Pentagon opens web casino site for betting on assassinations and terrorist attacks

[underdog]

Mideast 'Futures' System Set

Pentagon Project Would Use Market to Seek Information

 

By Ken Guggenheim

Associated Press

Tuesday, July 29, 2003; Page A15

 

The Pentagon is setting up a commodity-market style trading system in which investors would be able to bet on political and economic events in the Middle East -- including the likelihood of assassinations and terrorist attacks.

 

Two Democratic senators said yesterday they want the project stopped before investors begin registering this week.

 

The Pentagon office overseeing the program said it is part of a research effort "to investigate the broadest possible set of new ways to prevent terrorist attacks." It said there will be a reevaluation before more money is committed.

 

The Policy Analysis Market (PAM) is intended to help the Pentagon predict events in the Middle East based on investors' information or analyses.

 

A graphic on the market's Web page showed hypothetical futures contracts in which investors could trade on the likelihood that Palestinian leader Yasser Arafat would be assassinated or Jordanian King Abdullah would be overthrown.

 

Although the Web site described PAM as "a market in the future of the Middle East," the graphic also included the possibility of a North Korean missile attack.

 

That graphic was apparently removed from the Web hours after the news conference held by Sens. Ron Wyden (D-Ore.) and Byron L. Dorgan (D-N.D.). "The idea of a federal betting parlor on atrocities and terrorism is ridiculous and it's grotesque," Wyden said.

 

Dorgan said, "Can you imagine if another country set up a betting parlor so that people could go in . . . and bet on the assassination of an American political figure or the overthrow of this institution or that institution?"

 

According to its Web site, PAM is a joint program of the Pentagon's Defense Advanced Research Projects Agency (DARPA) and two private companies: Net Exchange, a market technologies company, and the Economist Intelligence Unit, the business information arm of the publisher of the Economist magazine.

 

DARPA has received strong criticism from Congress for its Terrorism Information Awareness program, a computerized surveillance program that has raised privacy concerns. Wyden said PAM is under John M. Poindexter, a key figure of the 1980s Iran-contra scandal.

 

DARPA said yesterday that markets offer effective and timely methods for collecting "dispersed and even hidden information. Futures markets have proven themselves to be good at predicting such things as elections results; they are often better than expert opinions."

 

According to the plan for PAM, contracts will be available based on economic health, civil stability, military disposition and U.S. economic and military involvement in Egypt, Iran, Iraq, Israel, Jordan, Saudi Arabia, Syria and Turkey. They also will be available on "global economic and conflict indicators" and specific events.

 

Traders who believe an event will occur can buy a futures contract. Those who believe the event is unlikely can try to sell a contract.

 

Registration is scheduled to begin Friday, with trading beginning Oct. 1. The market would initially be limited to 1,000 traders, increasing to at least 10,000 by Jan. 1.

 

The Web site says government agencies will not be allowed to participate and will not have access to the identities or funds of traders.

 

Wyden said $600,000 has been spent on the program so far and the Pentagon plans to spend an additional $149,000 this year. The Pentagon has requested $3 million for the program for next year. Wyden said the Senate version of next year's defense spending bill would cut off money for the program, but the House version would fund it. The two versions will have to be reconciled.

[BN]

Admiral cast out for terror bet plan

 

Poindexter forced to resign from Pentagon after backing scheme for futures market in world chaos

 

Julian Borger in Washington

Saturday August 2, 2003

The Guardian

 

One of the most politically accident-prone officials in recent American history has been forced to resign over his scheme to establish a futures market to allow speculators to bet on assassinations, coups and acts of terrorism, it emerged yesterday.

 

Admiral John Poindexter was already controversial when he was hired by the Bush administration. He had been Ronald Reagan's national security adviser, and played a central role in illegally channelling funds from Iranian arms sales to rightwing Contra guerrillas in Nicaragua.

 

He was convicted of lying to Congress and obstruction of justice after he admitted destroying incriminating documents, but the conviction was later overturned on technical grounds, in an appeal court dominated by Reagan-appointed judges.

 

Admiral Poindexter caused uproar almost immediately in his new Pentagon job as the head of an ambitious electronic surveillance scheme aimed at monitoring the personal records of ordinary Americans in the search for signs of terrorist activity.

 

The scheme was known as the Total Information Awareness system, with an all-seeing eye as a symbol, and Knowledge is Power as its motto.

 

In the face of a congressional and public outcry, the name of the office was changed to Terrorist Information Awareness, the motto removed, and the eye replaced by a more anodyne logo involving a circle and a crescent.

 

But the makeover was not good enough for Congress, which cut the scheme's funds and banned it from focusing on American citizens without congressional permission.

 

The administration was still arguing with Congress over the programme when the row erupted over the admiral's latest project at the Pentagon's "outside-the-box" thinktank, the defence advanced research projects agency.

 

The futures market, thought up by one of the agency's computer programmers and backed by Admiral Poindexter, would allow punters to lay anonymous bets on future events in the Middle East, such as the assassination of Yasser Arafat or the overthrow of the Jordanian monarchy.

 

The theory was that, just as bookies' odds were often a better predictor of political events than professional pundits, so this "policy analysis market" would tap into a hidden reservoir of inside information about the Middle East, and help the Pentagon foresee threats.

 

The plan was dropped by the Pentagon as soon as it came to light this week, and neither the defence secretary, Donald Rumsfeld, nor his deputy, Paul Wolfowitz, came to Admiral Poindexter's defence.

 

Instead, an unnamed defence official briefed Pentagon reporters, praising Admiral Poindexter's "very creative intellect", but announcing his imminent departure and wishing him luck as a private consultant.

 

According to the New York Times, the official made it clear that the Pentagon would not be seeking his advice in the near future.

 

The same official made it clear that the Pentagon realised Admiral Poindexter was politically tainted and that "it has become difficult for projects he's involved in to get a dispassionate hearing".

 

Admiral Poindexter is expected to leave his post within weeks.

 

Even as he prepares to go, some are arguing that the policy analysis market could have been a useful predictive tool.

 

David Ignatius, a liberal commentator at the Washington Post, argued: "For all its defects, the political futures market was an interesting, unconventional idea for capturing information that's "on the street" - the subtle tips and clues thatordinary people know, but that are often lost to our intelligence agencies."