Swiftly, Plan for Terrorism Futures Market Slips Into Dustbin
The New York Times
July 30, 2003
By CARL HULSE
WASHINGTON, July 29 - The Pentagon's new terrorism
futures market is suddenly a thing of the past.
Only a day after it was disclosed, outraged senators of both parties
called today for the immediate end to the online trading bazaar that would have
rewarded investors able to predict terror attacks and other global unrest.
Pentagon officials raced to oblige, saying it would be shut down posthaste.
"It is a very significant mistake," said Senator John W. Warner,
Republican of Virginia, the chairman of the Armed Services Committee.
Democrats quickly pointed the finger at John M. Poindexter,
a retired rear admiral who was a key official involved in developing the plan.
"This Poindexter program is still a runaway horse that needs to be reined in,"
said Senator Ron Wyden of Oregon, one of the two Democrats who
brought the plan to light on Monday.
Admiral Poindexter first gained notoriety in the Iran-contra scandal
during the Reagan administration and more recently he oversaw a Pentagon
program for extensive electronic surveillance of computer records in the search for terrorists.
"That is two strikes now," Mr. Warner said. "Do you have to throw a third strike?"
Admiral Poindexter did not respond to requests for comment left at the Pentagon.
Mr. Wyden and Senator Byron L. Dorgan of North Dakota disclosed the
existence of the futures program on Monday, calling it grotesque.
Under the Pentagon plan, traders were to be able to begin registering
on Friday to trade futures in Middle East developments as of Oct. 1 on a Web
site of the Policy Analysis Market, which the Pentagon was operating with private partners.
At a Senate hearing this morning, Deputy Defense Secretary Paul D. Wolfowitz
said he first learned of it from news accounts.
"I share your shock at this kind of program," Mr. Wolfowitz said.
"We'll find out about it, but it is being terminated."
Mr. Warner and his colleagues summoned the head of the Defense
Advanced Research Projects Agency, where the market idea was developed, to
the Capitol to explain how the concept originated. The director, Tony Tether,
put out a statement, saying the program was finished, effective
immediately. "Our job at Darpa is to explore new ideas and this
is an idea that was not going to work out," he said.
Mr. Warner and other senators responsible for overseeing Defense
Department spending moved quickly to disassociate themselves from the
program, promising hearings and much more aggressive oversight of
the research arm of the Pentagon. They said they had never been told any
details of the $3 million program, which they harshly criticized as ill-conceived
and unwarranted.
"It is totally unauthorized as far as we are concerned," said Senator Ted Stevens,
Republican of Alaska, the chairman of the Appropriations
Committee. "No funds should have been used for it at all.
It's really a serious mistake on the part of Darpa."
Democrats said cutting off the money to this specific initiative was not enough.
"I think those who thought it up ought not only close down the
program, they ought not be on the public payroll any longer," Mr. Dorgan said.
He and Mr. Wyden said the uproar over the market plan should give momentum
to their push to cut off all money flowing to the Terrorism
Information Awareness effort being run out of Darpa. That program,
originally called Total Information Awareness, was developed by Admiral
Poindexter as a way of forestalling terrorism by tapping into computer
databases to collect medical records, travel records, credit records and
financial data. Worried about privacy concerns, Congress earlier this year
prohibited it from being used against Americans.
Admiral Poindexter was a central figure in the 1980's Iran-contra scandal
and was convicted of lying to Congress, though his conviction was later
overturned. At the Pentagon, the chief spokesman, Lawrence Di Rita,
was asked about the status of the former Navy officer and said, "At the
moment, Admiral Poindexter continues to serve in Darpa."
Republican lawmakers said the uproar over the marketing plan
could jeopardize Congressional support for Darpa programs, though they were not
ready to call for the end of the terrorism information effort. As for personnel
changes, they said those decisions were the responsibility of Defense
Secretary Donald H. Rumsfeld.
But Senator Pat Roberts, a Kansas Republican who serves on both
the intelligence and armed services committees, called the market plan
"absurd," and added, "It seems to me they are way off base and somebody
should bear that responsibility, and I think we know who that is."
The Pentagon market Web site was the first step in a broader program
titled Futures Markets Applied to Predictions.
In statements over the past two days, Darpa said the idea behind the
project was to use a marketplace to assess the probability of events, a concept
that has worked with predictions in such matters as commodity prices and elections.
Examples of potential events on the Web site included the
overthrow of the king of Jordan, a missile strike by North Korea
or the assassination of Yasir Arafat.
While some lawmakers said they understood the fundamental
idea behind the project, they said it clearly crossed a line given
the continuing effort
against terrorism and the war in Iraq.
"I cannot conceive of any reason why the United States Government
should be involved in a project of this nature," the Senate majority leader, Bill
Frist, Republican of Tennessee, said in a letter to lawmakers responsible
for Pentagon spending, urging that they cut off any aid to the market
project.
The Democratic leader, Senator Tom Daschle of South Dakota,
was harsher. "I am troubled, alarmed, just amazed that anybody with positions of
responsibility and authority would suggest that we do things of this nature," he said.
Mr. Warner and others said Darpa, which is credited with creating
the forerunner to the Internet among other innovations, has proved its value in
the past, but they said this plan was out of bounds.
"It sounds like maybe they got too imaginative in this area," Mr. Wolfowitz said.
nytimes.com
Copyright 2003 The New York Times Company |
