Poindexter to Give up Post Amid Terror-Market Flap

31 July 2003
22:24 GMT
Dow Jones Business News

Associated Press

WASHINGTON -- Retired Adm. John Poindexter will resign his position at the 
Pentagon after the uproar over a research project he was overseeing that 
included a kind of futures market on political violence in the Middle East.

A senior defense official said Thursday that Defense Secretary Donald H. 
Rumsfeld and Adm. Poindexter realized it would be difficult for Adm. 
Poindexter to continue in his job after the controversy.

The Pentagon plan would have allowed traders to profit by correctly 
predicting assassinations and terrorist strikes in the Middle East.

The defense official said Mr. Rumsfeld didn't ask for Adm. Poindexter's 
resignation but that the former admiral expected to offer it within a few 
weeks.

"I think his decision was probably a wise one," said Senate Intelligence 
Committee Chairman Pat Roberts, a Kansas Republican.

In the 1980s Adm. Poindexter was national security adviser to President 
Reagan. He was a key figure in the 1980s Iran-Contra scandal.

The project was disclosed Monday by Democratic Sens. Ron Wyden of Oregon and 
Byron Dorgan of North Dakota. Criticism increased Tuesday from lawmakers of 
both parties, and Senate Armed Services Committee Chairman John Warner (R., 
Va.), announced he had an agreement from defense officials to end the project.

Sen. Warner made that announcement after speaking with the head of the 
Pentagon's Defense Research Projects Agency (Darpa), where Adm. Poindexter 
works. Sen. Warner called the program "a rather egregious error of judgment."

Darpa and two private partners would have set up an Internet futures trading 
market on events in the Middle East. Traders could have bought and sold 
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.

The idea was that investors' choices could reveal information unavailable 
elsewhere.

Sen. Barbara Boxer (D., Calif.), said Tuesday that there was "something very 
sick about it" and whoever was behind it should be dismissed.

Darpa has been criticized by Congress for its Terrorism Information 
Awareness program, a computerized surveillance program that has raised 
privacy concerns. Adm. Poindexter also is the head of that program.

(END) Dow Jones Newswires

07-31-03 1824ET