're using for sale. We have a bureaucratic hierarchy of who is in charge of what when it comes to looting and smuggling and trafficking.

VANEK SMITH: This is Allison Cuneo. She works with the State Department. And she says ISIS has completely regulated looting. There's a minister of antiquities in ISIS, and he oversees the looting of antiquities. That is his job.

SMITH: And if you want to loot in ISIS territory, you need an official permit, an official permit that you stand in line and you pay for.

CUNEO: It's a small little paper that has a stamp at the top. And then it just says, salaam alaikum, hello, you know, may God be with you. The person who carries this paper is permitted to dig for antiquities. And then it has a signature of whoever authorized it.

VANEK SMITH: And when the looter finds something, they have to declare it and pay a tax on it to ISIS.

SMITH: This is where Allison and her team from the State Department come in. They are trying to keep track of what is being dug up in ISIS territory and what is being smuggled over the border. And they've asked smugglers to basically take a picture of items that they see that are stolen from ISIS territory and text that picture to Allison and her team. And a couple weeks ago, she was watching football with her colleagues in a sports bar, and one of them got one of these messages.

CUNEO: We wanted to take a break and step away from work, at least for a little bit, and just have some downtime. And then one of our colleagues said hey, look at this, while we were having our chicken wings (laughter).

VANEK SMITH: On the phone was a picture from a smuggler. It was a photo of a giant mosaic, like 6 feet tall and 3 feet wide, like it had been pried off of some ancient wall. She said the detail was amazing. It was a Roman soldier with a helmet tucked under his arm and two women on either side of him. She says it's Greco-Roman, which means it's from about 2000 years ago.

SMITH: It was enough to stun an archaeologist.

CUNEO: Wow. Just wow. I was just astounded because, up until that point, I had seen a lot of small objects, so portable objects - books, coins, sculpture. This had been the first time, in person, I had seen something come in that was this large.

VANEK SMITH: And how much would something like that be worth?

CUNEO: Possibly millions.

VANEK SMITH: And Allison says hundreds of objects like these are being smuggled out of ISIS territory every day.

SMITH: You would think, looking at this budget, that the criminal parts of the ISIS operation would provide enough money - the stealing of the oil, the stealing of the antiquities, the stealing of the sheep and the goats and people's land. But ISIS also does what governments everywhere do - it taxes its people.

VANEK SMITH: Twenty-five percent of the income for ISIS in this province comes from taxing people.

SMITH: Mohammed told us all about this, and he said it was so brutal. ISIS officials would show up at your house or your office once a month and ask for money. I mean, I guess it's not asking if, basically, your life is on the line. But they demand that you give money. Mohammed said he'd get home, and they would be waiting outside his house in a car.

KEDDERER: On the first week of the month, they would start to go to the houses and jobs, and they'd take your money.

VANEK SMITH: So they would basically just show up at your door, and you'd have to hand them cash?


VANEK SMITH: Taxes for water, even though there's no clean water; taxes for electricity, even though there are only one or two hours of electricity a day - there are income taxes. And Mohammed says when you told them how much you made, they would say no, we heard you made this much, and you would just have to pay taxes on the fake amount they made up. And even just walking around on the street, you would get stopped and have to pay taxes. If you were caught littering, if you didn't have to right papers with you, if your beard was too long, if your beard was too short...

SMITH: They tax it.

VANEK SMITH: They would tax you no matter what. And Mohammed had a little savings that he'd been keeping, and he was desperate to find a way to hide it from the ISIS tax man. He had the money in Syrian pounds, but those kept losing value all the time. So he took all of his savings, and he went to the next town over, and he bought gold jewelry.

KEDDERER: So I changed it to gold because the gold keeps the value of the money.

VANEK SMITH: Not only does gold keep its value, but if ISIS found that gold in his house, Mohammed could say oh, no, that's not new money. That is a wedding gift from a really long time ago.

SMITH: ISIS was especially harsh on those things that they banned completely, things like cigarettes and alcohol. One small thing - Mohammed was addicted to smoking. He loved his cigarettes. And he figured out a way to get cigarettes, but it was really complicated. And it was dangerous.

KEDDERER: (Laughter) It's kind of a action movie.

VANEK SMITH: Mohammed would go to someone he knew was selling cigarettes on the black market. He would give them his address and enough money for a carton, and he would leave.

KEDDERER: And he'd tell me go to your house - I know your house. And on the night, like 2 a.m. or 3 a.m., he'd come by a motorcycle, and he'd put it on a package. And he just would throw it to my house and keep moving.

VANEK SMITH: A man on a motorcycle would slow down and toss the cigarettes onto his doorstep.

SMITH: In, like, a big envelope, no markings.

VANEK SMITH: Yes. And Mohammed said he kind of loved getting away with this behind ISIS's back, but he was also terrified that he would get caught.

SMITH: And, in fact, six months ago, Mohammed was asleep in his bed when he heard a knock on the door. It was a bunch of agents from ISIS, and they said get in the car.

VANEK SMITH: Did you know why they were taking you?

KEDDERER: No, no, no. I'm thinking, maybe they take me for - at first, I think smoking.

