[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
         JAMES ZADROGA 9/11 HEALTH AND COMPENSATION ACT OF 2009

=======================================================================

                             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 ELEVENTH CONGRESS

                             FIRST SESSION

                                   ON

                                H.R. 847

                               __________

                             MARCH 31, 2009

                               __________

                           Serial No. 111-12

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov



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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            DANIEL E. LUNGREN, California
MAXINE WATERS, California            DARRELL E. ISSA, California
WILLIAM D. DELAHUNT, Massachusetts   J. RANDY FORBES, Virginia
ROBERT WEXLER, Florida               STEVE KING, Iowa
STEVE COHEN, Tennessee               TRENT FRANKS, Arizona
HENRY C. ``HANK'' JOHNSON, Jr.,      LOUIE GOHMERT, Texas
  Georgia                            JIM JORDAN, Ohio
PEDRO PIERLUISI, Puerto Rico         TED POE, Texas
LUIS V. GUTIERREZ, Illinois          JASON CHAFFETZ, Utah
BRAD SHERMAN, California             TOM ROONEY, Florida
TAMMY BALDWIN, Wisconsin             GREGG HARPER, Mississippi
CHARLES A. GONZALEZ, Texas
ANTHONY D. WEINER, New York
ADAM B. SCHIFF, California
LINDA T. SANCHEZ, California
DEBBIE WASSERMAN SCHULTZ, Florida
DANIEL MAFFEI, New York
[Vacant]

       Perry Apelbaum, Majority 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
HOWARD L. BERMAN, California         STEVE KING, Iowa
SHEILA JACKSON LEE, Texas            GREGG HARPER, Mississippi
MAXINE WATERS, California            ELTON GALLEGLY, California
PEDRO PIERLUISI, Puerto Rico         DANIEL E. LUNGREN, California
LUIS V. GUTIERREZ, Illinois          TED POE, Texas
LINDA T. SANCHEZ, California         JASON CHAFFETZ, Utah
ANTHONY D. WEINER, New York
CHARLES A. GONZALEZ, Texas
WILLIAM D. DELAHUNT, Massachusetts

                    Ur Mendoza Jaddou, Chief Counsel
                    George Fishman, Minority Counsel
                                 ------                                

  Subcommittee on the Constitution, Civil Rights, and Civil Liberties

                   JERROLD NADLER, New York, Chairman

MELVIN L. WATT, North Carolina       F. JAMES SENSENBRENNER, Jr., 
ROBERT C. ``BOBBY'' SCOTT, Virginia  Wisconsin
WILLIAM D. DELAHUNT, Massachusetts   TOM ROONEY, Florida
HENRY C. ``HANK'' JOHNSON, Jr.,      TRENT FRANKS, Arizona
  Georgia                            STEVE KING, Iowa
TAMMY BALDWIN, Wisconsin             JIM JORDAN, Ohio
JOHN CONYERS, Jr., Michigan          LOUIE GOHMERT, Texas
STEVE COHEN, Tennessee
BRAD SHERMAN, California
SHEILA JACKSON LEE, Texas

                     David Lachmann, Chief of Staff

                    Paul B. Taylor, Minority Counsel


                            C O N T E N T S

                              ----------                              

                             MARCH 31, 2009

                                                                   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..............................................     1
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................     3
The Honorable F. James Sensenbrenner, Jr., a Representative in 
  Congress from the State of Wisconsin, and Ranking Member, 
  Subcommittee on the Constitution, Civil Rights, and Civil 
  Liberties......................................................     5
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..     6
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....................................     8

                               WITNESSES

Mr. Kenneth R. Feinberg, former Special Master, Victim 
  Compensation Fund
  Oral Testimony.................................................    11
  Prepared Statement.............................................    13
Ms. Barbara Burnette, former Detective, New York City Police 
  Department
  Oral Testimony.................................................    25
  Prepared Statement.............................................    27
Mr. James Melius, MD., Administrator, New York State Laborers' 
  Health and Safety Trust Fund
  Oral Testimony.................................................    29
  Prepared Statement.............................................    31
Ms. Christine LaSala, Chief Executive Officer, World Trade Center 
  Captive Insurance Fund
  Oral Testimony.................................................    36
  Prepared Statement.............................................    38
Mr. Michael A. Cardozo, Corporation Counsel, City of New York
  Oral Testimony.................................................    46
  Prepared Statement.............................................    47
Mr. Theodore H. Frank, American Enterprise Institute
  Oral Testimony.................................................    50
  Prepared Statement.............................................    53
Mr. Richard Wood, President, Plaza Construction Corporation
  Oral Testimony.................................................    69
  Prepared Statement.............................................    72

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of Christine C. Quinn, Speaker, New York City 
  Council........................................................    91
Prepared Statement of Associated Builders and Contractors (ABC)..    92
H.R. 847, the ``James Zadroga 9/11 Health and Compensation Act of 
  2009''.........................................................    95


