9/11 Victims' Fund May Cost Less


The Associated Press, by Devlin Barrett

December 12, 2003, 7:35 PM EST

WASHINGTON -- The unprecedented program to compensate victims of the Sept. 11 attacks may cost far less than its original $6 billion estimate, the fund's administrator told The Associated Press.

The total payout from the program could run as low as "$2 to $3 billion -- well under what had been estimated," Kenneth Feinberg, the fund's special master, said in an interview just days before the Dec. 22 deadline for families to file for compensation.

When the victim compensation fund was launched after the Sept. 11 attack, the estimated price tag was put at $6 billion and some believed it could climb higher.

Feinberg said the disparity stems from the fund's creation in late 2001, when the death toll was in flux. Hundreds of names of people feared killed in the attack were eventually removed from the list.

Others have suggested that so-called "offsets" -- individual life insurance and other death benefits that are deducted from the government's awards -- are holding down the overall cost.

Dozens of applications are still being received every day from the families of those killed and wounded in the terrorist attacks.

Participation from the families of those killed was at nearly 75 percent as of Friday.

With only days remaining, it's unclear whether the fund will reach Feinberg's long-stated goal of signing up 90 percent of the nearly 3,000 families whose loved ones were killed.

"In the last six weeks there has been a substantial flood of additional claims," he said. "I continue to believe we will see a tremendous surge in additional claims, and I'm not yet ready to say I was erroneous in predicting at least 90 percent."

Analysts say some still-distraught families are procrastinating about applying, while other families are determined to forsake the fund to file negligence lawsuits.

The fund was created by Congress soon after the attacks to provide financial aid to the families of those killed or injured, and to protect the commercial aviation industry from crippling litigation. Families agree not to sue the airlines or other U.S. entities in exchange for compensation.

Awards are based on the victim's projected lifetime income plus variables like the number of children in the family and the amount of money available from other sources such as life insurance.

Despite Feinberg's predictions, one analyst cautioned that it may be too soon to estimate the overall payout. Perry Binder, a professor at Georgia State University's Robinson College of Business, noted that financial details need to be processed and judged between now and June, when the fund sends out its last payments.

The fund has already paid out some $1.4 billion based on more than 1,300 awards.

As of Friday, 2,210 claims have been filed by the families of those who died in the attacks on the World Trade Center, Pentagon, and Flight 93.

In addition, 2,233 of those injured during and after the attacks have filed paperwork for compensation with the fund. The Justice Department had estimated about 3,000 would apply.

So far, the highest award to the family of someone killed has been just under $7 million, while one survivor who suffered severe burns received $7.9 million.

Bill Doyle, a retiree whose son Joey died on the 101st floor of the trade center's north tower, said he struggled over whether to join the fund or sue, but is now so confident in the fund that he's working long hours to encourage other families to apply.

"Even two years later, some people still just don't want to deal with it," said Doyle, citing the case of a widower friend who received the necessary paperwork but then refused to look at it.

Doyle said he and the man's relatives eventually arranged for an attorney to go to the man's house, pull the papers out of the basement and press him to make a decision before the deadline.

Lawyer Justin Green, whose firm represents hundreds of Sept. 11 families, said his chief worry is that some believe the deadline "is like taxes -- that you can file late and only pay a small penalty. In the case of the fund, the penalty is that you get nothing."

Some families, angry over the legal protection the fund offers to airlines and other U.S. entities, have refused to join. They argue it is a betrayal of their effort to determine if negligence by American officials or companies allowed the terror attacks to succeed.

"I am disgusted with the entire process," said Sally Regenhard, whose firefighter son was killed in the World Trade Center.

Seventy-three families have joined lawsuits over the attacks, forsaking guaranteed payment from the fund. Even after the deadline, the final number of those who receive payments may change, because filing the initial fund paperwork does not automatically bar a family from opting to sue instead.

The families of those killed aboard the airliners have tended to shy away from the fund in greater proportions. Most experts believe they have a stronger court case against the airlines than do victims killed on the ground.

But Binder, the professor, warned that lawsuits may never result in the kind of answers many angry families are seeking. In any public lawsuit, the federal government will seek to block certain critical information from the public eye, citing national security interests, he said.

"That's the only thing I am 100 percent sure about," Binder said.

Copyright 2003, Newsday, Inc.