IE 11 is not supported. For an optimal experience visit our site on another browser.

Deep Pockets, Dark Goals: How Will ISIS Keep Funding Terror?

Terrorist group has raised "hundreds of millions of dollars" in its two-year existence, U.S. officials say, but it's spending it just as fast.

Ransom payments for kidnap victims, crimes like extortion and robbery and, lately, oil sales are believed to have brought in “hundreds of millions of dollars” for ISIS during its two-year reign of terror, U.S. intelligence officials tell NBC News. But the group is burning through money nearly as quickly, fighting a two-front war in Syria and Iraq and trying to govern the self-declared “caliphate” it has established, they say.

The Islamic terror group’s annual revenues are now at least comparable to the funding that al Qaeda had available during its heyday in the late 1990s and early 2000s, when U.S. intelligence estimated it was bringing in $25 million to $30 million a year, according to one official. And it may be that ISIS’s financial resources go “well beyond” those of Osama bin Laden’s organization at the time, the official said.

Ransom payments are one of ISIS’s major sources of income, with “tens of millions of dollars” paid by some European governments and wealthy relatives of the kidnap victims over the past two years. The low end of the estimate range is "well above $25 million," according to the official, who spoke on condition of anonymity.

In addition to collecting ransom, ISIS feeds its ravenous hunger for cash primarily through extortion and oil smuggling, said the official.

But while those activities are “the bread and butter,” no revenue stream is considered too insignificant, added a second official, noting that ISIS “requires drivers to pay 'road taxes' in territories it controls."

"It's like the Mafia. When it sees an opportunity to make money, it jumps in with both feet."

Austin Long, a Columbia University assistant professor and former RAND Corp. analyst, compared ISIS s approach to that of the Mob.

"It's like the Mafia. When it sees an opportunity to make money, it jumps in with both feet," he told NBC News. "So historically, they've made money on everything from protection rackets to carjacking to people's donations. … Now, they're selling resources they've taken from oil fields and oil refineries ... (and collecting) ransom."

The second U.S. official said that in addition to selling equipment seized from the oil fields it has overrun, ISIS has been able to export some oil by disguising its point of origin and smuggling it out of the conflict zone. Some of that oil is going through Turkey, likely by truck, the official said.

It also has enriched itself with the spoils of war in other ways.

In June, the group raided Mosul's central bank and other smaller banks as its fighters overran Nineveh province in Iraq. Initial reports from the mayor of Mosul had the group had made off with as much as $400 million in currency and gold bullion, but a senior intelligence official told NBC News last month that number was more likely "to the tune of millions of dollars."

"They pose a greater threat today than they did six months ago, and we're taking it very seriously.”

Unlike al Qaeda and other Sunni terrorist groups, which relied heavily on funding from wealthy Gulf state patrons, the amount of financial aid that ISIS gets from rich Sunnis outside Iraq and Syria “pales in comparison” to its self-generated funds, said the official.

White House spokesman Ben Rhodes said Friday that the increased funding and heavy weaponry seized during ISIS’s advance into Iraq “has developed their capacity in a way that has increased the threat. … They pose a greater threat today than they did six months ago, and we're taking it very seriously.”

'Seven figure' payoff per kidnap victim

The group’s reliance on kidnapping reappeared in headlines this week after it was revealed that ISIS had asked Global Post, the last news organization to employ photojournalist James Wright Foley, for 100 million euros (approximately $132 million) for his safe return. Foley was beheaded this week by an unidentified ISIS fighter in retaliation for U.S. air strikes against ISIS in Iraq.

U.S. officials say European governments -- along with some wealthy Arabs -- have paid seven-figure ransoms to the group in exchange for hostages.

In April, four French journalists, two of whom were often cellmates of Foley, were freed near the Syrian-Turkish border as part of a deal with ISIS.

Image: Islamic State militants stand guard after controlling a checkpoint in Khazer at the border area of the Kurdish semi-autonomous region
ISIS militants stand guard a checkpoint in Khazer at the border area of the Kurdish semi-autonomous region in Iraq on Aug. 7. Reuters

At the time, the French government denied reports that $18 million had been paid for the journalists' release, 10 months after they were captured. However, Phil Balboni, the CEO of Global Post, told reporters this week that he knew that recent ransoms for other kidnapped journalists had been between 2 million and 4 million euros (roughly $2.6 million to $5.2 million).

The U.S. officials declined to comment on the specifics of ransom payments paid by other governments.

Michael Leiter, former director of the National Counter Terrorism Center and an NBC analyst, said ransom payments help ISIS and other terrorist groups and add risk for citizens of those countries who agree to pay up.

"There is no doubt that paying ransom both encourages more kidnapping and provides terrorists with critical financial resources," said Leiter. "Al Qaeda in North Africa specifically avoided taking hostages of countries that didn't pay up, instead targeting European nationals whose countries routinely wrote checks. Moreover, these funds were central to purchasing the weapons and other support necessary to carry out additional attacks."


While ISIS’s earning power is impressive, it has a problem now that it has seized a large swathe of territory in both Iraq and Syria, the officials said. It can’t afford to see its cash flow diminish.

"It's coming in and out quickly," one official said. "… Fighters have to be paid something."

He added there are logistics issues, moving men and materiel as well as feeding, clothing and tending to the medical needs of their fighters. Also, traditionally, the families of "martyrs" killed in action get pensions.

And ISIS has a new expense. "The cost of governance, paying administrators in the towns and cities they have captured and incorporated into their caliphate," said the first official. "Running a caliphate is not cheap."

Follow NBC News Investigations on Twitter and Facebook.

And while ISIS may have eclipsed al-Qaeda’s income, it has problems that bin Laden never faced when his group was training jihadists and plotting terror attacks under the protection of the Taliban.

"Al Qaeda wasn't fighting a two-front war" or looking skyward at U.S. air assaults, the official added.