Poindexter Will Be Quitting Over Terrorism Betting Plan

The New York Times ^ | August 1, 2003 | ERIC SCHMITT

[Willie Green]

For education and discussion only. Not for commercial use.

WASHINGTON, July 31 — The official who oversaw a plan for the Pentagon to run a terrorist futures-trading market is resigning under pressure, a senior Defense Department official said today.

John M. Poindexter, a retired rear admiral who was President Ronald Reagan's national security adviser, is stepping down "within a few weeks," the defense official said, after the disclosure of a proposal that outraged lawmakers and embarrassed senior Pentagon officials. The plan was to create an online trading parlor that would have rewarded investors who forecast terrorist attacks, assassinations and coups.

Defense Secretary Donald H. Rumsfeld did not personally fire Admiral Poindexter, but the defense official said that Mr. Rumsfeld agreed that the admiral had become too much of a political lightning rod and that it was time for him to go.

"It's fair to say that the secretary understood what Admiral Poindexter understands, which is that it's difficult for any work that he might be associated with to receive a dispassionate hearing," said the official, who spoke to reporters at the Pentagon today on the condition of not being named.

A spokesman for Admiral Poindexter and his organization, the Defense Advanced Research Projects Agency, or Darpa, a research arm of the Pentagon, said he and the office had no comment on the resignation, which was reported today by The Wall Street Journal.

But Admiral Poindexter said in an e-mail message to a friend, which was given to a reporter, on Wednesday night that he had been contemplating resigning for several months, to get out from under a steady stream of criticism and to spend more time sailing on the Chesapeake Bay.

Admiral Poindexter was engulfed in troubles nearly two decades ago in the Iran-contra scandal during the Reagan administration. More recently he oversaw development of a program at Darpa that proposed spying electronically on Americans to monitor potential terrorists.

That program, originally called Total Information Awareness, was envisioned by Admiral Poindexter as a sweeping electronic surveillance plan that would forestall terrorism by tapping into computer databases to collect credit, financial, medical and travel records.

But this year Congress barred the program from spying on Americans, and the Pentagon changed its name to Terrorism Information Awareness.

The latest furor centered on an initiative under Admiral Poindexter's control called Policy Analysis Market. Under the plan, traders were to be able to begin registering on Friday to trade futures in Middle East developments as of Oct. 1 on a Web site program, which the Pentagon was operating with private partners.

Two Democratic senators, Byron L. Dorgan of North Dakota and Ron Wyden of Oregon, disclosed the existence of the futures program on Monday, calling it morally repugnant.

The defense agency staff has tried to defend the idea behind the program, saying it was merely using the marketplace to assess the probability of events, much like predicting elections or commodity prices. But even senior Pentagon officials, like Deputy Defense Secretary Paul D. Wolfowitz, said they were mortified that the program's developers could be so politically tone-deaf, and they quickly agreed to kill the program.

Today, the senior defense official sought to soften the impact of what even staunch supporters of Admiral Poindexter acknowledged were whopping blunders.

"We've had a couple of programs of varying degrees of merit that have been seen as certainly unorthodox," the official said. "It's cutting edge and beyond that in some cases."

The defense official praised Admiral Poindexter for his "very creative intellect" and wished him luck in other counterterrorism efforts. But he also said it was highly doubtful that the Pentagon would seek his advice as a consultant any time soon.

Republicans who had criticized the $3 million futures program today sought to prevent the debacle from tainting the agency's other work.

"Although this was a serious mistake by Darpa, I believe that the agency has played a tremendously important function in our overall defense structure for decades," Senator John W. Warner, the Virginia Republican who leads the Armed Services Committee, said in a statement, adding, "Darpa must continue to serve in the interest of our national security."

As for Admiral Poindexter's future, Mr. Warner said that was a matter for the Defense Department to decide. Mr. Warner met with Mr. Rumsfeld in the Capitol within the last two days, although the senator's spokesman declined to say whether they discussed the admiral's fate.

But Democrats suggested more shenanigans were afoot in the Pentagon that had not been uncovered.

