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Terrorist Futures Site Sinks Poindexter

Dr. John M. Poindexter, director of the Dept. of Defense's Information Awareness Office (IAO), is expected to resign within the next few weeks according to senior Pentagon officials. Since joining the IAO in January of 2002, Poindexter has been an ongoing source of controversy.

The IAO is an agency of the Defense Advanced Research Projects Agency (DARPA) created in the aftermath of the September 2001 terrorist attacks on New York City and Washington. The goal of the agency is to gather intelligence on possible terrorist activities through electronic sources such as the Internet, telephone and fax lines.

Under Poindexter's leadership the IAO has created a firestorm of controversy with its Total Information Awareness (TIA) program, which seeks to capture the "information signature" of people in order to track potential terrorists and criminals. Now renamed as the Terrorist Information Awareness program, critics have called it a domestic spy program and the Senate has temporarily blocked funding for the project.

Earlier this week, Poindexter again came under fire for the IAO's latest proposal to predict terrorist events through the online selling of "futures" in terrorist attacks. The Senate again intervened to block the program.

The Policy Analysis Market (PAM), the first phase of the project, was already online with funding from a federal grant and was scheduled to begin a beta testing on today. The Defense Department had 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.

But late on Monday afternoon, Senators Ron Wyden (D.-Ore.) and Byron Dorgan (D-N.D.) held a press conference to denounce the program. By Tuesday, Sen. John Warner (R.-Va.), the powerful chairman of the Senate Armed Forces Committee, announced he had contacted the IAO and had been assured the program would be discontinued. By Tuesday afternoon, the site had been pulled off the Internet.

PAM was a joint venture between DARPA; the Economist Intelligence Unit, the business information arm of The Economist Group, publisher of The Economist; and Net Exchange, which was responsible for design, development and operation of the PAM trading system.

PAM was designed to 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 PAM website offered for sale were 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.

"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," Wyden and Dorgan wrote in a letter to Poindexter.

Poindexter is a retired Navy admiral and former National Security Advisor to Ronald Reagan. In 1990, Poindexter was convicted on five counts of deceiving Congress in the Iran-Contra affair and sentenced to six months in prison. The convictions were eventually overturned on the grounds that his immunized congressional testimony had been unfairly used against them.

After leaving the government, Poindexter joined Syntek Technologies, which worked with DARPA to develop an "information harvesting" search engine known as Genoa. Poindexter brought the Genoa concept with him to the IAO.

"As Congress contemplates the future of the Terrorism Information Awareness Program after the resignation of Dr. Poindexter, we want to make one point clear: even with today's announcement, the proposed TIA program would still be the biggest spying and surveillance overreach in America's history, and it should be shut down," Wyden said Thursday night. "Congress will have the opportunity to do just that in the conference for the defense appropriations bill in the fall and we hope to see this program de-funded once and for all. We have always believed that it is possible to fight terrorism vigorously without gutting civil liberties. The TIA program skews that balance and needs to go."