Officials say ISIS earns $1 million a day from black market

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Officials say ISIS earns $1 million a day from black market
David Cohen, US Treasury undersecretary for terrorism and financial intelligence, speaks during a daily press briefing at the White House on October 23, 2014 in Washington, DC. White House Press Secretary Josh Earnest was joined by Cohen to speak about the Treasury's efforts to combat the Islamic State group. AFP PHOTO/Brendan SMIALOWSKI (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
QAMISHLI, SYRIA - SEPTEMBER 25: Syrian petroleum, being drilled from 1,200 oil wells in Rimelan district, under the control of Kurdish groups, of Qamishli, is being wasted due to the clashes between Islamic State of Iraq and Levant (ISIL) and Kurdish armed groups. A general view of the wells is seen on September 25, 2014. (Photo by Adem Demir/Anadolu Agency/Getty Images)
QAMISHLI, SYRIA - SEPTEMBER 25: Syrian petroleum, being drilled from 1,200 oil wells in Rimelan district, under the control of Kurdish groups, of Qamishli, is being wasted due to the clashes between Islamic State of Iraq and Levant (ISIL) and Kurdish armed groups. A general view of the wells is seen on September 25, 2014. (Photo by Adem Demir/Anadolu Agency/Getty Images)
A screen grab from a video posted to YouTube by ISIS that claims to show journalist James Foley, who was abducted in 2012 while covering the Syria civil war, being beheaded.
SALADIN, IRAQ - AUGUST 31: Iraqi armed forces have entered the northern town of Amirli which had been under the siege of Islamic State militants for over two months in Saladin ,Iraq on August 31, 2014. Supported by Kurdish forces and Shiite militias, the Iraqi army launched an offensive shortly after the U.S. carried out airstrikes against Islamic State (IS) positions near the town, and dropped aid for the nearly 20,000 Shiite Turkmen trapped in Amirli. The government forces and Kurdish peshmerga forces have been fighting against the militant group to block their advance. (Stringer - Anadolu Agency)
SALADIN, IRAQ - AUGUST 31: Shiite militias hold the Hezbollah flag after Iraqi forces have entered the northern town of Amirli which had been under the siege of Islamic State militants for over two months in Saladin ,Iraq on August 31, 2014. Supported by Kurdish forces and Shiite militias, the Iraqi army launched an offensive shortly after the U.S. carried out airstrikes against Islamic State (IS) positions near the town, and dropped aid for the nearly 20,000 Shiite Turkmen trapped in Amirli. The government forces and Kurdish peshmerga forces have been fighting against the militant group to block their advance. (Stringer - Anadolu Agency)
KHAZIR FRONTLINE, KRG, IRAQ - 2014/08/26: A Peshmerga soldier makes a victory sign on top of a bunker at the Khazir Frontline. Khazir refugee camp is located outside Kalak, a town halfway on the road between Erbil and Mosul. It was overrun by ISIS militants on the 7th of August following an unprecedented push of the Caliphate into Kurdish territory. Its thousands of Iraqi and Arab refugees were forced to flee again as the now deserted camp has become the new frontline between the Peshmerga and ISIS. It is the theatre of frequent U.S. airstrikes that have helped halt the ISIS advance into a stalemate situation. (Photo by Vianney Le Caer/Pacific Press/LightRocket via Getty Images)
MOSUL, IRAQ - AUGUST 19: Iraqi army forces and Peshmerga forces take security precautions against possible Islamic State (IS)-led terrorist groups' attacks with heavy weapons and armoured vehicles around the Mosul Dam on August 19, 2014 in Mosul, Iraq. IS-led militants had seized the control of the dam and they were driven after the U.S. airstrikes and ground offensive of Iraqi troops. (Photo by Sivan Siddik/Anadolu Agency/Getty Images)
A Peshmerga fighter looks at the remains of a car, bearing an image of the trademark jihadist flag, which reportedly belonged to Islamic State (IS) militants after it was targeted by an American air strike in the village of Baqufa, north of Mosul, on August 18, 2014. Kurdish peshmerga fighters backed by federal forces and US warplanes pressed a counter-offensive Monday against jihadists after retaking Iraq's largest dam, as the United States and Britain stepped up their military involvement. AFP PHOTO/AHMAD AL-RUBAYE (Photo credit should read AHMAD AL-RUBAYE/AFP/Getty Images)
MOSUL, IRAQ - AUGUST 9: Fierce clashes keep going on between Peshmerga forces and Islamic State-led armed groups outside of Makhmur district of Mosul, Iraq on August 9, 2014. It's stated that Peshmerga forces silence the Islamic State members with attacks staged with Iraqi air forces' strikes, Katyusha rockets, howitzers and heavy weapons. (Photo by Feriq Ferec/Anadolu Agency/Getty Images)
MOSUL, IRAQ - AUGUST 9: Fierce clashes keep going on between Peshmerga forces and Islamic State-led armed groups outside of Makhmur district of Mosul, Iraq on August 9, 2014. It's stated that Peshmerga forces silence the Islamic State members with attacks staged with Iraqi air forces' strikes, Katyusha rockets, howitzers and heavy weapons. (Photo by Feriq Ferec/Anadolu Agency/Getty Images)
US President Barack Obama speaks during a primetime address to the nation from the Cross Hall of the White House in Washington, DC, September 10, 2014. AFP PHOTO / POOL / Saul LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)

