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Amid furor, Pentagon kills terrorism futures market

Boxer calls program 'very sick'

Deputy Defense Secretary Paul Wolfowitz faced tough questions from lawmakers about the program.
Deputy Defense Secretary Paul Wolfowitz faced tough questions from lawmakers about the program.

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WASHINGTON (CNN) -- Facing an outcry on Capitol Hill, the Pentagon on Tuesday killed a program that would have had investors betting on the likelihood of terrorist attacks and assassinations.

"It's going to be terminated," Deputy Defense Secretary Paul Wolfowitz told members of the Senate Foreign Relations Committee, where he testified about the reconstruction effort in Iraq.

But criticism about the controversial Pentagon program -- brought to light Monday by Democratic senators -- dominated part of that hearing and others on Capitol Hill.

Wolfowitz, answering a question about the program from Sen. Barbara Boxer, D-California, defended the Pentagon's Defense Advanced Research Projects Agency (DARPA), which created the program and set up a Web site describing it.

"The agency that does it is brilliantly imaginative in places where we want them to be imaginative," he said. "It sounds like maybe they got too imaginative in this area."

"There is something very sick about it," a clearly angry Boxer said, adding that those responsible should be fired.

Wolfowitz said he'd only learned about the program Tuesday morning and added that the department will "find out exactly how this happened."

The program, called the Futures Markets Applied to Prediction (FutureMAP), would have involved investors betting small amounts of money that a particular event -- a terrorist attack or assassination -- would happen.

It has been part of the Total Information Awareness program under retired Adm. John Poindexter, a prominent figure in the Iran-Contra scandal during the Reagan administration.

His current boss, DARPA director Anthony Tether, was asked whether Poindexter would keep his job. "I don't see why not," he said as he left meetings on Capitol Hill.

Republicans moved quickly to distance themselves from the program, which was supposed to start Friday.

"We're going to recommend to the secretary of defense not to use such funds as he has available ... to implement the initial stages of this program," said Sen. John Warner, R-Virginia, chairman of the Senate Armed Service Committee.

"I just got off the phone with the head of DARPA, and we mutually agreed that this thing should be stopped," Warner said at a hearing on military promotions.

Tether agreed. When reporters asked him later whether the program was dead, he replied, "Oh yes, absolutely."

Before the Pentagon pulled the plug on the program, it generated fierce criticism, particularly from Democrats.

Democratic Sens. Byron  Dorgan, left, and Ron Wyden talk about the controversial program at a Capitol Hill news conference on Monday.
Democratic Sens. Byron Dorgan, left, and Ron Wyden talk about the controversial program at a Capitol Hill news conference on Monday.

"I couldn't believe that we would actually commit $8 million to create a Web site that would encourage investors to bet on futures involving terrorist attacks and public assassinations," Senate Minority Leader Tom Daschle, D-South Dakota, said on the Senate floor. " ... I can't believe that anybody would seriously propose that we trade in death ... How long would it be before you saw traders investing in a way that would bring about the desired result?"

Monday, Sen. Ron Wyden, D-Oregon, said, "The idea of a federal betting parlor on atrocities and terrorism is ridiculous and it's grotesque."

Sen. Byron Dorgan, D-North Dakota, called the idea "stupid."

Wyden and Dorgan brought the proposal to public attention Monday.

The ranking Democrat on the Armed Services Committee, Sen. Carl Levin of Michigan, said that as reports surfaced about the plan, "Our first reaction was that it was a hoax."

But Warner, in an exchange with Levin during the hearing, said, "There's been no effort whatsoever to make it secret. The program is modeled after a successful program, utilized by one of the nation's foremost think tanks, which while not directed toward terrorism, is directed toward analysis of other contingencies in the future, and in the community's been perceived as a fairly successful program."

In a written statement, DARPA had said FutureMAP "is exploring new ways to help analysts predict and thereby prevent the use of futures market mechanisms."

DARPA had acknowledged the program faced "a number of major technical challenges and uncertainties. Chief among these are: Can the market survive and will people continue to participate when U.S. authorities use it to prevent terrorist attacks? Can futures markets be manipulated by adversaries?"

-- CNN Producers Paul Courson and Steve Turnham contributed to this report.

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