[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
PAYING WITH THEIR LIVES: THE STATUS OF COMPENSATION FOR 9/11 HEALTH
EFFECTS
=======================================================================
JOINT HEARING
BEFORE THE
SUBCOMMITTEE ON IMMIGRATION,
CITIZENSHIP, REFUGEES, BORDER SECURITY,
AND INTERNATIONAL LAW
AND THE
SUBCOMMITTEE ON THE CONSTITUTION,
CIVIL RIGHTS, AND CIVIL LIBERTIES
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
APRIL 1, 2008
__________
Serial No. 110-82
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
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41-582 PDF WASHINGTON DC: 2008
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COMMITTEE ON THE JUDICIARY
JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California LAMAR SMITH, Texas
RICK BOUCHER, Virginia F. JAMES SENSENBRENNER, Jr.,
JERROLD NADLER, New York Wisconsin
ROBERT C. ``BOBBY'' SCOTT, Virginia HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina ELTON GALLEGLY, California
ZOE LOFGREN, California BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas STEVE CHABOT, Ohio
MAXINE WATERS, California DANIEL E. LUNGREN, California
WILLIAM D. DELAHUNT, Massachusetts CHRIS CANNON, Utah
ROBERT WEXLER, Florida RIC KELLER, Florida
LINDA T. SANCHEZ, California DARRELL ISSA, California
STEVE COHEN, Tennessee MIKE PENCE, Indiana
HANK JOHNSON, Georgia J. RANDY FORBES, Virginia
BETTY SUTTON, Ohio STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois TOM FEENEY, Florida
BRAD SHERMAN, California TRENT FRANKS, Arizona
TAMMY BALDWIN, Wisconsin LOUIE GOHMERT, Texas
ANTHONY D. WEINER, New York JIM JORDAN, Ohio
ADAM B. SCHIFF, California
ARTUR DAVIS, Alabama
DEBBIE WASSERMAN SCHULTZ, Florida
KEITH ELLISON, Minnesota
Perry Apelbaum, Staff Director and Chief Counsel
Sean McLaughlin, Minority Chief of Staff and General Counsel
Subcommittee on Immigration, Citizenship, Refugees,
Border Security, and International Law
ZOE LOFGREN, California, Chairwoman
LUIS V. GUTIERREZ, Illinois STEVE KING, Iowa
HOWARD L. BERMAN, California ELTON GALLEGLY, California
SHEILA JACKSON LEE, Texas BOB GOODLATTE, Virginia
MAXINE WATERS, California DANIEL E. LUNGREN, California
WILLIAM D. DELAHUNT, Massachusetts J. RANDY FORBES, Virginia
LINDA T. SANCHEZ, California LOUIE GOHMERT, Texas
ARTUR DAVIS, Alabama
KEITH ELLISON, Minnesota
ANTHONY D. WEINER, New York
Ur Mendoza Jaddou, Chief Counsel
George Fishman, Minority Counsel
------
Subcommittee on the Constitution, Civil Rights, and Civil Liberties
JERROLD NADLER, New York, Chairman
ARTUR DAVIS, Alabama TRENT FRANKS, Arizona
DEBBIE WASSERMAN SCHULTZ, Florida MIKE PENCE, Indiana
KEITH ELLISON, Minnesota DARRELL ISSA, California
JOHN CONYERS, Jr., Michigan STEVE KING, Iowa
ROBERT C. (BOBBY) SCOTT, Virginia JIM JORDAN, Ohio
MELVIN L. WATT, North Carolina
STEVE COHEN, Tennessee
David Lachmann, Chief of Staff
Paul B. Taylor, Minority Counsel
C O N T E N T S
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APRIL 1, 2008
Page
OPENING STATEMENTS
The Honorable Zoe Lofgren, a Representative in Congress from the
State of California, and Chairwoman, Subcommittee on
Immigration, Citizenship, Refugees, Border Security, and
International Law.............................................. 2
The Honorable Steve King, a Representative in Congress from the
State of Iowa, and Ranking Member, Subcommittee on Immigration,
Citizenship, Refugees, Border Security, and International Law.. 3
The Honorable Jerrold Nadler, a Representative in Congress from
the State of New York, and Chairman, Subcommittee on the
Constitution, Civil Rights, and Civil Liberties................ 8
The Honorable Trent Franks, a Representative in Congress from the
State of Arizona, and Ranking Member, Subcommittee on the
Constitution, Civil Rights, and Civil Liberties................ 10
The Honorable John Conyers, Jr., a Representative in Congress
from the State of Michigan, Chairman, Committee on the
Judiciary, and Member, Subcommittee on the Constitution, Civil
Rights, and Civil Liberties.................................... 11
WITNESSES
Mr. Kenneth R. Feinberg, former Special Master, Victim
Compensation Fund
Oral Testimony................................................. 13
Prepared Statement............................................. 15
Mr. Michael A. Cardozo, Corporation Counsel, City of New York
Oral Testimony................................................. 19
Prepared Statement............................................. 20
Ms. Ann-Marie Lasowski, Acting Director, Education, Workforce,
and Income Security Issues, Government Accountability Office
Oral Testimony................................................. 23
Prepared Statement............................................. 25
Mr. Michael A. Valentin, former NYPD Detective
Oral Testimony................................................. 38
Prepared Statement............................................. 39
Mr. Theodore H. Frank, Resident Fellow, American Enterprise
Institute, Director AEI Legal Center for the Public Interest
Oral Testimony................................................. 42
Prepared Statement............................................. 44
Mr. James Melius, Administrator, New York State Laborer's Health
and Safety Trust Fund
Oral Testimony................................................. 58
Prepared Statement............................................. 61
APPENDIX
Material Submitted for the Hearing Record........................ 101
PAYING WITH THEIR LIVES: THE STATUS OF COMPENSATION FOR 9/11 HEALTH
EFFECTS
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TUESDAY, APRIL 1, 2008
House of Representatives,
Subcommittee on Immigration,
Citizenship, Refugees
Border Security, and
International Law
Subcommittee on the Constitution,
Civil Rights, and Civil Liberties,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:08 a.m., in
Room 2141, Rayburn House Office Building, the Honorable Zoe
Lofgren (Chairwoman of the Subcommittee on Immigration,
Citizenship, Refugees, Border Security, and International Law)
and the Honorable Jerrold Nadler (Chairman of the Subcommittee
on the Constitution, Civil Rights, and Civil Liberties)
presiding.
Present: Representatives Conyers, Nadler, Lofgren, Scott,
Watt, Jackson Lee, Waters, Cohen, Weiner, Davis, Wasserman
Schultz, Ellison, Franks, Goodlatte, Issa, Pence, King,
Gohmert, and Jordan.
Also present: Representative Maloney.
Staff present: Blake Chisam, Majority Counsel; Lou Debaca,
Majority Counsel; David Lachmann, Subcommittee Chief of Staff;
Andres Jimenez, Majority Professional Staff Member; Caroline
Mays, Majority Professional Staff Member; Paul Taylor, Minority
Counsel; and Jennifer Burba, Minority Staff.
Mr. Nadler. I call to order this joint hearing of the
Subcommittee on Immigration, Citizenship, Refugees, Border
Security, and International Law and the Subcommittee on the
Constitution, Civil Rights, and Civil Liberties.
Welcome, everyone.
Without objection, the Chair is authorized to declare a
recess, just in case there are any votes on the floor.
Let me note that Congresswoman Lofgren, who is the
Chairperson of the Subcommittee on Immigration, Citizenship,
Refugees, Border Security, and International Law, will be co-
chairing this hearing with me, as I am the Chairman of the
Subcommittee on the Constitution, Civil Rights, and Civil
Liberties. This is a joint hearing in which we will both be
chairing, both to serve as co-Chairs.
I will now recognize the co-Chair of this hearing, Ms.
Lofgren, for an opening statement.
Ms. Lofgren. Thank you, Mr. Chairman.
And, although it is not in the title, the very long title,
of our Subcommittee, the Immigration Subcommittee also has
jurisdiction over claims made against the Federal Government,
which is one of the reasons why I am pleased to be co-chairing
this hearing with you.
I will ask unanimous consent to put my full statement into
the record, but I would just summarize by saying that when we
created the 9/11 Victims Compensation Fund, we created a very
successful program, very ably administered as far as it went.
It was a bipartisan effort, and it provided the means to
compensate in a very short period of time the survivors of the
2,880 people killed in the attacks and the 2,680 people injured
in the attacks or in the rescue efforts immediately following.
The Special Master Fienberg, one of our witnesses today,
noted in his final report that 97 percent of the families of
deceased victims who might otherwise have pursued lawsuits for
years received compensation through the fund. So this was a
stunning success, and we thank the administrator for his,
really, very able effort.
Unfortunately, however, the specter of tort litigation is
with us. Over 10,000 lawsuits have been filed in the City of
New York by first responders, building and trades workers,
volunteers--who rallied to the World Trade Center to help, who
were not compensated by the victims' fund. They didn't know
they were sick in time to file, and they are suffering
tremendously.
I think there is broad agreement that these individuals are
sick and will continue to get sick because of their exposure to
the World Trade Center's noxious dust. And from the city's
testimony today, it seems clear the city agrees.
So the question at the hearing, the beginning, is our quest
to answer the question: What do we do?
I want to thank Chairman Nadler for his leadership on these
issues. The Bill 3543, the James Zadroga 9/11 Health and
Compensation Act of 2007, authored by Chairman Nadler along
with Representative Maloney and Representative Fossella,
represents a good first attempt at addressing these issues.
I believe this hearing is going to help us to begin to
answer the question: What do we do? And I believe we will leave
here today with a better sense of the problems that people are
facing.
From there I am hopeful that we can begin to structure a
fair and just program to compensate those who continue to bear
the deep scars from that terrible day in September almost 7
years ago.
And I thank Chairman Nadler for yielding to me and yield
back.
Mr. Nadler. Thank you.
And before I recognize the next opening statement, let me
simply note the presence here of a non-member of the Committee,
Representative Maloney of New York, who has been instrumental
in this whole area and who along with Congressman Fossella and
myself is the co-author of the legislation, the Zadroga Act,
which includes reopening the VCF, the Victims Compensation
Fund, which is the subject of this hearing.
And let me thank her for all the wonderful work she has
done and note her presence here.
I now recognize the gentleman from Iowa, who is the Ranking
Minority Member on the Subcommittee on Immigration,
Citizenship, Refugees, Border Security and International Law,
for an opening statement.
Mr. King. Thank you, Mr. Chairman, I appreciate you holding
this hearing.
Almost 7 years ago, terrorists carried out mass murder of
innocent Americans on our own soil. The attacks were carried
out by radical Islamists who hate America and the freedoms we
represent. They ripped away our security and devastated
thousands of families.
My heartfelt sympathies go out to those who suffered in the
wake of the 9/11 attacks. All of America identified with New
York, with Washington, D.C., and the Pentagon and Pennsylvania
as never before. An attack on any one is an attack on us all.
One of the groups that suffered in the aftermath is the
Ground Zero workers who worked heroically day and night for
months in rescue, recovery and cleanup efforts at the World
Trade Center site. For the most part, these workers went in
without contracts, insurance policies or knowledge that there
were toxins in the air. Today, many of these of these workers
are having health problems as a result of their work at Ground
Zero.
In addition to the Ground Zero workers, people who lived
and worked in the proximity of Ground Zero have also now
developed respiratory problems that appear to be related to
toxins in the air. Understandably, the Ground Zero workers have
looked to the construction companies that hired them for
compensation for their health problems. These companies along
with the City of New York are now being sued by some 10,000
plaintiffs who allege they were injured from the contaminants
in the debris. These victims are being forced to sue because
they do not qualify for relief under the 9/11 Victims
Compensation Fund.
The companies and the city are being forced to vigorously
defend against these lawsuits because they were unable to
obtain insurance to cover injuries arising out of the Ground
Zero cleanup efforts.
We are here today to examine what we in Congress can do to
help compensate those that are now experiencing respiratory
ailments due to the air quality in or around Ground Zero.
We are also here to ensure that whatever is done to
compensate the victims does not financially cripple the
construction companies--that is some of the largest in the
world and best in New York City. They stepped up as corporate
and good Samaritans and cleaned up the terrorist disaster at a
moment's notice at Mayor Giuliani's plea without having
protected themselves by obtaining contracts or insurance.
Because they had the right equipment and construction
experts, these companies were asked to mobilize within hours of
the Towers falling, and they did so as volunteers. The
companies cleared the debris for emergency personnel. They dug
for survivors in the huge pile of rubble. They worked for 9
months until the site was clear. They did it 24/7, and they did
so without a profit motive.
These companies and those executives who made the decisions
to help on 9/11 are heroes, too. Just as the firefighters, the
emergency responders and the workers who toiled for weeks and
weeks at the World Trade Center site, these corporate heroes
should not be forgotten by our government when they face the
liability nightmare that they now do.
If we in Congress do not address their liability exposure,
we cannot expect to call on these and other companies in the
future if tragedy strikes. In order to address the compensation
owed to those facing health problems from the toxins in the air
around Ground Zero and the liability exposure of the companies
that came to the aid of our Nation after the Towers fell, the
9/11 Victims Compensation Fund has been suggested as a
blueprint. That suggestion makes a lot of sense.
However, if we are to follow the 9/11 Fund as a blueprint,
we must make sure that we follow it studiously. We must make
sure that we provide adequate compensation to the victims
without handing the keys of the U.S. Treasury to the trial
lawyers. And we must make sure that we provide liability
protections to New York City and the companies that came to the
rescue of the victims.
The bipartisan legislation establishing the original 9/11
Fund had these types of protections. The liability of airlines
was capped at the levels of their insurance coverage. The
liability of other third parties such as New York City and the
Port Authority of New York and New Jersey were also capped.
Moreover, the legislation required 9/11 Fund claimants to waive
their right to file a civil action or be the party to an action
in any Federal court or State court that damages sustained as a
result of the Federal-related aircraft crashes of September 11,
2001.
With these liability protections in place, the 9/11 Fund
was successful in providing compensation to the victims or
their families. In fact, 97 percent of the victims or their
families chose to file under the 9/11 Fund instead of seeking
redress in the courts.
The 9/11 Fund model is one we should consider for victims
that are able to come forward with proof that they were in
general proximity of Ground Zero during the cleanup period and
are able to medically document that they have an illness as a
result of exposure to the air around the site. We should
provide these victims with a better path than the inefficient
and expensive litigation they are currently pursuing.
But if we pursue this path, we must do so in a manner that
limits the liability of construction companies that were
instrumental in the efforts at Ground Zero and places a
reasonable cap on recovery through litigation outside the fund.
Thus, while we owe it to the victims to provide a reasonable
means to seek compensation, we must make sure that any
expansion of the 9/11 Fund is proportionate to the original
terms of the legislation creating the fund.
So I would ask the unanimous consent to enter into the
record a statement by the five major contractors that is
submitted on behalf of these five major contractors that
participated in New York.
Unanimous consent requested, Mr. Chairman.
Mr. Nadler. Without objection, so ordered.
[The information referred to follows:]
Mr. King. I thank you, Mr. Chairman.
And I would conclude my statement. Thank you for holding
this hearing.
I thank the witnesses in advance, and I look forward to
your testimony.
And I yield back.
Mr. Nadler. Thank you.
I will now recognize myself for an opening statement.
This joint hearing of the Subcommittee on the Constitution,
Civil Rights, and Civil Liberties and the Subcommittee on
Immigration etcetera, will investigate the status of
compensation for the tens of thousands of people who are
suffering because of the collapse of the World Trade Center on
9/11.
I want to thank the distinguished Chairwoman of the
Subcommittee on Immigration for her agreeing to hold this joint
hearing with the Subcommittee on the Constitution. It is both
timely and important.
Other hearings have focused on the ongoing health crisis,
and this Committee has previously investigated the disastrous
response to the environmental catastrophe.
This is the first hearing in the Congress that will examine
the issue of providing compensation to the many first
responders, construction workers, volunteers and other affected
individuals. They are the true heroes of September 11, and they
need our help, not more salutes.
I want to welcome our witnesses and thank them for
participating. We are fortunate to have an expert panel with us
today to discuss the past successes, current challenges and
proposed solutions to the ongoing struggle to provide proper
compensation to the victims of 9/11.
I would also like to recognize those individuals who have
traveled to Washington today to attend this hearing and thank
them for coming. Many are the very people who have been denied
proper compensation thus far. And I hope that we can learn
today about why the system has failed so many.
Last June, Senator Clinton and I held companion hearings on
the actions of the EPA and other Federal agencies that allowed
workers to work in a toxic environment without proper
protection and gave them false assurances as to their safety.
Obviously, none of the injuries we are talking about would
have occurred were it not for the terrorists, who are
ultimately to blame. But many or most would have been avoided
if the Federal Government had acted in a responsible manner.
The Federal Government, therefore, has a moral and legal
obligation to compensate the victims of 9/11 and to provide for
their healthcare.
Many hearings have examined the health issues, and we have
heard from many who are too sick to work, and we must assume
that many more will become sick in the future. Which brings us
to today's hearing.
We have with us the former special master of the Federal
Victim Compensation Program, who was responsible for providing
approximately $7 billion in compensation to the families of
those who lost their lives and to those injured in the
immediate aftermath of the attacks. He paid claims to about
2,900 families of the deceased and to 2,500 people with
physical injuries, including respiratory illnesses. The funds
he distributed were tax free, and every award took into account
the recoveries from collateral sources such as private
insurance, pensions and workers' compensation. Claims payments
were halted because of a statutory expiration date.
We will also hear from Mike Valentin, a police officer and
9/11 first responder who can no longer work and who long ago
exhausted his prescription drug coverage and is now fighting to
keep his family financially afloat. Unfortunately, his case is
all too typical.
New York City Corporation Counsel Michael Cardozo will
discuss the World Trade Center Captive Insurance Company, which
established with a $1 billion congressional appropriation has
spent millions of dollars in administrative and legal costs to
contest rather than to pay claims filed by first responders and
other individuals whom Congress intended to assist.
Only a handful of claims have been paid, and none of those
have been related to the respiratory problems that so many
suffer. I look forward to hearing from him how many claims have
been paid out, what he sees as the challenges to compensating
9/11 victims.
I assume he may discuss last week's Second Circuit Court of
Appeals decision denying New York City and its contractors
immunity from World Trade Center-related lawsuits. Close to
10,000 victims have filed suit claiming that they ``suffered
respiratory injuries due to the failure of the city and the
Port Authority to monitor those conditions and to provide them
with adequate safety equipment and/or warn them of the
hazards.''
Finally, I look forward to the testimony of Dr. Jim Melius,
who is an expert on the proposed legislative solutions to
reopen the Victims Compensation Program and to provide for the
long-term health needs of those affected by the attacks of 9/
11.
I would like to note that my colleagues Congresswoman
Carolyn Maloney and Congressman Vito Fossella and I have
introduced the 9/11 Health and Compensation Act, which would
provide comprehensive medical treatment to any person whose
health was affected and would reopen the Victim Compensation
Fund so that people can be compensated for their economic
losses.
The pain and suffering of the living victims of 9/11 is
real and cannot be ignored. I think it is clear that we as a
Nation must do more than we have.
During the final months of the Civil War, President Lincoln
in his Second Inaugural Address noted that the Nation had to go
beyond mourning the dead and needed to look toward what could
be done to help the Nation recover and reconstruct. Nearly 7
years after 9/11, we are in the same position. We must, as
Lincoln remarked, ``bind up the Nation's wounds and care for
him who shall have borne the battle, and for his widow and his
orphan.''
I hope that as we continue to bring the truth to light
through these hearings we can do a better job of repaying a
debt that can never fully be repaid to the victims and heroes
of 9/11.
I yield back. And I now recognize the gentleman from
Arizona, the Ranking Minority Member of the Subcommittee on the
Constitution, Civil Rights and Civil Liberties, for an opening
statement.
Mr. Franks. Well, thank you Mr. Chairman.
First, let me just say, like so many others here today,
that my heart does go out to everyone who toiled and suffered
in the tragedy of 9/11. Those attacks were met with the very
noblest of responses. I still remember the reports of firemen
running up the stairs to try to help people from the burning
Towers.
Today I hope we all rededicate ourselves to doing what is
right and just for all Americans harmed by the terrible act of
terrorism on 9/11.
Among those heeding the call to respond to the 9/11 attacks
were private contracting firms that were asked by the City of
New York to immediately begin cleanup efforts after 9/11. They
did so even though they and the City of New York were unable to
secure liability insurance that they normally would have before
starting a recovery project.
Other major entities affected by the 9/11 attacks including
the airlines, the World Trade Center and port authorities were
protected by bipartisan Federal legislation from excessive and
unwarranted liability exposure following the attacks. The
cleanup firms, however, whose liability issues did not arise
until many months after the attacks were not so protected.
In the administrative compensation program created to help
the immediate victims of 9/11, called the September 11th
Compensation Fund, does not cover those exposed to subsequent
site contaminants. That fund, administered by Mr. Kenneth
Feinberg here, was administered within set parameters.
As the non-partisan RAND Institute for Civil Justice
pointed out in its 2004 report, ``pre-commitments by government
programs reduced the ability of government and society more
generally to allocate resources to meet those pressing needs
after an attack.''
And the Government Accountability Office in 2005 also
cautioned that ``because these compensation programs may expand
significantly beyond the initial cost estimates, policymakers
must be careful in considering the cost and precedent-setting
implications of establishing any new Federal compensation
programs, particularly in light of the current Federal
deficit.''
And I would like to submit both of those reports,\1\ Mr.
Chairman, for insertion into the hearing record today.
---------------------------------------------------------------------------
\1\ The reports submitted by Mr. Franks are not reprinted in this
hearing but can be accessed at the following links:
---------------------------------------------------------------------------
http://www.rand.org/pubs/monographs/2004/RAND_MG264.pdf
http://www.oig.dol.gov/public/feca/reports/
GAO%20PERSPECTIVES%20ON%20FOUR%20PROGRAMS%202005.pdf
Mr. Nadler. Without objection, so ordered.
Mr. Franks. Private contracting firms should not be driven
out of business by these lawsuits or deterred from responding
to future crises for fear of unlimited and potentially
bankrupting liability. The model Congress created on bipartisan
basis after 9/11 worked well as it was intended to do. Under
that model, if a person chose not to obtain relief through the
compensation fund but decided, rather, to sue the court, the
liability the airlines, the World Trade Center and the
airports, who were also victims of the 9/11 attacks, would be
limited to the extent of their insurance coverage at the time
of the attacks.
The Aviation Security Act conference report put reasonable
limits on the otherwise potentially infinite liability innocent
Americans would have faced as a result of litigation
surrounding the attacks. Consequently, the vast majority of
victims opted to seek compensation through the September 11th
Victim Compensation Fund, and Americans were spared decades of
costly and wasteful litigation regarding damages that the
terrorists themselves would be responsible for.
As the non-partisan RAND Corporation concluded, it is
difficult to imagine that the Victims Compensation Fund did not
resolve claims much faster and more efficiently than the tort
system would have given the size of the losses, the parties
primarily responsible for the attacks, and the complicated
liability issues surrounding the events of 9/11.
As we move forward today, I want to make sure that whatever
compensation fund might be created to cover new claims treats
current victims in the same responsible manner as those who
were injured in the immediate aftermath of the 9/11 attacks.
That is something that justice demands, Mr. Chairman, and I
will do all that I can to see that the victims of 9/11, whoever
they are, receive a fair and just result. And I look forward to
hearing from all of our witnesses today. Thank you, sir.
Mr. Nadler. Thank you.
And I will now recognize the distinguished Chairman of the
full Committee, the gentleman from Michigan, for an opening
statement.
Mr. Conyers. Thank you, Chairman Nadler and Co-Chairwoman
Zoe Lofgren, the two distinguished Ranking Members of the
Subcommittees that are holding a joint hearing, Steve King and
Trent Franks.
Please note how democratically this Committee operates. We
finally get down to the Chairman of the Committee after a half
a dozen people have already articulated their opening
statements.
I am going to just make a couple comments that will let all
of these distinguished witnesses know, all six of you, we are
proud that you are here. We think this is an important element
of understanding how we react to attacks of terror in our
country.
Now, in the wake of the World Trade Center attacks, then-
Governor Pataki and then-Mayor Giuliani, let us face it, took a
do-it-yourself attitude toward the victims of this
unprecedented disaster. Instead of respirators and professional
cleanup, first responders, construction workers, volunteers,
were sent into this disaster without protection. And the public
got instructions, believe it or not, to just wipe their
apartments and offices down with a wet rag. And now cancer and
lung disease are ravaging these survivors.
