U.S. Response I:  Pentagon Creates Online Futures Trading Market to Predict Terrorist Activities

The U.S. Defense Department’s Defense Advanced Research Projects Agency is establishing an online futures trading market that would allow people to wager on the likelihood of various types of terrorist activities, the New York Times reported today (see GSN, July 28).

The program, called the Policy Analysis Market, would allow people to deposit funds into accounts — similar to those used in stock trading — and then win or lose money by predicting various events, such as a coup in Jordan, according to the Times.  The market will focus on the economic, military and civil futures of eight Middle Eastern nations, including Iran, Iraq and Israel, as well as the results of U.S. interactions with those nations.  The program is set to begin registering an initial 1,000 participants Friday with trading to begin Oct. 1.  The number of participants could possibly grow to 10,000 by Jan. 1, the Times reported.

“Involvement in this group-prediction process should prove engaging and may prove profitable,” the market’s Web site said.

The Pentagon has said that similar futures trading projects have been able to predict events such as oil prices and elections.

“Research indicates that markets are extremely efficient, effective and timely aggregators of dispersed and even hidden information,” the Pentagon said in a statement.  “Futures markets have proven themselves to be good at predicting such things as elections results; they are often better than expert opinions,” the department said (Carl Hulse, New York Times, July 29).

More than $800,000 has been spent to establish the market, according to the Washington Times.

However, congressional critics of the program have called on John Poindexter, director of the Total Information Awareness office, which will oversee the program, to shut it down, saying that gambling on future terrorist attacks is “grotesque.”

“The federal government is encouraging people to bet on and make money from atrocities and terrorist attacks,” Senator Ron Wyden (D-Ore.) said during a press conference to disclose the program.  “Betting on terrorism is morally wrong,” he said.

“It’s a harebrained scheme,” said Senator Byron Dorgan (D-N.D.).  “I think this is an unbelievably stupid program that is so devoid of value.  It is offensive to almost everyone,” he said (Audrey Hudson, Washington Times, July 29).

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U.S. Response II:  GAO Says Port Security Needs Long-Term Plan

By David McGlinchey
Global Security Newswire

WASHINGTON — As part of its efforts to enhance security at U.S. shipping terminals, the Homeland Security Department must increase the number of well-trained port security officials, a task that could prove difficult without advanced strategic planning, the General Accounting Office said in a report yesterday (see GSN, June 17).

The Bureau of Customs and Border Protection — part of the Homeland Security Department — has not yet managed a smooth transition in port security efforts from “short-term focus to a long-term strategic approach,” according to the GAO report.  The GAO called for a comprehensive plan for developing a skilled port security workforce.

Last year, U.S. customs officials launched the Container Security Initiative, which posted agents in foreign ports to screen high-risk shipments for weapons of mass destruction before they departed for the United States.  Under the CSI program, more than 10 nations have agreed to participate in the program, according to the Customs and Border Control Web site (see GSN, July 23).

More than 1,700 companies also agreed to join the Customs-Trade Partnership Against Terrorism (C-TPAT), under which firms improve their own security in exchange for smoother access to U.S. ports.

Senator Charles Grassley (R-Iowa) applauded the GAO findings and said port security relies on well-trained customs officials.

“The success of these programs, and our trust in them, depends largely on the quality, training, oversight, and retention, of the people on the ground who administer them.  Going forward, we have to have a good roadmap in place.  It’s that simple,” he said in a statement.

The GAO called for customs officials to develop “human capital plans that clearly describe how CSI and C-TPAT will recruit, train and retain staff to meet their growing demands as they expand to other countries and implement new program elements.”

The plan also called on the Homeland Security Department to develop benchmarks for the two programs to measure their progress.

“The measures should be used to determine the future direction of these Customs programs,” the report says.

In addition, the GAO said that Homeland Security officials should build strategic plans to identify the programs’ goals and reach them.

The Customs and Border Protection bureau agreed with the GAO report and said it was already addressing the problems.

“The Office of International Affairs has initiated action to develop a program to recruit, train and retain the staff necessary to effectively and efficiently carry out the mission of the CSI,” the bureau said in a statement.

Grassley said he was encouraged by the fact that customs officials agreed with the GAO assessment.

“The additional steps identified in the GAO report are crucial to the successful management and long-term success and oversight of these programs,” he said.