         JAMES ZADROGA 9/11 HEALTH AND COMPENSATION ACT OF 2009

                              ----------                              


                        TUESDAY, MARCH 31, 2009

      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 Subcommittees met, pursuant to notice, at 10:06 a.m., 
in room 2141, Rayburn House Office Building, the Honorable 
Jerrold Nadler (Chairman of the Subcommittee on the 
Constitution, Civil Rights and Civil Liberties) presiding.
    Present from the Subcommittee on Immigration, Citizenship, 
Refugees, Border Security, and International Law: 
Representatives Lofgren, Jackson Lee, Waters, Weiner, King, 
Harper, Lungren, and Chaffetz.
    Present from the Subcommittee on the Constitution, Civil 
Rights and Civil Liberties: Representatives Nadler, Watt, 
Scott, Johnson, Conyers, Jackson Lee, Sensenbrenner, Rooney, 
and King.
    Also present: Representative Maloney.
    Staff present from Subcommittee on Immigration, 
Citizenship, Refugees, Border Security, and International Law: 
David Shahoulian, Majority Counsel; Zachary Somers, Minority 
Counsel; and Andres Jimenez, Majority Professional Staff 
Member.
    Staff present from Subcommittee on the Constitution, Civil 
Rights, and Civil Liberties: David Lachmann, Subcommittee 
Majority Chief of Staff; Paul Taylor, Minority Counsel; and 
Matthew Morgan, Majority Staff Assistant.
    Mr. Nadler. [Presiding.] This joint hearing of the 
Subcommittee on the Constitution, Civil Rights, and Civil 
Liberties, and the Subcommittee on Immigration, Citizenship, 
Refugees, Border Security, and International Law will now come 
to order.
    We will begin the proceedings by recognizing the 
distinguished Chair of the Subcommittee on Immigration, 
Citizenship, Refugees, Border Security, and International Law 
for an opening statement.
    Ms. Lofgren. Thank you, Mr. Nadler.
    Last year, the Immigration and Constitution Subcommittees 
held a joint hearing on the 9/11 Victims Compensation Fund, 
where we examined the need to reopen the funds for those who 
were injured as a result of the 9/11 attacks but whose injuries 
did not become clear until after the VCF fund expired.
    That hearing was instrumental in leading us to the bill we 
are considering today. Congress created the VCF in the 
immediate aftermath of the 9/11 attacks. What we learned at the 
hearing is that the VCF was a stunningly successful program, at 
least as far as it went.
    A truly bipartisan effort quickly conceived days after 9/
11, the program established a system to compensate injured 9/11 
victims and the family members of the deceased. Over its short 
existence, the VCF distributed just over $7 billion, $6 billion 
of which was distributed to the surviving family members of 
2,880 people who were killed in the attacks and $1 billion to 
the 2,680 people who were injured in the attacks during the 
rescue efforts conducted immediately after the attacks.
    The average award for families of the dead was about $2 
million. The average award for injured victims was just under 
$400,000. As we learned in our last hearing, this was all done 
in 33 months, with overheads costs of less than 3 percent and 
with 97 percent of the families of deceased victims opting into 
the fund rather than pursuing tort relief in the court.
    As Special Master Ken Feinberg states in his written 
testimony before us today, ``This was one of the most 
efficient, streamlined, and cost-effective programs in American 
history.''
    We now have a bill before us that would reopen the VCF and 
provide protection for those who, by no fault of their own, 
could not take advantage of the fund when it was available. 
This is as important as ever.
    Last year, we were dealing with some 10,000 lawsuits. We 
are now up to over 11,000. These suits have been filed by first 
responders, workers, and volunteers from around the country who 
rallied to help locate survivors recover the dead and clean up 
debris from the fallen towers. Most of these people are now 
suffering because of their exposure to the toxic dust that 
covered much of Lower Manhattan.
    These lawsuits, filed by people who were not eligible to be 
compensated under the VCF because they discovered their 
illnesses too late, didn't even know they could even apply 
because they thought the fund was only for those who died or 
who worked on the site after the first 96 hours after attacks, 
taking far too long to decide.
    As noted last year, the doctors and scientists already 
agree: People are sick and will continue to get sick because of 
their exposure to World Trade Center dust. We must resolve this 
problem.
    The question is, how? Workers' compensation has failed. 
Medical programs aren't covering enough people. And the Captive 
Insurance Fund created by Congress to resolve claims has 
instead used the money to defend against each and every one of 
them. Five years and $270 million in administrative and legal 
costs later, the Captive Insurance Fund has settled less than 
10 claims.
    Last year's hearing led us to determine it was necessary to 
reopen the VCF for those who deserve our help. After months of 
hard work and difficult negotiations, Chairman Nadler, along 
with Representative Carolyn Maloney, Peter King, and Michael 
McMahon, arrived at the compromise we have before us today.
    I believe this bill, while perhaps not perfect, goes a long 
way to establish a fair and just program to compensate those 
who continue to bear the deep scars from 9/11. Now, I look 
forward to hearing from the witnesses on this bill. Their 
thoughts and discussions we will have today will help us as we 
continue to work on these issues and move this bill through the 
legislative process.
    It is unusual to have a joint hearing of two Subcommittees. 
And although the Immigration Subcommittee is known for 
immigration, we do have assigned to us a responsibility for 
claims, which is why we are part of this hearing. And certainly 
the issue of due process is one that the Constitution 
Subcommittee plays a lead role in.
    And luckily for us, not only is the Chairman of that 
important Subcommittee here today; he also knows about this 
because the World Trade Center was in his district, and he is a 
New Yorker and a terrific lawyer and will run the rest of this 
hearing.
    And I thank the gentleman and yield back.
    Mr. Nadler. I thank the gentlelady. And I will now 
recognize myself for 5 minutes.
    Today, these two Subcommittees 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 
after the terrorist attack on 9/11.
    Last year, we held a hearing that examined the possible 
mechanisms that could be used to compensate those suffering 
from 9/11-related health effects. And this year, we have a 
bill, H.R. 847, the ``James Zadroga 9/11 Health and 
Compensation Act of 2009,'' which I believe provides the best 
avenue to making our first responders, area residents, workers, 
students and others whole.
    [The bill, H.R. 847, is availble in the Appendix.]
    Mr. Nadler. I want to first thank the Chair of the 
Immigration and Claims Subcommittee, Congresswoman Lofgren, not 
only for agreeing to hold this joint hearing, but for her 
support and outstanding work on this issue over the last couple 
of years.
    I would also like to thank my colleagues, Congresswoman 
Carolyn Maloney, Congressman Peter King, and Congressman Mike 
McMahon, with whom I have introduced the 9/11 Health and 
Compensation Act, which would both provide comprehensive 
medical treatment to any person whose health was affected and 
would reopen the Victims Compensation Fund so that people can 
be compensated for their economic losses.
    And I particularly want to mention Congresswoman Maloney, 
who has worked for, what, 6, 7 years now so heroically and on 
this problem.
    We came very close to passing this bill last year, and I am 
hopeful that, with the changes we have made to the bill this 
year and with the support of my colleagues on the Committee, we 
can finally pass it this year and provide relief to so many 
people who desperately need it.
    I also want to welcome our witnesses and thank them for 
their participation. We are fortunate to have an expert panel 
with us today to discuss this legislation.
    Finally, I would like to recognize those individuals who 
have traveled to Washington to attend this hearing. I thank you 
all for coming.
    I want to specifically recognize Ms. Leona Hull, the sister 
of Leon Heyward.
    Many of you in the audience are among those who have been 
denied proper compensation thus far, and I hope we can examine 
today how this system has failed so many of you and how we can 
help with this legislation.
    After the collapse of the Twin Towers on 9/11, tens of 
thousands of first responders, residents, area workers, and 
students were exposed to a cocktail of toxic substances that 
was said to be worse than the Kuwaiti oil fires. They are now 
coming down with diseases like sarcoidosis, lymphoma, and rare 
blood cancers.
    In June 2007, then-Senator Clinton and I held companion 
hearings on the actions of the Environmental Protection 
Administration and other Federal agencies that clearly were a 
contributory factor to causing harm to the health of many 
people.
    At the House hearing, we heard the callous voice of former 
EPA Administrator Christine Todd Whitman trying to explain why 
she told New Yorkers that the air was safe to breathe, when in 
fact she had considerable evidence to the contrary. We reviewed 
the EPA inspector general's report, which found that the EPA's 
statements ``were falsely reassuring, lacked a scientific 
basis, and were politically motivated.''
    We heard about how the White House changed the EPA press 
releases ``to add reassuring statements and delete 
precautionary ones.''
    After the hearing, I was more convinced than ever that the 
Federal Government not only failed to protect the first 
responders, workers, residents, and school children who were in 
the area, but that the Federal Government bore responsibility 
for not preventing many of their injuries, which it could well 
easily have done had it been honest in the first place.
    Obviously, none of these injuries would have occurred were 
it not for the terrorists, who are ultimately to blame, but 
many of the injuries we are seeing today would have been 