Now, the current mayor has worked hard to fix this mess and
has taken--but the city is really in an adversarial stance. And
I leave it to all of our New York people here--Mrs. Maloney,
Mr. Weiner, Jerry Nadler and others here. But they have taken
an adversarial stance against the victims of the environmental
tragedy.
Now, in my opening statement, let me give you the bottom
line here. We need to sit down and start settlement
negotiations that will get these victims the help they deserve.
And the way we do it is get beyond--you know how many people
have received relief under this World Trade Center Captive
Insurance Company? Five. Five victims--8,600 claims pending.
And we have got something like a billion dollars to account for
what is going on. What has really turned out to be the case is
that the lawyers are suing the victims against allowing them to
get recovery. That is where the money is going.
So this unique hearing with two Subcommittees--and we have
got another Ranking Member of Crime, Bobby Scott, here. We have
got the former Chairman of the Congressional Black Caucus, Mel
Watt, here. We need to, after we hear from the witnesses, let
us do something here. And we have got all the players here, and
this is the right time to do it.
And I will put the rest of my statement in the record, Mr.
Chairman. And thank you both.
Mr. Nadler. I thank the gentleman.
We have a distinguished panel of witnesses today. Ken
Feinberg served as the special master of the Federal September
11th Victim Compensation Fund of 2001. He is currently the
managing partner and founder of the Feinberg Group, LLP, and
has had a distinguished teaching career at the Georgetown
University Law Center, University of Pennsylvania Law School,
NYU School of Law, University of Virginia Law School and
Columbia. Why did you ever leave Columbia and NYU? He has been
listed by the National Journal as one of the 100 most
influential lawyers in America, and was named lawyer of the
year by the National Law Journal in 2004. Mr. Feinberg received
his J.D. from New York University School of Law.
Michael Cardozo has served as the corporation counsel and
chief legal officer of New York City since January 2002. He
serves as legal counsel for the mayor of New York, elected
officials, the city and its agencies, and also heads the
Election Modernization Task Force. Prior to becoming
corporation counsel, Mr. Cardozo was a partner at Proskauer
Rose where he served as co-chair of the firm's 150-person
litigation department. He is a graduate of Columbia Law School
and served as a law clerk to the late Judge Edward McLean in
the United States District Court for the Southern District of
New York.
Ann-Marie Lasowski joined the U.S. Government
Accountability Office in 1988. She currently serves as acting
director in GAO's Education Workforce and Income Security
Issues Team where she leads work and worker protection issues.
In recent years, she led a body of work on defense trade issues
covering topics such as the U.S. export control system, foreign
military sales and militarily critical technologies. Ms.
Lasowski began her career as an analyst in GAO's Philadelphia
field office, performing evaluations and orders on topics
including transportation safety, housing programs,
environmental contracts, and defense contract management and
financing issues.
Detective Michael Valentin was a detective with the New
York City Police Department and is now retired on medical
disability as a result of his exposure to toxic dust and
particulate matter while working at the World Trade Center site
for 3 months.
Ted Frank is the resident fellow and director of the
American Enterprise Institute Legal Center for the Public
Interest where he manages the institute's research and studies
liability reform. His research areas include product liability,
class actions and civil procedure, corporate regulation,
antitrust and patent litigation, lifestyle litigation, medical
malpractice, and judicial selection--a rather wide field.
Previously, Mr. Frank was a litigator in private practice. His
litigation experience includes defending the 2003 California
gubernatorial recall election against an ACLU constitutional
challenge; Vioxx and automobile products liability cases; class
action defense; and antitrust and patent cases.
Dr. James Melius is an occupational physician and
epidemiologist. For the past 10 years, he has worked with the
Laborers International Union of North America and currently is
administrator of the New York State Laborer's Health and Safety
Trust Fund and director of research for the Laborers Health and
Safety Fund of North America. He currently Chairs the steering
committee for the World Trade Center Medical Monitoring and
Steering Committee which oversees this program for World Trade
Center responders. He received his M.D. from the University of
Illinois in 1974 and his Dr.P.H. in Epidemiology from the
University of Illinois School of Public Health in 1984.
Before we begin, I want to formally acknowledge all of the
people who have come down from New York in buses who are now
here. They have come down to show their support for all those
who are still suffering after 9/11.
I want to acknowledge those in the overflow room as well.
Thank you for your service. We welcome you all.
Without objection, the written statements of the witnesses
will be made part of the record in their entirety. We would ask
each of the witnesses to summarize his or her testimony in 5
minutes or less. To help you keep time, there is a timing light
at your table. When 1 minute remains, the light will switch
from green to yellow and then to red when the 5 minutes are up.
Before we begin, it is customary for the Committee to swear
in its witnesses. If you could please stand and raise your
right hand to take the oath.
Do you swear or affirm under penalty of perjury that the
testimony you are about to give is true and correct to the best
of your knowledge, information and belief?
Thank you.
Let the record reflect that the witnesses answered in the
affirmative.
We will now recognize our witnesses in order. First, I
recognize for 5 minutes for statement, Mr. Feinberg.
TESTIMONY OF KENNETH R. FEINBERG, FORMER SPECIAL MASTER, VICTIM
COMPENSATION FUND
Mr. Feinberg. Thank you very much, Mr. Chairman.
This is the first time since the 9/11 Fund expired almost 5
years ago that I have had a chance to come here and personally
thank this Committee, the House of Representatives, the
Congress, the Administration, for their absolute, unstinting
support for the 9/11 Fund. It was truly bipartisan. I had the
complete support of the Administration, Attorney General
Ashcroft, and the Congress, Members from both parties. And it
would have never worked without that bipartisan support, and I
am very grateful.
I also particularly thank the Chairman of the full
Committee, Chairman Conyers, who I first worked with in 1975
when I was a Member of the Senate Judiciary Committee staff.
And it is good to see him.
The statistics concerning the 9/11 Fund speak for
themselves if statistics are any indication of success. Over $7
billion in taxpayer funds was paid to 5,560 eligible claimants.
Families of 2,880 victims received almost $6 billion in
compensation. In addition, 2,680 physical injury victims were
paid over $1 billion by the 9/11 Fund. As the Chairman pointed
out, and others, some 97 percent of all eligible families who
lost a loved one on September 11 voluntarily agreed to enter
the 9/11 Fund rather than litigate.
The real irony here that brings me here today to testify is
that there are almost 11,000 current litigants who, had they
manifested an injury, a physical injury, before the fund
expired by statute on December 22, 2003, they would have been
paid. The only reason they weren't paid under the 9/11 Fund is
that they didn't manifest any injury from their exposure at the
World Trade Center site until after the fund was dissolved.
So we are asked here today to consider: What do we do? Not
only about the 11,000 individuals who have already brought
suit, but it is estimated that there may be over the next 5, 10
years an additional 25,000 or 30,000 people who now have latent
in-residence illness that may manifest a physical injury in the
next decade. And again, the only reason they weren't paid by
the fund is they weren't ``sick'' at the time the fund expired
by statute.
Now, in my testimony I have proposed for your consideration
two alternate ways to move forward in this matter.
Option one is to simply reenact the September 11 Victim
Compensation Fund. But there are two major challenges if you
decide to reenact that fund.
First, if it is reenacted, I would recommend that it be
reenacted with a one-line extension. There are some well-
intentioned amendments to that fund that have been circulating.
I have been asked to comment upon them. I suggest for your
consideration it would be a mistake in reenacting the fund to
change the rules and regulations of that fund.
If you want to reopen the fund to cover 11,000 people or
more, that is an option. But I suggest that amendments designed
to change the way the fund worked would be a mistake and would
probably be the political death knell of any attempt to simply
reauthorize the fund to deal with these current claims.
The second challenge with reauthorizing the fund is a
philosophic dilemma which I raised in my testimony: Why
reauthorize the 9/11 Fund? There was no 9/11 Fund for Oklahoma
City. There was no 9/11 Fund for the victims of Katrina. There
was no 9/11 Fund for the African Embassy bombings. There was
not even a 9/11 Fund for the first World Trade Center attack in
1993. Those people aren't eligible under the fund.
So if you reopen the fund--and there is a strong, basic
fairness argument for reopening the fund to deal with people
who are legitimately ill but who weren't around legitimately
ill at the time that the fund expired--understand that there
are real philosophic questions as to the wisdom of the Congress
again singling out for special public compensation certain
victims of life's misfortune while failing to do so for others.
I leave that philosophic conundrum to the Committee. But I
just want everybody to understand that that is a problem that I
heard repeatedly in administering this fund. ``Mr. Feinberg, my
son died in Oklahoma City. Where is my check?'' ``My son died
in the basement of the World Trade Center in 1993. Why aren't I
eligible?'' That is a serious dilemma.
I also say, finally, in my testimony that if this Congress
decides not to extend the 9/11 Fund, I urge all parties
currently involved, directly and indirectly, in the litigation
currently pending in Manhattan to come together and settle and
resolve all of the litigation. There is a captive insurer with
substantial resources, there are other defendant companies with
extended insurance that might or might not be available to add
to that captive amount. But it is certainly an option that I
lay out in my testimony is vastly preferable than continuing
this ongoing litigation with all of its uncertainty, with all
of the roll of the dice that goes with litigation, the time and
money it will take, without anybody knowing in advance what the
result will be.
So if the 9/11 Fund is not to be extended, I urge this
Committee to do what it can to encourage the private parties to
sit down and resolve that litigation. It should not be that
difficult.
Finally, I want to just thank not only this Committee for
inviting me to testify. Michael Cardozo is here from the City
of New York. The City of New York, when I administered the 9/11
Fund, the City of New York and the Department of Defense
discussed with me practically every day--Michael Cardozo was on
the phone with me at least three, four times a week--how can we
best administer the program to help eligible claimants?
So I just want to publicly thank the city and the mayor,
and the Defense Department and the secretary, for all they did
as well in helping make this 9/11 Fund work.
And, finally, I just point out, Mr. Chairman, Deputy
Special Master Camille Biros is here today, who worked so
closely with me and others in helping to administer the 9/11
Fund, and I thank her for her service as well.
Thank you very much.
[The prepared statement of Mr. Feinberg follows:]
Prepared Statement of Kenneth R. Feinberg
Mr. Chairman,
My name is Kenneth R. Feinberg, and I served as the Special Master
of the Federal September 11th Victim Compensation Fund of 2001.
Appointed by the Attorney General of the United States, I was
responsible for the design, implementation and administration of the 9/
11 Fund. I served in that capacity for 33 months, until the Fund
expired by statute on December 22, 2003.
If statistics are any barometer of success, the 9/11 Fund served
its purposes in providing an efficient and effective administrative no-
fault alternative to tort litigation against alleged domestic
tortfeasors. Over $7 billion in public taxpayer funds was paid to 5,560
eligible claimants. Families of 2,880 victims received
$5,996,261,002.08 in compensation; in addition, 2,680 physical injury
victims were paid $1,053,154,534.56 by the 9/11 Fund. Some 97% of all
eligible families who lost a loved one on September 11 voluntarily
agreed to enter the 9/11 Fund rather than litigate. The average award
for a death claim was $1,267,880.49; the average award for a physical
injury claim was $392,968.11. And all of this was accomplished with 9/
11 Fund administrative and overhead costs of less than 3%. I point with
pride to the fact that this was one of the most efficient, streamlined
and cost effective government programs in American history.
It was also totally bipartisan. During the thirty-three months that
I served as Special Master, I had the complete cooperation of the
Department of Justice, Office of Management and Budget, the
Administration, and the Congress. I also received unqualified support
from various state and local governments, including, particularly, the
City of New York and the Department of Defense. All government entities
worked at my side to make sure that the 9/11 Fund was a success and
that prompt payments were made to all eligible claimants.
I also worked closely with Federal Judge Alvin Hellerstein, who
continues to preside over all the federal 9/11 related cases in
Manhattan. Judge Hellerstein worked tirelessly with me in coordinating
the litigation and the 9/11 Fund claims in an effort to maximize the
number of individuals who elected to enter the Fund rather than
litigate. I am in his debt for his extraordinary work, then and now, in
coming to the aid of families and victims in distress.
When the Program expired, in December of 2003, only 94 lawsuits
were filed by families of deceased victims who decided to litigate
rather than enter the 9/11 Fund. It is my understanding that almost all
of these wrongful death lawsuits have since been settled and that there
are currently only a handful of cases still being litigated in federal
court in Manhattan.
The same cannot be said for the 9/11 physical injury victims,
particularly the responders working after September 11 during rescue
and clean-up operations at the World Trade Center. As already
indicated, the 9/11 Fund paid over $1 billion to 2,680 eligible
physical injury claimants. The vast majority of these physical injury
victims were responders suffering various respiratory ailments at the
World Trade Center site in the days, weeks and months following the
September 11 attacks. Almost all of these responders were compensated
by the Fund for respiratory ailments rather than traumatic physical
injuries. The 9/11 Fund eligibility criteria recognized that these
respiratory ailments were often latent, that physical manifestations of
injury often did not occur until months or years after first exposure
to hazardous substances at the World Trade Center. That is why the 9/11
Fund modified its eligibility criteria to permit the valid filing of
claims years after the terrorists attacks, when these physical
manifestations first appeared and became apparent.
However, as already indicated, the 9/11 Fund expired by statute on
December 22, 2003, before thousands of responders, and possibly other
individuals exposed to the toxic air at the World Trade Center site,
manifested any physical injury. This large group of individuals could
not be paid from the 9/11 Fund since there was no longer any Fund to
process and pay their claims. Accordingly, they have exercised the
alternative option of litigating before Judge Hellerstein. It is
estimated that 11,000 responders will file suit by the end of this
year, and that as many as an additional 29,000 individuals may yet
manifest physical injuries in the next few years. It is anticipated
that these affected individuals might file suit as well.
I take no position on the merit of these lawsuits, which involve
complex issues of liability, legal immunity of governmental entities,
medical causation, and valuation of individual damage claims. But I do
believe that these lawsuits should be resolved, that protracted and
uncertain litigation is in nobody's interest. That is why the 9/11
Victim Compensation Fund was established by Congress in the first
place, a recognition that a prompt and efficient alternative to tort
litigation constituted a better way.
It is ironic that these very individuals who have filed lawsuits
seeking compensation are the same type of individuals who received
payments from the 9/11 Fund; had these thousands of individuals
manifested a physical injury before the 9/11 Fund expired, they, too,
would have received compensation without litigating. It is perfectly
understandable, therefore, why they seek to be treated the same way and
in the same manner as their brethren. It is my understanding that their
decision to litigate is directly related to the fact that there is no
longer a 9/11 Fund to process their physical injury claims.
What should be done to resolve this problem, and the costly and
uncertain litigation, and provide prompt compensation to eligible
claimants physically injured in the aftermath of the September 11
attacks? I offer two proposals for your consideration, both of them
controversial and challenging and neither easy to achieve. But I
believe that either of my proposals are preferable to the existing
uncertainty and expense associated with the ongoing litigation.
i. renew and extend the federal september 11th victim compensation fund
One option would be simply to reenact the law establishing the
Federal September 11th Victim Compensation Fund for an additional
period of years in order to provide the same public compensation to
eligible physical injury claimants. This could be justified on grounds
of basic fairness; Congress would simply declare that the same
eligibility criteria and compensation should be made available to those
currently suffering respiratory injuries who were not paid by the
earlier 9/11 Fund solely because they did not manifest a physical
injury until after the earlier Fund had expired. Congress could simply
reopen the 9/11 Fund to encompass all such claims during a ``window''
of five years during which time all September 11 related respiratory
physical injuries could be evaluated and processed. (medical evidence
would need to be considered by Congress in deciding how long this
``window'' would be open, permitting the filing of such physical injury
claims).
But one should not underestimate the philosophical, political, and
practical problems associated with reenactment and extension of the 9/
11 Fund.
First, any attempt to reenact and extend the 9/11 Fund should be
initiated with the understanding that there would be no changes in the
rules and regulations governing the original Fund, that the new law
would simply be a ``one line'' reaffirmation of the law which
established the original 9/11 Fund. This will not be easy. Various
interested parties, while championing the reenactment of the 9/11 Fund,
have called for statutory modifications and additions, e.g., indemnity
protection for contractors at the World Trade Center site; compensation
for claimants suffering mental trauma without accompanying physical
injury; elimination of the collateral offsets rule which was an
integral part of the original Fund; and subsequent Fund payments for
eligible claimants who received compensation from the earlier Fund, but
whose physical condition has subsequently worsened resulting in a
demand for additional compensation. These and other well intentioned
requests have all been asserted in connection with any attempt to
reenact and extend the original 9/11 Fund. But I suggest that any
attempt to modify the statutory provisions and accompanying regulations
of the original Fund will lead to the type of controversy and
disagreement that will undercut political consensus and prevent
reenactment of the Fund.
Second, even a ``one line'' extension of the original 9/11 Fund
poses fundamental philosophical and political questions of fairness.
Why should Congress be reenacting the 9/11 Fund, providing millions in
additional public compensation to the physical injury victims of the
September 11 attacks, while no such Fund exists at all for the victims
of the Oklahoma City bombing, the victims of the African Embassy
bombing, the victims of the first World Trade Center attack in 1993 or,
for that matter, the victims of the unprecedented disaster associated
with Hurricane Katrina? Why should Congress, which has already enacted
legislation authorizing over $7 billion in public compensation to the
families of those who died on September 11, or who were physically
injured as a result of the attacks, now authorize additional millions
or even billions in compensation for the remaining September 11
victims, while failing to do anything similar to the other victims of
life's misfortunes? It is a fundamental question posed to our elected
officials in a free democratic society. Why some victims but not
others? On what basis should such distinctions be made? Are some
victims more ``worthy'' than others?
I have maintained that the original 9/11 Fund was the correct
response by the American people to the unprecedented terrorist attacks
on September 11, 2001. It was sound public policy, reflecting national
solidarity towards the victims and expressing a national sense of
compassion not only to the victims, but to the rest of the world. The
September 11 statute was an expression of the best in the American
character. It could be justified, not from the perspective of the
victims, but, rather, from the perspective of the Nation. But whether
or not it should be reenacted instead of being considered a unique
singular response to an unprecedented national tragedy is a fundamental
question better left to the consideration of Congress.
ii. settlement of the current and future physical injury litigation
Even if Congress decides not to extend and reenact the 9/11 Fund,
this does not mean that the current litigation should continue.
Fortunately, there is a path open for the comprehensive resolution of
the litigation, while protecting all defendants against the likelihood
of similar future litigation.
As I understand it, Congress created a September 11 related captive
insurance company for the City of New York and its contractors in an
amount approximating $1 billion. This money is readily available at the
present time to resolve the physical injury claims currently pending in
federal court against the City of New York, the contractors, and other
defendant entities. Two problems have been raised, however, about the
availability of these funds and the challenges posed in securing a
comprehensive settlement of the litigation.
First, is the obvious question as to whether or not the $1 billion
is sufficient to resolve all of the pending claims? After all, it is
noted, the 9/11 Fund paid over $1 billion in resolving just 2,680
physical injury claims; how can $1 billion be sufficient to resolve
some 11,000 current similar claims? A fair question. But there are
answers. Nobody knows how many of the 11,000 pending claims are
eligible for compensation, what the eligibility criteria might be, or
what the compensation levels should be for valid physical injuries. In
addition, how many of the existing plaintiffs are already receiving
health related reimbursement? What role will collateral offsets play in
any settlement negotiation? Most importantly, it is not clear to me
that the $1 billion is the sole source of compensation in the event
that a comprehensive settlement is sought. What about financial
contributions over and above the $1 billion from other defendants and
their insurers? If settlement negotiations do commence, to what extent
is it possible and likely that all defendants, not just the City of New
York and the captive insurer, will contribute settlement proceeds in an
effort to secure ``total peace'' through a comprehensive resolution of
the dispute? These are important questions that can only be answered in
the context of meaningful settlement negotiations.
Second, creative settlement terms and conditions can be negotiated
which might provide additional financial security to eligible claimants
over and above immediate compensation. For example, plaintiff attorneys
involved in the litigation have been meeting with officials of the
insurance industry to determine whether some type of individual
insurance policy might be made available to each eligible plaintiff.
Premiums would be paid from the captive insurance fund; in return, each
eligible plaintiff would receive an insurance policy to be paid by the
insurer if and when the individual plaintiff develops a future cancer
or some other related illness. This approach, and other similar
creative ideas, might be advanced during settlement negotiations to
maximize financial protection for plaintiffs while taking advantage of
relatively limited settlement dollars.
Third, is the perplexing and legitimate problem of future physical
manifestations resulting in additional litigation. I agree with the
City of New York and other defendants that it makes little sense to
settle all 11,000 current cases only to find that additional lawsuits
are filed by future plaintiffs who do not manifest a physical injury
until years after a current settlement. But, again, there are answers
to this vexing problem which should help ameliorate defendant concerns.
For example, it might be possible to set aside a portion of all
available settlement proceeds, to be used if and when additional
individual physical injury claims are presented for payment.
Alternatively, it might be possible for all current eligible plaintiffs
to be paid in installments, with additional funds due and owing
depending upon the filing rate of future claims; this is exactly what
Federal Judge Jack B. Weinstein did in reorganizing the Manville Trust
involving individual asbestos claims. A down payment was made, with
future payments depending upon the filing rate of subsequent individual
asbestos claims. Another idea is to provide some type of claims
registry; an eligible individual exposed to toxic fumes at the World
Trade Center, but not yet manifesting any physical injury on the date
of the settlement, might receive a modest payment immediately and
``register'' for participation in the settlement. This potential future
plaintiff would immediately receive the available insurance policy in
addition to the modest down payment; in return, the individual would
surrender all future rights to litigate.
These are just some personal concepts which may be supplemented by
other similar creative settlement terms and conditions. Some may work,
others may not. What is important is that all interested parties come
to the negotiation table with the flexibility, creativity, and
determination to secure a comprehensive settlement. This approach is
vastly preferable to the ongoing costly and uncertain litigation
lottery.
__________
Mr. Chairman, I believe that either of the approaches which are the
focus of my testimony today, are better alternatives than the existing
litigation currently proceeding in federal court in New York City.
Whether Congress decides to reenact the Federal September 11th Victim
Compensation Fund, or whether it encourages all interested parties to
commence intense negotiations designed to resolve all current and
future September 11 related physical injury litigation, I am convinced
that the courtroom is not the best place to resolve these disputes. I
am prepared to assist the Congress and the parties in any manner
requested, and to do so pro bono. What is important is that the
litigation be brought to an end and that eligible claimants receive the
compensation necessary to move on with their lives as best they can. We
do not have the power to change history and prevent the September 11
terrorist attacks. But it is the responsibility of the Congress and the
American people to try and bring some degree of financial security to
the victims of September 11. I hope I have offered a blueprint and some
food for thought to all interested parties.
I thank you for the opportunity to testify here today.
Mr. Nadler. Thank you, Mr. Feinberg. And we join with you
in thanking the deputy special master and the corporation
counsel.
We will now recognize the corporation counsel for a
statement. Mr. Cardozo?
TESTIMONY OF MICHAEL A. CARDOZO,
CORPORATION COUNSEL, CITY OF NEW YORK
Mr. Cardozo. Thank you, Mr. Chairman, Members of the
Committee.
I particularly want to thank the members of the New York
delegation and their staffs who have long made the question of
health of the workers and the other people at Ground Zero and
area residents a prime area of concern.
Needless to say, the City of New York strongly supports the
bill that we are discussing today, introduced by Chairman
Nadler and Representatives Maloney and Fossella, and
particularly supports what we are talking about today, a
reopening of the Victims Compensation Fund.
Six and one-half years ago, 90,000 people from every State
in this country responded to the attack on this Nation and
participated in the Ground Zero rescue and recovery effort.
Today, over 10,000 of those people report that they suffer from
a wide range of ailments. And, unfortunately, it is anticipated
that many, many more may claim and report accurately that they
are also sick as a result of 9/11.
Now, medical care for these people is being provided by the
city, the Mount Sinai Consortium and others, and enactment of
this bill would provide the stable funding required to ensure
that, as Mayor Bloomberg has committed, everyone who was hurt
as a result of the 9/11 attacks has access to medical care at
no cost.
But in addition to these health problems, many of the
people are unable to work, and some have other losses. Those
individuals who rushed to the scene of the devastation without
a thought for their personal safety, New York City and the
contractors who provided aid to the city without a written
contract and without adequate insurance, are now battling
against one another. Some of those people are sick, and others
may become sick.
But New York City and the contractors do not believe that
they committed a wrong that makes them liable for these
illnesses. And in any event, the amount of money available in
the captive insurance company, $1 billion--a congressionally
authorized insurance company, not a victims' compensation
fund--that money is not sufficient to resolve the claims of
those who claim to have become ill let alone future claimants.
