Australian Associated Press August 1, 2003, Friday SECTION: Domestic News LENGTH: 652 words HEADLINE: FED: A certain confusion over Terror Australis BYLINE: By Mike Hedge, Senior Correspondent DATELINE: MELBOURNE, Aug 1 BODY: If the Pentagon had got its way, American gamblers would by now be betting money on the likelihood of a terrorist attack in Australia. But if they were getting their tips from their colleagues in the US Department of Homeland Security, they would have done their money cold. Maybe. In one week the American government has come up with two of its more baffling reactions to the threat of terrorism. The first, the novel scheme in which punters and stock market speculators were invited to bet money on terrorist attacks, coups and political assassinations, has been scrapped. The second, a public warning that named Australia as a terrorist target, survived despite assurances it was a mistake. Before it canned the plan to punt on-line on death and destruction, the Pentagon had spent some $755,000 of public money promoting it. The idea had been hatched in the Defence Advanced Research Projects Agency, an outfit headed by long-serving government operative John Poindexter, who came to prominence in the 1980s in an equally novel scheme known as the Iran-Contra affair. In that one the US secretly sold arms to Iran and used the money to fund rebel forces in Nicaragua. This time they figured they could tap into the grapevine that feeds the racetrack and the sharemarket and use it as a form of insider trading that would help predict acts of terror. No-one at the Defence Advanced Research Projects Agency considered the possibility that terrorists could make a neat profit by betting on themselves. The scheme was sacked only days before it was due to begin. The terror alert that may or may not have been meant to name Australia as a target has caused similar consternation - and confusion. At a time when US intelligence organisations hunting for Saddam Hussein are listening to mobile phone conversations from outer-space, when they can photograph the number plate of a car from a few hundred kilometres away and when the Australian prime minister has become George W Bush's eighth-best friend, simple communications have degenerated to a farcical level. Last weekend the Department of Homeland Security issued its warning naming Australia as a possible target of al-Qaeda terrorists. On Monday, Canberra demanded clarification and a retraction. On Wednesday the Americans had supposedly acknowledged their mistake and promised to amend it. By yesterday they had not issued a replacement to the warning that terrorists could use aircraft originating in Australia in an attack that could come before the end of the northern summer. The Australian government has hardly been erudite in dealing with the warning. Foreign Minister Alexander Downer insists that such pieces of intelligence have to be taken seriously. "But on the other hand, I don't think it should be overstated," Mr Downer said this week. Similarly, in a radio interview, he said it was "unlikely in the extreme" that Australia would be a terrorist target. Then again, said Mr Downer, "you never know". Mr Downer also chose to dispute the American interpretation of the word "venue" as used in the security alert. It does not really mean the "site" of a terrorist attack, he said, but the place from which the terrorists began their journey. But the American warning is clear: "At least one of these attacks could be executed by the end of the summer 2003," it read. "... Al-Qaeda planners have primarily considered suicide hijackings and bombings as the most promising method to destroy aircraft in flight as well as to strike ground targets... "Attack venues may include the United Kingdom, Italy, Australia or the east coast of the United States, due to the relatively high concentration of government, military and economic targets." There might be confusion over the whereabouts of Saddam Hussein or Osama bin Laden or weapons of mass destruction. But there should not be confusion over this.