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The Saudi Connection to Terror

By       Message Daniel Lazare     Permalink
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Reprinted from Consortium News

Saudi King Salman meets with President Barack Obama at Erga Palace during a state visit to Saudi Arabia on Jan. 27, 2015.
(image by (Official White House Photo by Pete Souza))

How does ISIS pay for its operations? This is the key question as the war against the terror organization advances to a new level in the wake of the Paris atrocities. But the mainstream's approved answer is part of the problem.

That approved answer, from many political leaders and assorted "terrorism experts," is that ISIS (also known as ISIL, Islamic State and Daesh) funds its operations through a variety of illicit activities such as illegal antiquity sales, kidnapping for ransom, holding up banks, and peddling crude from oil fields it controls in northern Syria and Iraq.

The line, dutifully parroted by news outlets from The New York Times to The Wall Street Journal and the Guardian, is nothing if not politically convenient. If ISIS is truly self-supporting, then it's essentially self-contained. If so, then all the Western powers have to do once they've sealed it off in its self-proclaimed caliphate is to send in the F-18's and Mirage 2000's to rain down smart bombs and blow it to smithereens.

This is the thinking behind President Barack Obama's unfortunate remarks on Nov. 12. When ABC This Week host George Stephanopoulos asked whether ISIS was gaining strength, Obama shot back that it was simply not the case:

"What is true is that from the start, our goal has been first to contain, and we have contained them. They have not gained ground in Iraq. And in Syria they'll come in, they'll leave. But you don't see this systematic march by ISIL across the terrain. What we have not yet been able to do is to completely decapitate their command-and-control structures. We've made some progress in trying to reduce the flow of foreign fighters."

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Contain and decapitate -- this the essence of the U.S. strategy. Hence, the more the Obama administration tries to contain ISIS militarily, the more it puts out word that it is also self-sustaining economically.

But what if it isn't? In fact, there is every reason to be skeptical of the U.S. position -- and not only because American leaders have been claiming success for close to two decades in various struggles against Islamic terrorism even as it has morphed from a few scattered cells to a vast movement stretching from Nigeria to Bangladesh.

Exaggerating the Sums

So let's start with antiquities. Last year, NBC News breathlessly reported that ISIS was tapping into a $7 billion underground market in order to finance its operations. "Priceless pieces of history snatched from illicit diggings or swiped from museum cases have become one of the four most common commodities -- next to drugs, weapons and human beings -- to be trafficked by smugglers," it declared.

But the $7 billion total is dubious considering that the contemporary art market, entirely above board of course, amounts to only $2 billion. Black markets are all but impossible to measure for the simple reason that participants scatter like rats as soon as the lights go on.

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ISIS's role, moreover, is doubly difficult since it operates under deep cover. But we do know a few things, one of which is that antiquities do not move as easily as, say, corn or wheat. To the contrary, buyers are relatively few and far between, appraisals are required, and haggling is standard. With so many police snooping around, buyers are especially wary of getting caught funneling money to ISIS. So the role of antiquities would seem to be no more than ancillary.

The same goes for bank heists. Although ISIS was widely credited with making off with $400 million when it took Mosul, in northern Iraq, in July 2014, The Financial Times described the seizure as the biggest heist that "never happened."

"We speak to the banks there all the time," it quoted an Iraqi banking official as saying. "We have been informed that all are guarded from the outside by their own guards and that nothing has been removed from the premises of any banks, not even a piece of paper."

Kidnapping for ransom also seems less than lucrative in an economy inside ISIS-controlled territory that is going increasingly downhill. Ditto local taxation. While illicit oil sales may play an important role, they are also probably not as profitable as believed. Assuming they were filled to the brim, the 116 tanker trucks that U.S. planes destroyed on Monday may have contained a hundred barrels of crude each, oil that, at today's prices, ISIS would be lucky to sell for around $30 a barrel. Thus, the damage to the Islamic State's "treasury" weighs in at a relatively minor $350,000 or so.

Moreover, ISIS is by now a very large operation. Troop-size estimates start at 20,000 to 31,500 (figures put out by the C.I.A. in September 2014) and go as high as 200,000, although 100,000 seems more plausible. Fighters reportedly earn anywhere from $350 a month to $800 or more. These are very imprecise numbers, but at the very least they suggest an organization with a monthly budget in the tens of millions.

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Freelance journalist and author of three books: The Frozen Republic (Harcourt, 1996); The Velvet Coup (Verso, 2001) and America's Undeclared War (Harcourt 2001).

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