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tv   Real Money With Ali Velshi  Al Jazeera  November 3, 2014 6:30am-7:01am EST

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stories above the chicago river and as if that wasn't enough he then put on a blind fold for the second part of the walk. you can see more of that if you head over to al, our website there for you on the screen. ♪ does the money come from, who can america trust. i introduce you with the man charged with taking down terrorist organizations without firing a shot election day is two days away. i break down the money pouring into the campaign, where it's spent, and who is behind the incredible amount of cash. i'm ali velshi, and this is "real money".
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today i'm focussing on the role money is playing in the newest war in the middle east. the fight against the islamic state of iraq and levant, or i.s.i.l. they are the sunni muslim in surgents grabbing territory in iraq and syria, wreaking havoc in both countries. president obama vowed to degrade and destroy i.s.i.l., and i talked to the man whose job is to take on terror groups. what makes i.s.i.l. successful is a question many, including washington officials are asking. it's not a run of the mill terrorist group, it has a bureaucracy regulating trades. i.s.i.l. is trying to create a resilient economy to fund the yate. that poses a change for the president obama administration. patricia sabga has this report. >> it's a principle setting i.s.i.l. apart from other
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groups. avoid outside funding. a rule enshrined in the document seized by forces in iraq, in which an unidentified rebel warns: >> it's been resistant historically to receiving funding from foreign patriots, whether states and private donors. partly because it doesn't want to seed autonomy or control. it shields i.s.i.l. from counterfinance measures. i.s.i.l. relies on money from extortion rackets. having protection money. the biggest money spinner is sales of oil. the biggest money from sports facilities and pipelines. >> there are estimates that i.s.i.l. makes between
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1-3 million a day from oil alone. i.s.i.l. sells plundered oil and refined products on the cheap, through truck drivers that move it through smuggling areas. the most heavily trafficked is turkey, says the council on foreign relation, steven cook. >> the oil is laundered. by the time it crosses the border into turkey or sold in turkey, it doesn't look like the oil came from i.s.i.s. they must consider the potential for armed militants to take action on turkish soil, a cal coolize likely to curtail the black market oil trade by the coalition power best positioned to do so i sat with the obama administration point man on the financial fight against i.s.i.l. david cohen is the under secretary for terrorism and financial intelligence at the department of the treasury, he's
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distributed as a financial batman, going after the money of groups and countries that the united states target with sanctions. his unit grew from one man shop to a 700 force receiving $200 million in funding. i.s.i.l.'s real strength is not on the battlefield. listen to what he said. >> i think the point is not to confuse funding with financial strength. for a terrorist organization, what matters is not just the revenue side of the balance sheet, but the expense side. i.s.i.l.'s expenses, if it tries to govern, if it will try to exercise control over the swath of territory where it's currently operating which includes a bunch of territory and sizeable cities and downs. that costs a lot of money, to
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try to deliver services, pay fighters. they have substantial expenses. just by way of comparison, if you look at what the iraqi government have budget this year for the provinces where i.s.i.l.'s currently operating for the delivery of social service, it was well over $2 billion. so however well funded i.s.i.l. is, and they are well funded, that pales in comparison to the expenses that the iraqi government would be spending. we don't expect i.s.i.l. would be spending money on that magnitude. still, it drives home the point that their ambition to govern, to be a state is going to fall short because they can't possibility have the resources to deliver. >> and ultimately, things like keeping the lights on and the water running are the issues, you are well-known for really
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crafting the sanctions against iran. which in many cases centered around the use of the swift system, and viewers that moved money around the world are familiar, it's international money transfer system allowing people to do business. but iranians had a certain standard of living, and iran is a member of the world community as much as some people may not like that. they are easier to tart. i.s.i.l. is running a little below the radar. are you hoping they get big enough to use the international clampdown? >> hardly. we have financial tools that we adapted to the particular situation, where we are callupon to try to create an effect. in the iranian situation, iran was integrated into the world economy and integrated into the world financial system in a way that created a vulnerability that we were able to target. one of the things we are very