VANEK SMITH: You thought you'd been arrested for smoking?

KEDDERER: There are a lot of charge.

SMITH: Yeah, there were a lot of charges that Mohammed could have been guilty of. It could have been for the gold he was hiding or some of his communications with his friends outside of ISIS or maybe something he had done for a client of his advertising business or, frankly, in this town, it could have been for nothing at all.

VANEK SMITH: The ISIS agents drove Mohammed to their headquarters, and they put him in a room with no windows. And they left him there for more than a day. Finally, the door opened.

KEDDERER: Two guys come to my room. Are you Mohammed? I told them yes, I'm Mohammed.

VANEK SMITH: Were you scared?

KEDDERER: Of course (laughter). You are arrested by ISIS. What do you think?

SMITH: The two men from ISIS look at Mohammed, and then they do something that he never would have expected. They bring out a laptop. They open it for him, and they say, hey, we know you're in advertising, and we have an advertising job for you. We need a new logo for the ISIS news agency.

KEDDERER: They asked me to design a logo for a news agency which belongs to ISIS.

SMITH: A logo.

VANEK SMITH: That is why they had dragged him into headquarters in the middle of the night.

SMITH: So they left him with the laptop, and Mohammed went to work. And an hour later, he says, he had the concept.

VANEK SMITH: It was a blue camera lens with the Euphrates River running through it. Mohammed showed it to the two men. He says he was terrified.

KEDDERER: But they really liked it.

VANEK SMITH: They really liked it.

KEDDERER: After that, they offered me to work with them.

VANEK SMITH: They offer me to work with them.

KEDDERER: And they say they will give you a high salary, a lot of money and a car and a gun and a house, anything you ask, you will take it.

SMITH: We'll give you anything you want to do this job - the salary, the gun, the house - a brand-new career working for ISIS.

VANEK SMITH: This is really hard to believe, but there is actually a line item in ISIS's budget for the media center, the media center in this province that was trying to hire Mohammed. The budget is $155,000 a month.

SMITH: So they really could have afforded to give him anything he wanted.

VANEK SMITH: In that part of the world, that is an enormous amount of money.

SMITH: Mohammed thanked ISIS very much for the job offer, and he asked for a few days to think about it. But he also knew what it meant to work for the ISIS news agency.

VANEK SMITH: They do a lot of propaganda of destruction of temples. And they also make videos of people getting executed.

SMITH: For Mohammed, the decision was easy. Within days, he left ISIS-controlled territory. He fled to Turkey with his wife.

VANEK SMITH: And you can probably tell from the tape, Mohammed has an amazing sense of humor. He's a really funny guy, and he uses this now to fight ISIS. He distributes cartoons and satirical articles making fun of ISIS, and he manages to get it distributed in Deir ez-Zor.

SMITH: As you might have guessed, ISIS did not take this well. A few months ago, they sent Mohammed a photo of his house, the house where he lives in Turkey. They posted it on Facebook.

KEDDERER: And they say Mohammed, see, that's your house.

SMITH: Mohammed, see, that's your house.

KEDDERER: That's for you to know that we can reach you, even if you are in Turkey. I changed my house, of course.

SMITH: He moved, and now he is very secretive about where he lives. He wouldn't even use Skype to talk with us because he says Skype can be traced. It's not safe.

VANEK SMITH: When this budget got smuggled out of ISIS territory, our experts were really excited about this. This was a window into a really secretive organization. And how an organization like this spends its money tells you a lot about them, namely, how to cut it off from its money.

SMITH: So one thing you can see in the budget, experts tell us, is that some of the Western measures against ISIS seem to be working. The amount of oil revenue seems to be going down. There are some indications that, perhaps, ISIS is paying less money, cutting back its salaries for its fighters. And all of that stuff may show a little bit of desperation.

VANEK SMITH: But there's another way to look at this budget, which is that ISIS is getting its money from a lot of different places. They are very effective at getting money.

SMITH: You can almost see them setting themselves up to be self-sustaining in a way, even though it's by doing horrible things. Like, they have some reliable ways to fund themselves and get money.

VANEK SMITH: This is what makes them really hard to stop. The bottom line of this budget is that it does not look like ISIS is hurting for money. For the month of January, it made $3 million more than it spent.

SMITH: $3 million surplus when an $8 million budget - that's scary.


SMITH: As always, we love to hear what you think of the program. You should email us, planetmoney@npr.org, or you can tweet us @planetmoney.

VANEK SMITH: We have a few people we would like to thank. Matthew Levitt - he helped us figure out ISIS's budget, also the folks at Filt Productions in Stockholm. Thanks, guys.

SMITH: Now that you're done this episode of PLANET MONEY, may we suggest another of NPR's fine podcasts? You might want to check out "All Songs Considered." Each week, Bob Boilen, Robin Hilton and the NPR music team share their favorite new music. Find "All Songs" at npr.org/podcasts and on the NPR One app.

VANEK SMITH: Our producers for today's show are Nick Fountain and Kristen Clark.

SMITH: I'm Robert Smith.

VANEK SMITH: And I'm Stacey Vanek Smith. Thanks for listening.

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