P000617
February 13, 2002
Kenneth R. Feinberg, Special Master
September 11 Victim Compensation Fund
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Feinberg,
My comments regarding the formation of the September 11 Victim Compensation Fund ("Fund") were
acknowledged
previously as being incorporated in the official record. I expressed a deep concern that the U.S.
Department of Justice
has acted illegally in a broad range of areas regarding structured settlements, including the exclusion of
brokers introduced
to a claim settlement process by the claimant, in violation of the whole body of procurement law. In
that context, I had
deep reservations that the U.S. Department of Justice would be able to administer the distribution of
assets from this fund
in a manner that is fair to settlement brokers who do not seem to have special influence with Justice
Department
personnel.
I understand that the preamble to the proposed regulations to distribute the Fund, 66 Fed. Reg at
66280, gives discretion to
the Special Master "to provide claimants with information regarding annuities or other financial planning
devices or to offer
structured awards with periodic payments." I trust that you will not be bound by the illegal tactics and
practices of the
Torts Branch, as detailed in my grievance of March 12, 2001, to Attorney General Ashcroft (part of
the commend record
described above), to which I have not received even the courtesy of an acknowledgment.
What is your current procedure for involving structured settlement brokers? Are you or your staff
making the selections
and if so, on what basis? In the event a structured settlement broker is invited by a claimant or
claimant's attorney to
handle a structured settlement transaction involving the Fund, would your office accept that person as
the broker of
record? I am a structured settlement broker who has been routinely excluded from participation in
structured settlements
handled through the Department of Justice under the Federal Tort Claims Act, in favor of other brokers
anointed by the
government attorney handling the claim. (This is all documented in my March 12, 2001, grievance that
is part of the
record.)
How are structured settlements being handled? It is my understanding that the Fund was created either
as a Designated
Settlement Fund under I.R.C. 468B or a Qualified Settlement Fund under Treasury Regulations
1.468B. If so, under
Revenue Procedure 93-94 the fund can create the future payment obligation to the claimant then make
a "qualified
assignment" under I.R.C. 130. Is that the procedure adopted, or are you following the traditional
Torts Branch
approach of having the United States own the annuity with the claimant agreeing to look only to the
issuing life insurance
company for future payments? There seems to be no authority for a claimant to receive the exclusion
under I.R.C.
104(a)(2) if the latter method is used, placing the claimant at risk for an adverse tax ruling.
I would appreciate very much your response to these questions.
Sincerely,
Individual Comment
Tulsa, OK