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Why ransoms are big business for terrorists and why the U.S. won’t pay

How the U.S. special forces launched a secret mission to rescue James Foley and other hostages. Eric Sorensen reports

James Foley was killed in the most inhuman way by his Islamic State captors, after being held for nearly two years.

Foley might have been freed before he was gruesomely beheaded had the U.S. paid a ransom to the militant group. But, the U.S. has a strict policy of not paying ransoms to terrorist groups.

The ransom demand for Foley’s release was also astronomically high — approximately US$132.5 million — and unlikely to be paid by anyone.

But his parents were going to try to pay what they could.

According to the Telegraph, the 40-year-old freelance journalist’s parents, John and Diane Foley, were willing to break the law in order to secure their son’s release.

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They believed they might be able to buy his freedom for $5 million — which is how much the European countries have paid groups such as the Islamic State to broker release deals, according to the Telegraph.

READ MORE: The work of James Foley and other journalists killed in 2014

The governments of France and Spain allegedly paid millions for the release of captive journalists: France denied it paid as much as $18 million for the release of four journalists in March, while the Spanish government wouldn’t comment on whether it paid IS to free two kidnapped journalists.

The U.S. and British governments equate paying ransoms to militant groups with funding terrorism and believe it would only lead to further abductions of foreigners.

The United Nations Security Council earlier this year asked member nations to stop paying ransoms to extremist groups.

Although the Canadian government is among those who refuse to pay ransoms to terrorist groups, at least two Canadians held captive abroad were released after hefty sums were paid.

Canadian diplomats Robert Fowler and Louis Guay, kidnapped in Niger in 2009, were freed after a $1.1-million ransom was paid to al-Qaeda in the Islamic Maghreb, but it’s not known who fronted the funds.

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Ransoms are big business for terrorist groups.

“Hostage-taking goes back to the dawn of terrorism,” Scott Stewart, the vice president for tactical analysis for the Austin-based intelligence firm Stratfor, told USA Today. “But because ransoms are being paid out, we are seeing an epidemic of kidnappings.”

The New York Times reported on July 29 al-Qaeda and “its direct affiliates” accrued more than $125 million through ransoms since 2008. But almost half of that —$66 million —was in 2013 alone.

The Islamic State, formerly known as the Islamic State of Iraq and Greater Syria or ISIS, was an offshoot of al-Qaeda in Iraq but has since been disavowed by the terrorist network.

“Their business plan includes a step-by-step process for negotiating, starting with long periods of silence aimed at creating panic back home. Hostages are then shown on videos begging their government to negotiate,” the New York Times reported in its investigative piece.

That was the case with Foley: his parents didn’t know if he was even alive until the release of the above mentioned Spanish journalists were freed.

READ MORE: Voice-recognition, social media may be key to identifying militant in Foley video

While governments may refuse to balk at the demands of terrorist groups, kidnapping victims’ families or the companies they work for may not.

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Shipping companies have paid hundreds of millions of dollars for the release of their vessels and crews taken hostage by pirates.

Somali piracy syndicates brought in at least $339 million in ransom between 2005 and 2012, according to a report last year from the World Bank and the United Nations Office on Drugs and Crime, with at least $151 million collected in 2011 alone.

Somali sponsors of maritime piracy are known to funnel money to al-Shabab —an al-Qaeda affiliate in the Horn of Africa.

READ MORE: A second American hostage at risk by Islamic State; no good option for US

Technically, family members or employers of captives could be prosecuted for paying ransom on charges of providing support to terrorists, although the government is wrestling with whether that should be changed.

The U.S. refused to pay the exorbitant ransom for Foley’s release or bow to other demands, but did try to rescue him and other captives. U.S. Defense Dept. officials revealed Wednesday a secret mission in Syria, carried out earlier this summer. But, the attempt to locate hostages was unsuccessful.

But the U.S. government’s insistence not to negotiate with terrorists isn’t exactly unwavering. As the Washington Post noted, the U.S. secured the release of Army Sgt. Bowe Bergdahl in exchange for the release of five Taliban prisoners. President Barack Obama’s political opponents derided the swap and an independent government watchdog group now says the deal “violated law,” the BBC reported Thursday.

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WATCH: Mission to rescue Foley other Americans was flawless, hostages just weren’t there: U.S. Secretary of Defense Chuck Hagel

With a files from The Associated Press

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