An alleged ISIS militant calling himself 'the Palestinian Slayer'

Druze men stand in the Israeli-annexed Golan Heights as they look at smoke rising in the distance caused by fighting between forces loyal to Syrian President Bashar Assad and rebels over the control of the Quneitra border crossing, on August 27, 2014. Syrian rebels, including Al-Qaeda's affiliate Al-Nusra Front, seized control of the Syrian crossing with the Israeli-occupied Golan Heights today, the Britain-based Syrian Observatory for Human Rights said. AFP PHOTO / JACK GUEZ (Photo credit should read JACK GUEZ/AFP/Getty Images)
Members of United Nations Disengagement Observer Force Zone (UNDOF) use binoculars to watch smoke rising in the distance caused by fighting between forces loyal to Syrian President Bashar Assad and rebels over the control of the Quneitra border crossing, on August 27, 2014. Syrian rebels, including Al-Qaeda's affiliate Al-Nusra Front, seized control of the Syrian crossing with the Israeli-occupied Golan Heights today, the Britain-based Syrian Observatory for Human Rights said. AFP PHOTO / JACK GUEZ (Photo credit should read JACK GUEZ/AFP/Getty Images)
Kurdish Peshmerga fighters hold a position on the front line in the Gwer district, 40 kilometres south of Arbil, the capital of the Kurdish autonomous region in northern Iraq, on September 18, 2014. France said that it will follow the United States in launching air strikes against the Islamic State group in Iraq, as the jihadists posted their latest video of a Western hostage. AFP PHOTO / SAFIN HAMED (Photo credit should read SAFIN HAMED/AFP/Getty Images)
A rebel fightercarries homemade mortar rounds on September 3, 2013 in the northern Syrian city of Raqqa. UN leader Ban Ki-moon said on September 3, 2013 that a military strike on Syria over the use of chemical weapons could worsen the country's conflict. AFP PHOTO / MEZAR MATAR (Photo credit should read MEZAR MATAR/AFP/Getty Images)
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The murder of David Haines is an act of pure evil. My heart goes out to his family who have shown extraordinary courage and fortitude.
British Prime Minister David Cameron leaves 10 Downing Street in central London on 3, September 2014, after chairing an emergency meeting following the execution of a second US journalist by Islamist fighters in Iraq and the threat that a British hostage will be next. In a video showing the severed head of 31-year-old Steven Sotloff, a masked militant warned a British man, widely identified as David Cawthorne Haines, would be killed in response to US air strikes against militants in northern Iraq. AFP PHOTO / JUSTIN TALLIS (Photo credit should read JUSTIN TALLIS/AFP/Getty Images)
British Prime Minister David Cameron leaves 10 Downing Street in central London on 3, September 2014, after chairing an emergency meeting following the execution of a second US journalist by Islamist fighters in Iraq and the threat that a British hostage will be next. In a video showing the severed head of 31-year-old Steven Sotloff, a masked militant warned a British man, widely identified as David Cawthorne Haines, would be killed in response to US air strikes against militants in northern Iraq. AFP PHOTO / JUSTIN TALLIS (Photo credit should read JUSTIN TALLIS/AFP/Getty Images)
U.S. President Barack Obama speaks during a televised address at the White House in Washington, D.C., U.S., on Wednesday, Sept. 10, 2014. Obama pledged a relentless campaign to destroy Islamic State extremists in Iraq and Syria, with Middle Eastern allies such as Saudi Arabia and Jordan playing crucial supporting roles. Photographer: Saul Loeb/Pool via Bloomberg
U.S. President Barack Obama leaves after speaking during a televised address at the White House in Washington, D.C., U.S., on Wednesday, Sept. 10, 2014. Obama pledged a relentless campaign to destroy Islamic State extremists in Iraq and Syria, with Middle Eastern allies such as Saudi Arabia and Jordan playing crucial supporting roles. Photographer: Saul Loeb/Pool via Bloomberg