avoided if the Federal Government had not acted dishonestly. 
The Federal Government, therefore, has a moral and legal 
obligation to compensate the victims of 9/11, to provide for 
their health care, and to attempt to make them whole from their 
subsequent financial losses.
    In 2004, Congress appropriated $1 billion for what became 
the World Trade Center Captive Insurance Company in order to 
provide health care for people who sustained injuries and 
illnesses in the aftermath of 9/11. I am hopeful that, through 
this hearing, we can find a way to ensure that this billion 
dollars goes toward healing those affected by this tragedy, as 
Congress intended.
    I should note that there have been many hearings that 
examined the health issues and degree of people's illnesses and 
in which we heard from many who are too sick to work. It is 
unfortunately very clear that many more people will become sick 
in the future.
    In a September 2006 peer-reviewed study conducted by the 
World Trade Center Medical Monitoring program, of 9,500 World 
Trade Center responders, almost 70 percent had a new or 
worsened respiratory symptom that developed during or after 
their time working at Ground Zero.
    Furthermore, another study documented that, on average, a 
New York City firefighter who responded to the World Trade 
Center has experienced a loss of 12 years of lung capacity.
    Now, obviously in these kinds of cases, whether by 
radiation from a nuclear bomb blast or exposure to radiation or 
exposure to other toxic substances, it is impossible to 
establish individual causality to 100 percent certainty, but 
the statistics that show increases of 70 percent or 80 percent 
from expected rates of illnesses are damning.
    The pain and suffering of the living victims of 9/11 is 
real and cannot be ignored. We as a Nation must do more. John 
F. Kennedy once remarked that, ``as we express our gratitude, 
we must never forget that the highest appreciation is not to 
utter words, but to live by them.''
    In the nearly 8 years after 9/11, we have done enough 
talking. Now it is time to pass H.R. 847, the 9/11 Health and 
Compensation Act.
    I yield back the balance of my time.
    And I now recognize the distinguished Ranking Member of the 
Constitution Subcommittee for an opening statement.
    Mr. Sensenbrenner. Thank you very much, Mr. Chairman.
    First, I would like to thank all those first responders who 
risked their lives and health by doing whatever they could do 
to mitigate the horrors of the September 11th attack and all 
who supported them.
    Those public servants and other volunteers toiled 
ceaselessly for months under a toxic cloud that hung over and 
around the former site of the World Trade Center. They, too, 
suffered as a result of vicious attacks perpetrated by blood-
thirsty terrorists whose driving mission was to cause the death 
and injury of as many innocent people as possible. We must 
never forget that.
    Along with the first responders and other volunteers, 
private contracting firms played an invaluable role in 
facilitating the recovery site of the attacks. These 
contracting firms were asked by the city of New York to 
immediately begin clean-up efforts, and they responded with the 
same drive to serve and protect that motivated other public 
servants.
    They did so even though they and the city of New York were 
unable to secure the liability insurance they would normally 
obtain before starting a recovery project.
    But while other major entities affected by the 9/11 
attacks, including the airlines, the World Trade Center, and 
the Port Authority, were protected by Federal legislation from 
excessive and undeserved liability exposure, the private 
contractors and other private entities were left in the lurch.
    I regret to say that, when Congress passed the legislation 
addressing liability concerns in September of 2001, I warned my 
colleagues that failing to comprehensively address the 
unprecedented liability issues raised by the 9/11 attacks would 
inevitably lead us to where we are today.
    On the House floor of 2001, I said that, while the airlines 
would not face bankruptcy as a result of the liability limits 
in the 2001 legislation, should the bill pass, the failure to 
limit others' liability will mean that Congress will need to 
pass corrective legislation again and again to protect American 
companies and their workers' jobs because this bill didn't do 
it right.
    Clearly, that bill didn't do it right. But if we seek to 
correct one failing in the original legislation, we must be 
careful not to aggravate other failings.
    I also opposed the 2001 legislation because it created an 
entitlement program that set a dangerous precedent in the 
future.
    Again, on the House floor in 2001, I said, ``No entitlement 
was created by Congress to compensate victims of the Oklahoma 
City bombing, earthquakes in California, hurricanes in Florida, 
and floods along the Mississippi River. If this entitlement is 
approved, does Congress really want to say no to victims of 
future tragedies, whether as a result of natural or manmade 
disasters?''
    ``If a disaster strikes in any of our hometowns, how can we 
explain voting for an entitlement in this bill, but not for our 
own constituents? Stop and think of the precedent this bill set 
when a future disaster strikes.''
    My concerns after 9/11 were confirmed by the findings of 
the nonpartisan Rand Institute for Civil Justice, which 
analyzed the September 11th Victims Compensation Fund in 2004 
and concluded that, ``pre-commitments by government programs 
reduced the ability of government and society more generally to 
allocate resources to meet the most pressing needs after an 
attack.''
    A 2005 study of four Federal compensation programs by the 
GAO also cautioned that, ``Because these programs may expand 
significantly beyond the initial cost estimates, policymakers 
must carefully consider the cost and precedent-setting 
implications of establishing any new Federal compensation 
programs, particularly in light of the current Federal 
deficit.''
    That deficit was much lower--than what it is today. Today 
the current economic crisis should magnify such concerns 
exponentially. At the same time, we have seen too much costly 
and wasteful legislation pass this Congress without adequate 
time for thoughtful analysis. I hope the hearing today will 
help us avoid repeating recent practice.
    With that, I look forward to hearing from all of our 
witnesses and yield back the balance of my time.
    Mr. Nadler. I thank the gentleman. I will now recognize the 
distinguished Ranking Member of the Immigration and Claims 
Subcommittee for an opening statement.
    Mr. King. Thank you, Mr. Chairman.
    I want to thank the witnesses, also, in advance.
    On September 11, 2001, terrorists carried out mass murder 
of innocent Americans on our own soil. These attacks were 
carried out solely because some people hate our country and the 
freedoms it represents.
    This terrorist attack ripped away our security and 
devastated thousands of families. My heartfelt sympathy goes 
out to those who suffered in the wake of the attacks on 9/11.
    One of the groups that suffered in the aftermath of 9/11 is 
Ground Zero workers who worked heroically day and night for 
months in rescue, recovery and cleanup efforts at the World 
Trade Center site.
    Many of these workers went in without contracts, insurance 
policies, or knowledge that there were toxins in the air. Some 
of these workers are having health problems as a result of 
their work at Ground Zero, as are residents in the area.
    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 over 10,000 plaintiffs who 
allege that they were injured from the contaminants in the 
debris. The victims are being forced to sue because they do not 
qualify for relief under the 9/11 Victims Compensation Fund, 
and the companies in the city are being forced to vigorously 
defend against these lawsuits because of lack of adequate 
insurance coverage.
    In order to address compensation for the victims and to 
provide liability protection to the construction companies that 
came to the city's aid after the towers fell, H.R. 847 proposes 
to use the 9/11 Victims Compensation Fund as a blueprint.
    Now, if we are to follow the 9/11 fund as a blueprint, we 
also must make sure we do so responsibly. First, we must make 
sure that we provide adequate compensation to the victims 
without handing the keys to the U.S. Treasury or the trial 
lawyers.
    The 9/11 fund is essentially a no-fault administrative 
scheme that does not require proof of complex tort theories. 
Thus, if the fund is reopened, it should include provisions to 
maximize the victims' recovery by limiting the contingency fees 
that personal injury lawyers may receive.
    In a letter to Congress regarding the original 9/11 fund, 
the Association of Trial Lawyers of America stated that 100 
percent of the compensation funds from the fund should go 
directly to these families.
    Second, if we are going to reopen the 9/11 fund, we must do 
so in a manner that protects our taxpayers. To be careful 
stewards of the taxpayers' money, we must require that victims 
be able to produce proof that they were in immediate proximity 
of Ground Zero during the cleanup period. We must also require 
them to medically document that their illnesses are a direct 
result of exposure to the air around the site.
    Additionally, to protect the taxpayers, we should consider 
limiting the compensation from the fund to objectively 
verifiable economic damages, such as past and future medical 
expenses and earnings. What is more, the fund should only be 
reopened for a reasonable, but limited period of time. H.R. 847 
would reopen the 9/11 fund for 22 years, and that will be 30 
years beyond September 11th.
    But as a former special master, Mr. Feinberg, has pointed 
out--and we will hear from you today--no latent claims need 
such an extended date. Moreover, if the reopened period proves 
to be too short, we can always revisit this issue in Congress.
    So, finally, to ensure that the taxpayers are protected if 
we decide to reopen the 9/11 fund, we need to follow pay-as-
you-go rules for this legislation. And in following PAYGO, we 
need to pay for the reopening of the fund by offsetting 
government spending, not by increasing taxes.
