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ISIS’s original piggy bank was Saudi Arabia

June 26, 2014

Could the Islamic State of Iraq (ISIS) terrorists truly have funded their ascendancy solely through extortion against local businessmen in northern Iraq? True, that has helped ISIS, and Money Jihad has covered these extortion operations several times (here, here, etc.). But we have also seen repeatedly that successful and multifaceted terrorist groups tend to rely on state sponsorship, whether it’s the Taliban’s seed money from Pakistan, Hezbollah’s support from Iran, or IHH’s money from Turkey.

As Money Jihad has always said, Saudi Arabia didn’t just fund 9/11—it funded the Iraq insurgency. The same elements Saudi Arabia funded during Operation Iraqi Freedom continue to be funded by Saudi Arabia today. Iraq says that this is the case. German security expert Günter Meyer says it is the case as well. The only person denying it is some flunky quoted in this article who lives in a bubble and works in John Kerry’s State Department. It is difficult to characterize Jen Psaki’s quote as anything other than a lie.

This analysis from Deutsche Welle (h/t El Grillo) is important to read for anybody wanting to understand what’s really fueling ISIS’s rise—and it didn’t just start with seizing a bank in Mosul:

Who finances ISIS?

During its conquest of the northern Iraqi city of Mosul, ISIS fighters looted more than 500 billion Iraqi Dinar, worth about $420 million (308 million euros) at current exchange rates. ISIS is a rebel army composed of Sunni jihadis that calls itself the “Islamic State of Iraq and greater Syria.” Its aim is to establish a theocratic Sunni caliphate in the region.

Iraqi officials estimate that the group now has about $2 billion in its war chest. What remains controversial is where the bulk of its money comes from.

Iraq’s Shiite-dominated government accuses Saudi Arabia of supporting the ISIS jihadis. On Tuesday (17.06.2014), Iraqi Premier Nouri al-Maliki said “we hold Saudi Arabia responsible” for the financial and moral support given to ISIS.

The USA, which is Saudi Arabia’s most important ally, has rejected the Iraqi Premier’s accusation. Jen Psaki, a speaker for the US State Department, said on Tuesday evening that al-Maliki’s accusation was “inaccurate and humiliating.”

Money from the Gulf States?

“There is no publicly accessible proof that the government of a state has been involved in the creation or financing of ISIS as an organisation,” said Charles Lister, Visiting Fellow at the Brookings Doha Center in Qatar, a subsidiary of the US think-tank Brookings Institution.

Others take a different view. Günter Meyer is Director of the Center for Research into the Arabic World at the University of Mainz. Meyer says he has no doubt about where ISIS gets its funding. “The most important source of ISIS financing to date has been support coming out of the Gulf states, primarily Saudi Arabia but also Qatar, Kuwait and the United Arab Emirates,” Meyer told Deutsche Welle. The Gulf states’ motivation in financing groups like ISIS was to support their fight against the regime of President Bashar al Assad in Syria, according to Meyer. Three quarters of the Syrian population are Sunni Muslims, but Syria is ruled by an elite drawn mostly from the Alawite minority. The Alawites are an offshoot of Shiite Islam.

Recently, however, the government of Saudi Arabia has recognized the dangers of this policy. “Saudi citizens now compose the largest contingent of foreign fighters in ISIS. When those fighters come home, there’s a danger that they might turn against the Saudi regime,” Meyer said. But there are reasons to believe that financing for ISIS continues to flow out of Saudi Arabia, “less from the Saudi government than from rich Saudis”.

Money from oil and extortion

Additional key financing sources for ISIS, according to Meyer, are the oil fields of northern Syria. “ISIS was able to get those oil fields under their control. They use trucks to bring oil over the border into Turkey. That’s an important source of funding for them.”

The view of Charles Lister at the Brookings Doha Center is that ISIS is largely able to fund itself. “ISIS has made an effort to establish networks in society that generate a continuing flow of money.” As an example, Lister points to the systematic extortion conducted by ISIS in the recently conquered city of Mosul.

“The exortion affects small businesses and big companies, construction firms, and if the rumors are true, even local government representatives,” Lister told DW. “In addition, it’s suspected that the organization levies taxes in the areas that it completely controls – for example Raqqa in northeastern Syria.”…

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