Fix the Fund
Updated: March 7, 2003
This web site is here to inform you about the “September 11th Victim Compensation Fund of 2001” (the “Fund” or the “VCF”): the purpose behind Congress creating it; how the administrator (“Special Master”) of the Fund has morphed it away from Congressional intent, and, as a result, has made the Fund blatantly unfair; how the Special Master has manipulated perception of the Fund, therefore lowering expectations of what to expect from the Fund; the built-in inequities and the ulterior motives behind them; how the administrator’s actions feed into the inequities; the unconstitutional, unlimited power of the administrator; and lastly, how to fix these problems.
This site will not address other social or policy issues that inevitably come up when looking at the larger scope of things that surround the creation of the Fund. These issues, legitimate as they are, are a separate matter and beyond the scope of this site and the author. There is a hope, though, that if the VCF can be corrected to be more equitable within itself, that it will be a positive model for further “growth” of American society. On the other hand, if the Fund turns out to be a debacle, whether due to the law itself or through manipulative administration, the probabilities are that Congress would not go down this road again.
Per the law: “It is the purpose of this title to provide compensation to any individual (or relatives of a deceased individual) who was physically injured or killed as a result of the terrorist-related aircraft crashes of September 11, 2001.”
The Fund is exactly what its name says. It is a government program (totally separate and not to be confused with charity donations) to compensate the surviving victims and the families of deceased victims of the Sept. 11 attacks for their losses. What kind of losses? The Act defines both monetary (economic) and non-monetary (noneconomic) losses. (details below) It is that simple. That is what the law states, in plain, easy-to-read language. The law requires information from the claimant concerning the harm and/or the economic and noneconomic losses being claimed.
It is not an attempt to place “a value on human life” (per Senator Tom Daschle). Nowhere in the law does it say it is a safety net program to keep the victims from being destitute (as the Special Master wants people to believe). The law gives Mr. Ken Feinberg, the Special Master, the authority to determine eligibility, verify the extent of the harm, including losses, and determine the amount of compensation based on the harm and losses and “the individual circumstances of the claimant.” Nowhere does the law give Mr. Feinberg the power to limit the compensation based on the verified losses.
The Victim Compensation Fund is part of the Airline Bailout Package. Days after the Sept. 11 attacks when approximately 3,000 people were murdered, the airlines asked Congress for financial help (because the airspace was shut down) and legal protection. American and United Airlines were in imminent danger if having their insurance cancelled due to the potential threat of lawsuits due to negligence. Without insurance, American and United could not have continued operating. Congress gave the airlines $10 billion in loans, $5 billion in grants, and restricted their liability for damages arising from the attacks to the limits of insurance liability coverage maintained by the air carrier. Later, other entities, including the City of New York, the Port Authority of New York and New Jersey (the owner of the World Trade Center), and Larry Silverstein (leaseholder of the World Trade Center) were given the same protection.
The terrorists’ organizations and their funders are being sued by the families (if the administration doesn’t stop us). They are being sued for “intentional harm.”
The airlines, the airport security companies, etc., were liable due to “negligence.” Examples might include: the airlines sold tickets to people who perfectly fit the profile of highjackers; the security people let them go after initially detaining them; several years earlier, the airlines made a “cost-benefit” decision to not reinforce cockpit doors like El Al, the Israeli airline, does; the City of New York issued radios to the Fire Department that didn’t work in high-rise buildings. These are issues of negligence for which they could have been sued, hence the request by them of legal protection
There are lawsuits against the airlines, etc., proceeding, but property owners (or their insurance companies) have first crack at the available money. The insurance companies that are paying out Workers’ Compensation benefits stand next in line. The federal judge on the case has instructed individuals who want to sue that there will be little to nothing left for them. Their only reason to sue is to force “disclosure,” which is always part of a lawsuit. It is where the “other side” must disclose information it would never have to disclose otherwise. Disclosure could be important to improving building safety and preventing future terrorist attacks.
