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After Weighing Cost of Lives, 9/11 Fund Completes Its Task

June 16, 2004
By DAVID W. CHEN
New York Times

Nearly three years after establishing a fund to compensate the families of Sept. 11 victims, the federal government said yesterday that it had completed the task and that it would end up paying more than 5,000 families almost $7 billion.

To mark the end of the program, the fund's administrator, Kenneth R. Feinberg, met with President Bush and Attorney General John Ashcroft yesterday afternoon at the White House. In an interview afterward, Mr. Feinberg said the president praised the program for giving the families the full compensation to which they were legally entitled.

It was a bittersweet coda to a program that hovered, day after day for a total of 997 days, as a sad and sometimes numbing reminder of the awkward and difficult process by which the families and the government decided how much the lives and the injuries were worth.

On Sept. 22, 2001, Congress created the Sept. 11 Victim Compensation Fund without any financial cap as part of an airline bailout package, and as a fast and, it hoped, less painful alternative to lawsuits. In exchange for giving up their right to sue, which some lawyers argued could be a draining and risky option, relatives of dead victims were told that the average payment would be about $1.5 million, tax free, after deductions for life insurance and other possible benefits.

The fund got off to a slow start, plagued by criticism of rules governing eligibility to apply and how the financial calculations would be made, as well as an overwhelming sense of grief among victims' families. Just a month before the application deadline, Dec. 22, 2003, only 60 percent of those eligible for death benefits had filed claims. The rate was so sluggish that New York members of Congress pushed for a one-year extension.

As the deadline approached, hundreds rushed to file, pushing the final application rate to 97 percent of the 2,973 families of the dead who were eligible. In what Mr. Feinberg said was a sign of the fund's success, only 70 lawsuits were filed against the airlines, while 30 or so families filed neither a lawsuit nor an application with the fund.

"When you have about two-thirds of all the physical injury claims not coming in until the last 45 days and 40 percent of the death claims, the magnitude of getting this completed fairly and consistently by the June 15 deadline was a difficult challenge, but we did it," Mr. Feinberg said.

By yesterday, Mr. Feinberg's office said that 2,878 families had received, or were about to receive, compensation on behalf of dead victims that averaged almost $2.1 million per family. The lowest individual payment was $250,000 and the high was $7.1 million.

In addition, 2,675 of the 4,430 who filed injury claims were to be compensated; of those, 1,919 were rescue workers at ground zero or the Pentagon. The range of those payments was from $500 to $8.7 million.

In all, Mr. Feinberg said, the government would spend approximately $6.9 billion on the fund, roughly $1 billion of which would go to injured victims. But the fund was more than just a blur of statistics about economic loss; it was also an intense emotional experience for thousands of people.

There were families who filed early because they wanted to get the process over with and move on. There were families who were so paralyzed by grief that they barely applied in time. There were families, too, that squabbled bitterly and endlessly over who would speak for the dead and who would get to share the awards.

There were lawyers and accountants, in New York and around the country, who wanted to contribute to the healing process in a post-9/11 world. Some assisted families without pay. Others did it for a reduced commission.

And there was Mr. Feinberg himself, who had previously mediated complex compensation disputes like the legal claims involving the effects of the Agent Orange defoliant used in the Vietnam War. Mr. Feinberg said he had never encountered the kind of raw and bottomless pain that consumed many 9/11 families.

"I underestimated the emotion caused by the horror," said Mr. Feinberg, who was also not paid for his work on the fund.

To sift through the claims during the surge in 11th-hour filings, Mr. Feinberg leaned increasingly in recent months on a temporary staff that included close to 250 people from assorted federal agencies and PricewaterhouseCoopers, the accounting firm. to Mr. Feinberg, alone, was the final arbiter.

In the last two weeks, hundreds of injured victims who said they had suffered respiratory illnesses at ground zero made last-minute claims. By midnight last night, all decisions were final, and the fund was officially shut down, save for a few hundred checks to be mailed out.