Sandbags Full of Money

Victim Compensation After 9/11

The fallout from the horrific events of September 11, 2001, continues to be in dramatic and pervasive evidence. Although the search for weapons of mass destruction in Iraq has lately received obsessive attention, the purported presence of such weapons was just one of a kaleidoscope of reasons used to justify the war. Earlier, a supposed connection between the Iraqi leadership and al-Qaeda (or, sometimes, “al-Qaeda ‘type'”) terrorists was the justification that shifted most often into view. Domestically, September 11 has sparked debate about the permissible extent of civil rights abridgements in times of national peril. This past summer, the discussion was refueled by allegations of abuses under the Patriot Act.

These long-legged stories made it easy to miss this item: in late January, surviving family members of Cantor Fitzgerald employees who were killed on September 11 brought a lawsuit against Kenneth Feinberg, the special master charged with administering the government’s 9/11 compensation program, known as the Victim Compensation Fund (VCF). The suit charges that by declining to provide the plaintiffs with full financial compensation for their loss, Feinberg is misreading the VCF and thereby defying the will of Congress. He is alleged to be “playing a cat and mouse” game with wage earners at the highest income levels-in particular, the well-paid bond traders who worked at Cantor Fitzgerald. Two similar lawsuits followed. In late May, the federal trial judge dismissed all of the suits, but at least one plaintiff has filed a notice of appeal.

Whatever the legal merits of their case, the plaintiffs’ frustration is understandable. Feinberg has publicly stated that, although there is no cap on awards under the VCF, payouts of more than six million dollars will be rare. Payments to date bear this out. By mid-July, of all awards to survivors of those killed on September 11, the highest was just over that amount. But unlimited payments to those at the peak of the economic pyramid would total twenty million dollars or more in some cases. Feinberg counters that Congress vested him with enormous discretion in making payment decisions, and that he is striving for a more democratic apportionment of the taxpayer money that funds this compensation initiative. On occasion, he has been explicit about his philosophy. At a June conference of law professors in New York, he had this to say when asked how he would change the Fund: “Give everyone the same.”

In his frequent public appearances explaining and defending the VCF, Feinberg has emerged as a reflective advocate; one who understands the fairness issues that creating such a generous compensation scheme raises. More than once, he has mentioned the valid criticisms leveled at the Fund by other victims of misfortune. To begin with an obvious example, the victims of other terrorist attacks, for whom there is no similar compensation sy...