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WASHINGTON - Retired Adm. John Poindexter will resign his position at the Pentagon after the uproar over a research project he was overseeing that included a kind of futures market on political violence in the Middle East.
A senior defense official said Thursday that Defense Secretary Donald Rumsfeld and Poindexter realized it would be difficult for Poindexter to continue in his job after the controversy, the Associated Press reported.
The Pentagon plan would have allowed traders to profit by correctly predicting assassinations and terrorist strikes in the Middle East.
Rumsfeld did not ask for Poindexter's resignation but the former admiral expected to offer it within a few weeks, the AP reported, citing the defense official.
"I think his decision was probably a wise one," said Senate Intelligence Committee Chairman Pat Roberts, a Kansas Republican.
In the 1980s, Poindexter was national security adviser to President Reagan. He was a key figure in the 1980s Iran-Contra scandal.
The project was disclosed Monday by Democratic Sens. Ron Wyden of Oregon and Byron Dorgan of North Dakota. Criticism increased Tuesday from lawmakers of both parties, and Senate Armed Services Committee Chairman John Warner, R-Va., announced he had an agreement from defense officials to end the project.
Warner made that announcement after speaking with the head of the Pentagon's Defense Advanced Research Projects Agency (DARPA), where Poindexter works. Warner called the program "a rather egregious error of judgment."
DARPA and two private partners would have set up an Internet futures market on events in the Middle East. Traders could have bought and sold futures contracts based on their predictions about what would happen in the region.
The idea was that investors' choices could reveal information unavailable elsewhere.
Sen. Barbara Boxer, D-Calif., said Tuesday that there was "something very sick about it" and that whoever was behind it should be dismissed.
DARPA has been criticized by Congress for its Terrorism Information Awareness program, a computerized surveillance program that has raised privacy concerns. Poindexter also is the head of that program.