ISIS has been able to do what other Islamic terrorist organisations hasn’t been able to do — rapidly grow its territory and conduct mass operations overseas because of an abundance of funding and a self-sufficient economy.
However, the latest report by the Financial Times suggests that the ISIS self-declared “caliphate” is slowly being eroded by high levels of financial corruption among its officials, commanders and fighters.
ISIS (also known as ISIL, Islamic State, and Daesh) has grown so rapidly that officials are unable to do due diligence on paperwork and verify what ISIS officials and commanders are claiming for.
For example, the FT said an emir known as Abu Fatima al-Tunisi ran off with some $25,000 (£16,774) worth of “zakat” (taxes), leaving a message to former ISIS comrades on Twitter saying: “What state? What caliphate? You idiots.”
“Zakat” dates from the times of Prophet Mohammed in the 7th century. Zakat is a form of almsgiving where citizens of an Islamist state would give 2.5% of their capital towards authorities to fight for a “holy cause.” When it comes to taxing goods, ISIS tax collectors — which work for the local Zakat Council under a provincial “wali” (governor) — calculate how much goods are worth by physically going round to stores to make a market comparison.
Meanwhile, the FT report says “50,000 ‘ghost’ soldiers had been drawing salaries from the military without serving.”
ISIS commanders apply to the caliphate’s financial administration for salaries for their troops but often lie about how many soldiers fall under their command.
“You’d have a frontline [Isis] commander apply for salaries for 250 people, but really he only has 150,” said one commander to the FT.
“When officials discovered the schemes they started sending financial administrators to deliver salaries. Then the administrators started agreeing with commanders on scams, too.”
At the beginning of December IHS research estimated that
ISIS rakes in $80 million (£53 million) per month. Around $1.1 million (£730,793) per day is made from just oil revenue alone. Other ways in which ISIS gets all of its funding includes scamming banks, selling antiques and artifacts, ransoms and taxation.
However, another fantastic in-depth report by the Financial Times recently revealed that ISIS “earns at least as much from taxation, extortion and confiscation as oil.”
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.