As you can see, by limiting the air carriers’ financial liability to the amount of insurance they had, for all practical purposes, the victims and their families were denied the right of “due process.” As someone said, “you can’t just take away their rights and not replace them with something else.” In this extra-extraordinary situation, the government, in-effect, would became the “insurer of last resort.” It would work like this: if the victims’ families waived their rights to sue, they would be entitled to a payment from the government equal to the monetary damages that would result from such a suit. A kind of “no-fault” situation, where it was already obvious what happened. Punitive (i.e., punishment) damages were specifically excluded.
Proper compensation for losses becomes even more important as we’ve all heard that it looks like the government itself might have been negligent and perhaps partially to blame for the attacks. This makes it even more imperative that the government operate the Fund in a victim-friendly manner and help all concerned to put this behind us as soon as possible.
The Victim Compensation Fund would provide victims and their families the access to justice along with due process that would otherwise have been denied. It would do so in a manner that did not ask the government to put a value on life, but rather, let the victim’s own salary, benefits, and other forms of income dictate, by formula, what the economic compensation would be.
In the Act that created the Fund, Congress, for the first time ever in a Federal law, defined the specific elements of “noneconomic losses.” This meant that prior law could not be looked to for precedent; that the proper procedure would be to look at what the courts awarded to plaintiffs in contemporary air crash lawsuits, and apply it to the Fund to determine the noneconomic damages.
But it didn’t work like that, not for the economic nor the noneconomic compensation
Ken Feinberg is everything the Founding Fathers of this country were striving to avoid when they wrote the Constitution. With a sparsely written law, Feinberg was forced to write most of the details himself in the form of regulations. Then, he has to implement what he just wrote, pointing back to those same regulations as unbendable rules. Finally, he is the final adjudicator as the law prohibits judicial review by the courts. Feinberg has the power of King George III; he is lawmaker, administrator, judge and jury .
Mr. Kenneth Feinberg was appointed by Attorney General John Ashcroft to be the Special Master of the VCF. A Democrat with prodigious credentials in mass tort cases, he was looked upon as an excellent choice to administer the Fund. That expectation came undone very quickly and has gone downhill ever since.
Mr. Feinberg is a highly successful lawyer and a tremendously skilled negotiator. Put that together with his strong Democratic credentials (he was Ted Kennedy’s chief-of-staff) and you have a recipe for what the Fund turned in to. Feinberg has set up an environment that he loves. Debate, argument, negotiating, all the things lawyer-ly negotiators thrive on. He will throw the families a “bone or two” to placate us, but nothing really changes from what he wants to have happen.
Feinberg’s attitude, personality and decision making is the cause of most of the problems with the Fund. He is used to dealing with fellow lawyers, not crime victims themselves, and certainly not those of a recent crime where the victims’ families were forced to view and relive the crime that killed their loved one every day on the news. He has been patronizing, manipulative and at times, even cruel. He uses adversarial techniques directly with grieving families that are more appropriately reserved for negotiating sessions with their attorneys. He has lost his composure several times and has demonstrated lapses of judgment in his comments. Recently, he called Staten Island “a third-world country,” as quoted by a New Yorker article.
From the very beginning of his appointment as Special Master, Mr. Feinberg’s statements about the Fund have been taken as “the law” because he is the Special Master, and, (by his own words to me) wrote all the regulations implementing the law. But as is explained below, from the outset, he put has his own “brand” on the purpose of the VCF. In doing so, he has skillfully and deliberately misstated the purpose of the Fund to the public and the press, thereby altering the perception of the Fund, which yielded articles and editorial opinions consistent with his position and consequently lowered expectations of what applicants should expect from the Fund.
With that accomplished, an applicant now enters into the Fund with severely diminished expectations. If an appeal to an award is made to the Special Master and he raises the initial award by 10%-15%, the applicant thinks Mr. Feinberg is a nice person, and is very appreciative. What the applicant doesn’t know is their award should have been significantly larger to begin with: far more than the “increased” award they just accepted.
