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RESPONSE TO TERROR

Sept. 11 Fund's Fine Print Angers Many Relatives

January 17, 2002|GERALDINE BAUM | TIMES STAFF WRITER

NEW YORK — When a federal fund to compensate relatives of the Sept. 11 dead was announced shortly before Christmas, the average award size--$1.6 million--seemed generous enough to take care of the people left behind.

But now that they've read the fine print and done the math, many families--and the lawyers, financial advisors and politicians who serve them--are considerably less satisfied.

They say the fund is stingy, it penalizes people who have other death benefits and lawyers say it makes it impractical for them to sue.

This week, they are making a desperate last pitch to modify the federal Victims' Compensation Fund.

Kenneth Feinberg, the special master appointed by the U.S. attorney general to oversee the compensation program, has until Tuesday to hear comments about the rules he established to dispense the money. Then, he will draw up a final set of guidelines and start accepting claims.

But the complexities of the program and limitations created by Congress are likely to continue to stoke dissatisfaction. Only 107 people have filed claims for emergency money from the federal fund. Many families, overwhelmed by sorrow, are now also angry over the fund.

"It's a last hurrah for us to urge reform," said Michael Cartier of Give Your Voice, a group of about 400 victims' families agitating for change. "But I'm not sure this will end here. I suspect people will keep fighting."

Tonight, about 1,000 relatives of the dead are expected to rally on Manhattan's East Side to complain about the rules. Earlier this week, a Boston-based group held a news conference demanding changes. Interested parties ranging from the trial lawyers' association to congressional delegations are filing their objections.

All this is being done for an audience of one--special master Feinberg, a Georgetown University Law Center professor. Since he was appointed Nov. 26, he has held back-to-back meetings with families, first to get their advice and, since Christmas, to sell them on his proposals.

"The intent of the law and the special master," said his spokesman Charles Miller, "is to make the families financially whole. But it's a complicated program and people need to take the time to determine if it's right for them."

Among the points of contention:

* The $250,000 payment for the pain and suffering of the victim and $50,000 to each dependent child. "Is the lack of a father for the next 20 years only worth $50,000?" asked John Lynch, a spokesman for the 9-11 Widows and Victims' Assn. "I don't think any parent would accept that price tag."

* The regulations seem to set a ceiling of $231,000 a year in economic losses when some of the victims were making far more than that. And while there seems to be a maximum, the regulations do not provide for a minimum award.

* Families complain that the formulas Feinberg is using to calculate economic loss are skewed to help the low- and middle-class workers and put high-end earners at a disadvantage. They add that these formulas should not be based on national averages but rather on trends in the New York area, where most of the dead lived and where the cost of living is high.

But what most angers some families--particularly of rescue workers and financial services people who died in New York on Sept. 11--is that they would get next to nothing in federal money because life insurance, pensions and other death benefits must be deducted from any award. However, those deductions were not taken into account when Feinberg announced that the average award was $1.6 million.

These same families also have no motivation to sue the airlines because of caps Congress put on their liability.

"A lot of the widows are facing a Catch 22 as they try to decide what to do," Lynch said. "Their husbands' pensions are good enough so they get nothing from the fund. [And] there's no point in filing a lawsuit because Congress protected the airlines."

Lynch, 66, whose firefighter son Michael's body is still missing, said he and his wife would never file a lawsuit because they did not want to endure years of depositions and court appearances. They simply want to find Michael's remains, Lynch said, "and move on."

Regulations established by Feinberg grew out of a law enacted by Congress 11 days after the terrorist attacks. The estimates then were that as many as 9,000 people were dead, and Congress was concerned that insurance claims against the airlines from so much death and destruction would force them into bankruptcy.

So, the law was written in such a way that people who collect compensation from the federal fund would give up their right to sue. Altogether, Congress set aside $15 billion to bail out the industry and estimated it would pay another $6 billion from the U.S. Treasury to take care of families for their losses.

Rep. Peter T. King (R-N.Y.) said once it turned out that there were not as many dead, Feinberg should not have created such restrictive guidelines for the fund.

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