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focused on with i.s.i.l. is making sure they do not get access to the international financial system. we are concerned there are a number of branches and we are working with them to make sure they do not become entry points for i.s.i.l. into the financial system. what do you - what can you deny them. i guess that's the issue. at this paint you are trying to figure out where the oil comes from and stops the buyers. what can you deny them in they are not part of the system. they ran factories, needed parts, sold oil, needed the dollars. what does i.s.i.l. need that the world can deny it. i.s.i.l. needs funding. we are focused on denying i.s.i.l. its funding. oil smuggling, figuring out who the people are that are
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purchasing the oil, and cutting off the transactions that way. it means denying i.s.i.l. access to external donations. it's not a significant source of funding, but it's not nothing. they are getting millions of dollars from donors, and we are very much focused on working with partners in the gulf to ensure that whatever they are getting, it doesn't turn into a more lucrative source of fundraising. we are focused on denying i.s.i.l. ransom payments. as i noted, one of the ways they have been funding themselves is through taking innocent civilians hostage, ransoming the people for their freedom. they have taken over $20 million in ransom. we are working to ensure that they no longer have access to ransom payments. there are - then the final, you know, piece of this is the extortion networks in iraq, where they are, you know,
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forcing people to pay up. the way, really, the best way to counteract that is not with treasury, it's with the tools of our counterparts in the iraqi security forces, in the coalition military, to push back i.s.i.l. from the territory where they are operating, and that will deprive them of the ability to extort funds. coming up, turkey's complicated role in the battle against i.s.i.l., we look at n.a.t.o.'s muslim majority member that refused to commit troops to fight against i.s.i.l. and you'll hear what david cohen says about i.s.i.l. smuggling oil across turkey's border - including this... >> the issue is that i.s.i.l. inherited long-standing smuggling routes that have been there for centuries. you are watching "real money", tweet me or hit me up on facebook much keep it right here.
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i want to talk about the purpose in the battle against i.s.i.l. turkey is positioned in a complicated position. it is complicated by history in geography. turkey sits between the east in the west, occupying parts of europe and asia. it shares a 565 mile border with syria, and iraq. both of them on the south. back in 1987 turkey applied for full membership in the european union, but last year germany's finance minister said what others thought - that turkey is not part of europe. the e.u.'s rejection of turkey explained some of the reason
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that turkish president recep tayyip erdogan has increasingly looked towards the middle east to extend turkey's influence as an islamic power. >> reporter: a member of nato since 1952, turkey is the only muslim nation in n.a.t.o. turkey is also surrounded by long simmering conflict and hostile neighbours. to the south, turkey, a solid ally of israel has been sending money to the gaza strip since 2008. the palestinian enclave controlled by hamas considered a terrorist group by israel and the united states. some reports suggest turkey provided hamas with as much as 300 million in annual aid. that support came to a head in 120 when the turkish sponsored gaza
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freedom flotilla was intercepted and boarded. it deft eight turks and one duel national turkish american dead. >> there's a lot of sympathy among the turkish public for palestinian rights. it's not to suggest that the ruling party has been able to allay that public sympathy with political support for hamas. >> on the southern flank, turkey has a porous border, a smuggler's haven for centuries. turkey's neighbours are swept up in violence and turmoil. the president was once a close ally of syria's president bashar al-assad. but he broke with damascus after syria's bloody assault on citizen protesters in 2011. since then, turkey purply let militants, including turks, cross its border into syria, to
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fight against the bashar al-assad regime. according to the british newspaper, "the guardian", turkey allowed saudi arabia and qatar to ship hundreds of tonnes of light weapons across the border to aid the anti-bashar al-assad rebels. over time militants joined the islamic state of iraq and levant, or i.s.i.l. beginning if 2013, i.s.i.l. forces swept across northern syria and northern and western iraq. capturing iraq's second-largest city, mosul in june. critics charged that turkey chose to overlook the black market, smuggled into turkey. by some estimates, black market oil supplies i.s.i.l. with as much as $2 million a day in revenue. now, if i.s.i.l. is smuggling oil over the border. maybe some turkish people benefit and it's not a threat to course. >> yes.
