Washington, July 30: As far as capitalism goes, this is the ultimate. It would have persuaded Karl Marx to rewrite his Das Kapital.
Confronted by an uproar on Capitol Hill, the Bush administration yesterday scrapped plans by the Pentagon to start a futures market in terrorism, which would have allowed investors to bet and make money on the probability of terrorist acts, political assassinations, coups and other atrocities.
Innocently called the “Policy Analysis Market”, the devious scheme was the brainchild of retired Admiral John Poindexter, who was president Ronald Reagan’s national security adviser. The Pentagon had already set up a website to promote the programme and 1,000 traders were to begin registering on Friday. Formal trading on say, whether Palestinian leader Yasser Arafat would be assassinated or when King Abdullah of Jordan would be overthrown, was to start October 1.
On Monday, two Democratic senators, Ron Wyden of Oregon and Byron Dorgan of North Dakota, exposed the scheme and news spread like wildfire on Capitol Hill.
Dorgan said the scheme was so preposterous that he initially had trouble convincing people it was not a hoax. When deputy defence secretary Paul Wolfowitz arrived on the Hill yesterday for a hearing at the Senate Foreign Relations Committee, he had a rough time from both Democrats and Republicans. Sensing the outrage among elected representatives, Wolfowitz immediately said: “I share your shock at this kind of programme... We will find out about it, but it is being terminated”.
Wolfowitz said, rather unconvincingly, that he learned about the project on his way to the hearing, only from accounts given by the two senators who brought it to public attention. “This is a programme that under further scrutiny probably doesn’t deserve continued support”, Pentagon spokesman Lawrence Di Rita told reporters shortly thereafter. “It simply did not make sense to continue... in light of the recent concerns surrounding” the scheme, Tony Tether, director of the Defence Advanced Research Projects Agency (DARPA), the Pentagon arm responsible for the futures market said in a statement.
Earlier in the day, Senator John Warner, a prominent Republican and chairman of the Senate Armed Services Committee, had phoned Tether to ask him to stop the programme immediately. As the day advanced, outrage about the scheme spread from committees to the Senate floor, where Thomas Daschle, leader of the Democrats, described it as a “plan to trade in death”.
He said the Bush administration should “issue a public apology, especially to the families of the victims of September 11”.
Poindexter became notorious in the 1980s for his role in the Iran-Contra scandal, in which the US government illegally sold weapons to Iran and covertly diverted funds from the sale to the rebels fighting Nicaragua’s Leftist government.
Poindexter was convicted for lying to the Congress, but his conviction was later set aside. Shortly after he was brought into the Bush administration last year, he initiated an equally controversial scheme called: “Total Information Awareness Programme”, which envisaged electronic surveillance of American citizens. If the futures market had opened as planned, early investors could have bought contracts for as little as five cents for predicting the assassination of a prime minister, for example. As more people bet on the killing, the price of the contract would have progressively gone up to a maximum of 50 cents.
If the Prime Minister in question was, indeed, killed, the pay off would have been one dollar: those who bought contracts at five cents would have profited by 95 cents per contract while those who put in fifty cents would have gained an equal amount.
The Pentagon had sought support from a market technologies company, Net Exchange, and the Economist Intelligence Unit of the UK for the market, for which it had sought a budget of $8 million till 2005.