The federal compensation for victims of the Sept. 11, 2001, terrorist attacks could have been distributed more fairly and efficiently if equal payouts had been given to all families instead of basing awards on factors such as the victim's age and potential lost income, according to the fund's administrator.
Kenneth R. Feinberg, special master of the September 11th Victim Compensation Fund of 2001, said that the varying sizes of individual awards, required by Congress, led to "finger-pointing" among victims and a sense that officials were placing a higher value on some lives than on others. It also greatly complicated the task of calculating compensation for those who suffered losses after terrorists slammed airplanes into the World Trade Center, the Pentagon and a field in rural Pennsylvania, he said.
"I had the firefighter's widow saying to me, 'Mr. Feinberg, why am I getting a million dollars less than the stockbroker's husband, who was pushing a pencil on the 103rd floor and my husband died a hero? I must be missing something,' " Feinberg said in an interview Tuesday. "And it fueled the divisiveness which was inevitable when the statute required different amounts for everybody."
Feinberg, who released his final report yesterday, stressed that he believes the overall program was a great success. His sentiments about uniform awards are personal observations, he said, not official conclusions. He also noted that the fairness and feasibility of any flat-award system would depend on the size of the awards and the extent to which accepting the compensation restricts the recipient's right to sue in court.
"I think a flat system is better, but you cannot, I think, create a fair and equitable flat-payment system unless you address somehow the questions of how much [the payment is] and are you curtailing the right to litigate?" Feinberg said in an interview. "If the flat payment is too small, you'll litigate."
Congress established the fund shortly after the attacks as part of legislation that provided billions of dollars to struggling airlines and protected the industry from potentially crippling lawsuits. People who sought compensation from the fund were required to waive their right to sue but in return received money sooner and with greater certainty than they would have through legal action.
Congress required that the awards be based on individual circumstances, a design that mirrored the civil justice system and, lawmakers believed, made the fund a more attractive option to victims who would otherwise choose to sue.
John C. Coffee, a professor at Columbia Law School, said a flat-award system would have prompted more victims to sue, creating more delays, and ultimately leaving some deserving people with nothing. Tailored awards have more appeal, he said.
"I don't know why someone who has got six children and would have had 40 more years in which to earn money to support them, why that person should get the same award as someone who is 72 and was already retired," Coffee said. "I do see why some individualization of the award to each victim's circumstances is necessary if the system is going to be perceived as equitable and just."
The fund paid out its first claim on Aug. 22, 2002, and its final payment is expected in the next few weeks. In all, more than $7 billion went to the survivors of 2,880 people who were killed and to 2,680 people who were injured in the attacks or the rescue efforts that followed, according to the report.
Families of the people killed collected awards averaging more than $2 million, and the injured drew payouts averaging almost $400,000. The awards for death claims ranged from $250,000 to $7.1 million, and for injury claims from $500 to $8.6 million. Many families also received charitable donations and insurance payments that were not included in the figures cited in Feinberg's 114-page report.
Administering the fund cost the government $86.9 million. Feinberg worked without pay.
The fund achieved the goal of warding off lawsuits, Feinberg said. Ninety-seven percent of the families of attack victims chose payouts from the fund. About 80 lawsuits have been filed, and none has been resolved.
"Statistically, insofar as Congress wanted to set up a program to divert and deflect claims from shackling the airlines in a time of post-9/11 crisis, the program was a wild success," Feinberg said.
The fund also provided many families with a much-needed sense of closure that would have eluded them in legal battles, Feinberg said. Thirteen families neither filed lawsuits nor applied to the fund by the deadline, he said.
"The major reason was grief," he said. "There are a number of people so clinically depressed that, despite my urging, they could not pick up a pen and fill out the forms."
Nikki Stern, whose husband, James Potorti, 52, was killed in the World Trade Center attacks, said she received a "comfortable" award from the fund. "It was a decent process," she said. "The application was almost impossible for anyone unless you had a master's degree. Maybe that can be simplified."
Beverly Eckert of Stamford, Conn., whose husband, Sean Rooney, 50, perished in the World Trade Center attacks, decided to file a lawsuit and forgo an award. "This wasn't about being compensated for loss. It was about how did it happen, how can you prevent it, and ensuring that there is some sort of accountability," said Eckert, a member of the Family Steering Committee for the Sept. 11 commission.
The compensation fund drew considerable criticism in the year after it was enacted. Grieving families labored over the extensive paperwork required to file a claim. Some families complained that "collateral offsets," such as life insurance and other payments from outside sources, were deducted from the federal compensation awards. Feinberg noted in his report that this problem would not have existed under a system of uniform awards.
And the families of victims of earlier terrorist attacks asked why they were not entitled to federal compensation as well.
"We have been thrown against the curb. We have been forgotten," said Kathleen A. Treanor, a leader of the now-defunct group Fairness for OKC, whose 4-year-old daughter died in the 1995 Oklahoma City bombing, along with two other Treanor relatives. "It's disgraceful. When someone can tell me why a rich New York stockbroker's wife deserves compensation, and a poor farmer's family that lost everything does not, I'll shut the . . . up."
Feinberg defended the government's decision not to cover the victims of other attacks under the fund. The Sept. 11 attacks were a "unique historical event" that triggered a "universal and profound" national response that justified limiting the compensation program to their victims, he said in his report.
A recent report by the Rand Institute for Civil Justice recommended that the government create a system of compensation for future attacks. Feinberg argued against that, saying officials should wait to see the magnitude of and reaction to a strike, should it occur.