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Threat Assessment:  Officials Warn of New Hijacking Attacks

Al-Qaeda is believed to be preparing to conduct a new round of attacks using hijacked airliners later this summer, U.S. officials said yesterday (see GSN, July 10).

Officials have learned of the suspected plot through interrogations of one or more captured senior al-Qaeda operatives, according to the Washington Post.  Information received from al-Qaeda operatives has been corroborated through other methods, such as electronic intercepts, officials said.

“The U.S. intelligence community has received information related to al-Qaeda’s continued interest in using commercial aviation here in the United States and abroad to further their cause,” Homeland Security Department spokesman Gordon Johndroe said.

Homeland Security issued an alert with the new information to law enforcement agencies, security officials and airlines over the weekend, Johndroe said.  There are no immediate plans, however, to raise the U.S. national terrorism alert level, which currently stands at “yellow,” indicating an elevated risk, Homeland Security officials said (Susan Schmidt, Washington Post, July 29).

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U.S. Response:  “Murky” Intelligence Can Be Basis for Action, Wolfowitz Says

U.S. Deputy Defense Secretary Paul Wolfowitz defended yesterday the Bush administration’s decision to invade Iraq, arguing that the government must be able to act on “murky” intelligence when necessary (see GSN, July 25).

No conclusive evidence has yet been found to support the frequent Bush administration claims about Iraqi weapons of mass destruction and links to terrorism.  The Sept. 11, 2001, terrorist attacks, however, demonstrated a need to act on the basis of “murky” information to prevent future attacks, he said.

“The nature of terrorism is that intelligence about terrorism is murky,” Wolfowitz said on Fox News Sunday.  “I think the lesson of 9/11 is that if you’re not prepared to act on the basis of murky intelligence, then you’re going to have to act after the fact, and after the fact now means after horrendous things have happened to this country,” he said (Anton Ferreira, Reuters/Philadelphia Inquirer, July 28).

U.S. Senator Carl Levin (D-Mich.) yesterday criticized Wolfowitz’s use of the word “murky” to describe prewar U.S. intelligence on Iraq.

“Boy, it sure didn’t sound murky before the war,” Levin said on CBS’s Face the Nation.  “There were clear connections, we were told, between al-Qaeda and Iraq.  There was no murkiness, no nuance, no uncertainty about it at all. ...  That’s the way it was presented to the American people,” he said (William Mann, Associated Press/Yahoo!News, July 28).

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U.S. Response I:  Energy Department Lifts Moratorium on Nuclear Waste Shipments

The U.S. Energy Department has a lifted a moratorium on nuclear waste shipments that was imposed after the Sept. 11, 2001, terrorist attacks, the Washington Times reported today (see GSN, Feb. 26).

Energy officials would not provide details about when shipments occur or what routes are used, except to local officials participating in shipment security arrangements.  New security requirements were imposed last year on nuclear plants shipping waste, including increased communications and shipment escort and monitoring provisions, U.S. Nuclear Regulatory Commission spokeswoman Sue Gagner said (Tom Ramstack, Washington Times, July 25).

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U.S. Response II:  Lawmakers Offer New Proposal to Replace House Members Lost in Future Attack

Republican members of the U.S. House of Representatives yesterday introduced a bill calling for rapid elections if a catastrophic attack on the U.S. Capitol killed more than 100 House members, according to the Washington Times (see GSN, June 4).

Under the bill, state political parties would have 21 days to choose nominees and hold a special election after the House speaker announced to loss of 100 or more representatives.  The bill was offered as an alternative to a recent think-tank proposal to modify the U.S. Constitution by allowing state governors to appoint House members after a catastrophic attack.  That proposal was made last month by a joint American Enterprise Institute-Brookings Institution commission.

“We alone, of all federal officials, have been directly elected by the people, never appointed,” said Representative David Dreier (R-Calif.), who helped draft the bill.  “I believe the Framers did this for a reason. ... We cannot let terrorists force us to change the structure they created for us,” he said (Amy Fagan, Washington Times, July 25). 

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U.S. Response I:  Report Gives U.S. Poor Marks For Homeland Security

By Joe Fiorill
Global Security Newswire

WASHINGTON — A Democratic think tank yesterday gave the Bush administration a “D” for its overall efforts to improve homeland security following the Sept. 11, 2001, terrorist attacks.

