Treasury urges patience in effort to dry up ISIS dollars

Lawmakers expressed concern Thursday about the government’s ability to dry up funding for the Islamic State in Iraq and Syria (ISIS).

A Treasury Department official acknowledged there are several unique challenges to the financial front of the Obama administration’s offensive against the deep-pocketed terrorist group, but urged patience as efforts continued.

{mosads}“Our efforts to combat its financing will take time,” said David Cohen, the Treasury Department’s undersecretary for Terrorism and Financial Intelligence. “We have no silver bullet, no secret weapon to empty [ISIS’s] coffers overnight.”

ISIS stands out from many other terrorist groups because of its large, self-funded operations. Policymakers estimate ISIS has nearly $2 billion in assets, and reaps millions of dollars per week through a host of activities.

While many extremist and terrorist organizations rely on outside donors to fund their operations, ISIS is actually internally funded, relying on oil sales from controlled territory, kidnapping and extortion, among other means to finance its operations.

While urging patience, Cohen did say he believed the government’s efforts to tamp down ISIS’s finances were having an impact. This summer, the group was making as much as a million dollars per day on oil sales. That number has now fallen to several million dollars a week — a slight change, but a significant one, he argued.

“It is small steps,” he said “I don’t expect I’m going to be able to come back to this committee a month from now … and show a decrease.

“It’s going to take a dedicated effort over some period of time,” he added.

But he also acknowledged that many of the Treasury’s tools to tackle illicit financing across the globe are difficult to apply to ISIS. Because the group is internally funded, its interactions with the legitimate financial system, where the Treasury can access and freeze assets, is limited.

The Treasury typically identifies those that aid and abet terrorist and other illegal organizations, which in turns allows it to freeze assets and bar U.S. businesses from working with them. While some ISIS contacts may operate in the broader financial system, the government is still working to track down targets that could have an impact, according to Cohen.

But Cohen was more optimistic in discussing broader challenges facing the group as it amasses power. As ISIS gains control of various regions and attempts to operate as a government of sorts, Cohen said the group will be under significant financial strain if it tries to provide even the most basic of public goods and infrastructure.

The hearing took place the same day ISIS reportedly announced plans to begin minting its own coins, as the group gains territory in the Middle East. The administration has requested $5.6 billion in funding for anti-ISIS operations, which it hopes will be included in a government funding bill Congress must pass by Dec. 11.

Lawmakers in both parties aired frustration at the government’s inability to make a bigger dent in the group’s finances, and questioned whether the administration underestimated the strength of the group until recently.

“It is inconceivable that we have what we think is one of the best intelligence agencies in the world, that ISIS could have developed this far with sophisticated operations for selling oil … without us knowing what they were doing,” said Rep. Maxine Waters (D-Calif.).

And Rep. David Scott (D-Ga.) expressed anger at what he saw as limited engagement by international allies in the initiative.

“This Congress ought to know what in the hell are they doing to stop this financing?” he asked.

Discussion of ISIS specifics and tools to battle its finances was limited at times during the public hearing. Chairman Jeb Hensarling (R-Texas) said he expected the panel would hold a closed, classified hearing to discuss the issue in more detail early when the next Congress convenes in 2015.