N002196
Monday, January 21, 2002 8:56 PM
Interim Final Rules/September 11 Victim Compensation Fund of
2001
Darien, CT
19 January 2002
Kenneth L. Zwick, Director
Office of Management Programs
Civil Division
U.S. Department of Justice
Main Building, Room 3140
950 Pennsylvania Avenue
Washington, DC 20530
Dear Mr. Zwick:
I wrote to you last on 17 November 2001 regarding the initial regulations on the September 11th Victim Compensation Fund of 2001. It is now the 19th Saturday night I have spent alone with my three-year-old daughter since our world came to a crashing halt on September 11th, 2001, when my wonderful husband of almost 12 years, , met his untimely demise at the hand of Islamic terrorists at a mere 36 years of age. The first snow of the New Year falls outside my window and I wonder whether his unfound remains are blanketed at the World Trade Center or, even more unthinkable, at the Freshkills landfill in Staten Island.
I have thoroughly reviewed the Interim Final Rules to the September 11th Victim Compensation Fund of 2001 as published on 20 December 2001. My initial reaction was one of disgust and revolt.
My position has softened somewhat after having attended a meeting for the surviving families of employees (the company with whom my husband was associated at the time of his death) with Special Master Feinberg this past Tuesday, January 15, 2002 in New York City.
I must say that I found Mr. Feinberg to be straightforward, informative, considerate of the many individual issues that surround just compensation, polite, amusing, and humanistic. He displayed an appropriate sense of humor, as much empathy as anyone who has not experienced the gut-wrenching effects of this horrible atrocity for themselves, and yes, a certain level of arrogance (which is not always a negative attribute). He handled most every inquire with eloquence and aplomb.
I am writing today with the hope of receiving firm reassurance of the many points that were addressed by Mr. Feinberg which are paramount to me and the many surviving families of specifically, and the surviving families of victims in general. While the following interpretations of the Interim Rules are mine alone, they are based upon taped comments provided by Mr. Feinberg at the 15 January meeting.
1. Issues of Collateral Offsets: Mr. Feinberg assets that, according to the statute, "life insurance MUST be offset". He further asserts that "I have no control over that." He went on to state that because this is the way that the statute was written, that only Congress could change the law, and that this was "highly unlikely." I accept this and will take this issue up with my Congressman. I will similarly urge others in my position to write their Congressman in order to modify this statute. As you must be aware, many of us feel that to offset proceeds received from life insurance amounts to penalization for adequate financial planning and foresight.
In light of the life insurance collateral offset however, Mr. Feinberg stated, "I am determined to try and maximize the amount of awards that will go to individual families." He asks how he will do that in practice, and answers his own question. He says he will minimize the scope of offsets and cites, in particular, worker's compensation and pensions. "Some pensions are funded by the victim (that died). That amount of the pension will not be offset-that's the victim's contribution."
Mr. Feinberg commented that in some states, any award made by worker's comp would have to be subtracted as collateral and given back to the compensation carrier. He said, "That's not a benefit to the victim or his family. So I do not want to offset Worker's Comp." "I will do whatever I can to try and minimize the harshness of the offsets."
How can the Special Master and the DOJ subtract as collateral payments by worker's comp and Social Security? The continuing payment of these benefits is stringently regulated and will certainly vary for those who return to the workforce, remarry, or, in a worse-case scenario, die. How can these determinations be made now and on what basis?
2. Issue of Economic Loss: Many in attendance were primarily concerned about the perceived cap which would limit compensation for earnings above $230,000. Mr. Feinberg emphatically stated, "THERE IS NO CAP." He further went on to state "and the amended regulations will spell out that THERE IS NO CAP."
Mr. Feinberg explained that the "perceived" cap idea came from the fact that $230,000, nationally, is 98% of the workforce according to the Bureau of Labor Statistics and the Bureau of the Census. He further stated that this 98% of workers has a "presumptive" award. He stated that if one could show that earnings would exceed $230,000 per year, a hearing could and should be employed to demonstrate that earnings would exceed $230,000 per year. He said that it would be the claimant's choice whether to proceed with solely a "paper" documentation of earnings or whether to proceed through a full hearing process. He urged us to carefully review our W2s and tax returns.
Mr. Feinberg then proposed the scenario of an individual whose earnings exceeded $230,000 per year. Mr. Feinberg asserted that there is no presumptive award for those earning over $230,000 per year because the Bureau of Labor Statistics and the Bureau of the Census said they did not have the appropriate figures as there were so few (less than 2% nationally) that earned over that amount. Mr. Feinberg went on to say that for those who provided an argument that $230,000 is too low, "we will compute a number, an award, higher than the $230,000." He further asserted, "I want everyone to understand that there is no requirement in these regulations, on this program, to cap people who make more than $230,000 at $230,000. This is incorrect and, I believe, inequitable."
Subsequent to this statement, many in the audience cited concern over a paragraph in the Interim Final Rules which states, "Claimants should not expect awards grossly in excess of the highest awards listed on the Special Master's presumed ward chart, as the individual circumstances of the wealthiest and highest-income claimants will often indicate that multi-million dollar awards out of the public coffers are not necessary to provide them with a strong economic foundation from which to rebuild their lives. It is our view that, absent extraordinary circumstances, awards in excess of $3 million, tax-free will rarely be appropriate in light of individual needs and resources." Mr. Feinberg emphatically responded that "nowhere in these regs do we adequately address anybody earning more that $230,000."
Upon further discussion and exploration of this topic, Mr. Feinberg stated, "I am saying that you guys are a legitimate exception to the benchmark."