    In closing, let me just say that we owe it to the victims 
to at least try to provide them with a better path than the 
ineffective and expensive litigation they are currently 
pursuing. And we owe it to the contractors that rushed in to 
help the immediate aftermath of the attacks to limit their 
liability exposure.
    But as we look forward to compensating the victims and 
providing liability protection to contractors, we need to 
remember that we also owe it to the American taxpayers to act 
responsibly with their tax dollars.
    I can only think what it is like as a contractor having run 
to the sound of the guns, not in such a massive way as many of 
the contractors did in New York on 9/11, but still always 
deployed our manpower and our machinery at an instant's notice 
without regard to the risk or the liability when people needed 
help, I want to see that scenario. That is the American way. 
Now, that is what we saw in New York and we saw around the 
country on September 11th.
    And whatever comes out of this legislation, I want to 
encourage that kind of response and not have the threat of 
litigation hanging over their heads. They did the American 
thing. They did the right thing. And we need to do the right 
thing by the contractors.
    Thank you, Mr. Chairman. And I would yield back.
    Mr. Nadler. I thank the gentleman.
    And I will now recognize the distinguished Chairman of the 
Judiciary Committee for an opening statement.
    Mr. Conyers. Thank you, Mr. Chairman.
    I want to welcome everybody here that has traveled to this 
hearing because I think this is a critical test of what the 
Congress believes, in terms of helping out these first 
responders and people who, through no fault of their own, have 
been put in this incredible health situation.
    For some, it is too late. But the rest of us are here can 
do something.
    And I was heartened by my colleague's remarks here. Steve 
King and I are working on a number of issues. And he has muted 
his normal hostility toward lawyers in a very admirable way. I 
feel very good about this hearing.
    It is all in the Judiciary Committee. Don't ask me why it 
is the lawyers that hate the lawyers groups more than anybody 
else in the Congress. So I am feeling much better about this.
    Carolyn Maloney has done a great job, as have Jerry Nadler, 
Zoe Lofgren, Peter King.
    Now, I am composing a letter to a Congressman that came to 
this Committee in 1981. His name is Chuck Schumer. And he did a 
brilliant job on this Committee. And I have watched him and all 
the work he has put in for his country ever since.
    He got a little too close to Wall Street for my two cents, 
but Wall Street was his district. It was in his state. So I 
forgave him for that.
    But now the letter I am going to send the distinguished 
senior senator from New York will deal with the need for us to 
close ranks, resolve these differences, and get this show on 
the road.
    Now, I am as sensitive to costs and budget overruns and 
deficits as the Chairman emeritus of this Committee. But for 
goodness' sake, I mean, we talk about the war and terrorists 
and then get it confused with natural occurrences and natural 
disasters, as bad as they are. But this is the war that we kept 
hearing about, these people that attacked us.
    And so I want to commend all of our leaders that have 
pulled together a new bill that makes more sense, that has 
spoken to some of the problems from before, but we have to move 
the other body. That is where the problem is.
    And I would welcome working with the Chairmen of these 
Subcommittees and others----
    Mr. Sensenbrenner. Will the gentleman yield?
    Mr. Conyers. Of course.
    Mr. Sensenbrenner. May I make a suggestion on how to get 
Senator Schumer's attention?
    Mr. Conyers. Please do. I am waiting with baited breath.
    Mr. Sensenbrenner. Bring along a television camera or two.
    Mr. Conyers. Could we instruct--wait a minute--could we 
instruct the stenographer to strike that phrase from the----
    Mr. Nadler. Would the gentleman yield?
    Mr. Conyers. Who seeks? Who wants----
    Mr. Nadler. I do.
    Mr. Conyers. Oh, yes. Of course, Mr. Nadler.
    Mr. Nadler. I would simply point out that the senior 
Senator from New York has been very much involved in the 
negotiations on this bill and in getting the appropriations 
that have helped with the medical care for the last several 
years.
    So all jesting aside, he has been involved, and we expect 
him to help with this effort in the Senate, as it still 
proceeds.
    And I yield back to the gentleman.
    Mr. Conyers. I thank the Chairman. Then I am going to put 
his response to my letter in the record, just to confirm your 
unyielding confidence in the senior senator. And I thank you 
for allowing me to make these intemperate remarks.
    And I return my time.
    Mr. Nadler. I thank the gentleman.
    And I recognize for brief comment the distinguished Chair 
of the Immigration Subcommittee.
    Ms. Lofgren. I just wanted to note that we have been joined 
here by one of the authors of the bill, Carolyn Maloney. It has 
been Ranking Member Lamar Smith's policy not to grant unanimous 
consent to Members of the Committee to actually question 
witnesses, but we are glad that she is here joining us to 
listen. And I just wanted to note that for the record, and I 
thank you for yielding.
    Mr. Nadler. Thank you. And I join those comments and your 
observations.
    In the interest of proceeding to our witnesses and mindful 
of our busy schedules, I ask that other Members submit their 
statements for the record.
    Without objection, all Members will have 5 legislative days 
to submit opening statements for inclusion in the record. 
Without objection, the Chair will be authorized to declare a 
recess of the hearing.
    We will now turn to our witnesses. As we ask questions of 
our witnesses, the Chair will recognize Members in the order of 
their seniority on the Subcommittees, alternating between 
majority and minority, provided that the Member is present when 
his or her turn arrives.
    Members who are not present when their turns begin will be 
recognized after the other Members have had the opportunity to 
ask their questions. The Chair reserves the right to 
accommodate a Member who is unavoidably late or only able to be 
with us for a short time.
    Ken Feinberg served as the special master of the Federal 
September 11th Victims Compensation Fund estimated by Congress 
after the attacks of September 11th, 2001. He is currently the 
managing partner and founder of the Feinberg Group, LLP.
    Mr. Feinberg has taught at the Georgetown University Law 
Center, University of Pennsylvania Law School, New York 
University School of Law, University of Virginia Law School, 
and Columbia Law School. Mr. Feinberg received his J.D. from 
NYU School of Law.
    Barbara Burnette is a former New York City police 
detective. After 18 years of service, she retired from the NYPD 
due to injuries she sustained while working at the World Trade 
Center site. She lives in Arverne, New York, with her husband 
and three children.
    Christine LaSala has been the president and CEO of the 
World Trade Center Captive Insurance Company since its creation 
by Congress in 2004. In agreeing to serve as president of the 
Captive, Ms. LaSala came out of retirement after a lengthy 
career as the first female partner of Johnson & Higgins, the 
fourth-largest global insurance broker and employee benefits 
consultant.
    Her broad experience in the insurance industry includes 2 
years as an underwriter and over 25 years as an insurance 
broker working with corporations and public institutions to 
design their risk-management program. She is a graduate of the 
College of New Rochelle and studied finance at Fordham 
University.
    Dr. James Melius is an occupational physician and 
epidemiologist. For the past 10 years, his work with the 
Laborers' International Union of North America and currently as 
administrator of the New York State Laborers' Health and Safety 
Trust Fund and director of research for the Laborers' Health 
and Safety Fund of North America.
    He chairs the steering committee of the World Trade Center 
Medical Monitoring and Steering Committee, which overseas this 
program for World Trade Center responders. He received his M.D. 
from the University of Illinois in 1974 and a doctorate in 
epidemiology from the University of Illinois School of Public 
Health in 1984.
    Michael Cardozo has served as the corporation counsel and 
chief legal official of New York City since January 2002. He 
serves as legal counsel to 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 for the late 
Judge Edward McLean in the United States district court for the 
southern district of New York.
    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 price liability, 
class actions and civil procedure, corporate regulation, 
antitrust and patent litigation, lifestyle litigation, medical 
malpractice, and judicial selection, a wide range.
    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 product 
liability cases, class-action defense, and antitrust and patent 
cases.
    Richard Wood, our final witness, is the president of Plaza 
Construction Corporation since 1997, where he has been involved 
in many of New York City's most complex building projects, 
including 299 Park Avenue, the St. Thomas Choir School, Random 
House World Headquarters, 200 Chambers Street, the residential 
tower at 26th Astor Place, and 11 Times Square, among others. 
Plaza was among the contractors who worked at the World Trade 
Center site.
    I am pleased to welcome all of you. Your written statements 
in their entirety will be made part of the record. I would ask 
each of you to summarize your testimony in 5 minutes or less. 
To help you stay within that 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 would please stand and raise your 
right hand to take the oath.
    [Witnesses sworn.]
    Thank you.
    Let the record reflect that the witnesses answered in the 
affirmative.
    You may be seated.
    Mr. Feinberg will have to leave early. In order to 
accommodate the Members, I am going to ask him to testify and 
then allow Members the opportunity to question him before he 
has to depart.
    So, Mr. Feinberg, microphone please?