"The problem is more than the fact that Admiral Poindexter was put in charge of these projects," Senator Patrick J. Leahy, Democrat of Vermont, said in a statement. "The problem is that these projects were just fine with the administration until the public found out about them."

Senators Dorgan and Wyden said the outrage should fuel momentum to cut off all money to the Terrorism Information Awareness effort. "Even with today's announcement, the proposed T.I.A. program would still be the biggest spying and surveillance overreach in America's history, and it should be shut down," the senators said in a statement.

[xrp]

Woohoo! Don't let the door hit you on the way out, Johnny BOY!

[Paleo Conservative]

Woohoo! Don't let the door hit you on the way out, Johnny BOY!

I think it was a good idea. It got lots of heat from DemocRAT senators, because most DemocRATS don't understand market mechanisms.

[Varmint Al]

It was a brilliant idea, but the execution was lacking. They should have had the CIA contact some place like Onion to actually provide the betting location. They could have pulled it off and have been provided the money and charge a very small fee to place each bet. The CIA could have covered the difference and made sure that Onion would make a profit and not expose who was really behind the scheme.

Here are some of the benefits of the betting:

• Thousands of people would be thinking about and studying current events trying to "connect the dots" to make money.
• Some of these people (greedy terrorists) would have inside information and bet on possible terrorist events that might not have been previously identified. They would identify "new dots" to be connected.
• Any terrorists who would not be planning on suicide, would be interested in making profit from their inside knowledge.
• The increase in betting would be an excellent indicator that a terrorist event is eminent.
• With the CIA involved, all bets could be traced right to the very computer that they were placed from. These computers might have more important information on them that could also be obtained, quietly.
• Remember, it was the Democrats and the mainstream media that went ballistic when they heard of the scheme. Both entities do not want the Republican administration to succeed.

I am sure there are many more valid reasons and possible intelligence benefits that would be possible, but I can't think of them at the moment.

Good Hunting... from Varmint Al

[fourdeuce82d]

From May 8 2003 NYT:

Economists believe financial markets do a pretty good job of aggregating information in part because they offer strong incentives to those who make good predictions. Prices of oil futures contracts predict future spot prices well because traders who make better predictions can make a lot of money.

So why not use financial markets to help aggregate information about those matters of fact that are important to public choice? This intriguing idea is examined in detail in a paper by Robin Hanson, an economist at George Mason University, called "Shall We Vote on Values, but Bet on Beliefs?" (http://hanson.gmu.edu/ideafutures.html.)

[jrawk]

Here Here,

It would have worked. I miss portions of the cold war day when things like this were never even considered for press release. In some ways I think we now figure without a power as equal as Russia, we may as well tell our "lesser" adversaries exactly what we have planned.

-- lates
-- jrawk

[At _War_With_Liberals]

"Poindexter did leave on a positive note, however, winning the wager that a DARPA official would be politically assassinated in late July."

[jf55510]

I think that the futures market was a good idea, but was in the wrong shop. The bigger problem with this "resignation" is that is seems like the DoD is going to be forced to get rid of people that think outside the box, just because the ideas generate controversy. And when people are thinking out side of the box is usually when people get their best ideas.

[FairOpinion]

Obviously the message is that we don't want brilliant, creative people working in the government and coming up with innovative, outside of the box thinking to try to protect us from terrorism.

John POINDEXTER

B.S., Engineering, U.S. Naval Academy, 1958
M.S., Physics, California Institute of Technology, 1961
Ph.D., Nuclear Physics, California Institute of Technology, 1964


From 1958 to 1987 Poindexter served the U.S. Navy in various positions. As Deputy Commander of Naval Education and Training Command, amongst his duties of commanding the U.S. Navy's extensive education and training programs, he initiated a project to develop a distributed database management system for more efficient management of the training pipelines. When Commander of a destroyer squadron, he was Surface Warfare and ASW Commander of battle groups in the Western Pacific and Indian Ocean and developed new tactics and battle management procedures under the Composite Warfare Commander concept. As Commanding Officer of a cruiser he pioneered the shipboard use of computers to manage the ship's force portion of yard overhauls. He has been an Executive Officer and a Chief Engineer of destroyers. Significant staff assignments included: Executive Assistant to the Chief of Naval Operations, Administrative Assistant to the Secretary of the Navy and Special Assistant for Systems Analysis to the Secretary of Defense.

