Foundations of the Islamic State: Management, Money, and Terror in Iraq, 2005–2010 draws from more than 140 recently declassified documents to present a comprehensive examination of the organization, territorial designs, management, personnel policies, and finances of the Islamic State of Iraq (ISI) and al-Qa'ida in Iraq (AQI), both predecessors of the Islamic State. These records paint a clear picture of ISI practices and standard operating procedures. Leadership consciously designed the organization not just to fight but also to build an Islamic state governed by the laws dictated by its strict Islamist ideology. ISI was a vertically integrated organization with a central management structure and functional bureaus. It sought to replicate these structures at multiple lower geographic levels across territory. Each geographic unit had substantial autonomy to pursue the group's strategic objectives but was required to send frequent reports to the group's leadership; the central organization used these reports to inform decisions and provide strategic guidance. ISI paid its personnel a wage that would draw true believers rather than opportunists; trained and allocated its membership with an eye toward group effectiveness; raised revenues locally through diversified sources; and was able to maintain itself, albeit at much reduced strength, in the face of a withering counterterrorism and counterinsurgency strategy put in place by its opponents, starting in late 2006.

An analysis of the Islamic State predecessor groups is more than a historical recounting. The lessons from examining the group's history are useful for setting expectations about the strengths and vulnerabilities of the Islamic State and its ability to combat its opponents, designing a coordinated and effective campaign against it, and understanding why it might be able to survive such an effort and sustain itself in the future, albeit perhaps at a lower level of threat. Defeating the Islamic State will require persistence. The record of counter-ISI operations from 2006 through 2010 shows that military action and political accommodation can work together to degrade the group substantially, if not defeat it.