$200M ransom demand a sign of ISIS' financial desperation, say experts

ISIS demands $200 million


The Islamic State's staggering $200 million demand for two Japanese hostages may reveal the terrorist group's desperation to maintain control of its sprawling caliphate, especially amid falling black market oil revenues from seized wells and pipelines, terrorism experts said.

An online video purportedly released by the group's al-Furqan media arm and posted Tuesday on militant websites associated with the terror network presents a pricey ultimatum: Japan must pay $200 million within 72 hours or two Japanese hostages -- a 42-year-old private military company operator and a 47-year-old freelance journalist -- will be executed.

The hostages, identified as Haruna Yukawa and Kenji Goto Jogo, appear in the video in orange jumpsuits like other hostages previously killed by Islamic State, which controls a third of Iraq and Syria. The militant who threatens them speaks in a British accent and may be the same jihadist who appeared in videos with western journalists who were beheaded.

"They are criminals, not Muslims. Their actions directly contradict and violate the fundamental tenets of Islam." 

- Abed Awad, Rutgers University adjunct law professor

While Prime Minister Shinzo Abe vowed to save the men -- saying, "Their lives are the top priority" -- the Japanese government declined to say whether it would pay the ransom.

Terrorism experts say the exorbitant monetary demand shows the terror group's challenge at not only securing weaponry but achieving its broader goal: creating an Islamic government that seeks control over a vast region. Once considered the richest terror organization in the world, after looting the Iraqi central bank in Mosul of an estimated $800 million, the terror army has likely plowed through much of it in its quest to maintain control even as it fights a growing list of adversaries.

"They set themselves up to run a government," said Kyle Olson, a counter-terrorism expert and president of the Virginia-based Olson group. "That means they have to pay salaries now for bureaucrats working for the caliphate as well as purchase medical supplies for their hospitals. They need everything from weaponry to copy machines and paper clips."

Olson noted that plunging oil prices are certain to have taken a toll on the coffers of Islamic State, which control of wells in Syria and northern Iraq and sells it on the black market in Turkey and other places. Oil prices have fallen more than 50 percent since last June, impacting even the lower, black-market prices fetched by Islamic State.

"The lower price of oil means they have less money to spend," Olson told

Islamic State leaders claim that they have plenty of money to maintain their territory while fighting a broad array of enemies that includes Iran, the U.S and allies, Syria, Iraq and Kurdish forces. They recently told a London-based news outlet the caliphate established by Abu Bakr al-Baghdadi, a onetime prisoner of the U.S, military, has a 2015 budget of $2 billion, and a surplus of $250 million. Such figures are impossible to verify.

Olson and others say it's unlikely Islamic State will ever see a $200 million ransom payment. But Japan, like several other nations and private corporations, is known for paying ransoms for hostages -- domestically and internationally -- in the past.

"Japan officially does not admit it negotiates with terrorists," said Boston University professor Thomas Berger. "Historically, it has quietly worked behind the scenes to pay terrorists off."

"The Japanese are not tough anti-terrorists," Berger told, though he noted Japan is "well aware you create perverse incentives" when governments try to meet terrorist demands.

Some Muslim scholars say the hostage taking is just the latest example of how the terrorist organization is not following the true teachings of Islam.

"The taking of hostages and demanding ransom goes against the moral dictates of the Koran," said Abed Awad, an Islamic law expert and adjunct law professor at Rutgers University.  

The Koran, according to Awad, places "strict limits on Muslims during war," teaching them to "keep prisoners humanely" and dictating that "self-defense must be in proportion to the aggression."

"They are criminals, not Muslims," Awad said of Islamic State militants. "Their actions directly contradict and violate the fundamental tenets of Islam." 

Cristina Corbin is a Fox News reporter based in New York. Follow her on Twitter @CristinaCorbin.