And as a result, we are locked in a litigation. And
regardless of the result of that litigation, no one is going to
win. If the city and the contractors prevail, people who became
sick as a result of 9/11 will receive nothing. And if the
plaintiffs win, many of the contractors will face very, very
substantial financial jeopardy, since as I have noted the
available insurance may not be adequate to cover them.
Reopening the VCF, therefore, offers the means of resolving
this terrible dilemma. As you have just heard from my very good
friend Ken Feinberg, who so ably administered the 9/11 Fund,
that fund allowed for compensation to injured people without
any need to establish fault. And it worked just as Congress
intended.
But the critical limitations on the VCF that Mr. Feinberg
just noted have made it unavailable to the more than 10,000
people who are now suing the city and the contractors. If
someone became ill as a result of 9/11 exposure even days after
September 15, 5 days after the attack rather than 4, that
person was not eligible for a VCF payment. If someone
manifested an illness weeks after December 2003 when the fund
statutorily expired, she was not eligible to recover. And if
someone was cleaning buildings three blocks from Ground Zero,
that person, too, was ineligible to recover.
There is no just reason for these people to receive nothing
while many others who were in essentially the same position,
but who met the strict eligibility requirements, were
compensated. Reopening the VCF would deal with these problems.
Now, I do want to note that if this Committee and the
Congress reopens the VCF as we urge, there will undoubtedly be
some, hopefully few, who will nevertheless decide to pursue a
claim through the courts. If the Congress would provide an
indemnity to the city and the contractors in the event of such
claims, it would mean that the $1 billion presently in the
captive insurance company could be used to help fund the VCF.
Without it, the captive would have to continue.
In conclusion, let me just note as I have explained in
detail in my written statement, the VCF would provide fair,
fast and certain relief. And providing compensation through the
VCF will help ensure that if, God forbid, we have another
attack the response from the contractors, the relevant city and
the area workers will be as generous and robust as it was after
9/11.
Thank you very much.
[The prepared statement of Mr. Cardozo follows:]
Prepared Statement of Michael A. Cardozo
Good morning, Chairman Nadler, Chairwoman Lofgren, ranking members
Franks and King, and committee members. My name is Michael A. Cardozo
and I am the Corporation Counsel of the City of New York. I want to
start off by thanking the members of the New York delegation and their
staffs who have long made the issue of the health of the responders and
the area residents to the attack on the World Trade Center a top
priority. I also want to thank you for holding this hearing on
compensation for the responders and community members affected by the
September 11 attack.
The federal government contributed substantially to New York City's
economic and physical recovery from the 9/11 attacks. Mayor Bloomberg
and the people of New York City are grateful for the federal
government's strong support.
The federal government has also provided some funding through
annual appropriations for screening, monitoring and treatment of
responders and community members and for that we are also grateful. But
what is needed is long-term, stable funding and a method to address
compensation for non-health-related concerns. The City of New York
strongly supports H.R. 3543, the James Zadroga 9/11 Health and
Compensation Act of 2007 introduced by Chairman Nadler and
Representatives Carolyn Maloney and Vito Fossella. That bill would
provide the stable funding required for health issues.
But I am here today to testify in support of the provision of that
bill that would re-open the Victim Compensation Fund, thereby providing
a fast, fair, and efficient way to compensate the Ground Zero workers
and area residents who report that they were injured as a result of the
terrorist attack. I am also going to recommend a very important
addition to the bill: that the City and its contractors be indemnified
for the claims of any person who does not accept an award from a
reopened Victim Compensation Fund.
Approximately six-and-a-half years ago, over ninety thousand people
took part in the rescue and recovery effort--including workers and
volunteers who came from all 50 states and are constituents of every
member of these subcommittees, and indeed of virtually every member of
the House. In addition, some residents, students and area workers were
exposed to the dust and fumes.
While many who were at or near the site and who reportedly fell ill
have recovered, others continue to report a range of ailments. The most
commonly reported are respiratory illnesses, such as asthma, and mental
health conditions, such as Post-Traumatic Stress Disorder (PTSD) and
depression. We do not yet know the extent to which these conditions
will remain or will be successfully resolved with treatment.
We also do not yet know whether late-emerging conditions, like
cancer and pulmonary fibrosis, will arise in the future; but concern
about these illnesses developing was raised time and again in
discussions with responders and residents alike. We know that we must
build the capacity to detect and respond to any conditions that may
reveal themselves in the future.
In addition to the health effects reported by these individuals,
many report other losses. Some report they are unable to work, some
have out of pocket medical expenses or other losses. Simply providing
medical care, as important as that is, would not compensate them for
these types of losses.
Some of these people are City employees, particularly members of
the FDNY and NYPD. Others worked for the contractors the City retained
in the rescue, recovery and clean-up efforts in this attack upon our
country. Many of these contractors began work on September 11 itself.
They came forward out of patriotism and a sense of civic duty without
having a contract in hand or insurance to cover their liabilities.
As you are aware, almost 10,000 of those who worked on the rescue,
recovery and clean-up efforts have sued the City and the contractors
seeking compensation. Resolving these issues through the courts is not
in anyone's interest. It is especially not in the nation's interest, if
we want to assure that the next time--if God forbid there is a next
time--that people and companies will once again step forward.
We have a model of how we can proceed in a way that will quickly,
efficiently and fairly resolve these issues--the Victim Compensation
Fund of 2001, which was enacted shortly after September 11.
the vcf worked well
In the aftermath of the terrorist attack on the World Trade Center,
Congress established a Victim Compensation Fund (VCF). When Congress
created the VCF in 2001, it chose a no-fault compensation program--
those injured were compensated without any need to establish negligence
or fault. As ably administered by Kenneth Feinberg, the VCF worked
exactly as Congress had intended. Determinations were made promptly and
without the delays, litigation risks or rancor that lawsuits inevitably
engender. Approximately 5,500 claimants opted to accept awards rather
than to pursue a lawsuit.
limitations of the vcf
Unfortunately, the VCF had some limitations on it that made it
unavailable to most of the workers at Ground Zero. For example, to be
eligible for the fund, a claimant had to have been present at Ground
Zero within four days of the attack. And claims had to be filed by
December 2003.
Because of these limitations, there are now many rescue and
recovery workers, not to mention those in the community, who report
injuries, but have no option for compensation other than litigation.
More than 10,000 of those people have sued New York City and/or its
contractors. Most of them say they did not develop symptoms of their
injury until long after the filing period for the original VCF passed.
Also, many of them were not present at Ground Zero within four days of
the attack and were therefore not eligible for compensation from the
fund. These individuals, however, if they were hurt as a result of
their work helping their country recover from a terrorist attack, or
exposure to dust and fumes from the attack, deserve to be compensated
by their country for their losses. There is no just reason for them to
get nothing while many others, who were in essentially the same
position, but who met the strict eligibility requirements for
compensation, were compensated.
the downsides of litigation
Regrettably, these individuals have been relegated to the tort
system to obtain compensation for their injuries. The many downsides of
litigation are well known.
First, the outcome is uncertain for all concerned. Each plaintiff,
in order to prevail, must prove:
1. that the City or its contractors are not entitled to the
civil defense immunities provided by law, and
2. that the City or its contractors were negligent, a
difficult standard for them to meet.
Needless to say, we believe we are entitled to civil defense immunities
and we do not believe that we or our contractors were negligent.
Second, even today, some six-and-a-half years after the attacks and
since the first suits were filed, we may still be years away from an
end to the litigation. To be prepared for trial on plaintiffs' claims,
which they say total billions of dollars, both sides must engage in
extensive discovery, which has barely begun. Finally, as with any
litigation, if the plaintiffs are successful, much of the compensation
awarded will not go to them, but to their lawyers.
Even more regrettably, because the plaintiffs must prove that the
City or its contractors were at fault, the lawsuit necessarily pits the
City and the patriotic companies, which rushed to the City's aid
without a written contract or adequate insurance, against the heroic
workers, who rushed to the scene of the devastation without a thought
for their personal safety. Holding the City or its contractors liable
because of their response to an attack on our nation runs the risk that
the next time there is a similar disaster, cities and contractors will
hesitate to provide the needed help.
In the wake of September 11, because of these lawsuits and the
inability to obtain insurance, a number of the contractors experienced
business difficulties and continue to do so. The defendants all face
very substantial potential monetary exposure. To try and alleviate this
burden, Congress used a portion of the assistance provided to New York
City after the attacks to create an insurance company for the City and
the contractors to protect them from the very large potential exposure
they face in the lawsuits. The $1 billion provided was used, as the
legislation required, to set up a captive insurance company. This is an
insurance company set up under New York State law and regulated by the
insurance commissioner of New York to provide insurance to the City and
its contractors for liabilities relating to the rescue, recovery, and
debris-removal efforts following the September 11 attacks. It is not a
victim compensation fund.
Some have suggested that all that needs to be done is for this one
billion dollars of insurance be used to settle the claims brought by
the 10,000 plaintiffs. But this approach overlooks two critical
factors.
First, the plaintiffs' attorneys have said in open court that the
$1 billion, which would amount to about $60,000 per plaintiff when
standard plaintiff's legal fees and costs are factored in, will not be
nearly enough to settle all of the current claims. So, according to the
plaintiffs' attorneys, the $1 billion held by the captive insurance
company would be nothing more than a down payment on their claims. The
contractors would remain exposed to billions of dollars of additional
liability without the benefit of the insurance that Congress explicitly
provided for them and the City.
Second, even if the Captive were able to settle all of the current
claims for $1 billion that would leave the contractors vulnerable to
any claim that might be filed in the future. New cases are literally
being filed every week. And there is concern that there are some
potential diseases, like cancer, that could arise, but would not
develop for years. Without the protection of indemnity, which I will
speak about shortly, settling all of the cases currently pending will
not solve the problems faced by the City and its contractors.
reopening the victim compensation fund
Fortunately, there is a better way: re-opening the Victim
Compensation Fund. Compensation from the fund will be prompt and
certain and there will be no need to assign blame to anyone. In
addition, there will be no need to marshal the services of hundreds of
lawyers and experts in a pitched battle between the plaintiffs and the
City and its contractors. And there will be no need to use the valuable
resources of the federal judiciary.
indemnity
But simply re-opening the Victim Compensation Fund will not be
enough. Under the original VCF, individuals could opt not to accept the
award from the fund and instead pursue a claim through the court
system. Some did so. Under the Zadroga Act, there would be a similar
option and some will undoubtedly avail themselves of it. That means
that the need for the captive insurance company, although diminished,
will continue. The plaintiffs' lawyers have estimated that their claims
are worth billions of dollars. And they have asserted that there are
many claims that have yet to manifest themselves, like cancer, and that
may not develop until years in the future. Thus, the contractors remain
exposed to potential liability for their patriotic actions.
The way to eliminate this highly undesirable outcome is to provide
for an indemnity for any remaining claims for those who decide not to
pursue a VCF award. I emphasize that this indemnity would only cover
the claims of those who do not opt for the VCF. Past experience leads
us to believe that most will take the award from the reopened VCF. And
medical costs would be covered under another part of the bill.
Moreover, once an indemnity is in place, the captive insurance company
would no longer be needed and the funds it holds would be available to
fund the reopened VCF.
We all hope and pray that 9/11 will remain a unique event in this
nation's history. But if it is not, and if we do not resolve these
difficult issues fairly, the next time there is a major disaster, we
are concerned that the response will not be as robust as it was after
9/11. Workers will be reluctant to pitch in because they won't know if
they will be taken care of if they are injured on the job. Companies
will be slow to bring their resources to bear until they are satisfied
that they are not sacrificing their very existence by helping out. I
have been told that, because of the lessons the contractors learned
from 9/11, many engineering firms were reluctant to participate in the
recovery following Hurricane Katrina.
The solution I have outlined ought to take care of every party's
concerns. Re-opening the Victim Compensation Fund will provide fast,
fair, and certain relief to the workers and area residents. And
providing indemnity for the companies involved in the response to 9/11
will give them the peace of mind, and the protection against possible
financial ruin, they deserve.
I will be happy to answer any questions you may have.
Mr. Nadler. Thank you.
I will now recognize for her statement Ms. Lasowski.
TESTIMONY OF ANNE-MARIE LASOWSKI, ACTING DIRECTOR, EDUCATION,
WORKFORCE, AND INCOME SECURITY ISSUES, GOVERNMENT
ACCOUNTABILITY OFFICE
Ms. Lasowski. Mr. Chairman, Madam Chairwoman, Ranking
Members and Members of the Subcommittees, I appreciate the
invitation to talk to you today about our prior work on Federal
compensation programs.
Compensating victims is one of the key issues Congress
continues to face in light of those injured from the terrorist
attacks at the World Trade Center. As you well know, the
Federal Government has played an increasing role in providing
benefits to individuals injured from exposure to harmful
materials ever since 1969 when the Black Lung Program was
established. Since then, Congress has established other such
programs. Most recently, legislative proposals have been
introduced regarding the September 11th Victim Compensation
Fund.
My remarks are based on work GAO reported in 2005 on four
Federal compensation programs including Black Lung, the Vaccine
Injury Compensation Program, the Radiation Exposure
Compensation Program and the Energy Employees Occupational
Illness Compensation Program.
Today I will focus on three key areas: first, the structure
of these programs; second, the initial cost estimates and the
actual cost of benefits paid; and, third, claims filed and
paid. We did not review the September 11th Victim Compensation
Fund as part of this report.
First, all four Federal programs we reviewed are structured
very differently, including who administers the program, how
they are funded, the benefits provided and who is eligible for
benefits. Now, to address each of these points.
In terms of administration, several Federal agencies are
responsible for administering these four programs including the
Departments of Labor and Justice along with other agencies.
In terms of funding, funding of the four programs varies.
For example, the Black Lung Program is funded by a trust fund
that is financed by an excise tax on coal and supplemented with
additional funds. In contrast, the Energy Employees
Compensation Program and the Radiation Exposure Program are
fully federally funded.
In terms of benefits, benefits vary among the four
programs. Some of the benefits they provide include lump sum
compensation payments and payments for lost wages, medical and
rehabilitation costs, and attorney fees.
In terms of eligibility, the groups who are eligible for
benefits under the four programs and the proof of eligibility
required for each program vary widely. It is also worth noting
that in terms of structure, the Federal Government role has
increased since the inception of these programs, and all four
have been expanded eligibility to additional categories of
claimants, cover more medical conditions, or provide additional
benefits.
Second, as the Federal role of these four programs has
grown and eligibility has expanded, so has cost. In addition to
the costs associated with expanded eligibility, rising medical
costs have increased the cost of the programs.
Actual costs for benefits paid through fiscal year 2004
significantly exceeded the initial estimates for the Black Lung
and Radiation Exposure Programs. For example, for the radiation
program, the cost of benefits paid through fiscal year 2004
exceeded the initial estimate by about $247 million because the
original program was expanded to include additional categories
of claimants.
Third, regarding claims: the number of claims filed
generally exceeded initial estimates. For example, at the end
of fiscal year 2004, actual claims filed for the energy
employees program exceeded the estimates by over 46,000.
Furthermore, factors that affect the amount of time it takes
agencies to finalize claims includes statutory and regulatory
requirements for determining eligibility, changes in
eligibility criteria, the agency's level of experience in
handling claims, and the availability of funding. In addition,
the approval process and the extent to which programs allow
appeals can affect the time it takes to process claims.
In conclusion, the Federal Government has played a growing
role in providing benefits to individuals injured by exposure
to harmful materials. As the four programs we reviewed changed
and grew, so did their actual costs. In addition, the programs
varied in their ability to handle claims, and in some cases
took years to compensate claimants.
In designing a Federal compensation program, it is
important to consider how the program is to be structured.
Decisions about how to structure compensation programs are
critical because they ultimately affect the cost of the
program, an important issue in light of the Federal deficit,
and they affect how quickly those injured are compensated.
This concludes my prepared statement. I would be pleased to
respond to any questions. Thank you.
[The prepared statement of Ms. Lasowski follows:]
Prepared Statement of Anne-Marie Lasowski
Mr. Nadler. Thank you.
Detective Valentin is recognized.
TESTIMONY OF MICHAEL A. VALENTIN,
FORMER NYPD DETECTIVE
Mr. Valentin. I would like to thank everyone here for
inviting me to speak, and I apologize for my informality.
My name is Michael Valentin. I was born in the Bronx. I am
43 years old, and I am the son of a New York City police
officer. My father retired with 24 years of service. I am
married for 23 years to a wonderful and understanding wife. I
have three beautiful kids.
I joined the police department in 1995 and retired with a
line of duty disability on January 2007--11 years of service to
the City of New York. I remember the academy like it was
yesterday. It was the longest academy in NYPD history--11\1/2\
months. I remember being able to run five to eight miles per
day. Now I lose my breath walking up a flight of stairs or
walking a short distance.
On September 11, like so many others, I responded to the
attacks on the World Trade Center. For the next few months I
worked on or around Ground Zero. I assisted in bucket brigades,
searching for human remains, transporting supplies, and
perimeter security. I don't like talking about these things. I
saw too many bad things, and it brings bad memories to me, and
I would really like to try to forget them.
There are so many people like me, sick or dying with
terminal illnesses, that first responders need the help of this
Congress. I suffered health problems after 9/11, and on my 40th
birthday I was told that I possibly had lymphoma. The doctors
found a four-centimeter mass in my chest. Subsequently, my
partner also, approximately 2 or 3 months later, was diagnosed
with B-cell lymphoma; so was my lieutenant, a year before, B-
cell lymphoma, blood cancer. I just find that a little strange
that that would happen to one unit.
This was the beginning of something that I did not expect.
I went through four operations. They had to biopsy the tumor
twice because it got larger. Then they removed my gall bladder
and found a lymphatic tumor under it. I have been lucky that
none of my tumors were cancerous.
The doctors at Long Island Occupational and Environmental
Health in Hauppauge, Long Island, along with my family doctor
diagnosed me with the following: RADS, restricted airways
disease syndrome; GERD; sinusitis; pleural thickening, which is
indicative of asbestos exposure; pleurisy, very painful to
breathe. They attribute my illnesses to the exposure of toxins
and particulates from Ground Zero. I need to use my nebulizer
every 4 to 6 hours and to take over 10 medications a day,
including oral steroids.
I get all my pulmonary medicine through Long Island
Occupational, which is part of Mount Sinai, which saves me a
lot of money. And I, please, hope that you guys keep that
funded. There are over 1,000 police officers that attend that
one unit in Long Island, and at least 3,000 first responders
from all the building trades.
I am presently more than $160,000 in debt. Due to my
illnesses, I have recently depleted my 401K plan to catch up
with my bills. I feel embarrassed talking about these, but I
know that I am not the only one like this. There are hundreds
of us like me, in the same situation, and many cases much worse
than me. I consider myself fortunate to have the help and
support of my family.
I would like to talk about the captive insurance fund. It
is my understanding that Congress gave the City of New York $1
billion. It is a disgrace that the city is using the money for
a legal defense fund. I am sure that it was not what the
Congress intended this money to be used for. I still can't
understand why Christine LaSala, the CEO of Captive, is paid
$350,000 a year and $20,000 a year in benefits. That is sad
when I pay my own insurance, which costs me $250 a month.
What has she done for the money? So many families are
struggling with illnesses and deaths of loved ones? When men
and women who stand in my shoes and cannot pay their bills or
purchase medication, we need to take care, take control of that
money. I am tired of hearing about the city law firms making
hundreds of millions of dollars just to defend against us.
It is my understanding that the city exhausted their
appeals, and yet they claim that victory will be theirs on the
backs of police, firemen, and all the building trades and
volunteers.
Does this make any sense? Just like September 11, none of
it makes sense.
I am proud to have served the City of New York as a police
officer. I love my city. I love my country. I love my work. If
I had a chance to go back, I would go back in a New York
minute. Thank you. [Applause.]
[The prepared statement of Mr. Valentin follows:]
Prepared Statement of Michael A. Valentin
Chairwoman Lofgren, Chairman Nadler, Ranking Member King, Ranking
Member Franks and Members of the Committee, good morning. Thank you for
giving me the opportunity to speak with you today about my experiences,
and those of so many others of my colleagues, following the World Trade
Center attacks on September 11, 2001.
My name is Michael Valentin. I was born in the Bronx, and I am the
second generation of my family to serve as a New York City Police
Officer; my father retired in 1988 as an NYPD Detective after 24 years
of service. Today, at the age of 43, I am retired on medical disability
from my work as a New York City Police Detective. Although I loved my
work for the NYPD, I have been forced to retire as a result of my
exposure to toxic dust and particulate matter while working at the
World Trade Center site beginning on September 11, 2001 after the
towers fell, through mid-December of 2001. Although it is difficult for
me to relive those terrible memories, I am here to speak to you today
because it is important that this committee fully understands why its
work here is so important to so many brave and hardworking men and
women who--without thought for their own safety--ran to their City's
aid in its darkest days.
In September of 2001, I was a New York City Police Officer working
undercover for the Manhattan South Vice Unit. I was subsequently
promoted to Detective in April of 2002. On the morning of September
11th I was awakened by my wife, who told me that a plane had hit the
World Trade Center. I turned on the television in time to see the
second jet hit the South tower, and, like millions of other Americans,
I realized immediately that we were under attack. I contacted
colleagues who lived close by and we drove together to ``Highway 3,'' a
police unit located by the Grand Central Parkway. There, we met my
Lieutenant, who kept his department issued vehicle at that location,
and we all proceeded to the 7th Precinct, located in Manhattan's lower
east side. As we drove, I remember seeing a convoy of police officers
and firefighters who were all desperate to get to lower Manhattan, and
we were no different.
When we arrived at the 7th Precinct, a young woman was walking past
the Precinct, covered with what looked like powdered cement. Her face
was covered with powder except for circles around her eyes--but you
could see the look of horror in her face. I asked if she needed help,
and told her to come in so we could help her get cleaned up and check
her for injuries, but she said no, she just wanted to go home, and that
she was going to walk over the Williamsburg Bridge. As I entered the
Precinct, I saw a sobbing firefighter who was being consoled by one of
his colleagues. Realizing that the world we had known until that
morning was suddenly in chaos, I was overwhelmed by a feeling of
helplessness.
When we arrived at the Trade Center site on the West Side Highway,
one of my team members was visibly upset and crying uncontrollably
because he could not get in touch with his father, an NYPD Police
Chief. Although his father was later found alive and unhurt, he had
every reason to believe at that point that his father had been caught
in the collapse and there was no consoling him. We all had tears in our
eyes as we stood there watching his heartbreaking attempts to contact
his father. As we know now, many, many families of police officers and
firefighters--and those of the thousands of innocent civilians who
worked in the towers--had no happy relief at the end of that day,
because their husbands, wives, fathers, mothers and children did not
miraculously turn up safe and sound.
Later that afternoon when 7 World Trade Center collapsed, I was
standing only a block away. The scene was surreal--I remember feeling
like I was watching a disaster movie. Quite simply, I could not believe
what I was seeing with my own eyes. But if that scene was surreal, it
did not begin to let me know what waited for me in the days and weeks
to come. During the next few months, working in and around the World
Trade Center site, I saw things that were unimaginable--the sights,
sounds and smells of those months were burned into my memory for the
rest of my life. Looking back now, my memory of 9/11 seems like one
long nightmarish blur from beginning to end.
Throughout the initial attempts at rescue and continuing through
the recovery and clean up efforts in the months to come, my team and I
were assigned to many posts in and around the site. We performed
perimeter security, worked on the bucket brigade, did door-to-door
searches, recovered human body parts from the surrounding roof tops,
and transported equipment and supplies.
In October or November of 2001, I had a physical examination that
included a chest x-ray--my lungs were clear, and I was healthy, as I
had always been up until 9/11. Initially, during the time I was still
working on the World Trade Center site, I began to suffer from chronic
sinus problems and inflammation, and developed a hacking cough. I
coughed so hard that I actually developed back spasms. In 2003 and 2004
I began having intractable lung and sinus infections, and burning
inside my ears. Throughout 2004, I suffered from night sweats, and in
September 2004, on my 40th birthday, my doctors told me that they had
found a four-centimeter mass in my chest between my aorta and trachea,
and that it was most likely lymphoma. I underwent a surgery called a
mediastinoscopy, to biopsy the tumor. The mass turned out to be benign,
but when the surgeon and pathologist examined my lymph nodes, they
found black particulates in the lymph node. Not long thereafter, I was
diagnosed with gall bladder problems, and when I underwent surgery to
remove the gallbladder, my doctors found another lymphatic tumor. I
underwent a PET scan because of the continuing night sweats, and that
scan revealed that the lymphatic tumor had grown. A broncoscopy failed
to drain the tumor, so I underwent another mediastinoscopy. This was
the fourth operation I had since 9/11. While I was in the hospital,
they found that my lung function was diminished, and the doctors told
me to have that checked. Since then, I have been diagnosed with
reactive airway disease syndrome, gastro-esophogeal reflux disease,
esophagitis, sinusitis, thickening of the pleural lining of my lungs,
which is indicative of asbestos exposure, and pleurisy, which is a very
painful inflammation of the lining of the lungs. I also have severe
ankle swelling, and severe throat pain 24 hrs a day from the excessive
stomach acid production. I need to use a nebulizer to inhale medication
every 4 hours, and oral steroids so that I can breath. I take ten
medications daily.