In what Progressive Policy Institute President Will Marshall called “the most comprehensive assessment to date of the Bush administration’s handling of this new national security challenge,” institute researchers said the administration has largely failed to make progress on improving intelligence (“D”), state and local security measures (“D-”), border control (“D”), facilities protection (“D+”) and bioterrorism preparedness (“C”).

The authors also faulted the administration on “defending civil liberties and privacy” (“C-”) and on “managing the improvement of homeland security” (“D+”).

The report is the second in less than a month from a major think tank questioning the administration’s post-Sept. 11 response to the terrorism threat.  A Council on Foreign Relations-sponsored team said June 29 in a report that Washington is underfunding local emergency response and is generally ill-prepared for a new catastrophic attack against the United States, particularly one involving weapons of mass destruction (see GSN, June 30).

“To put it in the Texas vernacular that this administration loves so much, the administration is ‘big hat’ and ‘no cattle’ when it comes to bolstering our homeland defenses,” Marshall said yesterday at a panel discussion launching the report here.

The senior Democrat on the House Homeland Security Select Committee, Jim Turner, called the report “a wake-up call for the nation.”

“Unfortunately, we have failed as a nation to fully mobilize our resources in a way to protect this nation and make it safe from a terrorist attack,” Turner said.

Several speakers at yesterday’s discussion stressed the need for a national comprehensive threat and vulnerability assessment to be conducted so that homeland security funding can be need-based, rather than “formula-based,” as critics say is now the case.

Other frequent themes in the report include the color-coded terror alert system, which Turner called “farcical” (see GSN, July 2); the Bush administration’s willingness to spend liberally on defense and tax cuts, which panel members said contrasts with a relative lack of resources for homeland security programs (see GSN, July 23); friction between what state and local governments see as their pressing needs in defending against a terrorist attack and Washington’s priorities for those governments; and an alleged general lack of will and leadership on the part of the administration to strengthen homeland security.

On the relationship between homeland security and national security, former National Security Council terrorism expert Rand Beers said “offense” and “defense” must be seen as “part of the same spectrum.”  He called for “not neglecting each successive fallback line.”

PPI Vice President Robert Atkinson was particularly critical of the administration’s failure to pursue the integration of terrorist watch lists.  Atkinson said “administration insiders” have told him the project is a straightforward technical task that could be completed within a month if the “will” was present.

The panelists also stressed that the fact that no major terrorist attack has occurred in the United States since the September 2001 attacks — cited by some officials as evidence of the administration’s effective action — should not be a source of complacency.  Several cited the time gap between the 1993 and 2001 World Trade Center attacks as evidence that terrorist organizations such as al-Qaeda are methodical and strike when they choose.

According to John Cohen, a leader of the institute’s homeland security task force, some recent studies indicate that “not only is al-Qaeda not on the run, but they’re actually more active than ever” on a worldwide scale.

The administration’s only “A” on the report card came in the area of nuclear plant security (see GSN, May 13).  PPI technology analyst Shane Ham said the United States has made some improvements in the field since 2001, but he said security before the attacks was already adequate.  Although armed intruders could penetrate a plant’s outer perimeter, he said, it is not likely they would be able to create a catastrophic release of nuclear material.

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U.S. Response II:  Patriot Act Has Improved Intelligence Sharing, Mueller Says

The U.S.A. Patriot Act has helped to improve the FBI’s effectiveness in combating terrorism by aiding intelligence sharing “within law enforcement and intelligence communities,” FBI Director Robert Mueller told the Senate Judiciary Committee yesterday (see GSN, May 9).

Previously, FBI agents were “walled off” from participating in intelligence investigations by the Foreign Intelligence Surveillance Act, Mueller said.  The Patriot Act weakened FISA restrictions though, and while FBI agents must still demonstrate probable cause to conduct secret surveillance, the “resulting free flow of information and coordination between law enforcement and intelligence has expanded our ability to use all appropriate resources to prevent terrorism,” Mueller said.

Mueller also addressed the issue of the impact of the Patriot Act upon civil liberties.

“We are making every effort to effectively balance our obligation to protect Americans from terrorism with our obligation to protect their civil liberties,” Mueller said (Guy Taylor, Washington Times, July 24).

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U.S. Response I:  Customs Proposes New Cargo Security Measures

The U.S. Homeland Security Department’s Customs and Border Protection service formally proposed new regulations yesterday that would require cargo shippers to transmit advance information on shipments prior to their arrival in the United States (see GSN, July 2).

