[Congressional Record (Bound Edition), Volume 149 (2003), Part 15]
[Senate]
[Pages 19954-19955]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      DARPA AND THE FUTURES MARKET

  Mr. DORGAN. Mr. President, we are on the Energy bill, but I wish to 
take a moment, inasmuch as my colleague from Wyoming has finished his 
statement, to speak on another subject. This morning my colleague, 
Senator Wyden from Oregon, and I had a press conference disclosing 
something that is going on in a small corner of the Department of 
Defense. It is pretty disconcerting.
  I should say at the outset that over recent months, Senator Wyden and 
I have tried to put together a little project dealing with Government 
waste. Both of us believe very strongly Government does a lot of things 
to improve people's lives. It funds education and highways and provides 
for this country's protection and defense. There are a lot of things 
the Government does that are important to our daily lives, but when 
there is waste of money in Government, it is appalling.
  We have discovered in a small corner of the Pentagon something that 
is going on that ought to be stopped immediately: In three days, a 
program

[[Page 19955]]

sponsored by an agency in the Pentagon called DARPA will begin to allow 
sign-ups for the creation of a futures program for people to buy and 
sell futures contracts. It is an approach to try to use the market 
system to predict future events in the Middle East, they say.
  I encourage people to go to their Web page and take a look at it. 
They say, for example, they will create a futures market in which 
buyers and sellers will make judgments and price futures contracts on 
predictive events such as: Will Mr. Arafat be assassinated? Will the 
King of Jordan be overthrown? Will there be a bioterrorist attack 
against the country of Israel?
  I told someone about discovering that this was going on at the 
Pentagon. They said I am clearly wrong about that; there is not any way 
the Pentagon can be setting up a futures contract system in which 
people will make bets on the Internet about whether some leader will be 
assassinated or whether there will be a bioterrorist attack.
  The answer is, they are wrong. That is exactly what is happening. I 
say to anybody who wonders about it, go to the Internet. It is 
unbelievably stupid as a public policy, in my judgment, to think that 
real intelligence can be replaced by a betting system involving people 
connected to the Internet around the world; that you can replace real 
intelligence with a so-called market-based system in which presumably 
informed buyers and sellers would make bets, wagers--they call it 
futures contracts, but in fact it would be wagers--on whether a foreign 
leader would be assassinated, on whether there would be a bioterrorist 
attack, on whether North Korea would launch missiles.
  I am using all of these examples because they are on the Internet 
site sponsored by the Department of Defense. This is real. I thought 
immediately, this clearly must be someone who went to The Onion and it 
is a spoof.
  No, it is not. One does not find this on The Onion. They find it on 
an Internet site sponsored by DARPA at the Department of Defense, 
saying they are going to create this system and the sign-up starts 
August 1. The trading on futures contracts on these kinds of questions 
trying to be predictive about future events in the Middle East will 
begin on October 1, and they hope to ultimately have 10,000 traders. It 
is the most Byzantine, harebrained scheme I think I have ever heard 
coming from Government.
  I say to DARPA, and to Admiral Poindexter, who I understand is 
running this program: Stop it. End it.
  If not, we will try to end it in the appropriations process.
  The Department of Defense does a lot of wonderful things. I have 
great admiration for them, and I serve on the Defense Appropriations 
Subcommittee. But putting together a program for trading of futures 
contracts on the kinds of propositions I have just mentioned--
assassinating leaders, bioterrorist attacks--is not a project that 
warrants any credibility at all. It is a tragic waste of the taxpayers' 
money. It is offensive and, in my judgment, it will have no value to 
anyone.
  My hope is that Senator Wyden and I will have convinced the Pentagon 
today that enough is enough. Stop this kind of nonsense.

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