U.S. Treasury Secretary Jack Lew is heading to a December 17 summit at the United Nations on how to cut off financing for ISIS.
It’s a huge challenge partly because of the way ISIS gets its money — mainly through illegal activities.
“They are extorting money from the local population,” said Rachel Ehrenfeld, head of the nonprofit American Center for Democracy. “There is also drug trafficking going on there, arms trafficking.”
ISIS gets most of its funding from the territory it controls, either through that extortion or by pumping oil, according to Jonathan Schanzer, who used to track terrorism funding at the Treasury Department and who is now with the Foundation for Defense of Democracies, a Washington think tank.
“The only way to deprive ISIS of their cash is by taking territory away from them,” he said.
He says other efforts, like bombing oil installations or guarding borders against smuggling, are just nibbling at the edges.