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Online bets on terror
attacks
29/07/2003
13:30 - (SA)
Washington - The Pentagon plans to let online traders bet
on the likelihood that Palestinian leader Yasser Arafat might
be assassinated or that Jordan's King Abdullah II might be
overthrown, as part of an effort to predict and prevent
terrorist acts.
The scenarios are being developed by the Defence Advanced
Research Project Agency (Darpa), which funds Pentagon research
projects, under an experimental program known as Future
Markets Applied to Prediction, or FutureMAP.
The agency is betting that trading in the futures
contracts, modelled on the type of speculative transactions
common in commodity markets, will boost traditional
intelligence methods.
Lawmakers and media commentators have assailed those
methods since the September 11, 2001 terrorist attacks on New
York and the Pentagon.
"Futures markets have proven themselves to be good at
predicting such things as elections results; they are often
better than expert opinions," the agency said in a statement
on Monday.
But US Senators Ron Wyden of Oregon and Byron Dorgan of
North Dakota, both Democrats, said they wanted the program
stopped before it starts registering traders on August 1.
"The idea of a federal betting parlour on atrocities and
terrorism is ridiculous and grotesque," Wyden, who sits on the
Senate Intelligence Committee, told reporters Monday.
Wyden has been prominent among congressional critics of
another Darpa program, Terrorism Information Awareness (TIA),
a computer surveillance initiative that raised concerns about
invasions of individuals' privacy.
He said the new "Policy Analysis Market" trading scheme is
overseen by TIA chief retired admiral John Poindexter, a
central figure in the Iran-Contra scandal, in which US
officials illegally funded Nicaraguan rebels with proceeds
from also-illegal arms sales to Iran in the mid-1980s.
Dorgan described the internet scheme as "unbelievably
stupid".
"How would you feel if you were the King of Jordan and you
learned the US defence department was taking bets on your
being overthrown within a year?" he added, noting that Jordan
has long been a US ally.
In much the same way as Middle East analysts have used
petroleum futures contract prices to predict events in the
region, Darpa's contracts would focus on "the economic, civil,
and military futures of Egypt, Jordan, Iran, Iraq, Israel,
Saudi Arabia, Syria, and Turkey and the impact of US
involvement with each", according to the agency's "Policy
Analysis Market" website.
Traders, who would have to deposit money with the market
before being able to make any trades, would buy contracts for
an event they considered likely and attempt to sell contracts
if they thought it unlikely.
The more buyers there were for a contract - say, Arafat's
assassination in the first quarter of 2004 - the more likely
it would be considered and the higher the price. If the event
came to pass, buyers would cash in and sellers would lose out.
Up to 1 000 individuals will be allowed to register
starting on Friday and will begin live trading on October 1,
Darpa's website said. Their numbers would be increased to at
least 10 000 worldwide by January 1.
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