I was lucky to find the Long Island Occupational and Environmental
Health of Stony brook University Hospital located in Hauppauge, Long
Island. They treated me for my pulmonary problems and tested me for
other illnesses. I am fortunate to receive all of my pulmonary
prescriptions through them. This is vital to my family and me because
the average cost for these medications over the course of a year is
about 8 thousand dollars that would have otherwise come out of my
pocket. This Long Island Office has treated over one thousand New York
City police officers and over three thousand first responders from
firefighters to the building trades. It is my understanding that their
funding is in danger. I hope that you can do something about funding
for them.
Because I am unable to work, I had to sell my house in 2005 and
today, my wife and our children and I live with my parents. I've had to
stop all of my physical activities, like going salsa dancing with my
wife, bike rides with my kids, and my wife has taken over coaching my
girls' basketball team. I often feel as if I am married to my
nebulizer, and today, as a result of my illnesses, I am more than
$160,000.00 in debt. I worry about my children's future, and whether I
will be around to see them grow up. I have no life insurance, and no
long-term health care insurance. I am horrified at the thought of
burdening my family with my illnesses.
Two of my co-workers, Lt. William Serpe and my partner, Detective
Ernie Vallebouna were diagnosed with B-cell lymphoma, a cancer that is
usually extremely rare. The odds of two co-workers being diagnosed with
this disease is infinitesimal. Another colleague, Sergeant Dave
Moloney, suffers from reactive airway disease and had part of his
palette removed so he could breath. Like me, they have bleak life
expectancies and because of our grim prospects, insurance companies
have labeled us uninsurable
And we are not the only ones who have suffered. Literally thousands
of my fellow police officers, firefighters, construction workers and
laborers are all desperately ill and many have already died, including
Detective James Zadroga, a HERO who died of 9/11 illnesses with his
baby daughter by his side--only to have Mayor Bloomberg sully his
memory with public statements implying that Zadroga had caused his own
death by abusing his pain medications--pain medications that were kept
under lock and key by his father to prevent even an accidental
overdose. Detective Bobby Williamson died of pancreatic cancer leaving
behind a wife and three beautiful children. Sergeant Mike Ryan, who
lived only two miles from my home, died of lymphoma also leaving behind
a wife and children. These men and many more died because they put
their City and their duty ahead of their own safety. They died waiting
for their government to do the right thing and provide for their health
care and for the support of their families.
Even now, many police officers are being denied the three-quarter
salary line-of-duty pensions they should have received, and instead are
only given ordinary disability. Even to get that much, we have to face
a maze of bureaucracy that is frustrating, demoralizing and needless.
These brave men and women are not asking for a free lunch--all they
want is to be taken care of in their time of need. I was fortunate in
that I received a line of duty pension. Thanks to the intervention of
Congressman Israel I am also receiving social security disability
benefits. But here's the point--I should not have needed the help of a
United States Congressman to get the social security benefits I am
entitled to as a disabled police officer. Many of my colleagues have
been denied Social Security disability benefits--and today I am here to
ask for your assistance on their behalf.
In 2003, you and your colleagues allocated a billion dollars
through FEMA to provide the City of New York and its debris removal
contractors with coverage for claims arising from debris removal
performed after collapse of World Trade Center (WTC) buildings on
September 11, 2001. You left it to the City to determine the best
mechanism to administer those funds, and the City created the World
Trade Center Captive Insurance Company. Today, we know that the
Captive, and the city's control of that mechanism, is a national
disgrace akin to our nation's treatment of Iraq war veterans under
deplorable conditions at Walter Reed Hospital and its abandonment of
our Viet Nam veterans. I don't need to remind this committee that
America has a poor record in assisting our national heroes, leaving
them to fend for themselves after they've given unselfishly of
themselves in the service of their country.
I can't believe that my Congress would have set aside a billion
dollars to have that money go to pay insurance executives and law firms
hundreds of millions of dollars to fight the very heroes that money
should have been helping for these last five years. Surely you did not
intend that money to be used as a legal defense fund or to pay for
expensive dinners for the City's lawyers. I find it incredible and
offensive that my Mayor has the audacity to pay Christine LaSala, CEO
of the Captive Insurance Company, a salary of 350,000 dollars a year
and 20,000 dollars in benefits, while the men and women who stand in my
shoes cannot pay their bills or purchase their medications.
In the past week, the Court of Appeals for the Second Circuit
affirmed a decision of the District Court holding that the City of New
York and its Contractors are not immune from litigation for their
failure to provide adequate safety protections such as respirators and
hazmat suits to those of us who worked in hazardous conditions at the
World Trade Center Site. What is the City's reaction to that decision?
In the New York Times on Thursday, March 27, one of the City's Senior
attorneys was quoted as saying that this decision only means that
``victory is going to take longer to achieve, and we're going to have
to get into the underlying facts of the case.'' Victory? Let's think
about that for a minute. The victory that attorney was talking about is
a victory over the men and women who put their lives in mortal danger
to protect and serve this Country in its darkest time. Men and women
who are mortally sick and dying and forsaken by their country.
We had hoped that the Second Circuit's decision would spur the City
and the Captive to sit down and resolve our claims for medical care and
lost income. Instead, the City's lead defense attorney Jim Tyrrell told
the New York Law Journal that ``the `net result' of [the courts
decision] . . . will be the extension of `this litigation for years.'
'' Congressmen, with all do respect, I don't have years to wait. My
colleagues and the other men and women who are sick and out of work
because of their time at Ground Zero don't have years to wait. What
they do have is mounting frustration, worsening illness and disability,
bills and mortgages they can't pay and medications they can't afford.
They have children who may grow up without a parent, and spouses who
will be left young and widowed. We don't have the luxury of time to
wait while our Mayor and his Captive Insurance Company pay their
lawyers to fight us in court, and their claims administrators to do
nothing but generate bills. We need you to take control of that money
and see that it reaches the people you intended to help back in 2003.
I am proud to have been a New York City police officer.
Notwithstanding my comments here about the City's control of the
Captive Insurance Company, I love my city and I loved my work, and if
my health would permit me, I would go back to that work in a New York
minute. I still believe that New York is the greatest city in the world
and I love it dearly. Don't let the City and its lawyers discount my
testimony here today by telling you that my colleagues and I are just
disgruntled employees, because the NYPD treated me with decency and
respect through my illnesses. It was, and it is, an honor to be a New
York City police officer. We are only asking that our City and our
country help us now in our own hour of need.
Thank you for letting me speak with you today. On behalf of all of
my colleagues--not just the police officers and the firefighters, but
also the construction and building trades people and the volunteers, we
appreciate all of your dedicated work and your continuing efforts on
our behalf.
Mr. Nadler. Thank you very much.
Mr. Frank is recognized.
TESTIMONY OF THEODORE H. FRANK, RESIDENT FELLOW, AMERICAN
ENTERPRISE INSTITUTE, DIRECTOR AEI LEGAL CENTER FOR THE PUBLIC
INTEREST
Mr. Frank. Thank you, Mr. Chairman and Ms. Chairwoman and
Members of the Subcommittee for your kind invitation to testify
today.
The September 11 Victim Compensation Fund was a short-term
administrative program to compensate victims of the terrorist
attacks while limiting litigation against innocent third
parties who had also been victimized. Unfortunately, H.R. 3543
fails to protect innocent third parties from unfair litigation,
does not have the advantages that made the fund successful, and
magnifies the disadvantages and fairness problems of the
original fund.
The original fund used a non-adversarial structure to
compensate a limited set of claimants in time and place with
relatively uncontroversial claims. This structure will not work
for a longer-term compensation scheme involving a substantially
larger set of potential claimants with injuries with much more
ambiguous causation. For example, as the New York Times notes,
there is no scientific evidence that exposure to World Trade
Center dust leads to lymphomas or cancer.
I discuss problems in much more detail in my written
testimony, but let me touch on a few of them briefly. First,
the largest problem is that reopening the fund creates a
compensation program that is especially susceptible to error
and fraud because the fund was not designed to resolve
causation issues. A passenger on the September 11 planes or
someone killed or injured in the Towers or Pentagon was plainly
entitled to compensation from the fund. Thus, determining
eligibility for compensation was largely a ministerial
function.
The fund structure was not designed to vet recipients'
claims. But it is not the case that anyone with a pulmonary or
cancerous or psychological ailment in the greater New York area
is an appropriate claimant. The fund is required by law to
adjudicate claims within 120 days but has no provisions for
independent medical review or testing of claims. This creates
what is known as a Field of Dreams problem: ``If you build it,
they will come.''
If Congress reopens a system where geographic proximity and
a diagnosis are the only prerequisites for a large government
check and an attorney's contingent fee, attorneys will have
every incentive to manufacture a fake diagnosis. The law firm
behind many of the thousands of pending 9/11 lawsuits have
plaintiffs eligible for reopened fund compensation has
previously used questionable medical diagnoses to obtain huge
sums in the fen-phen litigation.
If the bill is passed in the current form, trial lawyers
will steal billions from taxpayers.
Second, expanding the program to include psychological
injury will result in double recovery for thousands of
claimants. Claimants who have already recovered millions,
including hundreds of thousands in non-economic damages, will
be permitted to double-dip and resubmit new claims for
psychological injury. And the legislation is so broad that
taxpayers could end up paying for psychotherapy for Woody Allen
and half of Manhattan.
Third, 3543 fails to protect innocent contractors who are
faced with tremendous liabilities simply for volunteering to
help New York City in its hour of need, often without pay.
Calls for government indemnification are not a solution because
they do nothing to stop the chilling effects on future
volunteers.
Prospective immunity is needed. And indemnification is
fraught with peril for abuse of the government fisc if
statutory language is not finely crafted to permit the
government to protect its interest in the underlying litigation
and if damages caps are not included.
Fourth, 3543 fails to provide adequate protection to
taxpayers that taxpayer money will be spent on compensation of
victims rather than on attorneys' fees.
Fifth, 3543 compounds problems of unfairness in the
original fund, as Special Master Feinberg noted, where victims
of one terrorist attack received millions and those of another
received nothing. The bill calls for a government bureaucrat to
define the ``New York City disaster area,'' and those who lived
or worked south of that cross street will be entitled to
potentially millions of dollars in compensation and benefits,
while those living and working to the north will do without.
And if you think school boards get lobbied hard over the
boundary lines between high schools, imagine what pressure the
WTC program administration will face when she decides which
Manhattan cross street is the dividing line for millions of
dollars of government largesse.
There are many, many more issues that outstrip the time I
have, and I welcome your questions.
[The prepared statement of Mr. Frank follows:]
Prepared Statement of Theodore H. Frank
Mr. Nadler. Thank you for your statement.
Dr. Melius?
TESTIMONY OF JAMES MELIUS, ADMINISTRATOR, NEW YORK STATE
LABORER'S HEALTH AND SAFETY TRUST FUND
Dr. Melius. Thank you.
Honorable Chairmen Conyers, Nadler and Lofgren, other
Members of the Committee, I greatly appreciate the opportunity
to appear before you this morning.
I think, as we know, in the period after September 11, over
50,000 emergency responders and recovery workers were exposed
during the initial rescue work at the site and in the
subsequent cleanup and recovery activities. Tens of thousands
of people living, working and going to school in the areas
around the World Trade Center area were also exposed either in
the immediate collapse of the buildings or in the subsequent
weeks and months in their apartments, workplaces or schools.
These people were exposed to a myriad of toxic materials
including pulverized concrete, asbestos, lead and many highly
toxic chemicals. I think as we all know, the failure of the
Federal Government to properly inform and protect these people
from these exposures added substantially to their subsequent
health risks. Due to the incomplete monitoring of these
exposures at the time, we will never know the full range of
their exposures and still cannot predict with certainty all of
the subsequent adverse health effects.
However, we do know that these exposures and the subsequent
accompanying psychological trauma have caused adverse health
effects in thousands of those exposed. These are not rare
isolated medical conditions. The proportions of those exposed
who have become ill is quite alarming. In a recent Mount Sinai
Medical Center study of responders and recovery workers, lower
respiratory disease symptoms were found in 46 percent of those
evaluated, upper respiratory problems in 64 percent, and mental
health problems in approximately one-third. Similar studies
have been found in other peer-reviewed studies of the exposed
population.
As we all know, the federally funded medical programs for
responders and recovery workers sometime after September 11
have provided excellent medical care for thousands of these
workers. Though it is difficult to document, I believe that
these programs have prevented disability in many thousands of
the people who have participated in them.
However, the continuation of these medical programs alone
is not sufficient to address all the harm being suffered by
these individuals. Many of these rescue and recovery workers
are no longer able to work because of the progressive
disability caused by their health conditions.
In my testimony, I offered two sources of information I
compiled on the numbers of those currently disabled that are
being treated in the medical program. Based on these, I can
conservatively estimate at the present time that at least 2,000
World Trade Center rescue and recovery workers became disabled
due to World Trade Center related illnesses, are no longer able
to work, and are not currently covered by any compensation
program. Many hundreds more are getting some assistance from
Workers' Compensation, Social Security, Disability and other
programs, which do not adequately cover their income loss and
other expenses due to their illness.
In summary, I think the economic needs of several thousand
people who willingly risked their health to respond to this
terrorist attack are not currently being addressed. I think as
we have heard from Mr. Valentin today, and I think there are
many other people who have testified at other hearings, many
other people I have talked to, the human suffering, including
the suffering in their families, is quite devastating to the
individuals involved. And I think the individuals like Mr.
Valentin speak much more clearly than I can about the problems
being experienced by these people.
But where do they look to for assistance?
One possible source of assistance for the people with World
Trade Center related conditions is workers' compensation
insurance. It is supposed to be a no-fault system to provide
workers who are injured or become ill due to job-related
factors with compensation for their wage loss as well as full
coverage for the medical costs associated with the monitoring
and treatment of their medical conditions.
For many reasons I have outlined in my testimony, including
the long delays, the difficulty dealing with complex medical
cases, and unresolved legal issues related to the compensation
legislation, the multiple workers' compensation systems
currently covering World Trade Center and recovery workers are
unable to provide timely and appropriate medical benefits
compensation for economic losses for the World Trade Center
responders.
Although some steps have been taken in New York to try to
address some of these problems, I think it is unlikely that
this can be accomplished in time to provide significant timely
relief for World Trade Center rescue and recovery workers
through the current compensation systems.
Another possible source of support is the World Trade
Center Captive Insurance Company. In March of 2003 when the
formation of that was being planned and was being announced,
Mayor Bloomberg stated in his press release this legislation is
necessary for the city to expedite the payment of claims
related to this World Trade Center effort. For many people,
including myself, we were hopeful that this would become the
source that would address both the medical problems as well as
the disability and economic losses being suffered by the many
World Trade Center workers.
Unfortunately, as we know, almost 4 years after its
formation the fund has paid out less than five actual claims--
four or five, I am not sure of the exact number. Meanwhile,
thousands of rescue and recovery workers and community
residents who have become ill have had to struggle without any
compensation and without any assistance until Federal funding
recently became available to at least help cover the medical
costs involved.
I am not an expert on insurance and cannot speak directly
to legal issues involved; however, it seems obvious to me that
the $1 billion could have been better used to help these
thousands of men and women with their medical bills and
compensation for their inability to continue to work rather
than being invested in a long-term legal battle in order to
protect the city and its contractors.
While I understand that the City of New York and the
construction contractors have very legitimate concerns about
their financial risks incurred in responding and recovering
from the terrorist incident, denying medical benefits and
compensation for the many rescue and recovery workers involved
in this effort is a tragically misguided policy. Moreover, as
Mr. Cardozo has stated, the Captive as currently funded does
not appear to be adequate to cover all the medical and economic
losses for the rescue and recovery workers and community
residents. We certainly need, I think, a more comprehensive
solution to this issue.
As I have stated before, I believe that H.R. 3543,
introduced by Representatives Maloney, Nadler and Fossella,
provides a comprehensive legislative approach to accomplish
this. In other hearings I have addressed some of the medical
program issues related to this legislation. I would just like
to offer two recommendations relative to the compensation
portion of that legislation.
First, I believe that reopening the Victims Compensation
Fund is the best mechanism for addressing economic losses. I
believe that it would provide the flexibility to properly
handle claims from workers and community residents with varying
circumstances and with varying degrees of economic loss.
I think it is far preferable to relying on the many other
compensation systems currently in place that are delaying
compensation and lead to gross inequities among the ill
claimants due to the specific processes used in each of those
systems.
I also believe that the VCF should develop a common
mechanism for ensuring that all of the claims are for
legitimate World Trade Center-related illnesses. For the most
part, this could be based on the designation on mechanisms for
World Trade Center medical program currently included in the
medical section of the legislation.
At the same time, I believe VCF could then provide an
appropriate and equitable way of taking into account individual
economic circumstances similar to the approach taken when the
VCF was administering the earlier 9/11 claims.
Secondly, I think the long-term medical monitoring and
treatment for World Trade Center-related medical problems
should be handled separately, as outlined in the currently
legislation.
I think that program is best handled in conjunction with
the current centers of excellence, and that this approach would
also reduce the problem in trying to take into the account the
potential costs of future medical care for conditions that
might later develop as part of the current economic
compensation.
We have already gone over 6 years after 9/11, and I think
it is very important for all the people who volunteered and
came to the assistance of our country at that time, and did
that without hesitation, to now be properly cared for. These
are unique circumstances, and I would hope that we could
provide a quick and equitable solution for the economic losses
and medical problems that these people will face in the future
and that will help address what hopefully will not ever occur
again which is another terrorist incident like this. Thank you.
[The prepared statement of Dr. Melius follows:]
Prepared Statement of James Melius
Honorable Chairmen Nadler and Lofgren and other members of the
Committee. I greatly appreciate the opportunity to appear before you
this morning.
I am James Melius, an occupational health physician and
epidemiologist, who currently works as Administrator for the New York
State Laborers' Health and Safety Trust Fund, a labor-management
organization focusing on health and safety issues for union
construction laborers in New York State. During my career, I spent over
seven years working for the National Institute for Occupational Safety
and Health (NIOSH) where I directed groups conducting epidemiological
and medical studies. After that, I worked for several years for the New
York State Department of Health where, among other duties, I directed
the development of a network of occupational health clinics around the
state. I currently serve on the federal Advisory Board on Radiation and
Worker Health which oversees part of the federal compensation program
for former Department of Energy nuclear weapons production workers.
I have been involved in health issues for World Trade Center
responders since shortly after September 11th. Over 3,000 of our union
members were involved in response and clean-up activities at the site.
One of my staff spent nearly every day at the site for the first few
months helping to coordinate health and safety issues for our members
who were working there. When the initial concerns were raised about
potential health problems among responders at the site, I became
involved in ensuring that our members participated in the various
medical and mental health services that were being offered. For the
past four years, I have served as the chair of the Steering Committee
for the World Trade Center Medical Monitoring and Treatment Program.
This committee includes representatives of responder groups and the
participating medical programs (including the NYC Fire Department) who
meet monthly to oversee the program and to ensure that the program is
providing the necessary services to the many people in need of medical
follow-up and treatment. I also serve as co-chair of the Labor Advisory
Committee for the WTC Registry operated by the New York City Department
of Health and as a member of the Community Advisory Committee for the
WTC Environmental Health Center at Bellevue Hospital. These activities
provide me with a good overview of the benefits of the current programs
and the difficulties encountered by responders seeking to address their
medical problems and other needs.
health consequences of september 11
In the period after September 11, over 50,000 emergency responders
and recovery workers were exposed during the initial rescue work at the
site and in the subsequent clean-up and recovery activities. Tens of
thousands of people living, working, and going to school in the areas
around the WTC were exposed immediately after the WTC buildings
collapsed or in subsequent weeks or months in their apartments, work
places, or schools. These responders, recovery workers, and other
people were exposed to a myriad of toxic materials including pulverized
concrete, asbestos, lead, and many highly toxic chemicals. As we know,
the failure of the government to properly inform and protect these
people from these exposures added substantially to their health risks.
Due to the incomplete monitoring of these exposures at the time, we
will never know the full range of their exposures and still cannot
predict with certainty all of the subsequent adverse health effects
from these exposures. However, we do know that these exposures and the
accompanying psychological trauma have caused adverse health effects in
thousands of those exposed. These adverse health effects include lower
respiratory disease (including asthma or asthma like conditions,
pulmonary fibrosis, and significant loss of lung function); upper
respiratory conditions including chronic sinusitis; gastrointestinal
problems most commonly reflux disorder or GERD; and mental health
problems including Post Traumatic Stress Disorder and depression. These
medical problems have been documented in peer reviewed scientific
publications of research studies done by several independent research
groups. Similar health problems have been documented in fire fighters,
other responders and recovery workers, and WTC community residents,
students, and workers (to the extent that this latter group has been
evaluated).
There is no doubt that these disorders and others not listed above
are occurring at a much higher rate than would be expected in this
population and that these health problems are due to the toxic
exposures and psychological trauma related to 9/11.
These are not rare isolated medical conditions found in a small
number of those exposed. The proportion of those exposed who have
become ill is quite alarming. In a recent Mount Sinai Medical Center
study of responders and recovery workers, lower respiratory disease was
found in 46% of those evaluated; upper respiratory health problems in
64%; and mental health problems in 32%. Similar results have been found
in other studies of the exposed populations. New patients are
continuing to come to the monitoring and treatment programs with these
illnesses that were not evident before this time. Although many of
these conditions do improve with medical treatment, the full scope and
the ultimate medical outcome for the people currently being treated or
who will become ill in the future is uncertain. Thousands are no longer
able to work, and thousands more require lifelong medical monitoring
and treatment.
As you may know, the federally funded medical programs for
responders and recovery workers some time after September 11 have
provided excellent medical care for thousands of these works.
Initially, only medical monitoring was available. However, two years
ago, Congress also provided funding for medical treatment programs for
those with WTC-related medical conditions. In December of last year,
Congress also provided money for medical monitoring and treatment for
community residents, workers, and students exposed after 9/11. These
programs have been an immense help to those who have become ill from
their exposures. Although it is difficult to document, I believe that
without these program thousands more of these people would have
developed much more serious health problems, and many more would have
become permanently disabled.
why medical programs are not sufficient
However, the continuation of these medical programs alone is not
sufficient to address all of the harm being suffered by these
individuals. Many of these rescue and recovery workers are no longer
able to work because of the progressive disability caused by their
health conditions. We do not have an exact count of those who have
become disabled, but I can provide some estimates. In the fire
department, over 800 fire fighters have received disability pensions
because of health problems related to their 9/11 exposures. These are
people whose illness is so severe that they are no longer capable of
working as fire fighters. Over the past year, nearly 1800 hundred
patients in the WTC treatment program at Mount Sinai Medical Center
have been evaluated by their social work unit. Of these, 870 are no
longer able to work because of illness. Of these 870 patients who are
out of work, less than 40% are receiving any financial assistance from
Workers' Compensation, Disability Retirement, or Social Security
Disability. In other words, over 500 of these ill police officers,
construction workers, utility repair workers, and others are now
without personal income and having to rely on their spouses, families,
or other financial resources. Most have lost all health insurance
coverage for their families, and many can no longer afford their
mortgage payments and have lost their homes. These are, for the most
part, blue collar workers without significant financial resources to
fall back on.
Another source of information on the number of disabled 9/11 rescue
and recovery workers is the the NYC 9/11 Unmet Needs Roundtable,
administered by New York Disaster Interfaith Services (NYDIS). Since
2002, the NYC 9/11 Unmet Needs Roundtable has brought together donor
agencies and community-based case management agencies to financially
assist persons impacted by 9/11, provide emergency assistance, and
facilitate victims' long-term recovery and return to self-sufficiency
when all other means of assistance are no longer available. In 2007,
these organizations provided assistance to over 2300 ill 9/11
responders who are disabled and suffering economic hardship due to
their 9/11-related illnesses. Of those 2300 ill 9/11 responders,
approximately two thirds are currently unemployed due to their
illnesses. The Roundtable used to be one of several charitable and
governmental financial assistance programs available to 9/11-impacted
persons, but is currently the ONLY program in existence that offers
financial assistance to ill 9/11 responders and other 9/11 health-
impacted persons while they await the receipt of long-term benefits,
such as Workers' Compensation, Social Security, and union disability
pensions.
