This morning LA TIMES had a story about this, I want to bring this to your attention Read and be amazed of what extend this administration will go to "fight war on terror" or in this case capitalize on it! This is New York Times now 5 hours latter. http://www.nytimes.com/2003/07/29/politics...pagewanted=1&hp Pentagon Abandons Plan for Futures Market on Terror By CARL HULSE WASHINGTON, July 29 - The Pentagon office that proposed spying electronically on Americans to monitor potential terrorists has quickly abandoned an idea in which anonymous speculators would have bet on forecasting terrorist attacks, assassinations and coups in an online futures market. Senator John W. Warner, the Virginia Republican who heads the Senate Armed Services Committee, said today that he had conferred with the program's director at the Pentagon, ``and we mutually agreed that this thing should be stopped.'' The senator's announcement - made during a confirmation hearing for retired Gen. Peter J. Schoomaker, who has been nominated to be Army chief of staff - signaled the end of a program that was met with astonishment and derision almost from the moment it was disclosed. Deputy Defense Secretary Paul D. Wolfowitz comfirmed the program's demise today. ``My understanding is it's going to be terminated,'' he told the Senate Foreign Relations Committee, according to Reuters. Under the discarded plan, traders bullish on a biological attack on Israel, say, or bearish on the chances of a North Korean missile strike would have had the opportunity to bet on the likelihood of such events on a new Internet site established by the Defense Advanced Research Projects Agency. The Pentagon called its latest idea a new way of predicting events and part of its search for the ``broadest possible set of new ways to prevent terrorist attacks.'' But two Democratic senators who disclosed the plan on Monday called it morally repugnant and grotesque. The senators said the program fell under the control of Adm. John M. Poindexter, President Ronald Reagan's national security adviser. One of the two senators, Byron L. Dorgan of North Dakota, said the idea seemed so preposterous that he had trouble persuading people it was not a hoax. ``Can you imagine,'' Mr. Dorgan asked, ``if another country set up a betting parlor so that people could go in - and is sponsored by the government itself - people could go in and bet on the assassination of an American political figure?'' After Mr. Dorgan and his fellow critic, Ron Wyden of Oregon, spoke out, the Pentagon sought to play down the importance of a program for which the Bush administration has sought $8 million through 2005. The White House also altered the Web site so that the potential events to be considered by the market that were visible earlier in the day at www.policyanalysismarket.org could no longer be seen. But by that time, Republican officials in the Senate were privately shaking their heads over the planned trading. One top aide said he hoped that the Pentagon had a good explanation for it. The Pentagon, in initially defending the program, said such futures trading had proven effective in predicting other events like oil prices, elections and movie ticket sales. ``Research indicates that markets are extremely efficient, effective and timely aggregators of dispersed and even hidden information,'' the Defense Department said in a statement. ``Futures markets have proven themselves to be good at predicting such things as elections results; they are often better than expert opinions.'' But it became abundantly clear this morning, at the hearing of Senator Warner's committee, that whatever the logic of the Pentagon's position it had no chance of surviving politically. ``I must say this is perhaps the most irresponsible, outrageous and poorly thought-out of anything that I have heard the administration propose to date,'' said Senator Tom Daschle of South Dakota, the Democratic leader. According to descriptions given to Congress, available at the Web site and provided by the two senators, traders who register would have deposited money into an account similar to a stock account and win or lose money based on predicting events. ``For instance,'' Mr. Wyden said, ``you may think early on that Prime Minister X is going to be assassinated. So you buy the futures contracts for 5 cents each. As more people begin to think the person's going to be assassinated, the cost of the contract could go up, to 50 cents. ``The payoff if he's assassinated is $1 per future. So if it comes to pass, and those who bought at 5 cents make 95 cents. Those who bought at 50 cents make 50 cents.'' The senators also suggested that terrorists could participate because the traders' identities will be unknown. This appears to encourage terrorists to participate, either to profit from their terrorist activities or to bet against them in order to mislead U.S. intelligence authorities,'' they said in a letter to Admiral Poindexter, the director of the Terrorism Information Awareness Office, which the opponents said had developed the idea. The program, called the Policy Analysis Market, had intended to begin registering up to 1,000 traders on Friday. It instead became the latest problem for the advanced projects agency, or Darpa, a Pentagon unit that has run into controversy for the Terrorism Information Office. Admiral Poindexter once described a sweeping electronic surveillance plan as a way of forestalling terrorism by tapping into computer databases to collect medical, travel, credit and financial records. Worried about the reach of the program, Congress this year prohibited what was called the Total Information Awareness program from being used against Americans. Its name was changed to the Terrorism Information Awareness program. This month, the Senate agreed to block all spending on the program. The House did not. Mr. Wyden said he hoped that the new disclosure about the trading program would be the death blow for Admiral Poindexter's plan. The Pentagon did not provide details of the Policy Analysis Market, like how much money participants would have had to deposit in accounts to participate. Until today, trading had been scheduled to begin on Oct. 1, with the number of participants initially limited to 1,000 and possibly expanding to 10,000 by Jan. 1. ``Involvement in this group prediction process should prove engaging and may prove profitable,'' the market's Web site said. The overview of the plan said the market was planning to focus on the economic, civil and military futures of Egypt, Jordan, Iran, Iraq, Israel, Saudi Arabia, Syria and Turkey and the consequences of United States involvement with those nations. The creators of the market envisioned other trappings of existing markets like derivatives. In a statement, Darpa said the trading idea was ``currently a small research program that faces a number of major technical challenges and uncertainties.'' ``Chief among these,'' the agency said, ``are: Can the market survive and will people continue to participate when U.S. authorities use it to prevent terrorist attacks? Can futures markets be manipulated by adversaries?'' Mr. Dorgan and Mr. Wyden called for an immediate end to the project and said they would use its existence to justify cutting off financial support for the overall effort. In the letter to Admiral Poindexter, they called the initiative a ``wasteful and absurd'' use of tax dollars. ``The American people want the federal government to use its resources enhancing our security, not gambling on it,'' the letter said. The two lawmakers said the program needed to adhere to a high standard because of the involvement of Admiral Poindexter, who was convicted of lying to Congress about weapons sales to Iran and illegal aid to Nicaraguan rebels. His conviction was later reversed on the ground that he had been given immunity for testimony in which he lied. In their letter, the senators cited the example from the Pentagon of a bioterror attack on Israel. ``Surely, such a threat should be met with intelligence gathering of the highest quality - not by putting the question to individuals betting on an Internet Web site,'' they wrote.
