Current State of ISIL’s Finances 29
Other Sources of Revenue
As with any successful organization, ISIL has a diversified funding portfolio. ISIL controls
significant resources within Syria and Iraq’s industrial and agricultural sectors. And although
access to state-owned banks in northern and western Iraq has been mostly curtailed, the heists
ISIL did conduct dating back to 2014 provided the organization with a substantial bankroll to
fund its nascent operational and organizational needs, on the order of at least $500 million.
13
ISIL has also earned money through kidnapping for ransom (KFR), estimated at $20 million
to $45 million in 2015 by the U.S.
Treasury; the sale of antiquities; exchange rate arbitrage
through participation indirectly with exchange houses and banks participating in the Cen-
tral Bank of Iraq’s currency auctions, in which dollars can be bought at below-market rates
and then sold at market rates; and seemingly banal activities like running fish farms and sell-
ing used automobiles. To date, ISIL has maintained a minimal reliance on foreign donors,
although accusations have surfaced of wealthy sympathizers and individuals from Qatar and
Kuwait donating money to the group.
14
How Much Money Does ISIL Make?
There is no single agreed upon source for how much money ISIL makes. Assistant Secretary
Daniel L. Glaser did note in comments from February that ISIL’s revenue from oil had been
halved, from $500 million in 2015 to approximately $250 million.
15
Even with that decrease
in revenue from oil, ISIL still may have earned $350 million per year from extortion.
16
It is
believed that ISIL has looted over $1 billion from bank vaults across Syria and Iraq, although
as will be discussed below, substantial portions of ISIL bulk cash reserves may have been
decimated by Coalition airstrikes over the past year.
17
Figures from IHS assert that ISIL’s
monthly revenue, overall, has been diminished by as much as 30 percent over the past year,
from roughly $80 million per month to $56 million per month (equivalent to $960 million per
year and $672 million per year, respectively). This includes a 26 percent drop in revenue earned
from oil and gas, a 23 percent drop in revenue earned from taxation and extortion, and a 67
percent drop in revenue earned from sources listed as “other,” which IHS lists as drug smug-
gling, sale of electricity, and donations.
18
Likewise, CJTF-OIR has said that Tidal Wave II air
operations, starting in October, reduced ISIL’s oil production from 45,000
barrels per day to
34,000 barrels per day, a 24 percent decrease. IHS also claims that 43 percent of ISIL’s overall
revenue comes from oil, while 50 percent comes from taxation and extortion, which seems to
be close to the yearly figured offered by Glaser of $250 million and $360 million, respectively.
13
Glaser, 2016b.
14
Bronstein and Griffin, 2014.
15
Glaser, 2016a.
16
Glaser, 2016b. Note that Glaser has also been cited as saying that ISIL earned $360 million, rather than $350 million,
annually from extortion and taxation (Torbati, 2016).
17
Rosenberg, Cooper and Kulish, 2016.
18
IHS Inc., 2016.
30 Financial Futures of the Islamic State of Iraq and the Levant
How ISIL Spends its Money
ISIL spends its money similar to the way other terrorist and insurgent groups do. Some of its
money goes to paying for its fighters’ salaries, some goes for weapons procurement, and some
is earmarked for maintaining the vast infrastructure of its caliphate and the provision of basic
services for those living within the territory it controls. Details are hard to come by, but there
have been several credible reports, especially in the Financial Times and New York Times.
19
The
rest of this section draws from those accounts.
The group has a central budget in Mosul as well as regional budgets below the central
level. Reports consistently say that the majority of the spending supports the war effort. A
Financial Times report noted that monthly expenses included $20 million for the core fight-
ing force, $15 million to $20 million for auxiliaries and local fighters, tens of millions on
munitions, and $10 million to $15 million for its security sections. The report noted that at
one point, compensation amounted to $600 million per year, about two-thirds of the group’s
expenditures at that time.
20
Reports of salaries have varied. One report held that in the summer of 2015, ISIL was
paying members $100 monthly, with $100 extra per parent and $40 per sibling.
21
However,
more recent documents have put those amounts at $50 per fighter, wives, and sex slaves, and
$35 for other dependents.
22
Other reports indicated that skilled workers received more, at least
at one point. For example, an oil field technician reported receiving $675
per month, up from
an initial $450, well above his $150 Syrian government salary.
23
At its peak of power in the summer of 2015, it appeared that the Islamic State was con-
ducting public works, such as fixing power lines, digging sewer systems, and painting side-
walks, and running a bus service from Syria to Iraq. They also conducted regulatory functions,
such as ensuring the safety of food in markets. It was also running schools and hospitals,
although the quality of those services was presumably low (for example, the curriculum in
school was not exactly designed to help people navigate a modern economy or engage in criti-
cal thinking). In addition, the provision of justice has been a constant, although a harsh one.
24
By December 2015 and into 2016, it appeared that many of the services had slowed and
been eliminated, and that maintenance was not being done. The National Hospital in Raqqa
was essentially closed because most doctors had fled. Fighter pay was reported to have been cut
by 50 percent.
25
People who had left Islamic State territory said that the group’s promises had
not been kept.
Change Over Time
Countering ISIL’s finances is one of several main lines of effort for the Coalition. Under the
auspices of Operation Tidal Wave II, Coalition airstrikes have reduced ISIL oil revenues by
19
Jones
and Solomon, 2015; Hubbard, 2015a; Hubbard, 2016b.
20
Jones and Solomon, 2015.
21
Hubbard, 2015a.
22
al-Tamimi, 2016.
23
Hubbard, 2015a.
24
Hubbard, 2015a.
25
Nicks, 2016.