Projecting these numbers to all of the people in the Monitoring and
Treatment Program, I can conservatively estimate that, at the present
time, there are over 2000 WTC rescue and recovery workers who have
become disabled due to WTC-related illnesses, who are no longer able to
work, and who are not currently covered by any compensation program.
Many hundreds more are getting some assistance from workers'
compensation, Social Security Disability, or other programs, most of
which do not adequately replace the incomes that these disabled workers
received before they became ill. The economic needs of these many
people who willingly risked their health to respond to this terrorist
attack are not being addressed.
These statistics alone do not convey the economic hardship of the
many individuals disabled by their WTC exposures. We will hear from one
individual at this hearing and have heard from many others at other 9/
11 related hearings. They have testified about about losing their
homes, being unable to provide any assistance for their children to
attend college, and relying on food pantries and community charities to
feed their families while enduring a seemingly endless process to
obtain compensation only to discover that this compensation is far less
than what they were previously earning. The individual impact of this
frustration on their lives and on their ability to care for their
family cannot be conveyed in these statistics.
workers' compensation
One source of assistance for people with WTC-related conditions is
workers' compensation insurance. Workers' compensation is supposed to
be a no fault insurance system to provide workers who are injured or
become ill due to job-related factors with compensation for their wage
loss as well as full coverage for the medical costs associated with the
monitoring and treatment of their medical condition.
The WTC program participants are covered by a variety of state,
federal, and local programs with different eligibility requirements,
benefits, and other provisions. Most private and city workers are
covered under the New York State Workers' Compensation system. New York
City is self insured while most of the private employers obtain
coverage through an outside insurance company. Uniformed services
workers are, for the most part, not covered by the New York State
Workers' Compensation system but rather have a line of duty disability
retirement system managed by New York City. A fire fighter, police
officer, or other uniformed worker who can no longer perform their
duties because of an injury or illness incurred while on duty can apply
for a disability retirement which allows them to leave with significant
retirement benefits. However, should a work-related illness first
become apparent after retirement, no additional benefits (including
medical care) are provided, and the medical benefits for even a
recognized line of duty medical problem end when the person retires.
Federal workers are covered under the compensation program for federal
workers. Coverage for workers who came from out of state will depend on
their employment arrangements with their private employer or agency.
However, volunteers from New York or from out of state are all covered
under a special program established by the New York Workers
Compensation Board after 9/11 and supported by federal funding.
A major difficulty with these compensation systems is the long
delays in obtaining coverage. For example, the NYS Workers'
Compensation system is very bureaucratic. The insurer may challenge
every step of the compensation process including even diagnostic
medical testing. This challenge usually requires a hearing before a
Workers' Compensation Board (WCB) administrative judge to evaluate the
case, and this hearing may often be delayed for months. Even once the
case is established, the insurer can still challenge treatments
recommended for that individual even for a medication that the
individual may have been taking for many months for a chronic work-
related condition. Thus, it may be many years before the case of a
person with a WTC-related condition is fully recognized and adjudicated
by the compensation system. The average time for just having a claim
established for a WTC-related condition at the Mount Sinai clinic is
over three years, and it may be many more months before reimbursement
for medical costs or lost income is allowed. Meanwhile, the claimant
may not be receiving any medical or compensation benefits or may have
had their benefits disrupted many times. These bureaucratic systems are
designed to address acute injuries. They are not flexible enough to
provide the comprehensive medical support and income replacement needed
for a WTC responder who has developed several medical problems
requiring frequent medical visits and continual modifications in their
treatment.
There are many other difficulties in getting these claims accepted.
Their medical circumstances are often quite complicated. Many are being
treated for multiple WTC-related medical problems. Legal issues about
causality, statutes of limitations for filing claims, and determination
of disability are often raised in these cases and may take many months
to adjudicate. Claimants are often confronted with a choice to accept
lump sum payments or a limited weekly payment. The lump sum payment is
often very appealing because of their backlog of unpaid bills and debt
incurred while waiting for their claim to be processed. However,
accepting the lump sum payment, usually means giving up their options
to reopen their claim to cover future medical costs should their
condition worsen.
In order to alleviate some of the problems for WTC claimants, two
years ago New York State implemented some new programs that were
deigned to improve coverage for WTC responders. These included the
availability of some medical coverage for people waiting for their
claim to be adjudicated and an extension of the time to file a claim.
New York is also in the midst of implementing major reforms in the
overall workers' compensation system that may also assist with WTC
claims. However, all of these new programs will take some time to
implement, and the changes will not alleviate the basic inadequacies of
the system to provide support for WTC responders with significant
medical problems.
In summary, the multiple workers' compensation systems covering WTC
rescue and recovery workers are unable to provide timely and
appropriate medical benefits and compensation for economic losses for
the WTC providers. Although some steps are being taken to address some
of the problems with these programs, it is unlikely that this can be
accomplished in time to provide significant relief for WTC rescue and
recovery workers.
captive insurance
Another possible source of support for workers and community
residents who have become ill as a result of their WTC-related
exposures is the special captive insurance fund set up after the
September 11. The World Trade Center Captive Insurance Company was
formed in July of 2004 based on earlier Congressional legislation that
allowed FEMA to provide up to $1 billion in coverage for the City and
its contractors for claims arising from debris removal after the
collapse of the World Trade Center buildings. In March of 2003, Mayor
Bloomberg and Governor Pataki announced the introduction of state
legislation to allow the implementation of the captive insurance
arrangement. Mayor Bloomberg stated in his press release, ``This
legislation is necessary for the City to expedite the payment of claims
relating to this effort.''
For many people including myself who were becoming increasingly
concerned about the growing number of responders and recovery workers
who were becoming ill from their work at the WTC, it appeared as if
this insurance entity would become the financial mechanism to assist
these ill workers. However, as subsequently became very clear, the WTC
Captive Insurance Company had little interest in ``expediting claims
payment''. In fact, while spending millions of dollars in legal and
consulting fees, the company has focused all of its efforts on
attempting to fight the many thousands of WTC medical claims made
against it. Almost four years after its formation, the fund has paid
out less than five actual claims, all reportedly for orthopedic
injuries related to 9/11 work. Meanwhile, thousands of WTC rescue and
recovery workers and community residents who have become ill as a
result of their exposures after September 11 have had to struggle to
pay the medical bills related to these illnesses until federal funding
recently became available to defray these costs. Hundreds more who can
no longer work because of their WTC-related illnesses have struggled to
support their families while trying to obtain workers' compensation or
other disability benefits.
I am not an expert on insurance and cannot speak directly to the
legal issues involved. However, it seems obvious to me that the $1
billion could have been better used to help these thousands of men and
women with medical bills and compensation for their inability to
continue to work rather than invested in a long term legal battle in
order to protect the City and its contractors. That was the intent of
the federal government providing this funding as Mayor Bloomberg
apparently understood it in 2003. I believe that the current policy of
the Captive to use all of its resources to challenge and fight claims
is misguided and blatantly unfair to the many men and women who put
their lives and health as risk to respond to the terrorist attack on
our country on 9/11 and are now in need of assistance. While I
understand that the City of New York and the construction contractors
have legitimate concerns about their financial risks incurred in
responding and recovering from a terrorist incident, denying (or at
best delaying) medical benefits and compensation for the many rescue
and recovery workers involved in this effort is a tragically misguided
policy.
Moreover, the Captive as currently funded does not appear to be
adequate to cover all of the medical and economic losses for the rescue
and recovery workers and community residents with WTC-related
illnesses. Medical monitoring and treatment costs for the rescue and
recovery workers alone are estimated to cost over $200 million per
year. A more comprehensive solution is needed.
what needs to be done
I believe that we must develop a comprehensive solution to address
the medical care and economic losses of the thousands of rescue and
recovery workers, community residents, and students whose health has
been harmed by exposures related to 9/11. HR 3543 introduced by
Representatives Maloney, Nadler and Fossella provides a comprehensive
legislative approach to accomplish that. In other hearing, I have
addressed the medical program outlined in that legislation. I will
focus my recommendations on the aspects of the legislation related to
compensation for economic losses. I would like to make several
recommendations.
First, reopening the Victims Compensation Fund (VCF) is the best
mechanism for addressing economic losses. I believe that the VCF would
provide the flexibility to properly handle claims from workers and
community residents with varying circumstances and degrees of economic
loss. Relying on the many other compensation systems for disabled
workers and community residents for economic compensation would lead to
continued long delays and gross inequities among the ill claimants due
to the specific processes used for compensation in each of these
systems. I also believe that the VCF should develop a common mechanism
for ensuring that all of the claims were for legitimate WTC-related
illnesses. For the most part, this could be based on the designations
and mechanisms for designating World Trade Center-related conditions
included in the medical program sections of the legislation. At the
same time, the VCF would provide an appropriate and equitable way of
taking into account individual economic circumstances (including
payments from other sources of compensation) similar to the approach
taken when the VCF was administering the earlier 9/11 claims.
Secondly, the long term medical monitoring and treatment for World
Trade Center related medical problems should be handled separately as
outlined in the current legislation. I believe that medical care for
these complex medical conditions would best be delivered in conjunction
with the current Centers of Excellence. This approach would also reduce
the problem of trying to take into account the potential costs of
medical care for conditions that might develop in the future as part of
the current economic compensation.
Thank you again for allowing me to testify. I would be glad to
answer any questions.
Mr. Nadler. Thank you Dr. Melius. [Applause.]
We will now have a round of questioning. I will recognize
myself to begin the questioning for 5 minutes.
The first question is to Mr. Cardozo: While you have
stressed that because the Captive is not a victims'
compensation fund the city must continue to litigate against
virtually all claims, the mayor, back in 2003 stated that the
creation of the Captive was necessary ``for the city to
expedite the payment of claims relating to this effort.''
You can see why some of us in Congress are now surprised
that 5 years later we have made no progress toward this goal
articulated by the mayor. In the same press release, Governor
Pataki, then Governor Pataki, stated that the ``the city
explored various options and decided the formation of the
captive insurance company was in its best interest for claims
arising out of the cleanup effort at and near the World Trade
Center.''
Ms. LaSala, at a meeting of the board of directors--I think
it was the first meeting or one of the first meetings back in
December of 2004--was reported, the minutes say she emphasized
that the fundamental purpose behind creating and funding of the
Captive is to ``conserve and disperse its assets in as
equitable a manner that maximizes compensation to those parties
who suffered damage as a result of the World Trade Center site
debris removal program.''
So in light of these--and I could also quote from a letter
the entire congressional delegation from New York wrote back in
2002 when we were considering this. It says that the coverage
envisioned in this proposal ``will ensure that sufficient
resources will be available to satisfy legitimate claims by
individuals affected by the recovery operations while
safeguarding the fiscal health of the city and the
contractors.''
In light of this, it seems to me evident that the purpose
of appropriating that billion dollars and setting up the
Captive was to enable the swift compensation of victims, and
that the city's or the Captive's policy of litigating every
single claim would be sort of like my insurance company saying
``We will never pay for your house burning down until you beat
us in a lawsuit.''
Mr. Cardozo. Congressman, if we all knew in 2001 or 2003
the extent of the claims, we perhaps would not be here today.
As I think all of us would agree at this table--although we
may differ on other things--the extent of damage to the people
who are now, unfortunately, suing us as well as, according to
Mr. Feinberg, 25,000 or 30,000 additional people, it was far,
far greater than had been anticipated.
And so given the fact that this captive is an insurance
company, we are faced with the problem that, at least according
to every estimate that we have seen, the billion dollars is not
sufficient.
Mr. Nadler. Sir, excuse me, sir, the billion dollars is
clearly not sufficient--I think we all recognize that----
Mr. Cardozo. And then----
Mr. Nadler. Given that fact, therefore, the conclusion is
instead of using that billion and trying to get more money from
Congress or somebody else, we should pay nobody?
Mr. Cardozo. Given the fact, Congressman, that this is an
insurance company designed, if you look at the conference
report and the other legislative history, to be an insurance
company to protect the city and the contractors--it is what the
appropriation bill says; that is what the conference report
says; that is what the IG report for the Department of Homeland
Security says.
Given the fact that neither the city nor the contractors
believe they did anything wrong and that this is to insure them
against claims, there is really no choice that they face but to
use--to defend against these claims. The analogy, if I may draw
it, the analogy I would suggest is if you had, if someone had a
car accident, and you are insured for a million dollars, and
the claims against you are for a million-and-a-half dollars,
you wouldn't expect your insurance company to pay the million
dollars----
Mr. Nadler. Let me--my time is running out, and I have some
questions for Mr. Feinberg. First, let me just proceed with one
more question.
What, if anything, has the city done to ascertain the
availability of other insurance from the Port Authority, the
four major contractors, to see if there is enough insurance to
perhaps enable a global settlement along the lines that was
talked about?
Mr. Cardozo. That is a very good question, and Judge
Hellerstein, who as you know is in charge of that litigation,
has ordered that all the available information about insurance
be produced right now in discovery on just that subject. It is
going on right now.
Mr. Nadler. Okay.
Mr. Cardozo. The city obviously doesn't know the
individual----
Mr. Nadler. Thank you.
Mr. Feinberg, first of all I note--and you wouldn't
disagree with this, from your testimony in commenting on Mr.
Frank's testimony--that the VCF did compensate the victims who
had pulmonary diseases that weren't evident the day after.
So let me ask you the following: You testified that the VCF
did not have an indemnity. And I take it that you do not agree
with Mr. Cardozo that if we reauthorize the VCF or reopen it
that we should indemnify the contractors, and the city for that
matter. Why?
Mr. Feinberg. Well, I think if you want to indemnify the
contractors and hold hearings on the wisdom of that, that is
entirely up to Congress. I think the VCF never had to worry
about that on a simple one line re-extension because we were
able, when we settled the claims, to get full releases from 97
percent of the people that were litigating.
Mr. Nadler. But would you agree, or disagree, or have no
opinion on the question of whether--granted that if we reopen
the VCF, 97, 98 percent of the people go through it; the other
2 percent might consider lawsuits--would it be as a matter of
policy, should we indemnify the city and the contractors? If
yes, why? If not, why not?
Mr. Feinberg. I don't think you should. I don't think you
should.
Mr. Nadler. Because?
Mr. Feinberg. The litigation system will take care of that.
If there is--the point I want to emphasize is that that is
really a separate issue. Indemnifying any defendant or any
litigant from lawsuits is a separate issue from the question of
whether or not public compensation should be available to
compensate people who are in desperate need of help.
I suggested a liability immunity will politically greatly
slow down the likelihood that you will be able to get that type
of compensation to the people that most need it.
Mr. Nadler. Thank you. My time is expired. I now recognize
the Ranking Member of the Subcommittee on the Constitution,
Civil Rights and Civil Liberties, the gentleman from Arizona,
Mr. Franks.
Mr. Franks. Well, thank you, Mr. Chairman.
Mr. Feinberg, I have been very impressed with your
understanding of all this. It is got to be a challenge to do
what you had to do given the grave circumstances that
surrounded all of it.
And some have proposed that the private contractors be
fully indemnified by the Federal Government for claims arising
out of the 9/11 attacks such that any damage or awards or
settlements resulting from private litigation would be drawn
from the U.S. Treasury and paid by taxpayers.
Given your experience, can you elaborate on what you think
would be the advantages or disadvantage? What would be the
outcome of such a policy?
Mr. Feinberg. I think that a compensation fund, like the 9/
11 Fund which was enacted, should be focused on compensating
victims. If the fund works properly, as the 9/11 Fund seemed to
have worked, at least statistically, issues concerning
liability of would-be defendants become irrelevant because when
you settle 97 percent of all the claims brought by the families
of lost loved ones, they are waiving their right to litigate
against anybody. We are getting a full release for domestic
would-be tortfeasors.
And I am suggesting that that solution guarantees
compensation to people in need while at the same time avoiding
the arguments over liability or no liability. Fault does not
become an issue.
Mr. Franks. Would you agree that--you mention in your
testimony that the standards governing compensation under an
expanded fund--if we expanded the fund and changed the rules
that, you know, that would differ from those that governed the
original fund so that there might be some indication on the
part of Congress that they were fomenting ill will among the
different categories of victims. If you agree or don't agree,
would you elaborate based your experiences in the fund that you
were master of?
Mr. Feinberg. A strong argument can be made, substantively,
a strong argument can be made that the original 9/11 Fund was
not sufficiently expansive.
It didn't permit, by statute, compensating pure mental
trauma without physical injury. It didn't permit it. So I
couldn't compensate mental suffering from somebody who, through
the grace of God, escaped from the World Trade Center without a
scratch and then suffered disability. The statute prohibited me
from compensating that individual.
But if you decide to extend the 9/11 Fund and add as an
eligibility claim mental trauma without physical injury, that
is up to Congress. That could be millions of people that were
not eligible under the 9/11 Fund. And my concern is not the
legitimacy of those claims--those claims may be very
legitimate. But it is pretty hard to reopen the fund and say
those people are now eligible, whereas people before weren't
eligible.
So Congress has to make that judgment. That is not a
judgment for a special master administrator to make.
Mr. Franks. Yes. Well, you bring a common sense and a logic
to this environment that is more rare than it ought to be.
Mr. Frank, the legislative proposal that we are talking
about here, the H.R. 3543, does not limit the ongoing lawsuits
against the private contracting companies. So, consequently,
some have floated the idea that they should be indemnified,
these companies should be indemnified, for their liability in
these lawsuits by the Federal Government, much like I asked Mr.
Feinberg. Under such a provision, the lawsuits against the
companies would be allowed to proceed, but taxpayers would pay
any damages that were assessed to the companies.
Do you think that is sound policy, and if not, why not?
Mr. Frank. The problem there is that there will be a race
to be who will be the most generous to the claimants. If the
fund is not sufficiently generous to the claimants, people will
stay within the litigation system because they have the
ultimate deep pocket, the United States Treasury, to draw from.
You will not get that 97 percent response rate that you got
in the first compensation fund. And the reason you were able to
get a 97 percent response rate was because Special Master
Feinberg was able to meet with many of the individual families
and say, ``Here, here is what you are going to do for you. You
are going to get millions of dollars. Come over to us. You will
get the millions of dollars immediately, and that will be
that.''
And that will not be possible in a reopened fund. You are
not going to get the 97 percent response rate. You are just
going to get a competing set of interests over who can be the
most generous to claimants, and at great expense to the
Treasury.
Mr. Franks. Well, thank you, Mr. Chairman. I think all of
this just underscores the importance of doing everything we can
in this country to prevent such attacks from occurring in the
future----
Mr. Nadler. Would the gentleman yield for a moment?
Mr. Franks. Certainly.
Mr. Nadler. I would just ask if the gentleman would ask Mr.
Frank why he thinks that what Mr. Feinberg did with the first
group of claimants couldn't be done, individually meeting and
so forth, to persuade the next group of claimants if we were to
reopen the fund to come into the fund as opposed to sue people.
In other words, why did you say that was impossible?
Mr. Frank. Well, it is possible if you just make it a blank
check and anybody who shows up gets funding regardless of
whether or not their injury was caused by September 11. And,
you know, there are tens of thousands of lymphomas every year;
there are tens of thousands of lung diseases every year. Not
all of them were caused by the World Trade Center. And if all
these of people are eligible, and they can just show up and say
``Here is my diagnosis, and I will get the check,'' then you
will get a good response rate.
But that is not going to be a few thousand people; that is
not going to be ten thousand people; that is not even going to
be 25,000 people. That is going to be close to 100,000 people,
perhaps more, because you are going to have Napoli, Kaiser &
Bern with a van in New York signing up people to get
compensation under the World Trade Center Compensation Fund.
Mr. Nadler. Thank you.
I now recognize the distinguished Chairperson of the
Subcommittee on Immigration, the co-Chair with me of this
hearing, Zoe Lofgren.
Ms. Lofgren. Thank you.
I just have a quick question. Mr. Feinberg, I don't think
you performed purely ministerial functions in your effort. Can
you explain how the fund dealt with causation and give your
thoughts on how the fund if reopened would deal with the
causation issues?
Mr. Feinberg. Yes. The statute gave us general guidelines
on causation that the death or the physical injury----
Ms. Lofgren. Right.
Mr. Feinberg [continuing]. Had to occur in the immediate
aftermath of 9/11, et cetera. We had to develop regulations--
which we publicized; we went around the country to meet with
the families--with interim regulations asking them what they
thought of the regulations. Is there a way to improve the
regulations?
And we came up with a final set of regulations. And we
constantly modified those regulations based on the quality of
the claims. For example, originally our regulations, as Michael
Cardozo correctly points out, originally our regulations
required that within 96 hours you not only had to be exposed to
respiratory particles in the air, but you had to have
manifested an illness and corroborated that illness with a
medical visit.
We quickly realized that there were thousands of people
like Mr. Valentin who were exposed within 96 hours but didn't
manifest any injury, didn't cough up blood, didn't experience
asthmatic attacks, until a year or more after the exposure. We
quickly changed the regulation to say that anybody who was
exposed within 96 hours of the World Trade Center attacks but
didn't go to a doctor until 72 hours after the physical
manifestation, they were eligible.
So we adjusted the regulations to deal with the problem of
causation.
What the medical criteria would be if the 9/11 Fund were
reauthorized, what we would require to constitute an eligible
claim--we will have to work that out with medical
documentation. We rejected 2,000 claims. The idea that we
simply rubber-stamped----
Ms. Lofgren. Yes, you weren't an ATM machine.
Mr. Feinberg. We rejected 2,000 physical injury claims
while compensating 2,680 more.
Ms. Lofgren. You know, Mr. Chairman, I am very happy that
we are having this hearing, and I am eager that we take action,
especially listening to Mr. Valentin's testimony--I mean, it is
so moving. And we are so grateful to you and to people like
you, that I would like to yield the remainder of my time to
you. As not only are you co-chairing this hearing, but the
Towers were in your district, so I yield the remainder of my
time to you.
Mr. Nadler. I thank the gentlelady.
Let me ask Mr. Feinberg, you heard Mr. Frank's testimony
that if we were to reopen the VCF it would be very difficult--
there are thousands of lymphomas, ten thousands; there would be
100,000 claimants; you couldn't distinguish. Could you comment
on that?
Mr. Feinberg. Well, Mr. Franks makes a good point when he
says that if we reopen the fund there will probably be
thousands of claims. I think that is likely. We had thousands
of claims under the original 9/11 Fund. So I think you will
probably have thousands of claims.
The challenging question is whether or not those claims
will be limited, like the original 9/11 Fund, to physical
injury only.
Mr. Nadler. Including respiratory.
Mr. Feinberg. That is right.
And then the next challenge will be, assuming that we have
an understanding from Congress as to what type of injury is
compensable, what are the regulatory requirements--medical and
evidentiary, not just medical but evidentiary as well--to
justify the compensability of that claim?
Mr. Nadler. And assuming that you had more or less the same
regulations from Congress--if we just reenacted it, as you say,
except eliminate the ``you had to be there within 96 hours''
because we know now that that was simply not right--do you
think we would get a 97 percent----
Mr. Feinberg. Yes. Well, I am often glib----
Mr. Nadler. We will allow you 96, but something in that
neighborhood----
Mr. Feinberg. I mean, I think--now, don't forget as the
Chairman well knows, the 9/11 Fund had no appropriation, none.
Mr. Franks is right on that. The 9/11 Fund simply authorized
the special master to authorize payments out of the United
States Treasury. There was no appropriation.
So insofar as Mr. Frank says, ``You know, if you have no
limitations, other than the good sense of the administrator and
the Congress oversight, as to what amount will be used to
compensate victims''--it is a real challenge.
But I suggest that if the Congress ever went to the limit
of extending the fund with a one-line extension and said,
basically, ``Do what you did before,'' I would like to think
that success promotes success.
Mr. Nadler. You would get roughly 97 percent again you
think?
Mr. Feinberg. I would hope.
Mr. Nadler. Thank you.
My time has expired, or rather the gentlelady's time that
she gave to me is expired. I thank the gentlelady again.
And I now recognize the gentleman from Iowa.
Mr. King. Thank you, Mr. Chairman.
And, again, I appreciate the witnesses' testimony.
I ask first, before I ask a question, if the staff could
put the poster back up that shows the percentages of the people
that were on the site. I want to make sure I am looking at
those numbers because I have a question--thank you very much.
And prior to that, I direct my first question to Dr.
Melius. And that is, I would ask if you could quantify this for
me. You gave some percentages on the particular types of
illnesses that are there. Can you start with the universe of
those that have some record of a claim, start with that number,
and then break this down for me, in a sense, that I get a
better understanding of the scope? And multiple different
diagnoses per individual, as we heard in this testimony, can
you give me a better sense of what we are really looking at
here? I am really vague on the overall picture.
