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Wyden, Dorgan Call For Immediate Halt to
Tax-Funded "Terror Market" Scheme

Defense Department program sells “futures” in possible terrorist attacks;
offers profit potential to anonymous bidders if catastrophic events occur

July 28, 2003

Washington, DC – U.S. Senators Ron Wyden (D-Ore.) and Byron Dorgan (D-N.D.) today called for the immediate end of a Defense Department project ostensibly designed to predict terrorist events through the online selling of “futures” in terrorist attacks. The “Policy Analysis Market,” the first phase of the program, has already gone online with funds from a Federal grant and is scheduled to begin a beta test on Friday, August 1. The Defense Department has also requested $8 million for its “Futures Markets Applied to Prediction” (FutureMAP) initiative, which would expand on the Policy Analysis Market’s terror-wagering scheme. In a letter to the Defense Advanced Research Projects Agency’s (DARPA’s) Dr. John Poindexter today, Dorgan and Wyden said they would advocate against any funding for such a program, and told Poindexter they want the Policy Analysis Market stopped now.

“The example that you provide in your report would let participants gamble on the question, ‘Will terrorists attack Israel with bioweapons in the next year?’ Surely, such a threat should be met with intelligence gathering of the highest quality – not by putting the question to individuals betting on an Internet website,” the Senators wrote to Poindexter. “Spending taxpayer dollars to create terrorism betting parlors is as wasteful as it is repugnant. The American people want the Federal government to use its resources enhancing our security, not gambling on it.”

The Policy Analysis Market and the FutureMAP program would work much like other financial markets, with investors buying “futures” in events they think are likely to happen, and selling off futures as they believe events become less likely to happen. Some of the possibilities the Policy Analysis Market website offers for sale are the overthrow of the King of Jordan, the assassination of Yasser Arafat, and a missile attack by North Korea. Bidders would profit if the events for which they hold futures – including government coups, assassinations and missile attacks – occur.

The Policy Analysis Market program is scheduled to begin registration for potential investors this Friday, and its website offers examples of policy experts making trades in the system. However, the Policy Analysis Market website states an intention to eventually include thousands of traders who only have to pick a username and password to participate. Additionally, the Policy Analysis Market website assures potential investors that DARPA will not have access to their identities or funds. This promise creates the possibility that terrorists themselves could drive up the market for an event they are planning and profit from an attack, or even make false bets to mislead intelligence authorities.

“Just last week the 9/11 report proved that the basics of communication and follow-through ought to be our primary weapons against the terrorist threat,” said Wyden, a member of the Senate Intelligence Committee. “Make-believe markets trading in possibilities that turn the stomach hardly seem like a sensible next step to take with taxpayer money in the war on terror.”

“This is an appalling waste of taxpayers’ money,” said Dorgan, a member of the Senate Defense Appropriations Subcommittee. “We need to focus our resources on responsible intelligence gathering, on real terrorist threats. Spending millions of dollars on some kind of fantasy league terror game is absurd and, frankly, ought to make every American angry. What on Earth were they thinking?”

The Senate version of the Defense Appropriations bill currently contains no funding for the FutureMAP program or for any component of the Terrorism (formerly Total) Information Awareness (TIA) program, which Poindexter oversees. The House version contains funding for TIA and its component programs.

Further details of the Policy Analysis Market and FutureMAP programs can be found in the Senators’ letter, and on the Policy Analysis Market website itself at www.policyanalysismarket.org.