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it gives funds to the islamic state. turkey's view of the islamic state is slightly ambivalent in that they are determined to see the end of santa barbara. and they do not, in looking at syria see many players likely to achieve that help. >> one of turkey's complicated relationship is with the kurd, who have autonomy in northern iraq. turkey fought a three decade long insurgency in its own territory, which took the lives of 30,000 people. over the past few years, turkey forged a relationship, yielding 6.2 million barrels of oil, worth $600 million through a pipeline. the iraqi kurds, in turn, used the money to finance kurdish peshawar fighters, who are battling the i.s.i.l. forces. >> the provides an economy for the kurds, a benefit to turkey, which has a big oil need, and it
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is a way the putting the dampers on kurdish ambitions within turkey itself, because the kurds will not encourage that. >> complicating matters, iraq's kurds are fighting i.s.i.l. on the ground, with kurdish forces from syria and turkey, including fighters who fought the army in the past. iraq's kurds are said to be disappointed by turkey's recent failure to provide more military support to peshawar fighters. turkey joined the u.s.-led coalition against i.s.i.l., and stated that it is making plans for a buffer zone along its border with syria to aid in the u.s. goal of destroying i.s.i.l. in a clear rebuff to the u.s. administration, turkey refuses to send troops into syria. it seems that when it comes to combatting the threat from i.s.i.l., turkey is determined to play by its own rules. turkish president recep tayyip erdogan still opposes
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arming syrian fighters because of their alliance with turkey's own insurgence. the workers party, p.k.k. has been fighting for an autonomous region inside turkey, and many say that is why turkey is hesitant to take the fight to i.s.i.l. in syria. i want to stay on the point with david cohen, tasked with finding the money and shutting it off. i asked if raising money through oil smuggling and other means puts i.s.i.l. in a separate category to other terror organizations we have seen. >> it is different, but not unique. it's different in the sense that it has amassed funds at a faster clip, i think, than any other territory organization that we have seen. setting aside state-sponsored terror organizations, it's the best funded in the world today.
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that being said, the mechanisms by which it raises money, some of them anyway, are mechanisms that we have seen before. external donor networks, kidnapping, and the extortion and criminal fundraising that i.s.i.l. is involved in, had its antecedence with al qaeda in iraq. they did essentially the same thing during the heyday, 5-7 years ago, longer. so we have seen what i.s.i.l. is doing today with other terrorist organizations. the oil smuggling is different. that is not something we have seen terrorist organizations do in the past. getting paid, you know, for contraband, that has been around for a while. >> let's talk about taxes. i.s.i.l. operates in two countries where there are governance vacuums. in some places we have heard that they are collecting taxes. are these real taxes or they are
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people? >> it's like the mafia collecting protection money. it's - they are forcing people often at gunpoint to pay up at don't. >> short of outright state sponsorship which i.s.i.l. is not likely to achieve pause it's a threat to so many around it. the oil is the biggest part of their income at the moment. they could be selling up to 50,000 barrels of oil a day. we have heard reports that it can go as low as 25 bucks, at a discount to the market. your numbers indicate an day. >> that's right. >> it's real money. we know that it's coming from oil fields and going into refineries, and not moving on donkeys, it has to move by trucks and cross a border to syria, turkey. it strikes me that there are a
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lot of military options. bombing the oil field, bombing the refineries. so there have been air strikes on some of the mobile refineries that i.s.i.l. has been operating. that had an impact. other military activities, other air strikes will impede this oil smuggling network. our role in this is part of a comprehensive plan to degrade and defeat i.s.i.l. and that is true in the financing of i.s.i.l. as well. so the air strikes on i.s.i.l.'s mobile refineries not just disables the refineries, but makes it difficult for the trucks carrying the oil, to get fuel. the trucks need refined product in order for the trucks to run. the air strikes on the i.s.i.l. mobile refineries has an impact