Dr. Melius. Yes. First of all, I can't give you the, sort
of the percentages to deal with those that have claims against
the Captive Fund because most of the public information that is
available has to do, that I am familiar with, is related to
those that are participating in the medical monitoring and
treatment programs.
And most of the information on that doesn't deal as well
with the number of people that have become disabled. I gave
some figures in my testimony, but frankly we don't have
information to exactly pin down the number of those people with
different illnesses.
However, I think based on what we know from the medical
monitoring and treatment programs, we would say that roughly
75-80 percent of the people that are involved in that have a
constellation of illnesses related to the respiratory system.
They usually co-exist. So it is sinus problems,
gastrointestinal problems and the respiratory health problems.
Mr. King. Okay. Now, am I hearing you say that of the
universe of people who were there on site, 75-80 percent have
some symptoms?
Dr. Melius. No. No. I think we would say that of the----
Mr. King. The universe of those----
Dr. Melius [continuing]. People that are in the monitoring
program, approximately one-third of those have an illness that
requires treatment right now through--they are usually referred
to treatment within the medical monitoring program----
Mr. King. Okay. About one in three of those----
Dr. Melius. One in three.
Mr. King [continuing]. That participated had some symptoms.
Dr. Melius. Right. Correct.
Mr. King. That helps me.
Dr. Melius. Okay.
Mr. King. I thank you, Dr. Melius.
And then I direct to Mr.----
Dr. Melius. Then it is----
Mr. King. Yes, go ahead.
Dr. Melius. Then--allow me to just follow up--then about
roughly about 80 percent of those have health problems related
to respiratory, upper respiratory/sinus, lower respiratory/
lungs, the asthma kind of problems that Mr. Valentin referred
to that--and then approximately----
Mr. King. The clock is ticking, and I do have the answer,
and I appreciate that.
I would like to, if I could, direct Mr. Frank's attention
to the poster that says ``Police Officers 44.57 percent,
Firefighters 10.76 percent, Laborers 33 percent, and then the
Other are 11.5 percent. In looking at that deployment, do you
know, Mr. Frank, if we have a list of those who were required
or authorized to be on site? Is there a full universe of those
people that we could start with to start to address the scope
of this in a fashion that is broader than we have here at this
hearing?
Mr. Frank. I imagine Mr. Cardozo would have a better sense
of that than I would.
Mr. King. I would then----
Mr. Frank. I simply don't know.
Mr. King. Thank you.
Mr. Cardozo?
Mr. Cardozo. With respect to police officers and
firefighters, I think that there is a universe. With respect,
of course, to the laborers, that is going to--you would have to
go to talk to each individual contractor. And, of course, there
is at least a potential some claimants go beyond that----
Mr. King. But let me ask as my clock ticks, and I am sorry
about that. Is it possible to put together a list of those who
were required or authorized to be on site?
Mr. Cardozo. I would say that firefighters and policemen--
there are 44,000 people have signed up for the World Trade
Center registry. It doesn't mean they are sick, simply says
they were there.
Mr. King. But do we know from their work records that they
were required to be on site? Or as a volunteer, I understand as
well, some of them came in and volunteered.
Mr. Cardozo. Congressman, I am not sure. I would be happy
to find out and let you know. I don't want to misstate the
facts.
Mr. King. I would appreciate that. And if anyone has any
information on laborers at all, so and I will submit some of
those questions for the record as the clock ticks down here.
Mr. Cardozo. I will be happy to do that.
Mr. King. Thank you.
And I just turn then back to Mr. Frank and ask if--I spent
my life in the construction business. I look at the
proportionality of that, and I understand the size and the
scope of Ground Zero, and it takes a lot of security personnel.
But we are not quite 2:1 in security personnel over the number
of workers that were there on the site, too.
The proportionality of the claims, does it come in
proportion to those percentage of workers that we have? I mean,
are we getting more claims from public employee workers than we
are from private sector workers? It seems to me that we are,
and if so, can you explain that?
Mr. Frank. There are several possible reasons for that. One
is a legitimate reason, which is that the police officers were
there at the earliest hours of the Ground Zero time, in which
case exposure to toxins would have been greater than, say,
workers who were there in February or March.
Second, to the extent that the policemen have a union that
is advocating on their behalf and signing them up for
litigation, they might be more likely to sue.
But I simply don't know the ratios involved and to what
extent they are medically legitimate.
Mr. Weiner. Would the gentleman yield? Would the gentleman
yield?
Mr. King. Yes, I would.
Mr. Weiner. I just want to clarify something. Just because
they are listed as police officers doesn't mean they weren't on
the pile. It doesn't necessarily mean they were only doing
security. A lot of them came to the scene and started looking
for their----
Mr. King [continuing]. Their peers----
Mr. Weiner [continuing]. And were on the actual pile, not
just doing security. So even though it says police officers,
this universe of people is not just at the perimeter. Many of
them were on the pile.
Mr. King. And I appreciate that, in reclaiming, and I
absolutely recognize that. And I want to honor that as well.
And I would ask the indulgence of the Chair and unanimous
consent to ask one additional question.
Mr. Nadler. Without objection.
Mr. King. Thank you, Mr. Chairman.
And I would like to direct it to Dr. Melius. And it is
something that I hadn't thought of, that is until I listened to
Mr. Frank's comments. Is the proximity to the, let me say,
September 11--the closer you arrived there on the pile and
worked, does that increase the likelihood of having a
respiratory illness? Is it proportional in that fashion, and is
it also proportional to the time spent on the pile? Have you
got anything that measures that for me?
Dr. Melius. Yes, it is actually proportional to both. The
amount of time that you spent there increases your likelihood
that you become ill, as well as how early you arrived and were
involved in working on the pile. So it is the amount of hours
spent early on, the total length of time that you worked there
as well as, you know, which days you arrived. If you arrived
early, you tend to be more likely to have symptoms. There is
data on that from scientific studies. There is also a breakdown
I can provide for you on the people in the medical monitoring
program that breaks it down by their occupation and I think
would address your earlier question also.
Mr. King. Thank you very much. I appreciate it.
And, Mr. Chairman, I yield back.
Mr. Nadler. I thank the gentleman.
I now recognize the distinguished Chairman of the full
Committee, the gentleman from Michigan, Mr. Conyers.
Mr. Conyers. Thank you, Mr. Chairman, and Chairwoman
Lofgren. This has been fascinating hearing. But it is the
American Enterprise Institute's witness, Mr. Theodore Frank,
that compels my attention most.
With such minimal requirements for recovery and such
potentially broad definitions of eligibility, taxpayers may
find themselves paying for psychotherapy for Woody Allen and
hundreds of thousands of other New Yorkers, many of whom are
among the wealthiest people in the Nation.
Well, I introduce you to the person on your right. A police
officer is not one of those in that category, I hope not.
Mr. Frank. Well, I----
Mr. Conyers. And that----
Mr. Frank. Can I answer?
Mr. Conyers. When I recognize you to answer. When I finish.
Mr. Feinberg, you have been around. What is this? Did you
have a wide open policy? Were you letting every psychotic New
Yorker that wanted to climb on board? Not that there are many
of them in New York--don't get me wrong. Mr. Wiener----
Mr. Weiner. I thank the Chairman.
Mr. Conyers. What is going on here?
Mr. Feinberg. The 9/11 statute, Mr. Chairman, did not
allow, statutorily did not allow, any compensation for mental
trauma alone. There had to be, under the 9/11 Fund, a physical
injury: a broken leg, a burn, a respiratory claim, corroborated
by doctors. So we didn't pay any psychotherapy mental trauma
claims. They were ineligible.
Mr. Conyers. Feeling better, Mr. Frank?
Mr. Frank. No, sir. Because section 203 of H.R. 3543 opens
up the fund to precisely the injury the Stabilization Act
forbid, which was physically or psychologically injured. And,
given the fact that the New York City disaster area goes well
beyond Mr. Valentin, who is perfectly entitled to compensation
to the extent his injuries were caused the problems of working
on Ground Zero--and I have no dispute with that, and I say that
in my testimony--but that is not what H.R. 3543 does. It is----
Mr. Conyers. But it----
Mr. Frank [continuing]. Substantially broader than that.
And if you want to fund vet Mr. Valentin, that doesn't require
you to open up section 203 to half of Manhattan.
Mr. Conyers. Okay. So you have got it in for people who may
have psychological or mental injuries that are derivative from
the basic claim. So you want to take all of them out. In other
words--do you have medical background?
Mr. Frank. Sir, I explain in my testimony why----
Mr. Conyers. I just asked you the question.
Mr. Frank. I do not have a medical background----
Mr. Conyers. Okay. I don't either.
Mr. Frank [continuing]. Background, and I see what happens
when you have broad----
Mr. Conyers. Well, just a moment now. Here is the problem.
I can agree with you to an extent. But who am I or you to
determine that there are other kinds of injuries?
It just so happened over the weekend--and this is a
fortuitous circumstance--I spoke before the Detroit Chapter of
the American Psychiatric Association. So as a disclaimer, I am
not carrying any of their water or trying to help them in any
way. But don't you see a relationship, a possible relationship,
between mental and physical injury? Is that conceivable?
Mr. Frank. Well, certainly. In the original 9/11 Fund, when
people had physical injury and asked for compensation, they
were also compensated for their non-economic mental injuries.
And that was in the statute, and that was in the definition of
how non-economic injury was defined in the Stabilization Act.
And they were compensated for that.
Mr. Conyers. So you go along with that, but you think that
this bill now has gone a little bit too far, or a lot too far?
Mr. Frank. You are holding up Mr. Valentin as who you want
to help, but that is not who this bill helps. It helps many
hundreds of thousands of people beyond that--helps in terms of
just giving away taxpayer money----
Mr. Conyers. Well, Carolyn Maloney has never given away a
dime in taxpayers' money, not even to New Yorkers who were
psychos. But, I mean, the problem that we are faced with is how
do we address your problem? Now, you are talking with some of
the most veteran lawmakers, including my friends on the other
side who may not be lawyers, but--and they have a little
feeling and attitude about lawyers that we will talk about
later--but the fact of the matter is, couldn't you trust it in
our tender hands to create a bill that would meet the
objections? Because I don't want to be giving out money in the
fashion that you derive. I mean, Woody Allen, he ought to be
helping us, not us helping him.
Mr. Frank. Well, that is what I try to do in my written
testimony, sir, where I identify the problems in the existing
legislation and what Congress needs to do to correct them. And
even Mr. Feinberg agrees with me that opening up to
psychological injury without proof of physical injury would be
a huge can of worms.
Mr. Conyers. Well, Mr. Feinberg, let me just close with
this question: Do you see a relationship between mental and
physical injuries? I mean, people can get hurt in a lot of
ways.
Mr. Feinberg. Of course there is a relationship. Of course.
The 9/11 Fund statute did not permit compensation for pure
mental trauma without an accompanying physical injury. So if
you reenact the 9/11 statute and add to it mental trauma
without physical injury, that would be a major shift from the
original statute.
Mr. Conyers. Would you accept an invitation from the
American Psychiatric Association in my place next year when
they meet?
Mr. Feinberg. Mr. Chairman, anything you asked me to do.
Mr. Conyers. Thank you, Mr. Chairman.
Mr. Nadler. I thank the gentleman.
And now---- [Applause.]
Mr. Nadler. I now recognize the gentleman from California.
Mr. Issa. I thank the Chairman.
I am not a psychiatrist, psychologist, medical doctor or an
attorney. I have got that off my chest real early. But I am a
taxpayer. So I am going to make my line of questioning purely
as a taxpayer from the state of California.
Mr. Cardozo, how much money has the Federal Government put
out in post-9/11, including the buckets of $10-$20 billion that
we just threw at the State and the City of New York versus how
much has been paid out by the city and the state of New York to
the victims in direct aid? And we are talking about victims--
direct, indirect--all the people that this bill is dealing
with. What has been your end of the take?
Mr. Cardozo. Congressman, if you--I don't know the precise
answer, certainly. But including the pensions--and I think it
is important, apropos of Congressman King's question as to who
would be covered here, that New York City as a matter of State
law now gives firefighters and police and any other city worker
who was affected by 9/11, who can show that he or she became
ill as a result of the attack, gives them a three-quater
pension basically meaning tax-free. So as a practical matter--
--
Mr. Issa. Yes, and you are able to give Federal State tax-
free because if you give somebody a medical tax-free status the
IRS recognizes that, and they pay no federal.
Mr. Cardozo. That is right. The State legislature enacted
that statute, and most of that money as a pension matter comes
from New York City.
The specific answer to your question is, as far as I have
said before in response to the Chairman's question, because of
the fact that the $1 billion captive insurance fund is, based
upon everything we know, not at all sufficient to cover the
claims we have been talking about, and because neither the city
nor the Captive believe they did anything wrong, we have no
choice but to be litigating. And so the Captive has paid
virtually none of the claims.
Mr. Issa. Okay. Because, well, you know, my question from
the dais is purely a Federal one. We voted in the wake of 9/11
huge amounts of money to the city and the state of New York. We
have spent, arguably, between $1-$2 trillion related to the
post-9/11, if you include going to Afghanistan and so on.
I have to ask why damages from a fire that had no dirty
bomb in it--it had no chemical munitions in it, it simply was
an aircraft, residue of two aircraft, and residue of the
materials used to build this building--why the firefighters who
went there and everyone in the City of New York needs to come
to the Federal Government for the dollars versus, quite
frankly, this being primarily a State consideration.
You know, it is very simple: I can't vote for additional
money for New York if I can't see why it would be appropriate
to do this every single time a similar situation happens, which
quite frankly includes any urban terrorist. It doesn't have to
be somebody from Al Qaida. It can be somebody who decides that
they don't like animal testing at one of our pharmaceutical
facilities.
Mr. Cardozo. Congressman, this was, I believe, an attack on
the United States of America. It was located at Ground Zero,
but it was an attack on America. The question which Congress
answered right after 9/11 is because it was an attack on
America, we should compensate these people.
I am also suggesting to you if, God forbid, there is an
attack, be it in San Francisco, Los Angeles, Houston, Seattle,
the next time, if we do want the contractors, the city and the
workers to give the same kind of response that they gave in New
York City, which enabled us to be able to deal with the
aftermath, if we want that to happen again we need this kind of
an approach.
Mr. Issa. But we turned $20 billion over to the City of New
York almost immediately after it. I think Hillary Clinton went
to the White House and walked away, essentially, with the
commitment from the President.
Are you saying that this, whether or not we pay to the
downwind hazard and anyone else who has alleged emotional
problems as a result of the trauma of 9/11, that if we don't do
that firemen and police aren't going to go to a fire regardless
of how it is caused?
Mr. Cardozo. No, what I am saying is--and I think if you
look at what happened in Katrina alone as an example, and a
cautionary example--if you were running the largest
construction companies in the world, as they were in New York,
and you are faced with this kind of liability, and your
government says there has been an attack in Los Angeles, please
come in--we know from a fact that there were people slow to
come in after Katrina because of that concern.
And I think because this was--and certainly 9/11 was an
attack on the Nation, and the only other alternative we all
know is the tort system with the inadequacies that we have
discussed today--I would suggest to you that, yes, it is an
obligation that the Federal Government should take----
Mr. Issa. I appreciate that.
Mr. Chairman, my time has expired. But I might note that we
had Filipinos fighting with us in World War II, and we promised
to give them full pensions as military personnel. As of today,
we still haven't done that. And I would say that we have to
look at this and every other commitment of the Federal
Government in light of that. And as a taxpayer, I would have to
say that I would like to see my Filipine veterans----
Mr. Weiner. Mr. Chairman----
Mr. Issa [continuing]. Get that for----
Mr. Weiner [continuing]. Mr. Chairman, we request that the
gentleman be given an additional minute to answer just a quick
question, if we could.
Mr. Nadler. Without objection.
Mr. Weiner. Would the gentleman yield to a question?
Mr. Issa. Absolutely.
Mr. Weiner. I just want to make sure an impression is not
left here that you don't mean to let. Congress passed the
compensation fund. A Republican-controlled Congress.
Mr. Issa. And it is expired.
Mr. Weiner. And, frankly, the gentleman voted for it.
Mr. Issa. I did.
Mr. Weiner. The gentleman voted for it because we had the
national sense that this was not an attack on New York City.
This was an attack on our country. And remember something else,
we also at the same time bailed out the airline industry. And
we made a decision that there were two imperatives, that we
should not--that a lot of these decisions were made in the
context of----
Mr. Issa [continuing]. And I thank the gentleman. The
answer to your question----
Mr. Weiner [continuing]. But I would just, if I could----
Mr. Issa [continuing]. The answer to your question----
Mr. Weiner. The point that the gentleman seems to miss is
that some extant body came in and did this to you. No, in fact,
you voted for it because there was a reason to vote for it. And
all this is is an extension of the very same conclusion. If you
conclude it was then wrong, that is one thing----
Mr. Issa. Right. And to answer the gentleman's question, so
that to be clear, I voted, this Congress voted, in order to
stabilize markets, stabilize confidence throughout the country
in the wake of 9/11. We did a lot of those things, and I think
they were the right things.
I am now asking on the extension whether all the
commitments and potential commitments, and we could choose to
commit, whether this one rises to the extent of it. And right
now I am not convinced. And I cited the Filipine veterans never
having----
Mr. Nadler. I would--the time of the gentleman has expired.
I hope the gentleman is not suggesting because we shamefully
have not met our commitments to Filipino veterans--which we
should do--therefore we should be as shameful and not meet our
responsibilities to people who gave up their health and their
lives---- [Applause.]
Mr. Issa. I just want to----
Mr. Nadler [continuing]. Who gave up their health and the
balance of their careers because of an attack on this country.
The time of the gentleman is expired.
I now recognize the gentlelady from Texas.
Ms. Jackson Lee. Thank you to both Chairmen and to my
Chairman of the full Committee.
And I am glad that Chairman is sitting in front of the flag
of the United States of America. I happen to be from Texas, but
the last thing I recognize is Texas is in the Union, and I am
an American. What that means is that America has an obligation
to those who were on the front lines of a terrorist act that
occurred in 2001 and risked their lives to save Americans. And
as well in 1993, terrorist act.
And might I add that we have, likewise, though it is not in
the context of a terrorist act, failed badly the people in the
Gulf Coast who suffered at the hands of an enormous natural
disaster. Hurricane Katrina is a story yet unfinished.
So I am quite quizzical about where we are today, and I
thank Chairman Nadler for his legislation. I know that I am on
the bill and look forward to not only supporting this bill, but
I join him and all uncompensated heroes of America, the
Filipino veterans and others. America needs to stand up and own
these issues and respond to them.
Mr. Cardozo, I just wanted to try and find out what amount
of monies are left, to your knowledge, in the closed 2003 Fund?
Mr. Cardozo. In the Victim Compensation Fund?
Ms. Jackson Lee. Yes.
Mr. Cardozo. None.
Ms. Jackson Lee. What are you utilizing to--there are
11,000 claims, I understand. And how are you addressing those
claims right now?
Mr. Cardozo. Well, as you know, there is a captive
insurance company that Congress set up to defend the city and
the contractors against that claim----
Ms. Jackson Lee. Let me have you stop for a moment. So what
you are doing--even though it a breach of Congress--what you
are doing is taking money and fighting claims of people who are
in need?
Mr. Cardozo. I don't agree with that characterization,
Congressman, because the money as appropriated--as it said it
in the Appropriation Act, as it said it in the Inspector
General's Report--was to create an insurance company. That
insurance----
Ms. Jackson Lee. And is that the insurance company where
the head of it was being paid $350,000 and $20,000 in health
benefits?
Mr. Cardozo. And that, as the Inspector General's Report
notes, the reason that captive insurance company was set up was
because neither the city nor the contractors could get private
insurance. In the ordinary course, FEMA would have paid the
premiums and you would have purchased insurance.
Ms. Jackson Lee. Mr. Cardozo----
Mr. Nadler. Would the gentlelady yield for a moment? Would
the gentlelady yield for a moment----
Ms. Jackson Lee. I----
Mr. Nadler [continuing]. A very short moment?
Ms. Jackson Lee [continuing]. Would be happy to yield.
Mr. Nadler. Thank you.
Mr. Cardozo keeps referring to the Inspector General's
Report. As far as I know, they haven't issued their report yet.
So I am wondering what he is referring to.
Mr. Cardozo. Well, you would know better than I. I am
referring to the January 2008 Report of the Inspector General
of----
Mr. Nadler. Well, let me just say that is a draft which was
withdrawn as inadequate and inaccurate. It was never issued.
Mr. Cardozo. Well, was that your----
Mr. Nadler. I yield back. [Applause.]
Mr. Nadler. Please, please refrain from cheering or booing,
either one.
The time is returned to the gentlelady.
Ms. Jackson Lee. I thank the gentleman.
Mr. Cardozo, there are often things that Congress does that
I vigorously disagree with, and I certainly disagree with any
premise or any--it is an interesting name, Captive, because you
have really captured and hung out to dry individuals who have
been on the front line by using those dollars to fight against,
if you will, or defend against claims of individuals who
probably legitimately deserve to be compensated. We have
someone who, I understand has resigned, but formerly was making
$350,000.
I don't know if Congress dictated that or not, but
certainly we deserve an F grade if that is what we did, to give
money to someone holding back on giving money to others.
Let me try to ask Mr. Feinberg again to get that
regulation, I understand it had to do with making sure that
someone got to the doctor within 96 hours and then 72 hours. Is
that accurate?
Mr. Feinberg. The regulations accompanying the original
statute required exposure at the World Trade Center----
Ms. Jackson Lee. Right.
Mr. Feinberg [continuing]. Within 96 hours of the 9/11
attacks and within 72 hours of that----
Ms. Jackson Lee. Did it have any language in there about
latent impact?
Mr. Feinberg. The subsequent regulations did.
Ms. Jackson Lee. Okay.
Let me go to Mr. Valentin. Mr. Valentin, thank you for
being here. I know that you struggle as well. When did you
first sense the impact of your disease, or your diagnosis, and
when did you get to the World Trade--within hours, within days?
Mr. Valentin. I got to the World Trade Center by 11:30 that
morning.
Ms. Jackson Lee. The day of?
Mr. Valentin. The day of.
Ms. Jackson Lee. All right, sir. And then when did you get
this diagnosis?
Mr. Valentin. Well, subsequently also, I was at No. 7 when
it fell, a block away.
Ms. Jackson Lee. Yes.
Mr. Valentin. I was in the plume dust there.
I became sick in November, roughly November, 2 months
later. I went and got a chest X-ray. And they thought I had a
pneumonia, but my lungs were clear. But it was a progression of
illness, and I didn't really see it until 2004. And it just
progressed until it got worse, and----
Ms. Jackson Lee. So you have a latent impact. And not only
do you have a physical illness, but I imagine there is some
mental trauma that goes on as you have been speaking about it.
Mr. Valentin. Absolutely.
Ms. Jackson Lee. And so when did you file a claim?
Mr. Valentin. I haven't filed a claim with Captive for it.
Ms. Jackson Lee. And for what reason?
Mr. Valentin. There is no way to file a claim.
Ms. Jackson Lee. So you are in essence barred from ever
connecting your disease and your mental trauma to the actions
of 9/11----
Mr. Valentin. That is right.
Ms. Jackson Lee [continuing]. Of which you were present?
Mr. Valentin. That is correct.
Ms. Jackson Lee. And you said that your surrounding
colleagues also--and maybe some of them did not get to a doctor
within 72 hours. Is that accurate?
Mr. Valentin. That is accurate.
Ms. Jackson Lee. And I might just say to you, without
making any humor out of it, some of you gentlemen who are in
the firefighters and police and others who work every day, you
are not apt to go to the doctor every 15 minutes. Am I honest
to say that? Is your wife here to join me, understand it?
Mr. Valentin. Exactly. That is exactly right.
Ms. Jackson Lee. You guys just hang in there, is that it?
Mr. Valentin. That is right.
Ms. Jackson Lee. And some of the other workers?
Mr. Valentin. That is correct.
Ms. Jackson Lee. I got him smiling.
Let me just say, Mr. Chairman, I didn't get a chance to
talk to Mr. Frank, but the Chairman of the full Committee ably
pointed out some inconsistencies in trying to address this
question.
There is no doubt that as we sit in this room and as we
look at the flag of the United States, you are owed as
Americans whether you are from New York, California, Texas,
Louisiana--we owe you. This bill is a responsible addressing of
the question of individuals who are now experiencing latent
damage. How dare we deny the recognition of the tragedy of 9/
11, Oklahoma, 1993 World Tower or Hurricane Katrina? We have to
stop it now, and I hope that this bill moves quickly through
this Committee.