The proposed regulations establish timeframes, based on the mode of transportation, for advance information on shipments to be electronically transmitted.  The information would be processed through an automated targeting system linked to law enforcement databases to allow the Customs service to better target suspect shipments, according to a Homeland Security press release. 

Under the regulations, shipments arriving by air and courier would have to transmit information four hours prior to arrival or at the time of take-off from certain nearby areas, according to the Homeland Security release.  Shipments arriving by rail would have to transmit information two hours prior to arrival in the country, and those arriving by ship would have to transmit information 24 hours before landing at a port.

Those shipments arriving by truck would have an hour to transmit information, according to the Homeland Security release.  Those trucks certified under the Free and Secure Trade program, however, would only have a deadline of 30 minutes prior to arrival.

“These security measures developed by Customs and Border Protection are important to the protection of America and the American people,” Homeland Security Secretary Tom Ridge said.  “Advance cargo information is essential to not only preventing instruments of terrorism from being shipped into this country, but also to speed the flow of legitimate cargo across our borders,” he said.

The proposed regulations also require that information on exports be transmitted before leaving the United States (U.S. Homeland Security Department release, July 22).  This is to allow Customs agents to inspect shipments for cash leaving the United States and to help provide security for other countries, a Customs spokesman said.

A 30-day comment period has been established for the proposed regulations.  The final version is set to be submitted Sept. 15 and will go into effect 15 days later, as called for under the Trade Act of 2002 (Hamilton/Goo, Washington Post, July 23).

For further information, see:

HSD Federal Register announcement, July 23

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U.S. Response II:  Senate Rejects Homeland Security Funding Increases

Republican senators yesterday voted down a measure that would have provided $1.75 billion in additional funding for homeland security efforts (see GSN, June 30).

Senator Robert Byrd (D-W.Va.) proposed the measure to add $29.3 billion to the fiscal 2004 Homeland Security Department appropriations bill.  The additional funding, which was defeated 50-43, would have exceeded spending limits.

“Homeland security initiatives are falling behind,” Byrd said.

The proposal would have directed more funding to transit security, police, firefighters, border control, chemical plant protection and air cargo security, the Washington Post reported today.

Senator Thad Cochran (R-Miss.), the chairman of the appropriations subcommittee for homeland security, said that homeland security efforts already receive billions of dollars.

There is “no end to the list of ways we could spend additional funds on homeland security,” he added.  Democrats might attempt to use the Republican vote against homeland security funding in congressional elections, according to the Washington Post.

“The American people believe that we here in Washington are taking care of the problem,” Byrd said.  “We must not mislead them,” he added (Helen Dewar, Washington Post, July 23).

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U.S. Response III:  House Members Criticize New Intelligence Center

Members of the U.S. House of Representatives yesterday criticized the recently established Terrorist Threat Intelligence Center, saying it has only created more bureaucracy, according to the Los Angeles Times (see GSN, April 30).

“There is an unclear division of responsibility and therefore no basis of accountability,” Representative Jim Turner (D-Texas) said during a joint hearing held by the House judiciary and homeland security committees.  “The robust intelligence unit envisioned by the Homeland Security Act does not exist today,” Turner said.

Representative Loretta Sanchez (D-Calif.) said the center appeared to needlessly duplicate intelligence efforts.  “What this looks like is the intelligence community's jobs-forever program,” she said.

Center Director John Brennan sought to defend his agency during yesterday’s hearing, saying it was an “innovative joint venture.”

“We’ve already witnessed the force-multiplier effect of having agents from partner agencies sharing information, insight, analysis,” Brennan said.  “No single agency has the authority or capability to deal with the terrorist threat,” he said (Susannah Rosenblatt, Los Angeles Times, July 23).

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U.S. Response IV:  South Africa Joins Container Security Initiative

South Africa has agreed to join the U.S. Container Security Initiative, the U.S. Homeland Security Department’s Customs and Border Protection service announced last week (see GSN, June 17). 

The service plans to station U.S. inspectors at the South African port of Durban to help examine high-risk cargo containers destined for the United States, according to a Customs and Border Protection press release.  In addition, South Africa is planning to station customs personnel in the United States.

“This is an important step, it is not just historically important, it is also economically important,” Customs and Border Protection Commissioner Robert Bonner said.  “It is important that we stand shoulder to shoulder against a new and unusual common enemy to protect not only our citizens, but also our economic strength and well-being as well,” he said (U.S. Customs and Border Protection release, July 15).

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