BAGHDAD
— When Qaeda-style insurgents overran the northern city of Mosul, among
the war booty they seized were what they claimed were five
American-made helicopters.
Noting
that they were still nearly new, the group said in a posting on
Twitter, “We’ll expect the Americans to honor the warranty and service
them for us.”
“Not
only are they effective jihadists but they have a sense of humor,” said
Toby Dodge, director of the Middle East Centre at the London School of
Economics, who related that anecdote.
Behind
the image of savagery that the extremists of the Islamic State in Iraq
and Syria present to the world, as casual executioners who kill helpless
prisoners and behead even rival jihadis, lies a disciplined
organization that employs social media and sophisticated financial
strategies in the funding and governance of the areas it has conquered.
The
insurgents seized as much as $400 million from the central bank in
Mosul, said Atheel Nujaifi, the governor of Nineveh Province, and
reportedly emptyed the vaults in all the other banks in a city of more
than one million residents. Other officials cite lower figures when
discussing the central bank theft.
ISIS: Behind the Group Overrunning Iraq
Background on the Islamic State in Iraq and Syria, the Islamist group that gained control of the second-largest city in Iraq.
Credit Uncredited/Militant Website, via Associated Press
In
a bloody see-saw battle for control of Iraq’s biggest oil refinery at
Baiji, halfway between Baghdad and Mosul, the insurgents worked with the
families of employees there to broker a cease-fire — so the workers
could be safely evacuated.
It
was no humanitarian gesture. “They want them to run the refinery when
the fighting is over,” one local official said, who spoke on the
condition of anonymity out of fear ISIS would kill him.
Their
extortion rackets in Mosul netted as much as $8 million a month,
according to Gen. Mahdi Gharawi, until recently the Nineveh Province
police commander, in an interview with Niqash, an Arabic language news
website. And that was even before they took over. Once in charge, they
typically levy “taxes,” which are just as lucrative. So-called road
taxes of $200 on trucks are collected all over northern Iraq to allow
them safe passage. The Iraqi government claims the insurgents are now
levying a “tax” on Christians in Mosul, who were a significant minority
there, to avoid being crucified.
Even
a cellphone app that helped ISIS propel its Twitter feed to the top of
the jihadi charts, had advertising embedded in it. All of that, in turn,
was part of a savvy social media campaign to convince well-heeled
supporters in Saudi Arabia and Gulf nations to donate to their
operations. “We don’t know the exact amount of money they stole from
Mosul,” said Ameen Hadi, a member of the last Iraqi Parliament’s finance
committee. “But it is big, big enough that ISIS can use it to occupy
other countries too.”
A
member of the board of governors of the Central Bank of Iraq was
reluctant to say how much ISIS got away with in Mosul, but said it was
at least $85 million and could be much more. He spoke on the condition
of anonymity because he was not authorized to speak publicly about the
case.
“ISIS
gets some money from outside donors, but that pales in comparison to
their self-funding,” said an American counterterrorism official. “The
overwhelming majority of its money comes from criminal activities like
extortion, kidnapping, robberies and smuggling. In Mosul, ISIS has
probably been hauling in several million dollars monthly just from its
extortion racket. In overrunning the town the group is better off
financially, but probably to the tune of millions — not hundreds of
millions — of dollars.”
While
ISIS “is among the wealthiest terrorist groups on the planet,” the
official said, “it also has significant expenses. Resources flowing into
the group’s coffers tend to move out the door in the form of payments
fairly quickly. Unless it has invested very wisely, it’s probably
sitting on a pile of assets worth somewhere in the tens of millions of
dollars.”
The
militant group has so much cash that it has reopened some of the banks
it looted in Falluja, in Anbar Province, to stash it in. Jassim Ahmed,
35, who works as a taxi driver in the city, which has been under
militant control since January, said he asked one of the gunmen guarding
the banks where the militants get their money. “Don’t ask me again,”
the gunman told him, he said. “Just understand, we have a budget to
administer all of Iraq, not just Anbar.”
“We
no longer have to imagine a terror state,” said Kamel Wazne, a
Beirut-based analyst who has followed the group’s development into a
self-financing, territory-controlling entity. “We have one.”
ISIS started amassing a bankroll in Syria last year after it took over the eastern Syrian oil fields,
near Raqqa. It operates primitive refineries to make products for local
use by ISIS’s own fighters, but sells much of the crude to its enemy —
the Syrian government. In Minbij, it runs a local cement factory, and in
Raqqa merchants even pay the militants a trash collection fee.