And I thank you, and I yield back.
Mr. Nadler. I thank the gentlelady.
And I recognize the gentleman from Texas.
Mr. Gohmert. Thank you. And I do appreciate the hearing. It
has been very informative testimony, both written and oral has
been helpful and very informative.
I am not going to make any political speeches. I am just
trying to gather information additionally. But I will say, I
mentioned to some of my firefighters back in East Texas just
this past week that with all of the horrors that came out of
that evil attack on 9/11, I am glad that finally our first
responders have begun to be appreciated as they should have
been all along. But they have been taken for granted for so
long. And after 9/11 people began to realize just what it is
they put on the line every day.
I want to ask about the insurance policies that were in
effect covering first responders back at the time of 9/11 and
whether or not--I guess, Mr. Feinberg, let me ask you--did
those come into play at all in consideration in the awards or
the compensation to people under the fund?
Mr. Feinberg. Absolutely. The statute passed by Congress
creating the 9/11 Fund required me, once I made the
calculations, to deduct from any gross award life insurance,
disability insurance, State victims of crime payments. I was
required by statute to take into account each individual's
insurance situation and deduct those amounts before providing a
public check from the U.S. Treasury.
Mr. Gohmert. Okay. Thank you. And that seems to me to make
sense because that is dangers that insurance companies are
insuring against.
But in some of the written testimony I had also read that
some of the first responders who had not been compensated under
the original fund who now appear to be injured as a result have
lost their health insurance and are not able to receive health
insurance.
Mr. Cardozo, you seem to want to respond, so I am curious
about that. I mean, normally the unions have been pretty good
about negotiating, I would hope, decent health insurance
policies. Are these guys being left out in the cold from health
insurance?
Mr. Cardozo. I am glad to answer that question. And I think
there is a two-pronged answer.
First of all, with respect to health insurance, once a
union member has to retire because of some kind of disability,
there is very good health insurance as a retiree, but it is as
a retiree, and there is a co-payment and the usual.
But as a result of both the help of this Congress and Mayor
Bloomberg's initiative in particular, every person who has been
injured or thinks he or she may be injured is now entitled to
free medical care at one of the centers of excellence that the
city is funding and that is being funded in part by Federal
dollars.
Now, that was not in effect on September 12th, and so there
are some people who had some out of pocket medical care. But as
far as firefighters and policemen are concerned, they were
covered by their insurance as long as they were policemen and
firemen. If they needed to retire because of their health
problems, they do get health insurance, but they did have to
pay the usual co-pay. But now they are getting that for free.
Secondly, and I think this is a very important point I just
want to mention, that, again, as far as city workers are
concerned, if you do become injured and have to retire or
became ill, such as someone unfortunately like Mr. Valentin,
you retire on a three-quarter pension which gives you three-
quarters of your pay for the rest of your life tax-free. Now,
that does not deal, obviously, with any past medical benefits,
it does not deal with pain and suffering, but it does
compensate you for the lost wages.
Mr. Gohmert. Well, you mentioned it wasn't in effect on
September 12th, are you saying there is a group now even under
this new policy that does not have access to the free medical
help?
Mr. Cardozo. Well, no. Today they can come in----
Mr. Gohmert. Okay.
Mr. Cardozo. Everyone is covered today.
Mr. Gohmert. Because that sure caught my attention because
if these first responders went in there and then they were not
at a point where they could retire and yet then were left in
the lurch, that would be a huge problem----
Mr. Cardozo [continuing]. The gap that I was talking about,
Congressman, here----
Mr. Gohmert. Okay.
Mr. Cardozo [continuing]. Between September 12th, if you
will, and the time these programs went into effect, policemen
and firemen who had to retire may have had to put some money
out of pocket.
Mr. Gohmert. Mr. Chairman, because of the lengthy answer,
could I ask unanimous consent to ask one quick question of----
Mr. Nadler. Without objection.
Mr. Gohmert [continuing]. The master?
I am also concerned--most tort systems allow for a
discovery rule. And it seems like it would certainly be
applicable here if you had firemen or policemen or workers out
there who didn't know until much later when the symptoms
manifested themselves that they were injured, isn't there some
basis for coming in and filing a late claim based on the date
of the discovery rather than the date of the injury so they
still may have access to the original fund? Is that possible?
Mr. Feinberg. Absolutely. We had a regulation--we modified
it when we saw this happening, Congressman.
Mr. Gohmert. Okay.
Mr. Feinberg. We modified it and allowed anybody who had a
latent injury to come in, and we would find them eligible if
they had the requisite medical evidence, etcetera. But the
statute expired on December 22, 2003. So all of these claims
that are now being asserted in court----
Mr. Gohmert. There is no ability for you to address those.
Mr. Feinberg. I had no ability to pay them because there
was no longer a statute in existence.
Mr. Gohmert. Okay.
Thank you, Mr. Chairman.
Mr. Nadler. Thank you.
I now recognize the gentleman from Minnesota.
Mr. Ellison. I first of all, Mr. Chairman, want to thank
you for this hearing and also want to thank and commend all of
the New Yorkers who are here in support of their city. I agree
that part of what it means to be a citizen of the country is
that when one part of our country has a catastrophe, we all
come to their aid. So I just want to restate the sentiments
already expressed here that I will very gladly and proudly
support the legislation.
And with that, I want to yield back to you, Mr. Chairman.
Mr. Nadler. Are you yielding me the balance of your time?
Or yielding----
Mr. Ellison. I am yielding--who wants to----
Mr. Nadler. No, no, no, I. Thank you. Thank you.
I have two questions. I just want to see if anybody else
wants it.
Dr. Melius, first of all: Given what Mr. Cardozo just
said--he painted a rather bright picture of benefits available
to city workers who had to retire on disability because of the
tragedy--why is it that we have people like Detective Valentin
who have lost their homes, had to pay their 401Ks? Is it true,
in other words, or is it a completely accurately picture, I
should say, because it is true in come cases, that the city and
State benefits now take care of this?
Dr. Melius. I think what Mr. Cardozo has presented is a
very rosy picture of what the situation is for the many city
workers who have become ill and disabled because of their World
Trade Center exposures.
They have great difficulty obtaining coverage, particularly
those that are disabled and can no longer work. There are long
delays in getting compensation, typically 3 years or more
before they can receive compensation, so they lose their homes
and they have limited health coverage. They have limited
ability to be able to pay the high co-pays and so forth that
are needed for their medications and so forth. I mean, I don't
know whether it is city policy, but it is certainly very common
for the city to oppose either the line of duty three-quarters
pension disability or the workers' compensation cases filed by
other city workers.
Full prompt compensation is just simply not reality and not
what we see commonly among the many people that are being
treated now in the medical programs.
Mr. Nadler. Thank you.
And Mr. Feinberg, how would you structure a settlement with
the Captive Insurance Company and existing insurance funds if
you were going to do that?
I said how would you structure a settlement with the
Captive Insurance Company and existing insurance funds if you
were going to do that?
Mr. Feinberg. As I say in my testimony, Mr. Chairman, sit
down with all of the parties and see if one can negotiate out a
settlement that will take into account not only the Captive's
available funds but insurance funds that may or may not--I
don't know; I haven't seen if there are policies, but would
have to see that--other sources of contribution that would
increase the overall aggregate amount.
And then try and work out a settlement that would give some
monies to those currently ill, put some monies aside for future
claims--something of great legitimate concern to the city--and
also perhaps find an insurer who might insure these claimants
against the likelihood of subsequent serious disease.
Mr. Nadler. Thank you.
I have one quick question for Mr. Cardozo, then I will
yield the balance of the time to Mr. Weiner.
Given that you testified about how we have these programs
in place now--they are funded to a large extent by the $160
million that Congress voted on a one-time basis in last year's
budget--if the President's recommendation of--and the estimate
is it cost $250 million, roughly, a year for the health care--
if the President's recommendation in this year's budget to cut
that $160 million to $25 million goes through, will this impact
the ability to provide those medical services?
Mr. Cardozo. Well, it obviously has that potential,
Congressman, which is why we strongly support the rest of this
bill to deal with this. Mayor----
Mr. Nadler. And you would strongly support a higher level
of appropriation this year?
Mr. Cardozo. Yes.
Mr. Nadler. Thank you.
Now, would the gentleman from Minnesota yield the balance
of his time to the other gentleman from New York, Mr. Weiner?
Mr. Ellison. Yes.
Mr. Nadler. Thank you.
Mr. Weiner. Thank you, Mr. Chairman.
And thanks to the gentleman.
And I am going to ask on my own time some substantive
questions about the legislation, but I can't allow the
gentleman from California's remarks about what led us here to
go unchallenged.
The notion that this is the City of New York asking for
more benefits from the Federal Government because we were the
point of attack on our country is patently absurd and, frankly,
insulting to no end. The President of the United States, when
he stood in our city, did not say New York City was attacked.
He said our country was attacked. There are people, some of
them in this audience, that are dying from that attack. That
was an attack on our Nation.
The efforts made by this Congress, whatever they might have
been, were not the reflection of Congress' generosity. It was a
reflection of our national sense that it was New York City that
came under this attack, and we had to do what we could to
repair the breach in our Nation.
You know, we frequently say that 2,800 some-odd citizens
died in that attack. That is not true. There are people who are
every single day, bit by bit by bit, who are dying from that
attack. And all we are saying here is: How are we going to deal
with our national obligation to make those people and their
families as whole as is possible?
Mr. Nadler. Gentleman's time has expired.
I now recognize the gentlelady from California.
Ms. Waters. Thank you very much, Mr. Chairman.
I have sat here and listened with great interest to the
debate and discussion about September 11 and the fund that was
set up to compensate the victims. But I am really taken back by
Mr. Frank's written testimony that is here in the book. It is
probably some of the most cynical testimony I have seen since I
have served on this Committee.
And I would like to ask Mr. Frank, how do you know that
psychiatric treatment is more acceptable in New York than in
other places in the country?
Mr. Frank. I am sorry. I don't understand the question. It
was a simple----
Ms. Waters. Well, let us go back to your testimony where
you talk about the likelihood that there will be claims for
psychiatric care and where you say that ``one strongly suspects
that ratio is higher for a cosmopolitan area such as New York
City where the stigma of psychiatric care is smaller than in
the American population at large.'' Where did you get that stat
from?
Mr. Frank. That was praise for New York City and for its--
--
Ms. Waters. I don't care what it was. Where did you get it
from?
Mr. Frank. That was just common sense, ma'am.
Ms. Waters. So you made it up.
Mr. Frank. That particular----
Ms. Waters. You are making a case here----
Mr. Frank [continuing]. Praise for New York City----
Ms. Waters [continuing]. Why----
Mr. Frank [continuing]. Was made up. You are correct. I
made up----
Ms. Waters [continuing]. The case--you made it up, that is
right. You are making a case here why taxpayer money is going
to be unwisely spent for psychiatric claims, and you are
concluding that it is certainly going to be high in New York
because everybody knows that it is more acceptable in New York
to have psychiatric problems, and you have concluded that that
is going to be costly.
Mr. Frank. Well, it is well known that New York is a more
educated community than the United States at large, and more
educated people are more likely to accept psychiatric----
Ms. Waters. That is not what you said. Anyhow, let us
also----
Mr. Frank. Well, that is what I said.
Ms. Waters [continuing]. Go to the cynical statement about
Woody Allen. What did you mean that taxpayers would find
themselves paying for psychotherapy for Woody Allen and
hundreds of thousands of other New Yorkers, many of whom are
among the richest people in the Nation? What kind of testimony
is this?
Mr. Frank. Well, if you look at H.R 3543 you will see that
the definitions of psychiatric injury are very broad, that the
definitions of eligible claimants are very broad, and the
absurd example demonstrates how just broad it is. This is a
bill intended to help heroes like Mr. Valentin, and it is in
fact a giveaway for a much larger group of people that you
might not be intending to give that money to.
Ms. Waters. Your extensive testimony, that probably was
prepared by 20 or 30 people over at the Institute----
Mr. Frank. No, ma'am. I prepared that by myself.
Ms. Waters. You shouldn't be proud of it. This testimony
that you have supplied here, making all kind of criticism about
the bill, admit--well, at least you gave the master credit for
being very responsible in the way that he managed the
compensation funds. But then you oppose the master having that
kind of authority in H.R. 3543. Why is that?
Mr. Frank. Well, I don't think the master should have had
that authority in the original stabilization----
Ms. Waters. But you said the master did a good job.
Mr. Frank. The master did a good job.
Ms. Waters. He did not abuse the authority.
Mr. Frank. The master did not abuse the authority he was
given. He had the potential to abuse the authority, and I
think----
Ms. Waters. But that leads you to a conclusion that the
master shouldn't have this kind of authority in 3543, even
though they did a good job in the original compensation fund.
Mr. Frank. Well, if you are going to put Special Master
Feinberg back in charge of this, and if he is going to be as
circumspect as he was the first time, but if he is as
circumspect as he was the first time, then the policemen and
firemen behind me aren't going to be satisfied.
You are talking about a much broader statute with much
broader authority for the special master in the original
situation. And I also don't know whether Special Master
Feinberg wants to spend another 5 years doing this.
Ms. Waters. Well, but he didn't ask you to decide whether
or not he would like to be the master of this fund. You have
taken it upon yourself to talk about the fact that he could be
good, and only if he had it would you be comfortable with the
fact that a master could be as responsible as he was.
Mr. Chairman, I thank you for the time that you have
allotted to me.
I would just like to say that I am certainly going to
support 3543. I thank you for this hearing. We are spending a
lot of time talking about whether or not psychiatric problems,
mental health problems, are legitimate for compensation.
And I want to tell you, I am surprised, based on what
happened September 11 in New York City, that we don't have more
people who have been psychologically damaged than we appear to
have. I think it was one of the most traumatic things that
could have happened to anybody, any time, any place, anywhere.
And whether or not we are talking about people who did not
know the negative impact it was having on their health at the
time or people who discover tomorrow, they deserve to be heard
and to be considered. And I hope that the Members of Congress
will do just that.
Mr. Nadler. I thank the gentlelady. And I thank the
gentlelady for her important comments.
I now recognize the gentleman from Virginia.
Mr. Scott. Thank you, Mr. Chairman.
Mr. Feinberg, how many claims did you say you paid, and how
many did you deny? How many claims did you pay, and how many
did you deny?
Mr. Feinberg. We paid about 5,300 claims, and we denied
about 2,000 claims. All the denials were physical injury
claims.
Mr. Scott. Okay. Now, let me just go through this a little
bit the way the settlements work. When somebody settles, it is
the final settlement--once you settle, that is it?
Mr. Feinberg. That is it.
Mr. Scott. You can't reopen it. And if you settled for the
broken bone and give a release and subsequently have asbestos-
related problems, that is too bad?
Mr. Feinberg. That is right.
Mr. Scott. And you didn't make partial payments--there is
one payment, and that is it?
Mr. Feinberg. That is correct.
Mr. Scott. And if someone was not satisfied with the offer,
they could refuse it and go to court?
Mr. Feinberg. That is correct.
Mr. Scott. And was the statute of limitation for the court
case told while it was pending with you?
Mr. Feinberg. No. The statute wasn't told, but the life of
the fund was such that the statute of limitations never really
entered into this. The fund expired.
Mr. Scott. Well, if they wanted to reject your claim and go
to court, a lot of them would have exhausted the statute of
limitations----
Mr. Feinberg. No. Because the fund expired by its own terms
on December 22, 2003, within the tort litigation statute of
limitations period.
Mr. Scott. So if they rejected the claim they would still,
at that time, be within the statute of limitations----
Mr. Feinberg. That is correct.
Mr. Scott [continuing]. For a court case.
We have heard about legal fees. My discussions with the
fine lawyers in Virginia was such to lead me to believe that
there was a lot of pro bono legal work being done.
Mr. Feinberg. Congressman, I am glad you raised that. Legal
fees were never an issue in the fund. Virtually all families
and physically injured victims who wanted an attorney were
provided an attorney pro bono with no fees whatsoever. It just
never arose as an issue.
Mr. Scott. Thank you. And you mentioned several of the
collateral sources. Is workers' compensation a collateral
source?
Mr. Feinberg. It is a collateral source, and it was a very
problematic issue.
Mr. Scott. Now, Mr. Cardozo, my recollection of workers'
comp says that you are eligible if your injury was arising out
of in the course of employment.
Mr. Cardozo. That is right.
Mr. Scott. And so that would cover the police officers and
the firefighters and whatnot. Would it----
Mr. Cardozo. No. Forgive me for interrupting, Congressman,
but under New York law, neither policeman nor firemen are
covered by workers' comp because they get what we call line of
duty payments instead.
Mr. Scott. Which is the same thing as workers' comp. Well,
Mr. Cardozo. Well----
Mr. Scott. Let me back up a step. Is line of duty pay a
collateral source?
Mr. Feinberg. Yes.
Mr. Scott. Okay, now, what happens to the restaurant worker
who was just working in the restaurant? Was his injury or
death--did that arise out of or in the course of employment?
Mr. Cardozo. Well, that would depend upon the workers' comp
of his private employer. That wouldn't be New York City
workers' comp.
Mr. Scott. Well, it would be a collateral source----
Mr. Cardozo. Oh----
Mr. Scott [continuing]. That Mr. Feinberg would look into.
Mr. Cardozo [continuing]. Yes.
Mr. Scott. Did anybody in that situation get workers'
comp--a restaurant worker in the World Trade Center?
Mr. Feinberg. I don't--I assume so, but would have to go
back and check our files to get an answer to that. I assume it
would.
Mr. Scott. And if you settled, could workers' comp
subsequently pay for some of the subsequent medical expenses?
Mr. Feinberg. Of private employees? I would assume that
they would, yes.
Mr. Scott. And that wouldn't be a collateral source that
you would want to get----
Mr. Feinberg. Once the check was cut, we walked away. We
would try, Congressman, and calculate what future workers' comp
benefits would be over the work life of that injured victim----
Mr. Scott. And you would have that----
Mr. Feinberg [continuing]. And consider whether we had to
deduct that or not at that time.
Mr. Scott. How much is needed in the WTCC Insurance Fund? A
billion isn't enough, Mr. Cardozo?
Mr. Cardozo. Well, the plaintiffs have said in open court
that as to the existing roughly 10,000 claims, a billion
dollars is not enough. And, of course, as Mr. Feinberg said, we
are faced with the additional possibility of 25,000-30,000
additional claims.
Mr. Scott. Mr. Feinberg, if you were to try to do an
eligibility, the present requirement is injury had to be in the
immediate aftermath of the attack--you are talking about
hours--and you have some geographic limitations. There are some
of these injuries--asbestos-related, for example--that you can
show were clearly caused by the 9/11 attack. How would they be
compensated or not compensated if we extend without amending
the statute?
Mr. Feinberg. I think you would have to look at the
existing, the regulations that we enacted in 2001, and decide
whether or not those regulations are pertinent in all respects
to latent claims that you are focusing on. And perhaps the
regulations would have to be adjusted to determine different
eligibility----
Mr. Scott. Well, if somebody could prove, convince by the
fund as to evidence prove that their situation was caused by
the 9/11 attack although they didn't have the hours, and they
didn't have the proximity, would that be a compensable injury
under, if we extended it?
Mr. Feinberg. We would have to examine that claim and
decide, you know, whether or not the assertion is valid. If the
assertion is valid, they would have a compensable claim, yes.
Mr. Scott. Thank you, Mr. Chairman.
Mr. Nadler. Thank the gentleman.
And I yield to the gentleman from North Carolina.
Mr. Watt. Thank you, Mr. Chairman. And thank you for
holding the hearing.
I would like to ask unanimous consent to submit for the
record an e-mail from a constituent of mine, Jennifer Hovey,
just for the purpose of demonstrating that this is not a
situation that is only affecting New Yorkers. I am from North
Carolina, and I would just like to lift a part of this just to
make the point.
She is talking about her father, a 35-year veteran of the
New York Police Department Bomb Squad, who suffers from severe
asthma and heart-related injuries due to his involvement as a
first responder on 9/11. And she talks about some of the things
that he could do prior to this response and a number of things
that he is unable to do, speaking of her father, Detective
Kevin Berry. So I would just like to submit this for the record
for that purpose.
Mr. Nadler. Without objection, so ordered.
[The information referred to follows:]
Mr. Watt. Mr. Feinberg, could you quickly give me kind of a
snapshot of the kinds of things that you rejected in the 2,000
claims that you rejected?
Mr. Feinberg. The statute prohibited compensation for
mental trauma alone.
Mr. Watt. So, no, no. I thought you told me you rejected
some things that were not prohibited under the statute. Is that
not the case?
Mr. Feinberg. Well, of the 2,000 physical injury claims
that we rejected, the overwhelming number of those were mental
trauma only. The other reason----
Mr. Watt. Okay. So in the 2,000 physical injury claims, you
are including emotional trauma claims, not physical injury in
the sense that----
Mr. Feinberg. That is right.
Mr. Watt. Okay.
Mr. Feinberg. In addition----
Mr. Watt. Are there other kinds of things that you can
quickly tell me about----
Mr. Feinberg. Yes.
Mr. Watt [continuing]. Aside from the trauma claims?
Mr. Feinberg. Yes. We rejected physical injury claims where
the medical documentation did not corroborate the claim.
Mr. Watt. Okay. I am just trying to get a picture of the
kinds of things because that seemed to be a fairly high
incidence of rejections. What portion of that would you say,
the 2,000 that you rejected, were trauma claims, emotional
claims, as opposed to physical claims, where you just didn't
have the substantiation of the physical connection?
Mr. Feinberg. I will have to go back, Congressman----
Mr. Watt. Approximate--I am not trying----
Mr. Feinberg. I really don't know. I would have to go back
and provide you that information in the next few days.
Mr. Watt. Now, you suggested that a simple extension, one-
sentence extension, but that leaves me a little uneasy because
I am--it sounds to me like you all were at some level in your
regulations defining a category of things that maybe should
have been the province of the Congress. And because when I hear
you say you redefined the regulations to fit circumstances, it
sounds to me like you as a master were doing a lot of the
things that you contemplated we should have done as--and that
makes me uneasy as a lawyer and as a legislator when you start
redefining this because that allows you to legislate.
Talk to me a little bit about--help me through that
uneasiness if you can, because shouldn't we at least be
amending the statute to incorporate the regulatory framework
that you already acknowledge was legitimate?
Mr. Feinberg. Well, that is a loaded statement,
Congressman. I agree with most of what you say.
I did have the responsibility of trying to clarify some of
the ambiguities in the statute. There was nothing ambiguous
about mental trauma alone is not compensable. So there is
nothing I could do with that. There was nothing ambiguous about
collateral offsets had to be deducted--like comp and life
insurance, etcetera. So in certain areas, I had no discretion.
In other areas, what is the immediate aftermath of the
attacks? How long is immediate? What is the immediate vicinity
of the World Trade Center? Canal Street? South Ferry? Lower
Broadway? We had to take regulations and try and clarify what
we thought Congress meant when it passed that law.
One problem now that you have, the statute having been
initially enacted, the regulations having been initially
promulgated, 7,300 applicants having been processed, if
Congress goes back now and decides to extend the statute and
change the rules, you are going to run into this difficulty, I
just--you know it very well----
Mr. Watt. Sure.
Mr. Feinberg [continuing]. People now will be treated ``A''
when people back then were treated ``B,'' and you will have a
real problem----
Mr. Watt. So your recommendation actually is to extend the
statute but incorporate your regulations. You are not saying
don't do at least that--because then you are going to have the
same conclusion in the opposite direction.
Mr. Feinberg. I think that is right. Although Congressman
Scott----
Mr. Nadler. The time of the gentleman has expired.
The witness may answer this question briefly.
Mr. Feinberg. Congressman Scott raises a very good point,
which is you had regulations back in 2001, 2002 and 2003. If in
2008 there is somebody who can demonstrate medically that they
were injured in a geographic area that might be a block away
from our regulations but it is now demonstrable--it can be
demonstrated and corroborated--I suppose you couldn't ignore
that claim, if it could be corroborated.
But other than that, I am agreeing with you that if, if the
statute is extended--a position that I discuss in my written
testimony is a very difficult philosophic question--if it is
extended, a one-line extension is the way to go.
Mr. Nadler. The time of the gentleman has expired.
I have a statement from the husband of a victim who was
killed, which I would like unanimous consent to insert into the
record.
Without objection, so ordered.
[The information referred to follows:]
Mr. Nadler. Before we go to our next questioner, I have to
say that unfortunately I have a bill of mine under
consideration on the floor imminently, and I need to briefly
step out of the hearing. We tried to move the bill so it
wouldn't conflict with the hearing, but as you can imagine,
trying to manage the schedules of 235 Members of Congress is
not always possible. The situation was unavoidable. So you will
forgive me, I have to leave. I will come back as soon as
possible. And the other co-Chair of this hearing will Chair the
hearing. Thank you.