NEWPORT, WALES - SEPTEMBER 04: US President Barack Obama (L) meets with British Prime Minister David Cameron at the NATO Summit on September 4, 2014 in Newport, Wales. Leaders and senior ministers from around 60 countries are meeting at what has been billed as the most important Nato summit since the end of the cold war with the situation in Ukraine and the threat of ISIS likely to be top of the agenda. (Photo by Peter Macdiarmid - WPA Pool /Getty Images)
NEWPORT, WALES - SEPTEMBER 04: (L-R) British Prime Minister David Cameron, NATO Secretary General Anders Fogh Rasmussen and US President Barack Obama talk as they arrive at the NATO Summit on September 4, 2014 in Newport, Wales. Leaders and senior ministers from around 60 countries are gathering for the two day meeting where Ukraine and the ISIS hostages are likely to be discussed. (Photo by Chris Ratcliffe - Pool/Getty Images)
NEWPORT, WALES - SEPTEMBER 04: British Prime Minister David Cameron gestures to US President Barack Obama as they arrive at the NATO Summit on September 4, 2014 in Newport, Wales. Leaders and senior ministers from around 60 countries are gathering for the two day meeting where Ukraine and the ISIS hostages are likely to be discussed. (Photo by Chris Ratcliffe - Pool/Getty Images)
French President Francois Hollande holds a press conference with Madagascar president (unseen) at the Elysee presidential palace in Paris on September 19, 2014. Earlier today, Hollande made a statement on France's first air strike in Iraq. French jets carried out their first air strike against Islamic State militants in Iraq, successfully destroying their target, Hollande announced, vowing that more operations would follow. Hollande himself visited Iraq late last week -- the most high-profile leader to do so since jihadists stormed across the country -- and Paris hosted an international conference on the crisis last Monday. AFP PHOTO FRED DUFOUR (Photo credit should read FRED DUFOUR/AFP/Getty Images)
Displaced Iraqi families from the Yazidi community cross the Iraqi-Syrian border at the Fishkhabur crossing to safety, in northern Iraq, on August 13, 2014. At least 20,000 civilians, most of whom are from the Yazidi community, who had been besieged by jihadists on a mountain in northern Iraq have safely escaped to Syria and been escorted by Kurdish forces back into Iraq, officials said. The breakthrough coincided with US air raids on Islamic State fighters in the Sinjar area of northwestern Iraq on August 9, and Kurdish forces from Iraq, Syria and Turkey working together to break the siege of Mount Sinjar and rescue the displaced AFP PHOTO/AHMAD AL-RUBAYE (Photo credit should read AHMAD AL-RUBAYE/AFP/Getty Images)
Peshmerga forces hand out water bottles and show the way to displaced Iraqi families from the Yazidi community as they cross the Iraqi-Syrian border at the Fishkhabur crossing, in northern Iraq, on August 11, 2014. At least 20,000 civilians, most of whom are from the Yazidi community, who had been besieged by jihadists on a mountain in northern Iraq have safely escaped to Syria and been escorted by Kurdish forces back into Iraq, officials said. The breakthrough coincided with US air raids on Islamic State fighters in the Sinjar area of northwestern Iraq on August 9, and Kurdish forces from Iraq, Syria and Turkey working together to break the siege of Mount Sinjar and rescue the displaced. AFP PHOTO/AHMAD AL-RUBAYE (Photo credit should read AHMAD AL-RUBAYE/AFP/Getty Images)
SANLIURFA, TURKEY - SEPTEMBER 22: Syrians, fleeing from clashes between the Islamic State of Iraq and Levant (ISIL) militants and Democratic Union Party (PYD) forces in the Tal Abyad district of Syria's Ar-Raqqah Governorate, passing through Turkish border gate on September 22, 2014 in Suruc district of Sanliurfa province of Turkey. (Photo by Orhan Cicek/Anadolu Agency/Getty Images)
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WASHINGTON (AP) - Islamic State militants are raking in money at a remarkable rate, earning about $1 million a day from black market oil sales alone, a Treasury Department official said Thursday.