Invading
Iraq has just expanded the revenue base. “The more territory they hold,
the more they will become self-reliant,” said Peter Neumann, a
professor of security studies at King’s College in London. “That is one
of the dangers and why they have to be stopped. If they become
self-reliant and can start paying people salaries and such, that makes
it much harder to dislodge them.”
They
are always on the lookout for new revenue streams. Their extreme
ideology may call for all non-Sunni Muslims to be killed, but they
apparently overlook that when there is money to be made on the backs of
unbelievers. In the course of the last week, several groups of Turkish
workers, a group of 40 Indian workers and a Chinese official were among
foreigners who disappeared in territory that ISIS overran and were later
released unharmed. While no one confirmed that ransoms were paid,
kidnapping for ransom has been in the militants’ business plan too.
In
a more dubious emblem of corporate success, the insurgents even have a
whistleblower, a jihadi who appears to have split from ISIS and posts
insider information about the group under the Twitter handle @Wikibaghdady.
The
rival jihadi posted documents last year that purportedly showed ISIS
planning ruthless fund-raising drives for Iraq, including imposing taxes
on “Shia, Christians and other minorities” and “gaining control over
the oil fields and energy sources.” Any company with Iraqi government
contracts should be taken over by ISIS, the documents said. “If the
owner of the company doesn’t agree, then he/she should be threatened to
be killed or to destroy the company.”
Even
the insurgents’ Twitter operation had a potential money-raising side.
According to J. M. Berger of Intelwire.com, who has studied the jihadis’
use of social media, ISIS distributed a cellphone app to its followers
called Dawn of Glad Tidings. The Google Android app even had advertising
embedded in it, he said, and also was a sophisticated spam generator
turning each ISIS tweet into thousands of additional tweets while
evading Twitter’s spam defenses.
After Mr. Berger wrote about the app for The Atlantic
last week, Twitter disabled it and closed down many of the group’s
Twitter accounts, although new ones opened almost immediately, he said.
“What they’re doing on social media is with a big eye to fund-raising,”
Mr. Berger said.
So
far the extremists have been prevented from expanding their operations
into Iraq’s oil-producing areas. But for the last week they have
besieged the Baiji oil refinery, the largest in the country with a
capacity of 310,000 barrels a day, with the facility briefly falling completely under their control on Wednesday.
While
many experts question whether the insurgents could operate the
sophisticated facility, they could bring its Iraqi workers back or, at
least, gain access to numerous storage tanks.
Baiji
supplies Iraq with a third of its domestic fuels, and a nearby
600-megawatt power plant provides 10 percent of the country’s
electricity, according to Barclay’s Research. All of the provinces where
ISIS has been active have been without electricity since Baiji’s
shutdown.
Fear
of gasoline shortages sent many Iraqis to Kurdistan this week, where
long lines formed Friday at gas stations, which were ordered to give no
one more than about eight gallons apiece.
“If Baiji falls, the fuel crisis will be huge,” said Barham Salih, the former prime minister of the Kurdish regional government.
Iraqi
government employees, even in areas taken over by the militants,
continue to draw their salaries, and the government said they would be
allowed to go to safe areas to collect their pay.
That
is a hearts-and-minds benefit that would be hard for the insurgents to
match, in a country where the central government is the major employer,
and many of those employees will end up paying ISIS taxes. And if ISIS
itself becomes the de facto government, it will get the blame for Iraq’s
chronic electricity shortages — which are now nearly total in
ISIS-dominated areas, just as the summer months begin.
“They’re
a very effective organization,” said Mr. Dodge, “but there’s a danger
this could be overstated. If you’ve seen what they’ve been up to in
Raqqa, the area they’ve held longest, the brutality, the beheading, the
austere Islam is bound to come back. They’re on this hearts-and-minds
campaign in Mosul, and to some extent Tikrit, but once they hold
territory exclusively on their own, they won’t be able to resist
assassinating rivals, imposing on society a harsher life, which is what
they’re about anyway.”
Correction: June 21, 2014
An earlier version of the byline with this article omitted the name of a reporter. Alissa J. Rubin and Rod Nordland both wrote the article, not just Mr. Nordland.
An earlier version of the byline with this article omitted the name of a reporter. Alissa J. Rubin and Rod Nordland both wrote the article, not just Mr. Nordland.
Reporting was contributed by
Duraid Adnan and Suadad al-Salhy in Baghdad, Tim Arango in Erbil, Iraq;
Ben Hubbard in Silopi, Turkey; Anne Barnard in Damascus, Syria; an
Iraqi employee of The New York Times in Tikrit, Iraq; Eric Schmitt in
Washington; and Clifford Krauss in Houston.
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