The firm’s report claims that the process by which the awards are calculated is biased against single and younger employees, uses “arbitrary and inappropriate” measures for determining earnings averages that may vastly underestimate the earning potential of some employees, and wrongly bases the amounts on after-tax income (rather than gross income). The report also takes issue with the requirement that victims’ families demonstrate “extraordinary circumstances” in order to obtain greater amounts than those set forth in presumed award charts. And it argues that awards should not be adjusted for donations made by private assistance. “We are not challenging the validity of the act that created this fund, but we are criticizing the Special Master’s interpretations, which are inconsistent with the act and make it much more difficult for families to collect under the statute to which they are entitled,” says Karen Valihura, a litigation partner at the law firm of Skadden, Arps, Slate, Meagher & Flom, which prepared the report pro bono.
Kenneth Feinberg, the fund’s special master, argues that the Cantor report “misinterprets” his rules and regulations and says he stands by his computations. “I am here to help these families–I am not an adversary,” he adds. “I’d be glad to meet with any individual Cantor Fitzgerald family member who feels that he or she has been treated unfairly. I don’t think they have.” Of the 3,300 families who are eligible for the Victim Compensation Fund, about 700 have filed claims so far, Feinberg says, including about a half-dozen families of Cantor Fitzgerald high-wage-earning employees. So far, 52 awards have been made, he says, and just six recipients have asked for hearings to appeal the amount received. The average amount awarded per family so far has been about $1.5 million apiece. Cantor argues that the families of their high-income earners–some of whom made more than that amount in a year–should be eligible for considerably more.
“Families of high-wage earners should not be penalized,” agrees Sanford Rubenstein, who represents about 40 families of September 11 victims. “There are glaring deficiencies in the manner in which the rules and regulations have been established–that’s the reason many couldn’t make a choice between filing a lawsuit or a claim with the fund.”
One of the reasons the fund was established was to try and prevent multimillion-dollar lawsuits against the airlines, the Port Authority of New York and New Jersey (the owners of the WTC) and others. Rubenstein predicts that if Feinberg and the Justice Department don’t make adjustments to the rules soon, there may be a flood of litigation. “Obviously, if the families feel like they won’t be treated fairly by the fund, they’ll exercise their other options,” he says.
But once a victim’s family sues a domestic entity, it loses its right to file a claim for compensation. “The fact that the Cantor report criticizes the fund, and shows its flaws, doesn’t make litigation the better choice for families,” says Don Nolan, founding member of Chicago’s Nolan Law Group, which represents about three-dozen families of victims killed in the attacks, including some from Cantor Fitzgerald. “This just shows that the fund is not doing what it’s supposed to do.”
Charles Wolf agrees. His wife, Katherine, worked for Marsh & McLennan, but he says the concerns raised in the Cantor report echoes many of his own–and of many other families he’s spoken with who have put off filing a claim for government compensation. He bristles at the criticism that some outspoken widows, or widowers like himself, have received that they are just “being greedy.”
Last week, he launched a Web site, www.fixthefund.org, which recommends changes for the Victim Compensation Fund. The site had logged about 5,500 visitors by Tuesday afternoon. “We’re all talking about exactly the same thing,” says Wolf, who has met with numerous family groups as well as with politicians and with Feinberg. “Do you know why we haven’t signed up for the fund yet? It’s not because we’re still grieving. It’s because Feinberg lost our trust. And because the fund isn’t fair.”
Still, while Wolf’s Web site and the Cantor report may help call attention to some of the families’ concerns, they won’t make the process of deciding whether to file a claim or a lawsuit any easier in the short-term. The majority of families of Cantor Fitzgerald employees still have neither filed claims nor pursued lawsuits that might prohibit them from seeking compensation from the fund.
“This report surely will add confusion and depression to family members who have been plagued not only be the loss of their loved ones but by this legal monstrosity that is really overwhelming for them,” says Nolan. “My hope is that the report will put more pressure on Attorney General John Ashcroft to sit down with Feinberg and work toward a more realistic approach to the needs of families.”
Feinberg insists that the Justice Department is not trying to put a cap on the award amounts. “That is just absolutely false.” But he adds that if any families have concerns, they should meet with him directly–and that he will consider requests on a case-by-case basis. “I understand the emotion that surrounds this entire process for the families. I am working as best I can to meet their needs,” he says. Despite Cantor’s critical report, Feinberg still predicts that by the fund’s deadline next December, 90 percent of all the eligible families will have participated the program.
But unless Feinberg changes the rules, holdouts like Wolf are not likely to be among them.
“We were already victims to terrorists, and now we feel like victims all over again,” he says. “I came into the activist’s role late, but I’m glad I’m here. I want to fix the fund, and I’m not going to go away. This is a simply matter of what is right and what is wrong.”
