A003635
December 17, 2001
Honorable John D. Ashcroft
Attorney General of the United States
United States Department of Justice
950 Pennsylvania Avenue, N.W.
Washington, D.C. 20530
Dear Mr. Attoney General,
On September 21, the Congress passed H.R. 2926, the Air Transportation Safety and
System Stabilization Act, ("Act"), which was signed into law by President Bush as Public Law
107-42. An important aspect of this law created a Victim Compensation Fund ("Fund"), which
was designed to compensate victims of the September 11 terrorism attacks. I hope that the
injured and the families of the deceased will utilize the Fund to help recover from these horrific
acts, although certainly no financial award can compensate adequately for the damage done to
thousands of Americans and their families.
Many of us in Congress expressed serious concerns about the Fund which was enacted
without being fully considered through the normal legislative process. The Act makes the
Federal Government and thus American taxpayer; ultimately responsible for any awards made by
the Fund. However, while Congress provided some specifics as to who is entitled to receive an
award and the extent of the award, the details are to be decided by the Department of Justice and
specifically by the Special Master, a position created by the Act. Thus the Special Master,
Kenneth Feinberg, has enormous responsibility to balance the needs of the victims and their
families with the knowledge that American taxpayers may end up footing the bill for his
decisions.
As you and Mr. Feinberg continue drafting regulations and procedures to administer the
Fund, I also ask you to consider my thoughts on a specific issue: how charitable gifts to victims
and their families should be considered as you determine appropriate awards from the Fund.
Section 405(a)(6) of the Act clearly states that the Special Master "shall reduce the
amount of compensation determined...by the amount of the collateral source compensation the
claimant has received or is entitled to receive as a result" of the terrorist incidents. The term
"collateral source" is defined in Section 402(4) as "all collateral sources including life insurance,
pension funds, death benefit programs, and payments by Federal, State, or local governments
related" to the terrorist incidents. It is was the clear intent of those who negotiated this Act and
specifically this "collateral source" provision that the Special Master should give consideration to
all significant collateral financial sources when determining awards.
As you know, some Members of Congress and other advocacy groups have urged you to
issue regulations which would exclude charitable contributions made to victims or their families
from the "collateral source" provision. Such an argument flies directly in the face of the statutory
language enacted by Congress and Congress's intent. The Fund was established to provide
reasonable compensation to victims and their families in lieu of litigation and was certainly not
meant to require taxpayers to provide awards in excess of full financial compensation.
The American public has responded to the terrorist attacks with an unprecedented sense
of charity. According to new accounts, various charities have received approximately $1.4
billion in contributions designated for victims compensation, including the Liberty Fund
established by the Red Cross which has raised almost $550 million. In addition, local
governments have established funds such as the Twin Towers Fund which has raised $113
million to be distributed solely to the families of public safety officers. Obviously the
Department could rationally determine that charitable assistance below a certain de minimis level
need not be disclosed as part of the claim process. However, under the Act, large financial grants
given directly to victims must be considered a "collateral source" and I encourage you to issue
regulations to reflect Congress's clear policy determination on this issue.
In summary, you and Special Master Feinberg will be under immense pressure to expand
the universe of Fund claimants and to be as generous as possible. I urge you to keep in mind that
the Fund was created by Congress as a unique federal response to a situation where normal
litigation may have left victims without recovery. The Fund should be administered with both
the needs of the victims and taxpayers in mind and with recognition of the impressive charitable
reaction of the American people. Handling this Fund properly would be yet another example of
your inspirational leadership in these trying times.
Sincerely,
Don Nickles, United States Senate