Ms. Lofgren. [Presiding.] At this point I would recognize
the gentleman, Mr. Cohen.
Mr. Cohen. Thank you, Madam Chair.
Mr. Cardozo--and I apologize, I had to be out of the room
for a little bit, if you have answered this--but I understand
that it is the position of the city that for a person to be
paid, they have to sue and win a judgment. Is that accurate?
Mr. Cardozo. If we can't--obviously, the best way to do
this is, we believe, is the Victim Compensation Fund. Barring
that, if we cannot settle this entire matter--because the city
does not believe, I am talking to the city, that it did
anything wrong, and the contractors do not believe that it did
anything wrong, the huge liability that far exceeds the
available insurance--that we have no choice but to be fighting
with people who we don't want to be fighting with. And the
answer to your question, therefore, would be yes.
Mr. Cohen. So you don't believe that if somebody has a
claim that you believe is a just claim that you could settle it
without the necessity of having an adverse appearance?
Mr. Cardozo. Well, I don't believe--I believe many people
are injured, Congressman. But the fact that they are injured
does not mean that the city's civil defense immunities are not
valid; it does not mean that the city was negligent in any way.
And, therefore, I do believe, given the magnitude of what we
are talking about that far exceeds the insurance, the city and
the contractors have no choice but to say because we don't
believe we did anything wrong that we are going to have to
litigate.
Mr. Cohen. But don't you sometimes have a claims
commissioner or claims adjuster that settles claims even though
the city has immunity?
Mr. Cardozo. Absolutely you do. But that is in a situation
where your insurance ultimately will be sufficient to cover. In
the analogy I drew before to Congressman Nadler--I don't know
if you were here--if you were in a car accident, and your
insurance company settled for the full amount of your insurance
policy with the first plaintiff and left you uninsured for the
second plaintiff, when you don't think you did anything wrong,
you would be quite upset.
Since the city does not believe it did anything wrong, it
does not mean that these people are not injured, are not sick.
But the city does not believe it did anything wrong. It
believes that the captive insurance company was created, as it
says, to insure the city and the contractors, that it has no
choice therefore but to say we are not liable and you are going
to have to prove your case in court.
Which is exactly why the answer to this whole problem is
what we have been talking about for the last 2 hours: the
creation of a victims' compensation fund.
Mr. Cohen. Let me ask the doctor, please----
Thank you, sir.
Dr. Melius, there were some 96 hours, a timeline placed in
here in this statute, for immediate aftermath. Ninety-six hours
and 1 minute--just as exposed to injury or illness?
Dr. Melius. Absolutely. And someone exposed after 96 hours,
started their exposure after 96 hours, could also have
developed as severe a respiratory health problem or other
health problem as someone exposed during that time period.
Mr. Cohen. Is there some period of time where the elements
would have dissipated in the immediate area of where the health
concern would not have been serious?
Dr. Melius. As long as there was work being done on the
pile or at Fresh Kills, the other areas, there was always the
likelihood that people would develop (have had serious
exposure), enough to develop illness. Now, that probably went
down as time went by and the exposures might have decreased,
but one can't say that across the board absolutely for
everybody.
So during the time period of the work on the pile and the
other affiliated or associated operations, almost any time
someone could have had the exposure and developed disease. The
problem was that people were not aware of the severity of the
exposure and were not properly protected for most of the time
period they were down there.
Mr. Cohen. What would be an appropriate hour, if you could
pick one--and it is difficult; there is no magic moment when
something starts and stops--but when the likelihood of illness
arising as a result of agents just on the pile, when would it
have gotten to be considered to be safe? Or was it the whole
time that it was there?
Dr. Melius. I believe it was the whole time that it was
there. It is defining terms of the medical portion of the bill
in terms of eligibility for the medical programs for people
that worked on the pile. There is a date when that work ended,
basically, and that was the time exposure stopped.
However, I will say that there were other people who did
not work in the pile but who did some of the cleanup in
residences and businesses in the downtown area surrounding
there that occurred sometime after. People left buildings or
didn't bother to clean them and then came back to try to clean
them. So there were even exposures occurring after that time.
I think that can all be defined and constrained within
eligibility terms. I don't think that would be a significant
problem. But it is a significant period of time.
Ms. Lofgren. The gentleman's time has expired.
Mr. Cohen. Wow, that was the fastest 5 minutes I have ever
experienced. Thank you.
Ms. Lofgren. Thank you, Mr. Cohen.
The gentleman from New York, Mr. Weiner, is now recognized.
Mr. Weiner. Thank you very much.
Let me just say, I agree, Mr. Cardozo, completely, that
this is not the responsibility of the city. This is the
responsibility of the Federal Government, and there was very
little disagreement about that in the early days after
September 11. The Federal Government has a responsibility to
take care of the people that were harmed in this attack on the
people of the United States.
And I have to say that the arguments being made by Mr.
Frank are evocative of the early days and the months that went
on during the consideration. You know, while we have a certain
level of history in our mind about this, let us not forget that
the work of Mr. Feinberg was very controversial. Just about
every single day, someone would say ``Well, what do you do
about this circumstance?''
And we empowered the master to make decisions that were
very difficult. If you think it is difficult trying to learn
whether someone's mental illness was a result of September 11,
imagine trying to put a value on someone's life. Imagine trying
to be the master when you are coming and you have the victims
of a family who was a dishwasher and someone who was a
stockbroker and someone who was the CEO of a company and
someone who was a police sergeant, and trying to come up with a
dollar value. If you think these issues are controversial and
are subject to difficult judgment calls, that is why we didn't
do it. We left it to the special master.
And I think for all of the notion now that ``Wow, that went
great. Why don't we do that again?'' it was only because of the
work of the master. And I just want to say publicly what I have
said before, you know, Mr. Feinberg was in a difficult
situation because to some degree we in the legislature said he
could not do things that many people were demanding he do. For
example, the difference between the attack in 1993 and the
attack in 2001, you could make a pretty good argument there was
no difference. Yet the legislature made it very clear we were
going to cover some things and not others.
So I am confident that a special master empowered by
Congress will have to make difficult decisions and will make
them. And I almost am absolutely convinced that it is true,
this universe is going to grow--as was the testimony--this
universe is going to grow. But that is a reason why you have to
build, not a reason why you don't. That is exactly the reason
to take some level of the mystery out of how we are going to
deal with this problem.
We have too many people who are short of breath today, who
are getting medical treatment today, trying to figure out what
it is that they should be doing. We could very easily lawyer
this for years and years and years. The imperative that we in
Congress have is to try to find a way to solve this problem.
And I think that the Victim Compensation Fund for all its
imperfections, for all of its judgment calls, for all of its
controversy, worked. We are here because we did this once
before, and we found, frankly, a model that worked pretty well.
It was not perfect. And I remember seeing articles about the
disparities. And listening to Mr. Feinberg trying to explain to
all of us the decisions--and I remember thinking as I read
these stories, ``Boy oh boy, I am glad I didn't have to make
that decision.''
And the same might happen here. We might have controversy
that emerges. We might have people that argue extreme cases and
get extreme judgments. We might have people that have said,
``You know what, you really have pretty good insurance from
some other source, maybe you go elsewhere.''
But the idea that this should be the subject of years and
years of litigation between the city and the plaintiffs is what
we need to stop. We need to make sure that that doesn't happen.
Mr. Conyers. Would the gentleman yield?
Mr. Weiner. I certainly would.
Mr. Conyers. That is why I suggested in my opening
statement, Mr. Weiner, that this is a perfect opportunity for
these parties to begin coming together to make the kind of
agreement to work this out so that we don't have lawyers or
congressmen going through this, hashing this, rehashing this
out for years.
Mr. Weiner. Well, and I just wanted, Mr. Chairman, I just
wanted to say one other thing.
You know, another thing about the Victim Compensation Fund
that we should remember in the fondest light is how
bipartisanly we kind of came together around the idea that this
was the right thing to do. I would hope that we kind of
remember that spirit and we shouldn't say to someone, ``Well,
because you are dying more slowly, we are going to turn our
back on you.'' Because that is really what is happening here.
We have a group of victims that are just as much a victim of
this attack as those people that were in those two buildings
and those people that were around.
You know, if you think about it, if we knew then what we
know today, I ask all of my colleagues: Would we have not
included this class? If someone said to us in 2002, in 2001,
``Ladies and gentlemen of the Congress, we believe that we will
know fully how many people suffered from this by looking at who
developed respiratory diseases up until the year 2012. That is
how we are going to do it.'' We would have said, ``Absolutely,
put those people in,'' because those are the people we wanted
to help and to serve.
That group of fact is no different than it is today. And
let us not forget that a lot of this discussion we had, ruled
on it, decided in a bipartisan way we wanted to cover, and so
all we are saying with that one-line extension that Mr.
Feinberg is suggesting is: Do Congress' will again.
And I yield back the balance of my time.
Ms. Lofgren. The gentleman yields back.
And I believe we have exhausted the number of members
wishing to ask questions. This has been a very helpful hearing.
I think it has elicited issues that we might not have fully
appreciated at the beginning. I think it is worth noting that
the attack on 9/11 was an attack on America. I was born and
raised in California. The valedictorian of my high school
class, Naomi Solomon, died in those Towers. We had firemen from
California who, search and rescue specialists, the entire
country responded just as we would expect a response today if
there were a very serious issue for our country.
So we want to thank all of the witnesses for their
testimony here today.
Without objection, Members will have 5 legislative days to
submit any additional written questions to any of you
witnesses, which we will forward. And if we are forwarding
questions, we would ask that you answer as promptly as you can
so that the answers may be made part of the record.
Without objection, the record will remain open for 5
legislative days for the submission of other additional
materials.
And, again, our thanks. People don't realize that our
witnesses are volunteers who have come here to help inform the
Congress so that we can do the best job for our country. We
thank you very much.
And with that, the hearing is adjourned.
[Whereupon, at 12:51 p.m., the Subcommittees were
adjourned.]
A P P E N D I X
----------
Material Submitted for the Hearing Record
Prepared Statement of the Honorable Zoe Lofgren, a Representative in
Congress from the State of California, and Chairwoman, Subcommittee on
Immigration, Citizenship, Refugees, Border Security, and International
Law
In the immediate aftermath of one of our nation's greatest
tragedies, Congress created the 9/11 Victims Compensation Fund. By all
accounts, the VCF was a stunningly successful program.
At least as far as it went.
The program, a truly bipartisan effort conceived hurriedly during
what would become the long shadow of the attacks of 9/11, provided a
means to compensate the victims of the 9/11 attacks and their family
members. In exchange for consideration of claims through an
administrative process of remarkable simplicity, those who elected to
apply under the VCF agreed not to pursue lawsuits.
Over the short, 33-month period during which the VCF was conceived
and operated, it distributed over $7.049 billion to survivors of 2,880
people killed in the attacks and to 2,680 people injured in the attacks
or in the rescue efforts conducted immediately after the attacks.
The average award for families of the dead exceeded $2 million. The
average award for injured victims came to nearly $400,000.
According to the final report of Special Master Feinberg, one of
our witnesses today, ``97% of the families of deceased victims who
might otherwise have pursued lawsuits for years . . . received
compensation through the fund.''
As I said, a stunning success.
And I look forward to hearing today from Mr. Feinberg. His able
administration of the fund and his expertise regarding administrative
alternatives to tort litigation will help the Committee greatly.
I mention the specter of tort litigation for a reason. Over 10,000
lawsuits have been filed in New York City by people--first responders,
building and trades workers, volunteers from around the country who
rallied to the World Trade Center site to help locate survivors,
recover the dead and clean up the debris from the fallen towers--most
of whom have suffered illnesses resulting from their exposure to the
toxic dust that covered so much of lower Manhattan and surrounding
areas.
These lawsuits--filed by people who, by no fault of their own, were
not eligible to be compensated under the VCF because they discovered
their illnesses too late, they didn't know they could even apply
because they thought the fund was only for those who died, or they came
to site a few short hours after the 96-hour ``immediate aftermath''--
are taking far too long to decide.
The doctors and scientists seem to all agree. People are sick and
will continue to get sick because of their exposure to the World Trade
Center's noxious dust. From the City's testimony today, it seems clear
the City agrees.
The question is what do we do about it? Worker's compensation has
failed. Medical programs haven't covered every one. The
Congressionally-created Captive Insurance Fund has paid pitifully few
claims--five to be exact--while the City defends every claim.
Today's hearing is the beginning of our quest to answer the
question: what do we do?
I want to thank Chairman Nadler for his leadership on these issues.
The bill, HR 3543, the ``James Zadroga 9/11 Health and Compensation Act
of 2007,'' authored by Chairman Nadler, Rep. Maloney and Rep. Fossella
represents a good first attempt at addressing the issues.
I believe this hearing will help us begin to answer the question,
``What do we do?'' I believe we will leave here today with a better
sense of the problems people are facing. From there, I am hopeful that
we can begin to structure a fair and just program to compensate those
who continue to bear the deep scars from that terrible day in
September, almost seven years ago.
Prepared Statement of the Honorable John Conyers, Jr., a Representative
in Congress from the State of Michigan, Chairman, Committee on the
Judiciary, and Member, Subcommittee on the Constitution, Civil Rights,
and Civil Libertie
In the wake of the World Trade Center attacks, a victims'
compensation fund (VCF) was put together quite quickly. That effort was
a success, and we are happy to be joined today by the former Special
Master in charge of that effort, Kenneth Feinberg.
The VCF, and the legislation that created it, was a response
focused on the immediate--the persons killed or injured that morning
and those who went into the wreckage while the fires still raged. Those
people and their family received assistance through the VCF.
But there were others. Some didn't know that there was a place for
them in the VCF because outreach was focused on the families of the
dead, rather than on the living. Some weren't eligible for the VCF
because they were on-site within the first 96 hours after the planes
hit. Others' symptoms have been gradually manifesting themselves, and
there is little recourse for them.
What do we see now? 70% of the workers being monitored showing
respiratory problems. Hundreds of people already stricken with cancer
from airborne particles--cancers so virulent that people have already
died. Many of these victims bravely rushed in to help in an emergency.
Others trusted their employers who sent them to do clean-up in the
months that followed, even though they were sent into the site without
protective gear.
Even as the environmental disaster spread a dust of poison over the
site and the surrounding area, the EPA, OSHA, the City, and State
officials took a ``do it yourself'' approach to protecting the public.
FEMA refused to relocate people from contaminated homes and apartments,
and refused to pay for cleanup. The suggestion to just wipe things down
with a wet rag was as ineffective a response to asbestos, lead, and
PCBs as duct tape would have been to a chemical weapons attack.
In 2003, we put a billion dollars into the World Trade Center
Captive Insurance Company (WTCC) to handle continuing claims from
debris removal. This was done through FEMA, which was supposed to be
the place to go for emergency services. Since then, we have learned a
lot more about how FEMA sees its mission, and how it is managed.
The WTCC was supposed to serve these victims by providing a
mechanism to pay claims. But instead, the WTCC spends most of its time
challenging claims, and even litigating against the very people they
were chartered to help! Sadly, instead of a duty to serve the victims,
the WTCC has chosen to argue that they have a ``duty to defend''
against every claim. As a result, the WTCC has only compensated five
victims. While the WTCC fights and denies, the illnesses worsen.
There are over 8,600 claims outstanding. Will there be any money
left to compensate these victims once the WTCC has spent it all on
attorneys fees fighting them?
Compare this for a moment against what Mr. Feinberg was able to do
with the VCF, where 97% of claimants were compensated.
The WTCC needs to stop wasting the money we gave it, and start
dealing with the thousands of people who they were created to serve.
I want thank Chairwoman Zoe Lofgren and Chairman Jerry Nadler for
having this joint hearing, and to congratulate Jerry Nadler for all of
his hard work on H.R. 3543, legislation that seeks to confront these
hard issues.
Prepared Statement of the Honorable Jerrold Nadler, a Representative in
Congress from the State of New York, and Chairman, Subcommittee on the
Constitution, Civil Rights, and Civil Liberties
Prepared Statement of the Honorable Sheila Jackson Lee, a
Representative in Congress from the State of Texas, and Member,
Subcommittee on Immigration, Citizenship, Refugees, Border Security,
and International Law
Chairwoman Lofgren, and Chairman Nadler, ranking members King and
Franks, thank you for convening today's very important hearing on
``Paying with Their Lives: The Status of Compensation for 9/11 Health
Effects.'' In this hearing, will address past successes, as well as the
current and future challenges of compensating people for illnesses and
injuries that resulted from the tragic September 11, 2001 attacks on
the World Trade Center.
The sad reality is that when the World Trade Center collapsed on 9/
11, thousands of first responders, local residents, workers, students,
and others inhaled a poisonous mixture of asbestos, lead, PCBs, and
other contaminants. More than six years later, many of these people
have become sick from the toxic dust, and there is currently no
comprehensive federal program to provide them with health care or
compensation.
Existing health coverage for this population varies widely, and a
number of people are either uninsured or under insured. The existing
system of workers compensation has failed, and the World Trade Center
Captive Insurance Fund, established with a $1 billion federal
appropriation, has spent millions of dollars in administrative and
legal costs to fight against rather than to pay claims filed by first
responders and others whom Congress intended to assist. Only a handful
of claims have been paid.
Following 9/11, over 50,000 individuals responded to the call and
engaged in clean0up activities at Ground Zero. Individuals were exposed
to asbestos and other harmful chemicals at the site.
Tens of thousands of people were living, working, and going to
school in the areas around the World Trade Center. People were exposed
to the harmful chemicals weeks or months after the buildings collapsed.
There was no complete health monitoring of the risks of exposure to the
dangerous substances that were present.
These dangerous substances included hundreds of tons of asbestos,
nearly half a million pounds of lead, and vast amounts of glass fibers,
steel, and concrete that blanketed New York and the surrounding areas.
This dust was blown into nearby buildings, schools, and residences.
Fires burned for many months, in part due to the 150,000 gallons of
oil stored in the buildings, which emitted heavy metals, PCBs and other
toxic chemicals, like dioxin and benzene. Lower Manhattan had been
turned into a 16-acre disaster zone, which resulted in an unprecedented
environmental assault for the city. The air was hazardous and caused
serious physical injury and death.
A study prepared for New York City Mayor Michael Bloomberg
estimates that the number of individuals most heavily exposed to the
possible environmental hazards and trauma of the 9/11 attach amount to
over 400,000 people.
In the immediate aftermath of 9/11, Congress created the Victim
Compensation Fund, a unique program designed to compensate people for
losses sustained as a result of the attacks on the World Trade Center,
and to limit litigation against the airline industry.
Attorney General John Ashcroft appointed Kenneth Feinberg as the
special master over the Fund. The fund was established as an
entitlement for eligible individuals and was not subject to
appropriation. Mr. Feingold has discretion to determine eligibility and
the amount of compensation. In return for accepting these funds,
recipients waved their right to sue the airlines.
The fund had an application deadline of December 22, 2003. Over a
33-month period, the Fund distributed over $7 billion to survivors of
nearly 2,880 people killed on 9/11, and to 2, 680 people who were
injured in the attacks or the rescue efforts.
Families of the deceased were paid in amounts from $800,000 to $6.5
million. Individuals were compensated for physical injuries from $500
to $7.1 million, and the Fund paid $1 billion in claims to people who
suffered physical injuries.
The Fund was successful because it provided an alternative to
litigation. It was expedient and less costly. Ninety-seven percent of
the families that participated in the program received compensation.
There was an application deadline for people to file claims under
the Fund. Most of the persons had filed claims with the Fund, but many
individuals who were injured as a result of 9/11 were time-barred. The
Fund's regulations limited compensation to workers who were injured
within the immediate 96 hours after the attack.
Specifically, in 2003 Congress provided $1 billion in 9/11 disaster
assistance to the Federal Emergency Management Agency (FEMA) to
establish a captive insurance company for claims arising from removing
debris, which also included claims by city employees.
The purpose of the Fund was to remove the financial burden from the
City and provide compensation for those working at Ground Zero. In the
five years since the fund has closed, thousands of individuals have
claimed to be suffering from 9/11-related health effects.
Approximately, 8,000 plaintiffs are suing the City of New York and
several contractors whose employees worked at Ground Zero.
The City has expressed concern that if it begins paying claims, it
would exhaust the $1 billion appropriated by Congress, and that it
would be deemed to have waived its claims to immunity. In a recent
ruling, the U.S. Court of Appeals for the Second Circuit held that
``New York defenses are just that: defenses to liability, rather than
from immunity from suit.''
Congress has responded with a bipartisan bill, H.R. 3542, ``9/11
Health and Compensation Act.'' This bill introduced by Representatives
Maloney, Nadler, and Fossella. I am a proud co-sponsor of this bill.
This bill has two main components. First, it would provide
comprehensive health care to everyone who was exposed to the toxins at
Ground Zero. Second, it would provide compensation for economic damages
and losses by reopening the 9/11 Victim Compensation Fund. These latter
provisions are before the Judiciary Committee.
Possible changes to the Fund have been suggested. These include,
extending the date for people to submit claims; expanding the
definition of ``aftermath of 9/11'' to cover a longer period; expanding
the geographical boundaries to include more people that suffer
respiratory ailments; expanding the Fund to include psychological harm;
allowing second claims to be made in limited circumstances; expanding
the pool of applicants to include residents, area workers, students,
and others.
I believe this legislation is taking us in the right direction. I
welcome the opportunity to learn more information so that we can craft
the best legislation that provides the maximum assistance to the most
people.
Thank you, I yield the balance of my time.
Prepared Statement of the Honorable Darrell Issa, a Representative in
Congress from the State of California, and Member, Subcommittee on the
Constitution, Civil Rights, and Civil Liberties
Mr. Chairman, thank you for holding this important hearing. It has
been over six years since the tragedies of September 11, 2001 occurred,
and I appreciate this opportunity to discuss the status of compensating
both the victims of 9/11 as well as those individuals who risked their
lives in rescue and cleanup efforts.
As with the assassination of President John F. Kennedy, we can all
remember where we were when we first heard of the planes striking the
World Trade Center, the Pentagon, and the plane downing in Pennsylvania
due to the bravery of those onboard. It was one of the darkest days in
American history.
The country responded with a remarkable outpouring of unity and
generosity. Americans from all states found some way to assist during
the aftermath--everyone wanted to do everything they could to hold a
shocked country together.
In Congress, we acted to appropriate at least $20 billion to the
City of New York alone for cleanup and rebuilding efforts. We tightened
our security at airports and on personal identification, and we
launched an unprecedented offense against terrorism worldwide.
Today our country is safer than it was before September 11, but the
scars from the attack still remain. Nearly 3000 people lost their lives
on 9/11, and many more were injured. The Victims Compensation Fund of
2001 distributed approximately $6 billion to the survivors of those
killed on 9/11 and over $1 billion to individuals injured in the
attacks or rescue efforts. However, many individuals who worked in the
cleanup effort at ground zero were injured at the site, and not all of
these injuries occurred immediately.
The Victims Compensation Fund (VCF) is widely held to have been a
success. This is in no small part attributable to the fact that the
claimants were relatively easily identifiable. We knew who was hurt or
killed in the attacks and rescue efforts, and we knew who their
survivors were.
H.R. 3543, the ``James Zadroga 9/11 Health and Compensation Act of
2007,'' is a well-intentioned but unrealistic attempt to expand the
claimant base of the original VCF. The bill's main goal is to
compensate individuals injured by air contaminants in New York
following 9/11, but the bill also opens up the pool to people who
experienced emotional distress without physical harm. Additionally, the
claimants include anyone who lived, worked, or attended school in the
New York City disaster area, an area defined ambiguously at best. I
cannot support H.R. 3543 in its current form for several reasons.
While some individuals may deserve compensation for exposure to air
contaminants caused by the 9/11 attack, opening the pool to an
extremely broad geographic area would generate limitless claims. Also,
as we have realized from the World Trade Center Captive Insurance
Company established to compensate cleanup workers for injuries, it is
extremely difficult to determine which injuries, especially respiratory
injuries, were caused by working at and around ground zero. Along those
same lines, allowing individuals with only psychological harm access to
any compensation pool would exponentially increase the number of
claimants. It is not that some people do not have genuine emotional
distress and are in need of assistance, it is that it is incredibly
difficult to wean out the fraudulent claims from the genuine claims.
That is why so many states do not allow damages for emotional distress
without physical harm.
I supported past funding efforts for the City of New York following
September 11, and I will continue to support efforts to assist
individuals harmed during the attacks, rescue efforts, and cleanup. We
should be able to work together to find ways to improve this
legislation, and I look forward to working with my colleagues on that
effort.