Rudy Giuliani: Obama 'Setting Up Business' for Hostage-Takers

President Barack Obama is essentially "setting up a business" for terrorists who want to take Americans hostage by announcing Wednesday that families will no longer face prosecution for paying ransom, former New York City Mayor Rudolph Giuliani says.

Appearing Wednesday on Fox News Channel's "Hannity," Giuliani said he doesn't oppose allowing families to negotiate, but said the official policy should be to oppose it and allow for plausible deniability when exceptions are made.

Families of hostages held by the Islamic State (ISIS) have complained they were threatened with prosecution if they tried to free their loved ones.

"President Reagan did this, not just President Obama. But in those days you could do it with plausible deniability," Giuliani said. "You didn't have to have it as a rule. The minute you announce it as a rule, people start thinking, I have a business here, I can make a lot of money this way. You know where that money's going. It's a terror organization."

The former mayor admitted the issue is "a very hard thing," but said it's better to allow it and keep quiet about it than to make a public change in policy.

European hostages are routinely released when families pay, providing terrorist groups with their second-highest income stream behind oil sales.

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