           TESTIMONY OF KENNETH R. FEINBERG, FORMER 
            SPECIAL MASTER, VICTIM COMPENSATION FUND

    Mr. Feinberg. Thank you, Mr. Chairman.
    Once again, I am honored to be here at your request. For 
me, it is sort of a reunion. I worked with closely Chairman 
Conyers and Congressman Lungren during the years when I was on 
the Senate Judiciary Committee.
    I want to thank the Committee for taking another look at 
whether or not the 9/11 fund should be reauthorized. I was 
appointed by the attorney general of the United States, John 
Ashcroft, to serve as the special master of the original 9/11 
fund. It was a bipartisan effort.
    I had tremendous support throughout my 33-month tenure as 
the head of the 9/11 fund, not only from the people on this 
Committee, but from the American people, Republican, Democrat, 
liberal, conservative. Everybody was very, very supportive, 
particularly the Department of Defense and the city of New 
York.
    I note Michael Cardozo is here today. On Friday of this 
week, he becomes the longest-serving corporation counsel in the 
history of New York City. He either loves his job or he is a 
glutton for punishment, or maybe both, but he was enormously 
helpful to me in the administration of the 9/11 fund.
    The Chairwoman has pointed out the success of the 9/11 
fund, if statistics are any indication.
    Should the fund be reauthorized, as it is in this 
legislation before you? I think it should, but it is a very 
close question.
    Congressman Sensenbrenner points out some of the 
philosophic difficulties in reauthorizing the 9/11 fund. There 
is no 9/11 fund for Katrina, for Oklahoma City, for the flood 
victims this week in North Dakota. There is no 9/11 fund.
    Yet, on the other hand, it should be pointed out a 
fundamental point about this legislation. Many of the people, 
rescue workers, who are now litigating in New York City, the 
only reason they are litigating is because the 9/11 fund 
compensated their brethren but could not compensate them before 
the fund statutorily expired on December 22, 2003.
    Had these people who are now litigating manifested a 
physical injury within the timeframe set by Congress to be 
compensated, they would have met all of the criteria, and they 
would have been compensated.
    We compensated over 2,000 rescue workers at a cost to the 
taxpayer of about $1 billion of the $7 billion that was spent. 
Had the sum of these very litigants today manifested 
respiratory illness before December 22, 2003, we would have 
readily under that statute compensated them.
    So the answer that Congress may find convincing is that 
elementary fairness says, if we compensated rescue workers 
prior to 2003, why not compensate these very same rescue 
workers post-2003?
    That is the dilemma here. It may be an answer to 
Congressman Sensenbrenner; it may not be. It is a close 
question. But I think one can make the argument that but for 
the termination of that statute and the fact that many of the 
thousands now litigating didn't become eligible with a physical 
injury until after 2003, they would have been compensated. That 
is the argument for Congress to consider.
    Now, whether or not Congress wants to go beyond the 9/11 
fund, with some of these other provisions, both in terms of 
contractor indemnity or caps, in terms of broadening the 
eligibility criteria as to who would be eligible if the fund is 
reauthorized by this legislation, I completely defer to 
Congress.
    I had enough problems determining eligibility and 
compensating 5,300 people back in 2001. Whether or not a fund 
like this should be reopened and the eligibility criteria 
expanded to include additional types of injury, that is up to 
the Congress to decide.
    And whether or not you can expect a special master to serve 
pro bono for up to 20 years as opposed to 33 months is another 
question that I defer to Congress.
    But those are the arguments pro and con. It is really an 
interesting dilemma for the Congress to consider whether it is 
appropriate to deal with the unfairness of not compensating 
some of these rescue workers pursuant to the original 9/11 
criteria. And if it should, what other criteria will be made 
part of this legislation?
    The Chairman has asked me to summarize within 5 minutes. I 
have done so. Thank you very much.
    [The prepared statement of Mr. Feinberg follows:]

