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How ISIS continues to fund its insurgency

The Islamic State is returning to its roots as an insurgent force, with growing influence beyond its traditional geographic boundaries. And without a state, the group has new fundraising methods to finance itself. Foreign correspondent Rukmini Callimachi, who covers ISIS and Al-Qaeda for The New York Times, joins Hari Sreenivasan for an update on where the terror group stands.

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  • HARI SREENIVASAN:

    For more perspective on the reemergence of ISIS in Iraq and elsewhere, we turn now to New York Times foreign correspondent Rukmini Callimachi, who covers ISIS and al Qaeda. You know, there's sort of a question of geographic control versus actual power. I mean ISIS seems to have shrunk geographically.

  • RUKMINI CALLIMACHI:

    Right.

  • HARI SREENIVASAN:

    But at the same time we see influences that they're having, not just in Iraq and Afghanistan, but elsewhere.

  • RUKMINI CALLIMACHI:

    So I think that part of the problem is we have gotten so used to ISIS being a territorial holding entity. The Islamic State, as it was called, is named as such because they wanted to create a state. And at one point they held a territory that was the size of Great Britain. We have mistaken that for the group itself, and we're forgetting that ISIS in its earlier form emerged in Iraq as early as 2002, 2003. And for the first decade or more of its existence, it held no territory at all, and yet was incredibly destructive, as an insurgent force. And that is what we are seeing now. It's basically just going back to its insurgent roots.

  • HARI SREENIVASAN:

    What was the consequence of that? Because when they had a state, they also had a revenue stream.

  • RUKMINI CALLIMACHI:

    Yes.

  • HARI SREENIVASAN:

    They had taxation.

  • RUKMINI CALLIMACHI:

    Yes.

  • HARI SREENIVASAN:

    Right, so as that shrinks, I'm imagining, there are fewer people paying taxes to ISIS.

  • RUKMINI CALLIMACHI:

    Yes, we are expecting a big downturn in their economics as a result of the fact that they have lost the big base of taxation that they had before. I was just in Baghdad a couple of weeks ago, and I met with coalition officials and unfortunately the number that they were citing for how much money ISIS still has on hand, just in Iraq and Syria, is over $300 million. So that gives you a sense of just how wealthy this terrorist group is. They are now going back to the types of fundraising that they were doing before, namely illegal taxation in areas that they do not control, coming into areas and telling businesses if you don't pay up, like the mafia, if you don't pay you're going to face the consequences. Kidnapping, which never stopped but which is becoming a major revenue stream now. And human trafficking, all of the other things that they have done since their earliest days. This is a group that has known how to finance itself without territory for over a decade. So I don't expect them to go bankrupt any time soon.

  • HARI SREENIVASAN:

    And I'm assuming that these are not folks that are using banks that we can put economic sanctions on and say here's these 10 names, make sure that they can't move their funds. How do they move all this money around?

  • RUKMINI CALLIMACHI:

    From what we're hearing, it's hard cash. So a lot of times when an area is cornered by the coalition, you will see ISIS members trying to escape. And at the moment when they capture them, they will find bricks of cash on them. Twenty thousand dollars, thirty thousand dollars, on a guy who looks like a shepherd. And so I think that part of it is hard cash. We're also hearing rumors that they're investing in various businesses. I haven't been able to confirm this myself, but this is what the coalition talks about.

  • HARI SREENIVASAN:

    You know, one of the most recent reports you had is from a place that we don't associate with ISIS, Tajikistan.

  • RUKMINI CALLIMACHI:

    Yes.

  • HARI SREENIVASAN:

    And this was a tragic story about a couple of American bicyclists who were traveling the world and they were with a group of other international cyclists, and what happened?

  • RUKMINI CALLIMACHI:

    This group of cyclists, two Americans from the Washington, D.C., area, had been cycling for an entire year. This was sort of the dream of their lives. They got to Tajikistan, which is a country that up until this July had a more secure rating in terms of safety than France or Germany. It was a Level 1 in the State Department whereas France and Germany are a Level 2. So there was no reason for them to have any worries at all in Tajikistan. They were cycling on a well-known route that has become quite popular with tourists, and a group of men who had pledged allegiance to ISIS, in a Daewoo van, came from behind them, ran them over and then jumped out and stabbed them to death. Four people died; several others were injured. The attackers actually filmed the attack as they were doing it. They appeared in ISIS's propaganda a couple of days later. And it was the very first ISIS attack in that country. And we're seeing more and more of this. Before the Manchester attack in England, there had never been an ISIS attack, a successful one, in the U.K., even though a lot of citizens of the U.K. have joined the terrorist group. Similarly, when the Barcelona attack occurred, there had never been an attack in Spain, even though we know that Spanish citizens have joined.

  • HARI SREENIVASAN:

    So is this part of the strategy then? So if you can't get into the United States and wreak havoc on the infidels here, attack everywhere else.

  • RUKMINI CALLIMACHI:

    That is the promise, that is the threat that ISIS has repeatedly made. And this is a group that has drawn recruits from a hundred different countries. So this is what they keep on saying in their propaganda. And of course it's put out to scare us, but unfortunately we're seeing evidence that they're making this come true. Tajikistan, again, was a country that was on nobody's radar. However it had a very large number of ISIS recruits: 1,300. That's on par with what the country like France, which has one of the highest recruit bases, and France has had repeated attacks over and over again. And so in a way it's not surprising that this has happened, but it's been incredibly destructive to that country. They had a burgeoning tourist industry, and of course, these lives that were lost.

  • HARI SREENIVASAN:

    Rukmini Callimachi of the New York Times, thanks so much.

  • RUKMINI CALLIMACHI:

    Thank you, Hari.

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