Sens. Byron Dorgan (D-N.D.) and Ron Wyden (D-Ore.) don’t really know what Adm. John Poindexter’s latest project is all about, but they do know they don’t like it.

The Office of Information Awareness, under Poindexter’s direction, is planning to roll out a futures market for terrorist events, something the two Senators called “ridiculous,” “grotesque,” “morally offensive” and “wrong-headed.”

“The first thing people say is, ‘You must be at The Onion site” when discussing the plan, Dorgan said Monday, referring to the satirical newspaper.

“I think this is unbelievably stupid,” he added of a program that would allow people to trade on the likelihood of terrorist events.

According to the Defense Advanced Research Projects Agency, which oversees Poindexter’s office, the program is designed to “concentrate on market-based techniques for avoiding surprise and predicting future events.”

Details of the plan are sketchy but the Senators said they understand that the Defense Department would allow traders to register under the Policy Analysis Market to create a futures market for terrorist events and political assassinations.

Beginning Friday, interested parties can select a username and password and deposit funds into a PAM trading account to start guessing whether, for example, Palestinian Authority leader Yasser Arafat will be assassinated or if the king of Jordan will be overthrown, according to PAM material.

Trading would commence Oct. 1.

“The new approach is to set up, as it were, a ‘market’ in two kinds of futures contracts: one pays $1 if an attack takes place; the other pays $1 if there is no attack,” according to a May 20 report to Congress prepared by the Defense Department. “Market participants trade the issued contracts freely.”

“It’s about as wrong-headed as anything I’ve seen in my time in office,” Wyden said of the plan.

Not only is the program offensive, Dorgan said — questioning how Defense officials would feel if a foreign country established a similar Web site aimed at U.S. political leaders — but it’s nonsensical.

He cannot imagine how it would function, he said.

Usually, when one buys a futures contract, there’s a commodity on the other end. “Would it be regulated by the Commodity Future Trading Commission?” he asked. “Would state gambling laws apply?”

The answer is, they don’t know, the Senators said. Plus they’re worried about who might be using the system and why.

Noting that the Web site says DARPA will not have access to traders’ identities or funds, they added: “This appears to encourage terrorists to participate, either to profit from their terrorist activities or to bet against them in order to mislead U.S. intelligence authorities.”

The theory behind the program is to adopt and apply market abilities to intelligence gathering. For instance, if the futures market for gold has helped predict the precious metal’s future price, perhaps the same theory can be applied to terrorist attacks, Dorgan inferred.

“The … program will identify the types of market-based mechanisms that are most suitable to aggregate information in the defense context, will develop information systems to manage the markets, and will measure the effectiveness of markets for several tasks,” according to the DARPA Web site.

The market would focus on events in the Middle East, according to agency information, though it uses “North Korea missile attack” as an example of the type of event on which people could speculate.

“Surely, such a threat should be met with intelligence gathering of the highest quality — not by putting the question to individuals betting on an Internet website,” the Senators wrote Poindexter on Monday to protest the program’s imminent launch.

“Spending taxpayer dollars to create terrorism betting parlors is as wasteful as it is repugnant,” they added.

A spokesman for DARPA said the agency is working on a response to the Senators’ letter but that it was not ready as of this posting.

Wyden said he has met with Defense officials to discuss the controversial Total Information Awareness Program (which has since been renamed the Terrorism Information Awareness Program and is run by DARPA and overseen by Poindexter) but that he did not get specific information about the market idea.

“I told them to get out of Never Never Land,” Wyden said.

Earlier this year, Wyden succeeded in reining in the project. An amendment aimed at stopping a data-mining program that had privacy advocates comparing it to Big Brother was successfully added with bipartisan support to the 2003 omnibus appropriations package.

The Defense Department must now get specific Congressional approval before deploying or sharing new technology with other governmental departments.

“They still didn’t get the message,” Wyden said. “We want to put the final nail in this coffin.”

Wyden and Dorgan will push to maintain provisions in the Senate’s fiscal 2004 Defense appropriations bill that would extend the original Wyden amendment and completely zero out Terrorism Information Awareness funding.

Neither provision can be found in the House bill but the Senators want to ensure they survive conference committee.

Already, Defense has shelled out almost $750,000 to launch the terrorism market and is in line to get another $8 million, according to the Senators.

“We think that this is a wasteful and absurd use of taxpayer dollars and should be stopped,” they wrote Poindexter, who first made a name for himself during the Iran-Contra scandal.

The Policy Analysis Market is a joint program between DARPA and two private companies: Net Exchange an the Economist Intelligence Unit, which, like Roll Call, is owned by the Economist Group.