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on the ability of the trucks to operate. >> it is your belief if that oil, that it couldn't get into turkey, it wouldn't be sold on the black market or otherwise. >> this is not just a turkey problem. the issue here is that i.s.i.l. has inherited long-standing smuggling routes that have been there for centuries. smaugling all sorts of commodities including oil. they are - they have begun to use the smuggling routes. some of which our outstanding is, go into turkey, and the kurdish region in iraq. we have information that i.s.i.l. is selling some of this oil to the syrian government, the bashar al-assad government. >> which becomes hard to get your head around. >> exactly, it's a clear example of the depravity. bashar al-assad regime, that as they are, you know, purportedly fighting against i.s.i.l., they
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are at the same time funding i.s.i.l. by buying oil that i.s.i.l. has stolen from fields in syria. it is hard to get your head around. our information is that's one oil. >> how do you deal with the inherent contradictions. the kurds were doing things that america didn't support or like. now they are on the same side and it is possible that they are selling oil and we heard about tankers going around the world buying tankers. you can't clearly have the same passion about not letting that happens a you can about not letting i.s.i.l. sell oil to further its aims. these are contradictions in policy. you made the point earlier that i.s.i.l. has sort of brought together the world community in a way that, you know, is unique, right. so whether it's the kurdish region in iraq, the turks, you know, you name it.
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the golf states, there is a -- gulf states, there is a broad consensus and coalition of nations that are all seized of the importance of fighting against i.s.i.l., and degrading organization. next, we turn to a different topic - the mid term elections, voters go to the polls in two days. i look at the billions pouring into the campaigns, who is behind it and what they hope to gain. that is next when "real money" continues. keep it here. primetime news. >> welcome to al jazeera america. >> stories that impact the world, affect the nation and touch your life. >> i'm back. i'm not going anywhere this time. >> only on al jazeera america. real reporting that brings you the world.
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it's a big day tuesday, america votes in midterms elections. at stake a possible republican take over in the senate, which
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the democrats control. we heard about the flood of money pouring in. i want to break down the unless of how much spending we see. where it's spent and who is behind the influx of campaign cash. $4 billion is what the nonpartisan center for politics says will be spent by the time the last race is call. that makes it the most expensive mid term history, not by a couple of bucks, but $400 million. republicans and conservative groups will have the spending edge, $1.92 billion, compared to 1.76 billion, by democratic and liberal groups much of all he spending. $2.7 billion comes from usual suspects. 897 million or a quarter of money to be spent will come from outside groups.
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we are talking three times the amount of the last midterms four years ago. here is where the liberals will have the spending edge. $433 million for the democrats, to $424 million for the republicans, from individual donors. democratic booster tom steyer, a california hedge fund billionaire and activist. he's the single biggest donor of the election. $56 million is what he has given. for those following the money and politics, it's no surprise we sa seen an explosion in outside spending. that, you recall, is the year that the supreme court citizens united case radically reshaped the finance landscape. that removed limits on outside spending, creating mega fundraising organizations that you know as super pacts. it allows the dark money to proliferate. the non-profits behind the
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spending don't have to disclose donors or report the money they spend on ads. nationwide the expensive race by a long shot is north carolina. $92 million expected to be spent. it's followed by senate races in other battle ground states. alaska looks to be the most expensive. $120 spent on eligible voters. we have been talking congressional spending, but there's money spent on state level races. $380 million on tv ads in governor races, florida, illinois, peninsula are the most expensive. $120 million is spent on state and local ballot measures. expanded gambling, to require genetically modified foods or marijuana in alaska and florida. judicial elections where a little money can go a long way, because people don't donate to
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them. $9.1 million in ad spending. it's a lot of money in a lot of places, an average of $20 million a day. that's the show for today. i'm ali velshi. thank you for joining us. >> an isil massacre in anbar province, hundreds of members of a sunni tribe are killed. now iraq is planning a major spring offensive with u.s. help. >> the fierce campaigning before polls open. >> israel following clashes over settlements in the closing of gaza crossings