GOP senators said they had few clues about terror market plans

By KEN GUGGENHEIM
Associated Press Writer

30 July 2003
07:23 GMT
Associated Press Newswires

WASHINGTON (AP) - Republican senators say Pentagon budget proposals never 
made clear that Congress was funding a futures market in which traders could 
bet on events in the Middle East, such as assassinations and terrorist attacks.

They said they never would have approved such plans and now are seeking 
answers about how the market came within days of registering its first traders.

The Pentagon dropped plans for the market Tuesday, a day after two 
Democratic senators disclosed details of the market. Leading Republicans 
joined Democrats in denouncing the project by the Pentagon's Defense 
Advanced Research Projects Agency, known as DARPA.

"It's totally unauthorized as far as we're concerned," Senate Appropriations 
Committee Chairman Ted Stevens, R-Alaska, said. "No funds should have been 
used for it at all. It's really a serious mistake on the part of DARPA."

DARPA and two private partners would have set up an Internet futures trading 
market on events in the Middle East. Traders could buy and sell futures 
contracts based on their predictions about what would happen in the region. 
Examples given on the market's Web site included the assassination of 
Palestinian leader Yasser Arafat and a biological weapons attack on Israel.

Investors were to begin registering Friday and trading was to have begun 
Oct. 1.

From the trading patterns, the Pentagon agency hoped to gain clues about 
possible terrorist attacks. In statements Monday and Tuesday, it said 
markets often are better than experts in making predictions.

Senators of both parties described the project as absurd, ineffective and 
immoral.

Democrats demanded details of any related Pentagon programs, an apology from 
the Bush administration and the firing of those responsible for the market.

"I think those who thought it up ought not only close down the program, they 
ought not be on the public payroll any longer," Sen. Byron Dorgan, D-N.D, 
told reporters. Dorgan and Sen. Ron Wyden, D-Ore., disclosed details of the 
program Monday.

At a separate news conference, Stevens, along with Armed Services Chairman 
John Warner, R-Va., and Intelligence Committee Chairman Pat Roberts, R-Kan., 
said they had only vague information about the DARPA project that included 
the market.

That project, FutureMAP, or "Futures Markets Applied to Predictions," will 
end along with the market Web site, the Pentagon said. The Pentagon had 
requested $3 million for FutureMAP next year and $5 million for 2005. The 
senators said the money attracted little attention in the overall the $3 
billion DARPA budget proposal.

"You could not tell from this document requesting $3 million what this 
program was about," Warner said, referring to a document explaining the 
budget request.

About $750,000 had been approved for FutureMAP in past budgets.

DARPA head Tony Tether went to Capitol Hill for a closed-door meeting 
Tuesday with Warner and Roberts, who is also chairman of Armed Services' 
emerging threats subcommittee.

Warner's spokesman, John Ullyot, described the meeting as businesslike and 
professional. He said the senators will submit written questions to Tether 
and will await responses before deciding whether hearings or other actions 
are needed.

Tether was asked as he left whether retired Adm. John Poindexter, who runs 
the DARPA division that included FutureMAP, would keep his job.

"I don't see why not," he said.

Poindexter, who heads DARPA's Information Awareness Office, is used to 
political storms. A former national security adviser to President Reagan, 
Poindexter was a key figure in the 1980s Iran-Contra scandal. In addition to 
FutureMAP, his office oversees the Terrorism Information Awareness project, 
a computerized surveillance program that has raised privacy concerns.

---

On the Net:

DARPA's FutureMAP Web site: http://www.darpa.mil/iao/FutureMap.htm

Rush