               Prepared Statement of Kenneth R. Feinberg

    My name is Kenneth R. Feinberg and I am honored to once again be 
invited to testify before these two distinguished House Subcommittees.
    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.
    I believe it is worthwhile to once again highlight the success of 
the 9/11 Fund. 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 $2,082,035.07; 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 K. 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 few remaining cases still being litigated in 
federal court in Manhattan some eight years after the 9/11 tragedy.
    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 terrorist 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 my 
understanding that over 11,000 responders have filed lawsuits to date, 
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 when their physical 
injuries become apparent.
    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 truly ironic that many of 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 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 these individuals who would have been 
compensated by the 9/11 Fund now 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 is 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 some period of time, 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 additional statutory modifications and additions, e.g., 
indemnity protection for contractors at the World Trade Center site; 
new eligibility criteria for rescue workers and others who allegedly 
suffered respiratory injuries well beyond the geographical boundaries 
of the World Trade Center site; and revised eligibility filing 
deadlines for claimants who manifested a physical injury during the 
period of the original 9/11 Fund, but did not make a timely filing 
claiming they were unaware of 9/11 Fund filing deadlines. 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 could be made available as 
part of an overall comprehensive settlement 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/
or 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 of the 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 ideas 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. I thank the gentleman. And as I said, we will 
have questions for Mr. Feinberg now, and then we will go to the 
other witnesses, since Mr. Feinberg has to leave.
    And I recognize myself to start the questioning.
    Mr. Feinberg, let me just ask you the following question. 
We have heard in some of the opening statements the problem 
that there are 11,000 tort claims pending against the city. We 
have heard concerns about paying too much to trial lawyers and 
so forth.
    If this bill were to be enacted--and you are familiar with 
the bill--if this bill were to be enacted, would it reduce the 
tort claims? Would it reduce the compensation or the amount of 
money spent on trial lawyers? Would it make sure that more of 
the money that is paid goes to victims?
    What do you think the effect would be in terms of two 
alternatives, adopting this or not adopting this?
    Mr. Feinberg. Well, I think that, a fortiori, the 
legislation would vastly reduce the amount of litigation by 
encouraging those 11,000 litigants to enter a newly enacted 9/
11 fund. Now, how many of them would pick up on that option?
    Whether they would meet the 9/11 criteria, we would have to 
go through the 11,000 cases, but I suspect that, as with the 9/
11 fund, a substantial number of those currently litigating 
would take advantage of the provisions of the fund to get 
prompt payment without the need to litigate any further.
    Mr. Nadler. Now, in the original 9/11 fund, 97 percent went 
to the fund----
    Mr. Feinberg. That is correct.
    Mr. Nadler [continuing]. Rather than litigate, correct?
    Mr. Feinberg. Correct.
    Mr. Nadler. And this might be 97 percent or it might be 
somewhat less, depending on different circumstances, but you 
would think it would be the overwhelming majority.
    Mr. Feinberg. I would hope. I would hope.
    Mr. Nadler. Do you have any suspicion?
    Mr. Feinberg. I have no idea.
    Mr. Nadler. Okay. I will yield back the balance of--well, 
actually, since we are only questioning one witness, we are all 
going to have our 5 minutes. I am sure it is a 5-minute thing 
now.
    But I yield to the distinguished gentleman from Wisconsin.
    Mr. Sensenbrenner. Thank you very much.
    Mr. Feinberg, welcome back.
    Mr. Feinberg. Thank you.
    Mr. Sensenbrenner. Let me ask you a question, and it goes 
to the whole issue of attorneys' fees. This bill proposes what 
is essentially a no-fault system. And it would be up to the 
plaintiff or the petitioner to prove up the damages that would 
be caused.
    Obviously, that requires a lot less lawyering than 
providing liability, particularly with a situation like this. 
Would you be in favor of having a statutory limit on attorneys' 
fees, like the 10 percent that we put in private claims bills 
before they go to the House floor?
    Mr. Feinberg. I don't know if Congress has to actually 
formalize a cap on attorneys' fees with this legislation. You 
will recall, Congressman, that when the 9/11 fund was enacted, 
the overwhelming number of claimants who filed with the fund 
using lawyers acquired those lawyers pro bono.
    The legal profession in the 9/11 fund stepped up. And about 
2,000 claimants were represented in which the lawyers 
voluntarily waived all rights to attorneys' fees.
    As to those who required a fee, we had a recommendation in 
our regulations--not a formal regulation, but a 
recommendation--that attorneys' fees remain at no more than 5 
percent. To my knowledge, with rare exceptions, even in those 
cases where attorneys did receive a fee, it was a single digit 
fee.
    So in this fund, I don't think it would be necessary to 
require that fees be capped, because I think the profession 
would step up and do it voluntarily, as they did with the 9/11 
fund.
    Mr. Sensenbrenner. You are a little more optimistic than I 
am, but then the claims in the original 9/11 fund were 
immediately in the aftermath of 9/11, when the memory of that 
horror was very vivid in the minds of the American people.
    Five-and-a-half years have gone by since the statute ran 
out on claims on the original 9/11 fund. And, unfortunately, I 
think that the American public's memory has been dulled 
somewhat.
    We do have a 10 percent cap on private claims bills that 
are routinely reported out of this Committee and considered by 
the House of Representatives. And if jawboning is good enough, 
I guess we can leave it at that, but let me say that I think 
that is an open question.
    The other question that I have in my 5 minutes, Mr. 
Feinberg, is, do you believe that there should be kind of a 
standard compensation schedule like happens in workers' comp 
claims for various types of injuries that are alleged by people 
who are petitioning out of the fund that is re-established in 
this bill?
    Mr. Feinberg. Yes. You would need, for purposes of 
efficiency, a streamlined process. We had in the original 9/11 
fund for purposes of physical injury compensation--I think it 
was three levels of compensation, depending and tied directly 
to the objective determination of physical disability, like 
workers comp.
    If somebody was 100 percent disabled, 60 percent disabled, 
40 percent disabled, and could confirm and corroborate 
objectively that degree of disability, we compensated them at 
those levels.
    Mr. Sensenbrenner. But you wouldn't be paying someone who 
is a highly compensated employee more than someone who was a 
far less compensated employee for the same injury?
    Mr. Feinberg. Oh, yes, we would. Under the 9/11 fund, we 
were required by Congress to take into account the economic 
loss suffered as a result of the physical injury of the victim.
    Mr. Sensenbrenner. Do you think that requirement should be 
maintained in this legislation?
    Mr. Feinberg. If you are reauthorizing the 9/11 fund, it 
was essential, an essential feature of the 9/11 fund.
    Mr. Sensenbrenner. Okay. But isn't a life a life a life, 
and a broken arm a broken arm a broken arm?
    Mr. Feinberg. Congressman, you won't have to convince me of 
that. The Congress in the original legislation required that 
stock brokers or bankers get more than busboys, waiters, 
firemen, soldiers, or policemen. The law was the law. I had to 
follow it.
    I have written that that is a very difficult inequitable 
calculation to make, but it was one that was required by the 
Congress of the United States.
    Mr. Sensenbrenner. Thank you. I think I have made my point, 
and I yield back the balance of my time.
    Mr. Nadler. Does anyone else wish to ask questions of this 
witness?
    The gentleman from Virginia--oh, I am sorry, the 
distinguished Chairperson of the Subcommittee.
    Ms. Lofgren. Yes, just one question. When you appeared 
before us last time, you had a few concerns about the bill as 
drafted. Does this newly drafted bill address those concerns?
    Mr. Feinberg. It addresses some of them; it doesn't address 
others. It is a good-faith effort.
    Understand, this bill addresses some of the immediate cost 
concerns----
    Ms. Lofgren. Right.
    Mr. Feinberg [continuing]. At the same time it broadens the 
eligibility requirements so that more people would be 
compensated under this fund, if it was re-enacted, than under 
the original 9/11 fund.
    Ms. Lofgren. Due to time, but not the nature of the 
illnesses----
    Mr. Feinberg. Oh, there is geographical expansion. There is 
geographical, that this fund would not only compensate people 
at the World Trade Center----
    Ms. Lofgren. Right.
    Mr. Feinberg [continuing]. It would compensate those 