The Democrat in him has tinted his vision of the Fund. In a nationally broadcast debate with me (Charles Wolf) on ABC Radio on September 9, 2002, Feinberg, told the national audience the VCF was a “safety net program” designed to keep the families from being destitute. He throws these misstatements out there to keep the truth from the public, and therefore skew public sentiment towards his position. In another debate with me on the NBC-TV Town Meeting with Tom Brokow on Sept. 11, 2002, Feinberg diverted the discussion away from issues surrounding his own rule making by quoting certain letters he received from the general public questioning the larger social issues of “why not me” and whether or not the Fund should exist at all.
This is how he diverts critical discussion away from the illegal and unpopular decisions he has made regarding the Fund that are not in accordance with the intent of the law and shortchange the family of the compensation Congress specified.
As recently as Dec. 5, 2002, on his web site, www.usdoj.gov/victimcompensation/payments.html, he invokes public criticism that was more appropriately directed at Members of Congress to justify his own decisions. He uses self-fulfilling arguments to justify that the awards being given are “generally consistent with my estimates.” Well, I guess so if you control the awards. He invokes the law to justify differing award levels, but then invokes his own made-up rule of financial need to limit the awards to high income people. That is fine when looking at increasing a low-income person’s award because they have eight children. It does not give him the right to arbitrarily limit the legitimate award for economic loss for a high income earner just because they were good enough to earn that much money, as many in the World Trade Center were.
This is the Democratic “income redistribution” mentality poking through and blinding him to what the law says.
To be successful on the job, smart people know you have to “keep your boss happy.” Feinberg is smart and he knows the hot points on the Republican agenda, one of those being tort reform. It all started back in 1975 when California passed a law capping noneconomic damages in medical malpractice suits. That very same number is the one Feinberg chose to use for the “presumed” noneconomic awards in the VCF. Not directly from the California law, but from three separate Federal laws in which that number has been carried into. These laws, which Feinberg cites as precedent specify: 1.) what a serviceman’s family gets when killed; 2.) the death benefit paid to a uniformed public safety officer when killed in the line of duty; 3.) the amount of noneconomic compensation paid when an infant or child is killed by a government vaccination. None of these laws have anything to do with the Fund. The amount has ever been adjusted for inflation, so Feinberg is using a 27-year old number to compensate the victims and families.
It is interesting to note that the tort reformers (primarily Republican) are currently trying to use this same 27-year old number to cap noneconomic damages in all tort cases. It looks like they love the idea of the VCF providing corporate defense attorneys with a prominent federal precedent to use in front of a jury. But more about tort reform later.
In the Act that created the Fund, Congress, for the first time ever in a Federal law, defined the specific elements of “noneconomic losses.” They are: “losses for physical and emotional pain, suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of enjoyment of life, loss of society and companionship, loss of consortium (other than loss of domestic service), hedonic damages, injury to reputation, and all other nonpecuniary losses of any kind or nature.”
This makes the citing of old law as precedent to set award amounts, entirely wrong. Prior law may not be looked to for precedent when superceded by a new law. The proper procedure would be to look at how the courts handled noneconomic awards in contemporary air crash lawsuits, and apply that to the Fund to determine the Fund’s noneconomic awards.
Economic losses means the loss of earnings and other employment benefits (e.g., health insurance) for the rest of the working life of the person who was killed. It also covers medical expenses, replacement services (e.g., hiring a plumber where the deceased was the “fix-it man”), burial costs, and loss of business or employment opportunities. The Act says that State law applies to this, so it may vary based on the State of residence.
This is the part of the formula that most clearly shows this is a compensation program rather than a “safety net” program. A young person had more working life ahead of them, losing more of it than an older person; therefore the family will be compensated more, given the income is equal. A high-income earner has lost more than a low-income earner (given the same age) and will also be awarded more. The government is making no distinctions regarding a person and the value of the life, but rather, uses a formula based on what the victim themself was worth in terms of their earning power.
1. The Victim Compensation Fund punishes people who decided to plan to take care of their family.
A. If the victim bought life insurance, those proceeds are subtracted from the computed award.
B. If the victim had a pension, that pension is subtracted from the computed award.
C. A widow(er) with children gets less money from the Fund because they have children than if they didn't have children. This is because the Social Security payments going to the children are deducted from the computed award.