David Cohen, who leads the department's effort to undermine the Islamic State's finances, said the extremists also get several million dollars a month from wealthy donors, extortion rackets and other criminal activities, such as robbing banks. In addition, he said the group has taken in at least $20 million in ransom payments this year from kidnappings.

"With the important exception of some state-sponsored terrorist organizations, IS is probably the best-funded terrorist organization we have confronted," Cohen, undersecretary for terrorism and financial intelligence, said in a speech at the Carnegie Endowment for International Peace in Washington. "It has amassed wealth at an unprecedented pace."

The group extracts oil from territory captured across Syria and Iraq, and sells it to smugglers.

IS, led by Iraqi Abu Bakr al-Baghdadi, wants to create a caliphate, or Islamic empire, in the Middle East. IS initially tried to oust Syrian President Bashar Assad, but other groups, including al-Qaida central command, turned against IS because of its brutality.

Unlike the core al-Qaida terrorist network, IS gets only a small share of funding from deep-pocket donors and therefore does not depend primarily on moving money across international borders. Instead, it obtains the vast majority of its revenues through local criminal and terrorist activities, Cohen said.

He acknowledged that the Treasury's tools are not particularly well-suited to combating extortion and local crime.

"They rob banks. They lay waste to thousands of years of civilization in Iraq and Syria by looting and selling antiquities," he said. "They steal livestock and crops from farmers. And despicably, they sell abducted girls and women as sex slaves."

Where ISIS' Cash Flow Comes From

In the Iraqi city of Mosul, Islamic State terrorists are reportedly going door to door and business to business, demanding cash at gunpoint, he said.

"A grocery store owner who refused to pay was warned with a bomb outside his shop. Others, who have not paid, have seen their relatives kidnapped. ... We've also seen reports that when customers make cash withdrawals from local banks where ISIL operates, ISIL has demanded as much as 10 percent of the value." Cohen said, using an acronym for the group.

But oil is the biggest money-maker.

"It is difficult to get precise revenue estimates ... but we estimate that beginning in mid-June, ISIL has earned approximately $1 million a day from oil sales," Cohen said. Other estimates have ranged as high as $3 million a day.

The Treasury said IS is selling oil at substantially discounted prices to a variety of middlemen, including some from Turkey, who then transport the oil to be resold. "It also appears that some of the oil emanating from territory where ISIL operates has been sold to Kurds in Iraq, and then resold into Turkey," he said.

Cohen said the Syrian government also has allegedly arranged to buy oil from IS.

He noted that U.S-led airstrikes on the group's oil refineries are threatening the militants' supply networks, and that Turkey and the Kurdistan regional government - the official ruling body of the predominantly Kurdish region of northern Iraq - are working to prevent IS oil from crossing their borders.

Cohen acknowledged, however, that IS moves oil in illicit networks outside the formal economy, making it harder to track.

"But at some point, that oil is acquired by someone who operates in the legitimate economy and who makes use of the financial system. He has a bank account. His business may be financed, his trucks may be insured, his facilities may be licensed," he said.

"We not only can cut them off from the U.S. financial system and freeze their assets, but we can also make it very difficult for them to find a bank anywhere that will touch their money or process their transactions."

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