claiming injury transporting material all the way out to Fresh 
Kills.
    Ms. Lofgren. But the theory is that whether you were 
transporting the material, or you were in the pit, you were 
still responding to this disaster.
    Mr. Feinberg. Correct. That is correct.
    Ms. Lofgren. All right.
    Mr. Feinberg. That is the goal, at least.
    Ms. Lofgren. That is the goal.
    All right. I yield back, Mr. Chairman. Thank you.
    Mr. Nadler. I thank the gentlelady.
    I now recognize the gentleman from Iowa.
    Mr. King. Thank you, Mr. Chairman.
    Thank you, Mr. Feinberg, for your testimony again. Would 
you be comfortable with a 5 percent cap on attorney fees?
    Mr. Feinberg. Well, I was comfortable with it in the 9/11 
fund. I would be comfortable with it now. It wasn't a formal 
regulation. It was sort of an legislative history we 
recommended. And for all intents and purposes, it worked, so I 
would be comfortable with whatever is decided.
    Mr. King. Thank you. And you have looked this bill over, I 
take by your testimony, so I would ask you if you have an 
opinion on as to whether the contractors might have liability 
for non-economic damages or punitive damages?
    Mr. Feinberg. Congressman, when you say they might have 
liability, I think that is a fair comment.
    Mr. King. And as you analyze the language that is in the 
bill, would there be any statutory protection from that to your 
knowledge?
    Mr. Feinberg. Sure. As I read the bill, there is some 
protection for the contractors in this legislation, yes. 
Whether or not it would provide blanket immunity and 
protection, again, I am not sure of that. But, clearly, there 
is an attempt to do just that.
    Mr. King. Okay. Let me just say that I think it is worth 
taking an extra look to ensure that there isn't some punitive 
damages or non-economic damages, liability on the other side of 
this bill that might not be properly introduced into the 
language, so I want to protect the contractors on the other end 
of this. I am concerned about that.
    Mr. Feinberg. I will look it over and respond directly to 
your staff.
    Mr. King. I thank you very much. Now, another question 
would be, if an individual opts into the health care benefits 
in Title I, is there then a presumption of liability that might 
go along with that?
    Mr. Feinberg. Oh, I don't think. I will check. I think if 
an individual opts into Title I, they have made a decision to 
avoid any debate over liability, in terms of favoring a no-
fault compensation system.
    Mr. King. Do you think we know----
    Mr. Nadler. Would the gentleman yield?
    Mr. King. I would yield.
    Mr. Nadler. I think there is a bit of confusion here as to 
which is Title I and Title II. You might want to specify at 
both ends.
    Mr. King. On my side, Title I being the health care 
benefits component of this and Title II being the compensation 
beyond the health care.
    Mr. Feinberg. I will have to go back and check as to that 
distinction.
    Mr. King. Thanks for pointing that out, Mr. Chairman. And 
so I will just make this point that, if an individual opts into 
this bill in the package of the Victims Compensation Fund and 
the health care benefits, which are under Title I, I would 
think that treatment for health care may provide a presumption 
then that they could use to file suit against and opt out of 
the Title II component of this and file a suit against the 
contractors and the city and the Port Authority, et cetera.
    I am just concerned about that, that if they opt into the 
health care, they also opt in to the Victims Compensation Fund. 
That is my comment on it.
    And in the interest of time, if there is a response----
    Mr. Feinberg. No, no, again, I will check and give you my 
considered judgment reviewing the language of the bill.
    Mr. King. Thank you, Mr. Feinberg.
    Mr. Chairman, I thank you, and I yield back.
    Thank you.
    Mr. Nadler. I thank the gentleman.
    The gentleman from Virginia is recognized.
    Mr. Scott. Thank you.
    If we extended the deadline, do you have a ballpark figure 
as to how many people might be eligible and how much the 
potential liability would be?
    Mr. Feinberg. I have no idea. I don't think anybody has any 
firm idea about that.
    Mr. Scott. On firefighters and police, why was workers' 
compensation insufficient?
    Mr. Feinberg. Under the original 9/11 fund?
    Mr. Scott. Right.
    Mr. Feinberg. Congress trumped workers' compensation by 
providing a blanket opportunity for workers and others, private 
citizens not working, not rescue workers, to file with the 
fund.
    Mr. Scott. Well, I mean, just for firefighters and police 
officers, they were eligible for workers' comp.
    Mr. Feinberg. That is correct. And because they were 
eligible, we had required by law collateral offsets so that, if 
they recovered workers' compensation, pursuant to program one, 
we would deduct that compensation in netting their ultimate 
award.
    Mr. Scott. You indicated you compensated some who filed on 
time for injuries?
    Mr. Feinberg. I am sorry. I didn't hear the question.
    Mr. Scott. You compensated some for injuries. When you 
compensated them, did you require a release from future 
payments? Or did you allow sequential payments if their 
conditions got worse?
    Mr. Feinberg. No, a total release.
    Mr. Scott. Would an open-ended situation be better? Because 
with these kinds of injuries, you don't what the future may be, 
so you wouldn't know when to settle for one check.
    Mr. Feinberg. That is a very good administrative law 
question. I would just respond by saying the goal of the 
original 9/11 fund was to compensate as of the date of injury, 
get a total release, close out the cases, and bring an end to 
the possibility of litigation. That was the goal, and that is 
why we required, under the statutory mandate, a total release.
    Mr. Scott. To be eligible, do you have to prove that you 
were injured as a proximate cause of 9/11 or do you presume the 
connection? Obviously, if you have to prove it, you have some 
that can't prove it that should be eligible, if you have a 
presumption----
    Mr. Feinberg. We estimated under the 9/11 fund regulations 
presumptions of proximate cause as to geographical location and 
time to make it very, very simple to either satisfy or not 
satisfy proximate cause requirements.
    Mr. Scott. And the total compensation, what damages could 
someone recover if they filed a claim? I assume medical care, 
lost wages, pain and suffering?
    Mr. Feinberg. All of that. There was no cap on the amount 
that could be compensated. As I recall it, for a physical 
injury, the least amount that we found eligible was $500 for a 
broken finger at the World Trade Center.
    And the most that we compensated anybody was a stock broker 
who came to see me with third-degree burns over 85 percent of 
her body. She received a little over $8 million. And in between 
was the range of all the physical injury payments.
    Mr. Scott. How would the damages differ from an ordinary 
negligence case?
    Mr. Feinberg. The damages didn't differ much from ordinary 
negligence, in terms of the gross calculation, economic loss 
plus pain and suffering. We were required by Congress, however, 
unlike tort law, to deduct collateral sources of income, like 
you mentioned, Congressman, so the net award might have been 
less.
    Mr. Scott. Thank you, Mr. Chairman. I yield back. Thank 
you.
    Mr. Nadler. Mr. Feinberg, how much time do you have left?
    Mr. Feinberg. I am okay.
    Mr. Nadler. Okay.
    The gentleman from California, Mr. Lungren?
    Mr. Lungren. Thank you very much, Mr. Chairman.
    And it is good to see you, Mr. Feinberg. And thank you for 
your service as the special master. That was extraordinary 
work.
    You have indicated, I think, in your opening statement that 
the question of fairness is somewhat elusive in a situation 
like this. We are trying to do the best we can in a difficult 
circumstance, and you can't have complete fairness, because, as 
you pointed out, you have other kinds of tragedies that strike 
just as heavily on the individual as this did. And Congress 
made a specific exception to the law in this circumstance, 
because this was viewed as an act of war, an attack on the 
American people.
    And so, as we try and figure out what we are going to do 
here, one of my greatest concerns is not just this question of 
fairness, but the principle or the precedent for the future 
that, if we have a disaster of this type, we don't have people 
reluctant to respond, not just because of the obvious physical 
injuries, but when you bankrupt companies in the process, it is 
not an encouraging factor to get them to respond in future 
events. And I think we ought to keep that in mind.
    But let me ask you very specifically about a quote of yours 
in a piece you wrote in The New York Times. And this is the 
quote directly. It says, ``More than $1 billion in public funds 
is currently available for distribution as part of the initial 
Federal appropriation earmark for New York City's 9/11 
recovery. If you add financial contributions for those 
contractors and others involved in litigation, supplement that 
with funds from various city charities, a total of at least 
$500 million is available to settle the pending lawsuits, more 
than sufficient to pay all eligible claims, as well as lawyers' 
fees and costs.''
    Is that your current position? Could you elaborate on that? 
And when you refer to financial contributions from contractors 
and others involved in the litigation, are you saying that that 
would be done to the extent of their insurance coverage or are 
you saying, whatever assets they had, which would, in my case, 
