Chapter 9 :    Social Philosophy

9-11-fund-distribution  

$7 Billion for the Grief of Sept. 11
By DAVID W. CHEN

Published: November 18, 2004   New York Times


The federal Victim Compensation Fund, the ambitious endeavor that delivered $7 billion to the families of those killed or injured on Sept. 11, issued its final report yesterday. It is an avalanche of data that captures, in detailed and sometimes new ways, the fund's largest awards and its many inequities, the demographics of the dead, and the time it took to get the grief-stricken their checks. Among the disclosures, the report shows that the fund, established to compensate for the lost earning potential of the dead, paid awards for 17 victims - children and homemakers among them - who listed no income at the time of the attacks. For the 25 wealthiest victims - people who were earning $2 million a year or more - awards averaged $6.3 million. And for those who applied but were ultimately deemed ineligible, it took an average of nearly six months to learn that no check would come. The report, too, offers striking facts not captured in the catalog of awards. The fund's special master, Kenneth R. Feinberg, said the families of 13 victims, shattered by lingering grief, had chosen to neither apply to the government fund nor sue the airlines or government agencies over any liability in the attacks.

The fund gave more money to families of 11 pregnant women who were killed and two women whose pregnancies ended because of the trauma of the attacks. And Mr. Feinberg, a Washington lawyer who worked free of charge, held personal hearings with 931 families making their case for awards. There was no news conference, no ceremony accompanying the release of the report yesterday. There was only word from Mr. Feinberg, in an interview, that the 114-page report, with more than 300 pages in supporting documents, had been transmitted to the Department of Justice. But in the report, Mr. Feinberg was frank about the challenges navigating the legal and emotional minefields. And while he described the fund as an "unqualified success,'' he also concluded that it might have been better "to provide the same amount for all eligible claimants'' so as to avoid divisiveness among the relatives, and that a permanent fund for terror victims should not be adopted. "It is unlikely - and probably unwise - to establish a similar program for future implementation absent the profound conditions which existed immediately after the September 11th attacks,'' he wrote. The report is the latest accounting of the recovery effort after Sept. 11, 2001. Last week, the Rand Corporation, a nonprofit research organization in Santa Monica, Calif., reported that victims and businesses in New York had received $38.1 billion in assistance, most of which came from insurance companies and government efforts like Mr. Feinberg's fund. Officially called the September 11th Victim Compensation Fund, the program was created by Congress as part of an airline bailout package. Intended to be a rapid and less painful alternative to litigation, it offered the families of dead victims a guaranteed minimum of $250,000 and a projected payment of roughly $1.5 million, tax free, after deductions for life insurance and other benefits. With a deadline of December 2003, the fund ended up attracting 2,880 out of 2,973 possible death claims, and 2,680 more injury claims. One victim had nearly $10 million in deductions for insurance and benefits, while the biggest award, $8.6 million, went to an injured victim. The final report said that most victims were working-class or middle-class. Sixty-one percent of the dead had annual incomes of less than $100,000. Forty-five percent of the injured made less than $25,000. Seventy-six percent of those who died were men, while 37 percent were in their 30's - two figures that do not seem surprising, given the high proportion of financial professionals at the World Trade Center. But 19 people were over 70; they were awarded an average of $632,000. Among injured victims, the average payment was $400,000. About half were firefighters who reported respiratory problems. Burn victims received the most money, with 40 people awarded an average of $2.1 million - the same award as for the average death claim.

In terms of process, the report noted that families of the dead waited, on average, 259 days, or more than eight months, between an application's receipt and payment. It took 169 days, on the other hand, for 45 claimaints to be informed they were rejected because they could not prove that the deaths had happened or that they were related to the attacks. Among those denied was Mariane Pearl, the widow of Daniel Pearl, the Wall Street Journal reporter who was beheaded in Pakistan. Still, the report noted that the fund had tried to offer the most favorable terms for taxes, earnings potential and other factors. The fund made 75 exceptions to the standard award of $250,000 for pain and suffering, offering larger payments in those cases. One case involved a mistaken burial, in which a relative was given the remains of the wrong victim, Mr. Feinberg said. "I tried to exercise my discretion," he said. "I raised the bottom, and lowered the top." The report also revealed how much manpower went into the fund. While Mr. Feinberg and his law firm worked free of charge for almost three years, the fund's administrative costs totaled $86 million, with the bulk going to PriceWaterhouse Coopers, which employed as many as 474 people to process claims. In a separate report this week, Trial Lawyers Care, a national consortium of nearly 1,100 pro bono lawyers that helped more than 1,700 families with their applications to the fund, said the average case had required 100 hours of each lawyer's time. One case required 1,000 hours. Federal officials, meanwhile, conducted almost 4,000 hearings with family representatives, as much to hear their cathartic need to tell a stranger about why a loved one was special as to listen to the merits of an individual case. Mr. Feinberg met with most of the 13 families who did not file either an application or a lawsuit. Most were from the New York area. Their backgrounds were different. But for them, three years was simply not enough time to climb out of an abyss of grief. "One lady said, 'Just leave it on the kitchen table. I can't do it,' '' Mr. Feinberg recalled. Since the fund completed its work in June, Mr. Feinberg said that he had not heard from any families. Nor does he expect to, because "they got some psychological closure, and they're moving on,'' he said. Mr. Feinberg has moved on, too, and returned to private practice. But he hopes to write a memoir and donate the proceeds to charity.

 

 

 

Return to the previous page by  clicking here> next section.

Copyright Philip A. Pecorino 2000. All Rights reserved.

Web Surfer's Caveat: These are class notes, intended to comment on readings and amplify class discussion. They should be read as such. They are not intended for publication or general distribution.

Return to:                Table of Contents for the Online Textbook