ERIC WESTERVELT, HOST:
The Sunni extremist group that calls itself the Islamic State has captured huge parts of Iraq and Syria with sheer brutality. ISIS likes to present itself as a descendent of a seven century caliphate. But captured documents show that its business and management structure is modern and sophisticated, more like a multinational corporation than an ancient religious dynasty. Cam Simpson is an investigative reporter with Bloomberg Businessweek. He says much of what we know about ISIS's structure comes from documents found in a ditch in Anbar province by U.S. Marines on a routine patrol during the surge and from a hard drive captured not long after that.
CAM SIMPSON: You know, in 2007, as the surge was getting going in Iraq, there was a group that called itself the Islamic State of Iraq, and it's the same group. But it was structured like what they call in the business world an m-form hierarchy. And that's the kind of management model that was really pioneered by Alfred Sloan of General Motors in the 1920s. It's considered by a lot of management experts as the most revolutionary change in organizational structure in history.
But what it means, basically, is you've got senior leaders who don't do daily decision-making. They focus on strategy. They focus on overall performance. They monitor performance. But the group is set up so it's semi-autonomous in every way, sort of, across its entire field of operations. So the decisions of how things run on a day-to-day basis are being made by people at the local level.
WESTERVELT: Wait a minute. This is kind of deeply twisted. You're saying that the group's sort of managers, so to speak, are measuring performance. But in this case, it's based on suffering, death and destruction.
SIMPSON: I know, it's really - it's really disturbing. And like a corporation - and, unfortunately it's not a conceit - they take an extraordinary amount of big data that they collect to measure performance on a day-to-day basis. But like you say, unfortunately, for the world, that performance is death. Every year they publish an annual report. It's 410 pages, and it's full of these macabre metrics of assassinations, armed attacks, bombings, house bombings, prisoners freed, suicide vest bombings, suicide car bombings. And they're broken down across all their regions of operation.
I mean, it's the kind of tool that you would see somebody who runs a company would be able to look at and say my operations in southern Baghdad are suffering for this specific kind of thing that I'm interested in and I need to change it this way. And it's sophisticated, and it's professional, and it's kind of scary.
WESTERVELT: Cam, these metrics are largely self-generated. I mean, who's to say they're not just part of ISIS's pretty sophisticated propaganda machine?
SIMPSON: Yeah, that's a really good question, Eric. I mean, some researchers at the West Point Counterterrorism Center asked exactly that question before this group was on anybody's radar screen. They were looking at these numbers. And what they did was they took a subset that they could test, kind of independently with press accounts and what they were hearing from the government of Iraq. And that was about 200 attacks in Baghdad. And they found that they were, sadly, extremely accurate. Just from the sort of independent, open-source public reporting that was out there.
WESTERVELT: Cam, it's been said that ISIS is one of the best funded terrorist organizations in history. What do these documents that Marines stumbled upon in the hard drive they later captured tell us about how they raise revenue?
SIMPSON: What the documents in 2007 showed about how the group was originally structured was that all of these individual units across the Anbar province were self-financing. They have an entire division called the spoils division, and they go after plunder of their murdered, vanquished enemies. You know, they seize their property and they sell it. They control smuggling routes. They extort taxes the way the Mafia used to do in every area that they control.
You know, before they even took over Mosul and really woke up the world this past summer, the State Department estimated they were getting 12 million dollars a month in revenue from running these extortion and smuggling rackets out of Mosul. In addition to that, you know, they have oil wells. The U.S. has been degrading its capacity to make money off of oil, but it's just hard to imagine that they're going to be able to put much of a dent overall in the financing of the organization. They just have too much money already.
WESTERVELT: More than two months into U.S. airstrikes against ISIS, the group has only expanded its reach and entrenched its position in key places like Mosul. Is its decentralized structure making it a lot harder to defeat this group and to try to degrade it?
SIMPSON: When you have individual nodes that are self-sufficient across this massive swath of territory that they control, just knocking out the top would be a setback, and it would probably be a significant setback. But those individual nodes would keep running because they're self-sufficient. They're self-financing. We see it across the board. You know, no person holding money holds money for more than a couple weeks at a time. So if you have people who're making all of these individual decisions and actually running the group day-to-day on the ground who are separate from the central leaders, just attacking the central leaders is really difficult. And I think that seeing the organization this way and understanding its management model also led me to understand why, as you said, it's been so difficult to try and turn them backwards - to even stop their progress.
WESTERVELT: It's going to take a lot more airstrikes. You have to put local pressure and really go after the larger structure that's pretty entrenched.
SIMPSON: Absolutely. There has to be consistent, sustained local pressure on every one of those local nodes across two countries. Right now we know - I think at this moment and it's always changing, unfortunately, because you said they're always expanding - but they have 18 different regional operations. And then there are sub-operations underneath each one of those. And you really have to bring that local pressure to bear as the U.S. did during the surge in Iraq starting in 2007 and the Sunni awakening, you know, where we bought these tribal Sunni tribal leaders and brought them onto our side and had them also go after Islamic State of Iraq at the same time. And, even then, it was just such a hard-fought campaign.
It's really hard to see how the Iraqi army, even with tremendous support from the air, from the U.S. and other allies in the region is going to do much damage.
WESTERVELT: Cam Simpson is an investigative correspondent for Bloomberg Businessweek. His piece "The Banality of Islamic State: How ISIS Corporatized Terror" is out now. Cam, thanks a lot for coming in.
SIMPSON: Thanks so much, Eric. It's been a pleasure. Transcript provided by NPR, Copyright NPR.