I dare say that all in attendance at this meeting were relieved to hear Mr. Feinberg's comments regarding the perceived earnings cap. It is my perception that many of us would like to proceed with application into the fund knowing that our lost spouses and loved ones full earning potential was taken into account. We feel comfortable having to bear the burden of proof in demonstrating both current earnings and earnings potential. I think the trouble lies with the fact that the Special Master and the other authors of these Interim Final Rules were unable to procure reliable, concrete settlement data for those in the higher income brackets. It would seem to me that, given the circumstances and the level of those inquiring, that this information could have been provided from any variety of reliable sources. The IRS has plenty of tax tables and percentages to figure out the yearly tax bill for those earning over $230,000. Why is the Department of Justice having so much trouble finding reliable compensation data for the country's top wage earners?
I would urge the Special Master and all others involved in the modification of these Interim Rules to delve a bit deeper. We, the surviving families of the victims, implore the DOJ to use up-to-date earnings models which capture the real potential of the demographics within the affected areas. I would also implore the authors to provide concrete data for those with earnings over $230,000, and to provide "presumptive" based on earnings up to at least $4,000,000 per year.
3. Suggestions for Moving Forward: Mr. Feinberg freely asserted that "anybody here who isn't coming into The Fund has made a terrible strategic mistake. There's no place to go but this Fund. My big problem is not that people will opt to litigate, my big problem is that there's no where to but this fund, so it had better be fair. That's my problem."
In order to ensure a certain comfort level with the Fund, Mr. Feinberg suggested the following:
-While not absolutely necessary, it may be important to have one's attorney prepare a "wonderful" brief citing W2s, tax forms and/or any pertinent employment contract data to support case of extraordinary earnings over $230,000.
-Resolve to be heard by requesting a hearing and making one's particular case known by presenting to the Special Master or his representative.
-Wait and see. "Watch what we do. Allow us to set a benchmark by which our good intentions will be judged."
-Avail oneself of a "dry run." The Special Master seemed to advocate the practice of claimants and their counsel of posing hypothetical earnings scenarios to representatives at area Fund offices without making official application to the Fund.
I would think that anyone unsure as to the amount of a "presumed" award would welcome the opportunity to propose a "hypothetical" scenario to one of the Special Master's representatives. I would further assume that many of us would like to avail ourselves of this exercise even given a table of presumed awards for those whose earnings exceeded $230,000. This goes back to one of the most basic concerns for many families, expressed time and time again quite early on: please allow us an adequate indication of our settlement before we completely waive our rights to pursue alternative means of compensation!
4. Issues of "Presumptive" Collateral and Consumption: Mr. Feinberg touched briefly upon these issues, but I dare say that most of us were left utterly confused as to how these discounts would affect the final settlement.
Mr. Feinberg used the argument of "presumptive" collateral and consumption to illustrate why it would be important for many claimants to go through the hearing process. He said that one reason the Interim Final Regulations indicated that it would be rare for a particular claimant to receive an award in excess of $3 million is the "national assumption that those (the upper 2%) earning over $230,000 have HUGE collateral offsets. That the person making $1 million per year has $5 million worth of insurance." He also said that "the computation of economic loss takes into account not only the amount of revenue generated, but discounts for your current lifestyle."
I, for one, feel that this is a heck of an assumption-particularly in light of the fact that so many who died were so young! I'd hate to think that the Special Master will penalize me for having the appropriate amount of life insurance, but will he also penalize me for being underinsured? Further, if you are going to discount my husband's earnings by assumptions of consumption, will I be penalized for having savings in the bank? The Special Master and the DOJ can't have it both ways!
5. Issue of Non-Economic Loss: Mr. Feinberg cited this as "public enemy number one," and many in our audience were incensed at the amounts being suggested under the present Interim Final Regulations. Mr. Feinberg conceded that "any number is arbitrary," and went on to explain that this number was a reflection of federal law for non-economic compensation awarded to public servants such as fire and police personnel.
Many in the audience argued that our loved ones were not public servants and should not be compensated as such, particularly in light of the generous pensions and other benefits that are often part of such a public employee's compensation package.
If any number is truly arbitrary, why not raise the non-economic settlement award to an amount that reflects the supreme sacrifice these civilians and their families made unwillingly and unknowingly? So much rhetoric is bandied about-that the victims are true war heroes. Compensate them accordingly!! Never let it be forgotten that our government-our Central Intelligence Agency, Immigration and Nationalization Service, Federal Aviation Administration-are directly responsible for the mass incineration of over 2,700 tax-paying, private-sector business people-not civil or public servants.
Further, Mr. Feinberg said that the non-economic portion of the settlement was built in to the "presumptive" awards as indicated on the charts. Are deductions being made for the assumptions of consumption as discussed above?
It was somewhat comforting for the families to hear Mr. Feinberg concede that he absolutely could not begin to feel the way we, the surviving spouses, children, parents, partners, fiancées and friends, feel.
He assured us that "I'll do my best. I consider myself working for you people. I'm going to maximize the dollars to you people. I think it is absolutely fair for people to say to me, 'nice words. Where was it in the regs?' I'm trying to change what I can change. What I can't change, hopefully I'll exercise my discretion to carry out your objectives."
I and the rest of the surviving families could not hope for more of a promise. Our welfare and the future of our children depend on these promises made by Special Master Feinberg. I implore you, Mr. Zwick, the members of the Department of Justice, our elected representatives, senators, and the President, George W. Bush, to ensure that the final regulations to the September 11th Victim Compensation Fund reflect these promises and assurances. We are all depending upon you.
Many thanks for this opportunity to comment.
Respectfully yours,
Individual Comment