Why did US refuse Islamic State ransom demand for James Foley?

The revelation that militants of the Islamic State terrorist organization sought a ransom in exchange for the release of American journalist James Foley is putting a new spotlight on the US government’s strict no-ransom policy.

The US has a longtime policy spanning administrations of both major political parties that categorically rules out paying ransom to terrorists for American citizens based on the conviction that paying for one hostage now leads to more hostage taking later.

“It’s a terribly difficult decision of course, but the idea behind not paying the kidnappers is that when you do, you encourage the activity for someone else,” says Mathew Levitt, an expert on Islamist terrorism and US counterterrorism policy at the Washington Institute for Near East Policy (WINEP). “You end up with more groups adopting the practice, and more of your citizens being kidnapped.”

In addition, the US rejects the practice as a pernicious perpetuation of terrorism – to the extent that, unlike any other country, the US will actually prosecute a private company or organization that pays a ransom for an employee on a charge of funding terrorism.

The US also believes that its policy is working. Senior officials are on record in recent years stating publicly that the relatively low number of abductions of Americans by Al Qaeda and its affiliates over the last decade – especially compared with abductions of citizens of European countries that do pay ransoms – is evidence of terrorists’ recognition that kidnapped Americans are not a valuable commodity.

“We know that hostage-takers looking for ransoms distinguish between those governments that pay ransoms and those that do not,” said David Cohen, the Treasury Department’s undersecretary for terrorism and financial intelligence, in a London speech in 2012. “Recent kidnapping-for-ransom trends appear to indicate that hostage-takers prefer not to take US and UK hostages,” he added, “almost certainly because they understand that they will not receive ransoms.”

Like the US, the United Kingdom stands out from other Western nations by its refusal to pay ransoms (Although unlike the US, it apparently does not seek to prosecute companies or organizations that do pay ransoms for employees). Other European countries, including France, Spain, and Switzerland, are known to pay ransoms – and some experts would say that the relatively high number of their citizens abducted by Al Qaeda proves that paying ransoms only abets more kidnapping. 

Indeed the US and UK are so confident of their no-ransom policies that they have spearheaded international efforts to end the practice – through a United Nations Security Council resolution adopted earlier this year, and an agreement signed by G8 counties at their 2013 summit.

Still, the no-ransom policy is leading to difficult questions, such as could a sum of dollars – reports are that IS, also known as ISIS, was seeking up to $132 million for Mr. Foley – have saved an American citizen from an appalling and grisly fate at the hands of his captors? Does the policy doom other Americans in IS hands, including journalist Steven Sotloff?

WINEP’s Mr. Levitt says the answers to such questions become murkier when dealing with a group as demonstrably brutal (and with different objectives from those of Al Qaeda) as IS.

An organization like Al Qaeda in the Maghreb has proven to be largely focused on amassing funds for Al Qaeda activities, and that has made Western hostages a particularly valuable commodity to that group, Levitt says. But other groups, including IS, “see the US as their primary enemy – and sometimes as a result it’s not always or even primarily about a ransom for them” when they are handling their American hostages.

“ISIS has lots of money and access to resources, so for them, this is not primarily about the money,” he says. Indeed many terrorism experts estimate that access to revenues from oil production in Iraq’s north, as well as cash seized from banks in the takeover of Mosul, have made IS the wealthiest terror group ever.

So why did IS even seek a ransom for Foley? “Clearly they are not opposed to amassing large amounts of money, and maybe they thought, ‘Maybe this time [the US] will make an exception,’ ” Levitt says.

But in the end, with the US dropping bombs on its fighters and reversing some of its recent gains, IS militants gave up on the ransom proposal and fell back on their darkest impulses.

“Once they knew they weren’t getting any cash and even if they didn’t think they were going to change the [US] calculus,” IS opted to use Foley in a brutal and horrifying manner – to frighten Western audiences in particular and try to convince them that their leaders don’t care about them, Levitt says. 

“At the end of the day this is propaganda,” he says, “and terrorizing people is what they do.”