• With: K.T. McFarland, Fox News Contributor/Former Deputy Assistant Secretary of Defense

    This is a rush transcript from "On the Record," August 21, 2014. This copy may not be in its final form and may be updated.

    GRETA VAN SUSTEREN, FOX NEWS HOST: Viewers, you heard Defense Secretary Hagel say ISIS is not just well-funded, it's rich. Well, it's very rich. It robbed a bank in Mosul in June and got $425 million. But that's just starters. It now has oil and lots of it.

    K.T. McFarland was the former deputy assistant secretary of defense under President Reagan and she joins us.

    I want to focus on the oil money. What do they have?

    K.T. MCFARLAND, FORMER DEPUTY ASSISTANT SECRETARY OF DEFENSE: Well, they've got a number of things. In eastern Syria, they've got oil wells. In western Iraq, they have oil wells and refineries. As you pointed out, they robbed a bank to the tune of half a billion, with a "B."

    They're thought to have roughly two billion in assets and cash. They're getting revenue from selling extra weapons, from selling antiquities, and kidnappings and ransoms. They're getting nearly $2 million a day. That makes them not only the best-equipped military, because they have all of the state-of-the-art American equipment, but it makes them the richest. If you take that, coupled with the fact they're somewhere near 7,000 European passport holders fighting in Syria and Iraq and several hundred American passport holders -- in other words, those groups could come to the United States.

    They're rich. They've got money, seed money. They can form cells and they're clearly not afraid of anything. In fact, the leader of ISIS has said in the past, see you in New York. Their goal is to bring the fight to America.

    VAN SUSTEREN: Just let the viewers get a sense of this. They now control seven oil fields and two small refineries. And they've got all this oil. They're selling 40,000 barrels a day, which is about $2 million a day. They sell it on the black market for anywhere from $25 to $60, when, if they were selling it on the regular market, it would be $102, so people want to buy it from them.

    MCFARLAND: Right.

    VAN SUSTEREN: So people are buying lots of oil from them. They're getting money. It's coming in over the transom.

    MCFARLAND: It's coming over the transom. And what are they using the money for? Now, remember, they used to be called al Qaeda in Iraq. They didn't have a very good experience. They got kicked out by the Sunni tribes for being too violent and too brutal. They had a rebranding effort. Now, they're taking over the areas and holding them. How? Because they're paying off. They're offering bribes to the Sunni tribes, and they're no longer violent to those people as they used to be. They're letting the local guys run it. They're saving their violence for Christians, for religious minorities, for everybody who doesn't agree with them.

    VAN SUSTEREN: K.T., thank you.

    MCFARLAND: Thank you.