From 1961 - 1964 Poindexter was a laboratory assistant at the California Institute of Technology, where he conducted laboratory research to further develop a model for understanding the Mossbauer Effect with Nobel Laureate Rudolph Mossbauer.

Poindexter has served the White House as Military Assistant from 1981 - 1983, as Deputy National Security Advisor from 1983 - 1985, and as National Security Advisor from 1985 - 1986. Joining President Reagan's White House staff in 1981, from 1983 to 1985 Poindexter was responsible for leading and managing the National Security Council Staff and was Chairman of the Crisis Pre-planning Group. As National Security Advisor, Vice Admiral Poindexter was responsible for providing recommendations to The President on national security, foreign policy and defense policy. Major events in which he played a significant role included: Strategic Defense Initiative, Operation Urgent Fury, Achille Lauro incident, Libyan Operation to respond to terrorist attacks, the Reykjavik Summit with Soviets, peaceful transition of government in the Philippines, and the Iran-Contra Affair.

From 1988 to 1989 Poindexter was senior scientist at Presearch, Inc. Presearch had primarily been involved with defense studies and analysis. Faced with anticipated defense budget reductions, Poindexter joined the firm to develop new commercial enterprises. He designed and developed hardware and software for the prototype of a digital real-time, imaging system to be used for physical security of high value facilities. It was used to obtain a contract for a nuclear power plant security system.

From 1990 to 1996, Poindexter served as co-founder of TP Systems, Inc. TP Systems was a software development firm specializing in commercial software for the IBM PCs and compatibles; Poindexter was the chief designer and programmer. Development included a symbolic debugger for multi-tasking environments, a BBS communications program, and numerous utility programs.

From 1993 to 1996, Poindexter served as a consultant to Elkins Group. Elkins was a business alliance with Electronic Data Systems (EDS), which has developed the Elkins Interactive Training Network (EITN), a satellite based training delivery system. Poindexter was the Chairman of the Maritime Advisory Committee and a member of the Board of Directors. He also provided advice on strategic planning.

From 1996 to 2002 Poindexter served as Senior Vice President for SYNTEK Technologiex. SYNTEK is a small high technology firm with contracts in domestic and international defense and commercial business. Poindexter was responsible for high-level advice on management and direction of information systems projects (for example Defense Advanced Research Project Agency's Project Genoa).

As of December 2002, Poindexter serves as the Director of DARPA Information Awareness Office. The mission of the Information Awareness Office (IAO) is to imagine, develop, apply, integrate, demonstrate and transition information technologies, components, and prototype closed-loop information systems that will counter asymmetric threats (most notably, terrorist threats) by achieving total information awareness: enabling preemption; national security warning; and, national security decision making.


From Wikipedia.org

http://www.wikipedia.org/wiki/John_Poindexter

[Paleo Conservative]

thinking out side of the box = thinking politically incorrect thoughts = DemocRATS appalled = thought crime

[csn vinnie]

If you think markets are smart, just remember that people were bidding Enron stock through the roof at the very moment that the CFO was cooking the books on his Weber grill. Of course, a lot of people made money on the bankrupt Enron stock, because other lemmings were doing the same thing.

I believe Adm. Poindexter was in charge of the Office of Information Awareness. Google it and go to the official website. The home page is nothing but gibberish. It is extremely doubtful that anyone who is unable to speak clearly will be effective in connecting the dots on terrorism.

Your Cousin Vinnie

[FairOpinion]

Have you ever heard the term "smart money", and "what is the "smart money" doing? The "smart money" gets out, and the greedy little people are left holding the bag.

The markets are smart, some people aren't. Eventually the dot-com bubble did burst -- the market was telling everyone that these stocks are worthless, which is what anyone who actually looked at them, could have seen earlier.