These points, written into the law, don’t happen in court. They do not subtract life insurance proceeds, pensions and government payments from damages awarded in a lawsuit. Consider this:
Mr. “D” chose to take part of his salary and paid for life insurance rather than buy that new car that he needed. When he was killed on 9/11, he “owned” his life insurance policy.
Mr. “T” chose to take part of his salary and bought that new car he needed. When he was killed on 9/11, he “owned” his new car.
Under the rules of the Victim Compensation Fund, Mr. “D’s” family must deduct his insurance policy amount from their award from the Victim Compensation Fund total. Mr. “T’s” family gets to keep his new car. Is this fair?
9/11 Victims who planned ahead and tried to do the responsible thing for their family’s future are being penalized for their sacrifice and forethought.
Only Congress can correct these inequities in the Victim Compensation Fund, but the Republicans won’t have it.
The Republicans have traditionally been a party of “less government handouts” and encouraging “self-sufficiency.” So why are they discouraging and punishing proper financial planning by penalizing those with insurance policies and pensions?
The Victim Compensation Fund is a compensation-for-loss program, not a social welfare program. So why are the Republicans taking a “family-unfriendly” position and subtracting Social Security payment for children? What happened to the Republican party’s goal of promoting family values?
The government wants the best from its citizens for the country. It demands excellence from the workers in the executive branch, it demands the highest standards from the men and women in the military. But the reverse is not true. The government is not ready to give its best to its citizens who have been let down by their government. The victims’ families are the ones who got the Independent Investigation bill passed; we are fighting the government who wants us not to sue Saudi Arabians and others for funding the terrorists; we are the ones fighting for safer skyscrapers and better radios for firemen.
Now we have to fight for the compensation that Congress and the President promised us.
Congressional testimony stated that this Act would give the victims of the September 11 attacks full compensation for their losses. As it stands, it does not. The victims’ families deserve the same rights as every other American citizen. If, in the national interest, airlines and others needed to be protected, thus restricting our individual rights to sue, then the substitute compensation program must use the same formulas that would be used in court and not capped awards, and not compensation figures based on a 27-year-old number.
Besides being unfair, there is an ulterior motive at work here. There are forces in big business that want this old noneconomic loss figure and the deduction of insurance, etc., to be a reality in all tort cases. This is called “tort reform” and one of the things they want are strict limitations on noneconomic damage awards. Why else would a 27-year-old monetary figure that has never been updated for inflation keep getting inserted into laws and used in regulations (like the VCF)?
The tort system (which means a personal injury or wrongful-death lawsuit) is the only way we citizens have of punishing large corporations when a company makes a defective product that injures or kills somebody. Regulations were supposed to do the job, but big business gets away with a lot because their lobbyists are so strong.
For example, take the October 29, 2002 New York Times story on . . . “a Graphic Look at Towers’ Fall.” This “trove” of material, including videotape, CD’s, mathematical analyses and high-tech imagery, represents the largest single repository of raw data and expert analysis on the WTC attack, dwarfing the analysis compiled by the government in its first look of how and why the towers collapsed. This is all part of a $3.5 billion lawsuit and would not have been done, had a lawsuit not been at stake.
The tort system is how big companies are brought to accountability when their products are defective. For example, look at Ford and Firestone. Would they have budged an inch had big money not been involved? This is why big business wants the “pain and suffering” damage potential to be limited.
Note, here, we are not talking about the excessively high awards, rarely made, but widely reported by the press. Those awards are usually always immediately reduced by the judge, or later, on appeal. What we are talking about, for example, is the child that got thrown from a defective car seat and is injured for life. Money is the only enforcement method to punish a large corporation, and if you limit that possible punishment, you take away the enforcement tool. It would be like reducing the sentence for murder to five years. How much of a deterrent would that be?
Now, perhaps you understand why the families are asking that the noneconomic figure at least be adjusted for inflation since 1975. This will help keep big business from having an ever-reducing (in real dollars) reduction in penalties for harmful or fatal defective products.
