COMPENSATING VICTIMS
December 5, 2001

Gwen Ifill talks to the special master of the Sept. 11 Victims Compensation Fund about the challenges of administering funds to victims and their families.

 

Online NewsHour Special Report: The Reponse: After the September 11 Terrorist Attacks Nov. 7, 2001: The fundraising difficulties facing local charities since September 11th. Browse the NewsHour's coverage of the Terrorism     Libertyunite.org The United Way The Salvation Army	GWEN IFILL: Within weeks of the Sept. 11 attacks, President Bush signed a new law providing federal payments for the families of those killed and injured. Congress did not set a limit on the Sept. 11 Victims' Compensation Fund, but it could amount to tens of billions of dollars. The payments will be based on lost wages, pain and suffering. In accepting the money, families give up their right to sue. The fund, which must be up and running by Dec. 21, is being administered by a special master, who will decide who gets how much, and why. That special master, appointed by the Attorney General, is Kenneth Feinberg, an arbitration and mediation lawyer in private practice here in Washington. He has served as a special master in a number of other notable wrongful death cases involving asbestos and the use of the Agent Orange defoliant in Vietnam. Welcome, thank you for joining us.
	How much in federal fund?
	GWEN IFILL: I just said tens of billions of dollars. Do we know how much money we're talking about? KENNETH FEINBERG: We don't know yet, we're getting very close to knowing that, because we're within a few days, a week perhaps, of trying to get these regulations that will govern the program in place. Also, even after those regulations are in place, we won't know for sure how much it's going to cost because, as you know, individual claimants under the program will have to choose whether they want to participate in the program or opt out and pursue their traditional legal remedies. GWEN IFILL: So when trying to come up with an amount that will be spent of taxpayers money devoted to this cause, is determined by how many claims are made or by some limit that the government can afford to spend? KENNETH FEINBERG: Neither. It's limited by the statute, which makes it very clear that one will consider, the special master will consider economic loss, lost wages, lost investments, et cetera, and non-economic loss, pain and suffering, emotional distress -- traditional tort variables. We will develop a set of guidelines for the victims, for the claimants, that will lay out what the methodology will be for the compensation, and they will then elect. GWEN IFILL: When you talk about opting out of this process, you're saying these are victims who would choose to sue rather than to take part of this federal fund? KENNETH FEINBERG: That's right. I'm hoping, and the Attorney General is hoping, that when these regulations are promulgated and everybody takes a look at the regulations, they will agree that it is better for them to stay in this program, forget the lawsuit, come in and within 120 days of submitting the claim, for filing the claim, they will get a check from the United States Treasury. GWEN IFILL: So the uncertainty of a lawsuit going through the court system, is that the point? KENNETH FEINBERG: The uncertainties of a lawsuit, the delays associated with a lawsuit, the emotional distress of continuing to litigate year after year -- repeating, the circumstances of Sept. 11. This program is designed to allow families and the victims of the horror to come in, make their claim, get the check, and get on with their life.
	How to dispense equitable compensation
	GWEN IFILL: Here's the sticky-wicket. How do you, and it's mostly you with a tremendous amount of power here, decide whether the family of a janitor who was making $16,000 a year at Windows on the World, with a family of eight say, how much does that person get versus a person who is a bond trader at Cantor Fitzgerald with a family of two in Connecticut in a big house but had greater earning potential down the line. KENNETH FEINBERG: That's the challenge. That's the challenge. Now, to some extent my hands are tied. By considering as the statute requires economic loss, the bond trader obviously has an income substantially greater than the janitor, and that has to be factored in. On non-economic loss, a query whether or not one should make distinctions between the bond trader and the janitor. The good news on all of this is that I don't have a lot of time to make these regulatory decisions. We will have to decide how the program will work, literally, within the next few weeks, and it will be out there and everybody will have a chance to evaluate it. GWEN IFILL: Is one option setting a floor for the amount of payments are or a ceiling on the amount of payments? KENNETH FEINBERG: Well, I think authorize options. Certainly a floor is an option, the idea that non-economic loss everybody should get at least a certain amount. Nothing is etched