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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 honour the warranty and service them for us."
"Not only are they effective jihadists but they have a sense of humour," 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 organisation 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 emptied 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.
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 authorised 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 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," 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 per cent 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 organisation," said 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."
©2014 The New York Times News Service
