SHOW All Things Considered (900 PM ET) - NPR

                             July 29, 2003 Tuesday

LENGTH 799 words

HEADLINE Reaction to Pentagon's proposed terror futures market

ANCHORS MICHELE NORRIS

REPORTERS DAVID WELNA

BODY

   MICHELE NORRIS, host

   After the questions on Iraq, Wolfowitz faced harsh criticism from senators on
a controversial new Defense Department program.  The initiative would have
created a futures market in which investors could speculate on everything from
political assassinations to deaths of US troops.  Embarrassed Republicans
quickly sought to distance themselves from the program.  Wolfowitz told them
that the program is being terminated.  NPR's David Welna reports from the
Capitol.

   DAVID WELNA reporting

   Wolfowitz told lawmakers that he first learned of the Pentagon's planned
futures market on terrorist incidents this morning, reading the newspaper. But
he assured lawmakers that this program, aimed at improving the Pentagon's
terrorist risk predictions and known as the Policy Analysis Market, is being
terminated.

   Mr. PAUL WOLFOWITZ (Deputy Secretary of Defense) And we'll find out exactly
how this happened, recognizing, by the way, that the agency that does it is
brilliantly imaginative in places where we want them to be imaginative.  It
sounds like maybe they got too imaginative in this area.

   WELNA For his part, Senate Majority Leader Bill Frist sent a letter this
morning to the chairman of the Armed Services and Appropriations committees,
asking that no spending be authorized to fund such a program. Frist made clear
in an interview he wanted nothing to do with the project.

   Senator BILL FRIST (Majority Leader) I think it's a misstep that, if we'd
known about, we would have killed much earlier.

   WELNA Armed Services Chairman John Warner called the futures program, which
was due to start October 1st, a very significant mistake, and Warner ordered the
head of the Pentagon's Defense Advanced Research Projects Agency, or DARPA,
which created the program, to appear this afternoon before an emergency closed
hearing on the matter.  Still, Warner made a point of defending DARPA.

   Senator JOHN WARNER (Chairman, Armed Services Committee) The nation is at
war.  DARPA is a vital part of the overall defense picture.  This mistake should
not, in my judgment, in any way cast doubt on the ability of the department to
conduct the war and conduct other affairs.

   WELNA Considerably more incensed about the futures market program was Ted
Stevens, the Republican chairman of the Senate Appropriations Committee.  He
said he'd been unaware of it, even though it's received hundreds of thousands of
dollars in funding.

   Senator TED STEVENS (Chairman, Senate Appropriations Committee) It is
totally unauthorized as far as we're concerned.  No funds should have been used
for it at all.  And it's really a serious mistake on the part of DARPA. I think
it may well jeopardize DARPA in the future.  If they're not going to live up to
the concepts of reprogramming, we'll have to watch more carefully over them.
That's all there is to it.

   WELNA And the Republican chair of the Senate Intelligence Committee, Pat
Roberts, promised there will be accountability for such a program being dreamed
up in the name of national defense.

   Senator PAT ROBERTS (Chairman, Senate Intelligence Committee) And this
defies common sense.  It's absurd that if you don't have the specifics of a
program in your oversight responsibility in regards to authorization or they don
't even go to the appropriators, it seems to me that they are way off base, and
somebody should bear that responsibility, and I think we know who that is.

   WELNA Roberts did not say just who that person might be, but Democrats say
retired Admiral John Poindexter, who conceived another controversial program
under DARPA, first called Total Information Awareness and now called Terrorist
Information Awareness, is also the person behind the futures market project.
Senate Minority Leader Tom Daschle said the Pentagon has some explaining to do.

   Senator TOM DASCHLE (Minority Leader) I'm not satisfied with just a tepid
cancellation of the program.  I think they need to renounce it, they need to
apologize to our military as well as to the families of 9/11 and all of those
who may have been adversely affected by a market on terror, as they have now
proposed.

   WELNA And Oregon Democratic Senator Ron Wyden, who first called attention to
the futures program yesterday, said it's not the only DARPA project that
deserves being terminated.

   Senator RON WYDEN (Democrat, Oregon) The Senate is going to continue its
effort to close the entire set of programs that make up Terrorism Information
Awareness.  There are more than 10 of these programs, of which the one that has
been closed today is only one.

   WELNA Lawmakers from both parties acknowledge this whole episode shows what
's needed is much closer congressional oversight of the Pentagon. David Welna,
NPR News, the Capitol.