Hill hits gambling program on terror

The latest brainchild of a contentious Pentagon program — an online gambling parlor that allows anonymous investors to make money predicting assassinations and terrorist attacks — is drawing fire from Capitol Hill.

The Terrorist Information Awareness office will open the waging scheme Friday and begin signing up 1,000 traders to deposit funds for transactions. In a report to Congress, TIA said the program will provide the Defense Department “with market-based techniques for avoiding surprise and predicting future events.”

Online trading begins Oct. 1, and by Jan. 1, at least 10,000 traders will be able to participate in the Policy Analysis Market.

Investors who successfully predict, for example, a missile attack by North Korea, the assassination of Palestinian Authority chief Yasser Arafat or the overthrow of the king of Jordan would profit financially, said the Defense Advanced Research Projects Agency. The agency oversees the TIA program.

Critics on Capitol Hill sent a letter to TIA Director John Poindexter yesterday demanding that the trading scheme end immediately. They also are taking legislative action to kill funding for the entire TIA program.

“The federal government is encouraging people to bet on and make money from atrocities and terrorist attacks,” said Sen. Ron Wyden, Oregon Democrat, during a press conference disclosing the program’s activities.

Mr. Wyden called the terrorist market “grotesque” and “bizarre.”

“Betting on terrorism is morally wrong,” he said.

“It’s a harebrained scheme,” said Sen. Byron L. Dorgan, North Dakota Democrat. “I think this is an unbelievably stupid program that is so devoid of value. It is offensive to almost everyone.”

A spokesman for DARPA issued a written statement that the agency has “undertaken this research as part of its effort to investigate the broadest possible set of new ways to prevent terrorist attacks and will continue to reevaluate the technical promise of the program before committing additional funds beyond Fiscal Year 2003.”

The program will explore new ways “to help analysts predict and thereby prevent terrorist attacks through the use of future market mechanisms,” the statement said.

“Research indicates that markets are extremely efficient, effective and timely aggregators of dispersed and even hidden information. Futures markets have proven themselves to be good at predicting such things as election results; they are often better than expert opinions,” the statement said.

DARPA will not have access to investors’ identities or their funds.

“We call on you to put an immediate end to a project being pursued by your office that would allow anyone — even terrorists — to profit by placing anonymous bets on future terrorist attacks,” the senators said in the letter.

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