in stone. The lawyers at the Justice Department, my staff, the lawyers at OMB, we are, Office of Management and Budget, we are now looking right now at all of the possibilities and we're going to try and come up with a system that will be perceived, the Attorney General said two things, two requirements, that the system be perceived as fair and equitable, and that it be efficient and speedy so that people don't have to wait a lengthy period of time for their compensation. GWEN IFILL: If you are the family of a firefighter, and we have all been hearing about all the private funds which have been raised for special groups of people who are victims, if you are say a part of that group, is the money that you're getting from these other private charities going to be off-set, will you get less money from the federal fund because of having received these others? KENNETH FEINBERG: That's a $64 question we haven't finally resolved. There are some offsets that are required by the statute -- off-sets pertaining to pensions, and consumption, how much you spend in the course of the year in living conditions. This question of charitable offsets is a thorny problem. We've received a tremendous amount of mail on this, both sides of the equation, and at the end of the day we'll have to make a decision whether or not charitable offsets should be included or not. I have met with all of the major charities, they have made their views known. And we're taking that under advisement right now, no decision has been made. And again, all of this has to play out in the next few weeks. GWEN IFILL: Another thing that has to play out, if you get a million dollars from a federal fund, taxes? KENNETH FEINBERG: No, not taxable; it won't be taxable I don't believe. I think that the IRS will issue a ruling that it's not taxable.
	Helping victims, or protecting airlines from liability?
	GWEN IFILL: You talked about people giving up the right to sue. Was that about protecting their right to get the money, or is that protecting the airline industry, which felt it was going to take a big hit if everybody decided to sue? KENNETH FEINBERG: From what I read, I think the latter. I think that, as I under it, the airlines were concerned about their future viability, if thousands of people could, or families could come in and litigate. That was part of the trade-off, a cap on liability of the airlines in return for a swift administrative compensation system. GWEN IFILL: So who is eligible to get some of this money? KENNETH FEINBERG: Eligibility as defined in the statute. I have no discretion, or limited discretion in this regard -- eligibility -- people suffering physical harm, physical harm, in the immediate vicinity of the World Trade Center or the Pentagon, or Shanksville, Pennsylvania - in the immediate aftermath of the accident -- temporally, time wise, fairly close to the disaster. Now, what is immediate, what is vicinity, what is physical harm, what is close? I have some discretion there, and again we'll try and come up with a fair workable eligibility criteria. GWEN IFILL: How about a family member, say lesbian and gay partnership, would they be eligible? KENNETH FEINBERG: That's a question. GWEN IFILL: Do you decide that? KENNETH FEINBERG: Well, I decide that, and the question will be do I look to the input you've received from various groups pro and con? Do I look to what does the local law say in that jurisdiction as to who is eligible and who should receive trusts and estates and wills and all of this. Again, you've listed about half a dozen tough discretionary calls that I'm going to have to make in the next few days.
	When do compensation checks arrive?
	GWEN IFILL: Okay, you have a few days. When will the people begin to actually see the money? KENNETH FEINBERG: The people will begin to see the money, and this is something the Attorney General made very clear to me, the people will begin to see the money just as soon as they file an application, opt into this system, we will immediately I am confident, even before all of the paperwork is completed, et cetera, I am fairly certain and the Attorney General has insisted money begin to go out immediately to those people. GWEN IFILL: There was talk about some of the first checks being cut before Christmas. KENNETH FEINBERG: That may be still, if we get these regulations done, it's conceivable. GWEN IFILL: So the regulations are done by Dec. 21, and by Dec. 25, you could see checks going out? KENNETH FEINBERG: You could. The drawback is even if the regulations are promulgated and people immediately file for emergency compensation, I want to make sure people understand the regulations, because once you get compensation you're opting into this system, and we'll welcome those applications, but I think it's very important, I've reached out to these victims, that they understand thoroughly what their options are. GWEN IFILL: You have a tough job. Thank you very much for joining us. KENNETH FEINBERG: Thank you very much for having me.