The same applies to the subtractions for insurance, etc. It is against public policy to use any financial asset that the victim already has to reduce what the defendant owes. Life insurance is a financial asset. Since Congress obligated the government to stand in for the defendant, they should not subtract life insurance from what the government owes the victims’ families.
There are two other items that need addressing that I’ve not spoken of before. One of them is Feinberg’s rule regarding survivors who were injured: that in order to qualify for inclusion in the Fund, you must have sought medical help within 72 hours. That may seem like a perfectly reasonable rule unless you were in New York City the week of the attacks.
I received a letter through this web site where the survivor told me this:
“I was at 90 West Street when the second plane hit, about 150 yards from the south tower. The United flight crossed my head I could see the rivets in the belly. I was struck in the neck by some flying metal. I did not got o hospital that night because I was too scared to leave the apartment, and did not want to be burden on the strained system. I did not think I was that badly hurt, just bruised. I have a ruptured disc in my spine that my doctor said would not have shown up back them and if I did go to a hospital they would have turned me away. I have intermittent paralysis in my hands. I lost one job because of it. I wear a narcotic pain killer patch which I am dependant on and take about 20 more tablets a day. Sometimes I cannot walk or move my neck. I think I have paid out nearly $10,000 in co payments.”
Taking this letter as written, this man temporarily sacrificed his own health care needs for sake of the greater good.
This site is not here to either verify or question the legitimacy of this letter. Assuming it is true, this man can’t be the only one in this situation. Living in the Greenwich Village neighborhood of Manhattan, one mile north of site of the Towers, I can tell you that this was a city under siege. The stories that were coming over the television told of thousands of patients in the hospitals and a system that was barely coping. We did not begin to understand the truth of what happened until the weekend. People were waiting for thousands of survivors to be pulled from the rubble. The lines of doctors and nurses were out there waiting for days. Blood donors were lining up all over. An at-the-time minor neck pain is certainly not serious enough to warrant asking for medical help in view of the circumstances.
The deadline for the seeking medical help needs to be extended to the following Monday or Tuesday, with appropriate methods taken to prevent fakers, without disqualifying legitimate applicants.
The Act specifies physical harm or death as a qualification, but there is another harm that is being ignored. Psychological harm or, more specifically, Post Traumatic Stress Disorder (PTSD). Here is an excerpt from a letter received through the site:
“I'm a survivor of the 11 September World Trade Center attack. I'm not the widow or husband of anyone, I'm the survivor. I was working on the 56th Floor of the North Tower when we were hit by the plane, and after an hour, exiting the building just moments before the South Tower collapsed. Due to severe post traumatic stress disorder, I have been unable to return to work since that day, despite two unsuccessful attempts. I cannot take subways, be near buildings, particularly glass, etc., etc. This list is long. I've been receiving NYS Worker's Compensation, but have not been granted any other compensation.”
Again, without questioning the validity of this claim, what about the people who were in the building or at the site and suffered PTSD. This is a real and unimagined disorder, and I’m told, is easily diagnosed by an expert. There isn’t much chance for fakery here, I’m told.
Congress would have to amend the Act to provide for PTSD sufferers to be eligible. Again, strict limitations on proximity to the disaster would be needed to prevent pretenders from unfairly taking advantage.
From the Administration and Mr Feinberg:
1. Adjust the 27-year old figure being used for the presumed noneconomic award for inflation since 1975.
2. Operate the Fund as it was created, a “Victim Compensation Fund”, and let the formulas dictate how much the upper income people will receive based on the salary they were earning at the time of death.
3. Allow people who sought medical treatment within a week to apply to the Fund.
From the Congress:
1. Repeal the section of the original law that specifies the deduction of insurance, etc.
2. Amend the law to allow qualified Post Traumatic Shock Disorder and other qualified Psychological disorders to be included in the eligibility parameters.
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About the Author
Charles Wolf lost his wife, Katherine, on September 11, 2001 on the 97th floor of the World Trade Center, Tower 1 (North Tower). Mr. Wolf is pleased to be able to help the other victims’ families in this complex subject.
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