XINHUA GENERAL NEWS SERVICE

                             July 29, 2003, Tuesday

SECTION WORLD NEWS; POLITICAL

LENGTH 478 words

HEADLINE US cancels plan to establish futures market to predict terrorism

DATELINE WASHINGTON, July 29

BODY

   A top US defense official said Tuesday a controversial plan developed by the
Pentagon to establish an online futures market to help predict where and when
terror attacks might occur would be scrapped.

   "My understanding is it's going to be terminated," Deputy Defense Secretary
Paul Wolfowitz told members of the Senate Foreign Relations Committee, referring
to the program designed by the Defense Advanced Research Projects Agency
(DARPA).

   The little-publicized program, or Policy Analysis Market, sought to use
market forces as a tool for predicting possible future terror attacks. Anonymous
speculators would bet on forecasting terrorist attacks, assassinations and
coups.

   The plan was supposed to attract as many as 10,000 participants betting on
the timing and probability of possible assassination of a political leader or
other major events. Live trading was set to start Oct. 1 and the Bush
administration has sought 8 million dollars for the program through 2005.

   Two Democratic senators, Ron Wyden of Oregon and Byron Dorgan of North
Dakota, first disclosed the program Monday. Calling it morally repugnant and
grotesque, they demanded the program be stopped.

   Dorgan said the idea seemed so preposterous that he had trouble persuading
people it was not a hoax. "Can you imagine," he asked, "if another country sets
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 the disclosure of the program, 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."

   "Futures markets have proven themselves to be good at predicting such things
as elections results they are often better than expert opinions," the DARPA
said in a statement.

   But Democrats launched fierce attacks on the program Tuesday, calling it "a
future market in death."

   Senate Democratic Leader Thomas Daschle from South Dakota denounced the
program as an incentive actually to commit acts of terrorism. "This is just
wrong," he declared.

   At the Senate hearing on Iraq reconstruction, Wolfowitz was grilled by
Democratic members of the Foreign Relations Committee about the "bizarre and
morbid new program" which they said "is profiting on death."

   Wolfowitz said he learned about the program first from the newspaper Tuesday
  morning and he expected an announcement of the cancellation from the Pentagon
later in the day.

   The DARPA has been criticized by Congress for another program, Terrorism
Information Awareness, a computerized surveillance program that has raised
concerns about invasions of individuals' privacy.

   "It sounds like maybe they got too imaginative in this area," Wolfowitz said.