in my view, be detrimental to what we are talking about, that 
is, if they ended up being out of business, we would have that 
terrible precedent for the future.
    Mr. Feinberg. Thank you. That quotation is accurate. It was 
in the context of my attempting to suggest that, if there is 
not going to be a 9/11 fund, if Congress does not reauthorize 
the 9/11 fund, surely there is a better way to resolve this 
litigation than continue to litigate ad infinitum in the courts 
in New York City.
    And what I was suggesting was--and I can just see Michael 
Cardozo starting to raise his hand--but what I was suggesting 
was that if you take the monies that were appropriated by 
Congress, perhaps voluntarily, supplement those funds with 
insurance proceeds from the contractors, you would, in my 
opinion, have a pot that would be ample to resolve the present 
litigation and set aside sufficient funds to protect against 
the possibility of future litigation arising out of latent 
physical manifestations.
    So I was using that as an example, option one, the 9/11 
fund; option two, the settlement of the litigation voluntarily; 
option three, business as usual, which I don't think anybody 
benefits from.
    Mr. Lungren. Just one other question, and that is, you have 
said regarding keeping the 9/11 fund open to the year 2031 that 
``no latent claims need such an extended date.'' What do you 
think would be appropriate?
    Mr. Feinberg. You would have to ask--and there are experts 
at this table--you would have to ask, what is the maximum time 
that any reasonable latent physical injury would manifest 
itself from the time of exposure to toxic products down in the 
World Trade Center or the Pentagon to the time when reasonable 
medical diagnosis would say, be it be a physical manifestation.
    And that period, it seems to me, would be an appropriate 
period--5 years, 6 years, 7 years more from 9/11--I think would 
probably be an appropriate period. But there are doctors who 
would answer that question.
    Mr. Nadler. Would the gentleman yield to me for a moment?
    Mr. Lungren. I would happily yield to the Chairman.
    Mr. Nadler. Thank you. I just want to clarify one point.
    Mr. Feinberg's quote that you quoted about the billion 
dollars, there is some dispute about that. There is $1 billion 
that was appropriated to the World Trade Center Captive, headed 
by Ms. LaSala. The Captive has interpreted that as money as for 
the defense of suits against the city and contractors.
    Some people think it was for payouts. It has not been 
available for payouts. This bill would make it available for 
payouts to people who do not opt into the VCF, and it would 
make that money, along with some other parts of insurance 
money, available for settling litigation of people who do not 
opt into the VCF. Right now, it is not being used for that.
    Mr. Lungren. Right. But you are talking--well, as we often 
find in this place, money can be fungible. And maybe using----
    Mr. Nadler. Well, that is right.
    Mr. Lungren [continuing]. That for payouts rather than----
    Mr. Nadler. I just wanted to clarify the status of that 
billion dollars.
    Mr. Lungren. I appreciate it. Thank you very much for your 
indulgence.
    Mr. Nadler. The gentleman from New York, Mr. Weiner, is 
recognized.
    Mr. Weiner. Thank you, Mr. Chairman.
    Mr. Feinberg and the panel, thank you all for being here. I 
think it bears recollecting that the Victims Compensation Fund 
was a remarkable success in the face of some extraordinary 
obstacles. You know, Mr. Feinberg had to quite literally put 
the value on people's lives.
    And I think what we learned is that we had got the 
objectives that we wanted. We wanted to prevent the delays that 
went with lawsuits. We wanted to prevent the uncertainty that 
came with perhaps a generation of lawsuits against every entity 
under the sun, including the airlines, including everyone else, 
and that to a degree a lot of the very tough questions that 
have to be wrestled with now had to be wrestled with then, that 
now there are some questions that clearly have arisen, and some 
of them were just addressed by Mr. Lungren and Mr. Feinberg 
about how it is you define someone. And it is going to be a 
medical test.
    But I think that if we--the seminal question that we have 
to ask ourselves--and I think we have reached some consensus 
here--is that, if we knew in the period--when we passed the 
Victims Compensation Fund, that sitting out there in the 
audience or sitting out there beyond the TV cameras were a 
whole group of people that had a deadly seed that was born on 
September 11th within them, within their lungs, within their 
blood, there is no question that, in a bipartisan fashion, we 
would have included them in the bill.
    There really--I don't think there are too many people that 
would say, oh, no, we would have not. This is simply a matter 
of additional information that is become clear, and that is the 
fact that many people are dying to this day.
    But we have to understand the imperative here. I am open, 
frankly--and Mr. King made some good points--I am open to the 
idea of always creating alternatives to the courthouse for 
people who want to, in an expeditious way, with money on the 
barrelhead, say, in the case of a hurricane or in case of a 
natural disaster, figure out a way to make that system more 
expeditious.
    I am open to that idea. I am not wedded to the idea of 
people having to wait and slog through the justice system.
    And I think we have also learned that, unlike our tendency 
sometimes to try to constrict the outcomes when we put people 
who are well-meaning, smart, who are prepared to make some 
tough calls, like Mr. Feinberg in charge, we get the outcomes 
we want, that citizens vote with their feet and say, ``I am 
willing to put my faith in a master's hands.''
    So then the question only becomes how we define it. And I 
think that it is true--Mr. Feinberg makes a good point--there 
are people who are dying today even though they were not 
literally on top of the pile every moment. And I think we are 
going to have to ask, in my other Committee, in the Commerce 
Committee, how we define that.
    But there is no doubt that I think we have reached a 
consensus on this Committee and in this Congress that we want 
to make sure that contractors in the future, the same way 
firefighters and police officers in the future, go into these 
piles and help out. We want to make sure that we don't have a 
situation where we are facing litigation for years and years, 
that it is the grandchildren of victims who are getting 
compensated and not the victims themselves.
    So I think that that is what Ms. Maloney and Mr. Nadler's 
bill does. And I really do think that, when we look back--and 
now we have some benefit of time--when we look back at the work 
that Mr. Feinberg and the commission did in dealing with these 
very tough problems, I think we learned a valuable lesson, in 
that sometimes less is more.
    And I think that Mr. Nadler and Mrs. Maloney's bill says, 
listen, let's figure out a way to take that and replicate it. 
Maybe it isn't 22 years. Maybe it is 12 years. Maybe it is 10.
    But I think one of the lessons we did learn is, if we don't 
leave a sufficiently wide window, and we try to do medicine 
from this side of the rostrum, we make a fundamental mistake.
    And I would also have to say that if these panelists--I 
know you will be leaving, Mr. Feinberg--but in addition to 
saying thank you, I have to once again point out the uncanny 
resemblance between you and Mr. Cardozo. I am sure--I don't 
know if it is something about the legal profession or dealing 
with these issues long enough, you begin to take on--kind of 
like we in Congress take on the appearance of our pets or 
something like that.
    But I want to thank you for the service and patriotism you 
have showed and the wisdom that you have demonstrated in 
guiding this. A lot of the complaints and concerns were raised. 
You took the job anyway and did a remarkable job with it. And I 
haven't heard you volunteer to be the master for the next 22 
years, but the job is probably going to be available.
    Thank you, sir.
    Mr. Feinberg. Thank you.
    Mr. Nadler. I thank the gentleman.
    And let me express the thanks to Mr. Feinberg, both for 
coming here and for his testimony, and for the tremendous job 
you did, which everybody acknowledges was a tremendous job as 
the special master of the original bill. And if this bill 
passes, you may be drafted a second time. So thank you very 
much.
    Mr. Feinberg. Thank you very much.
    Mr. Nadler. And let me thank the witnesses, the other 
witnesses for their patience while we question Mr. Feinberg, 
who has to leave early. Mr. Feinberg is excused, and now we 
will turn to the other witnesses.
    And I recognize for 5 minutes, Ms. Burnette.

       TESTIMONY OF BARBARA BURNETTE, FORMER DETECTIVE, 
                NEW YORK CITY POLICE DEPARTMENT

    Ms. Burnette. Thank you, Chairman Nadler, Chairman Lofgren, 
Representatives Sensenbrenner and King, and Members of the 
Subcommittees for inviting me to appear before you today.
    My name is Barbara Burnette, and I live in Arverne, NY. I 
am 45 years old, a wife and a mother of three children. With me 
today are my husband, Lebro, my son, Lebro, Jr., and my 
daughter, Tara.
    I am a former New York City police detective, retired from 
the force after 18 years of service. My career ended because of 
injuries I developed from over 3 weeks of service, about 23 
days in total, at the World Trade Center Site.
    On September 11, 2001, I was assigned to the Gang 
Intelligence Division of the NYPD, working in Brooklyn, New 
York. That morning, when my fellow officers and I learned of 
the attacks, we rushed to Manhattan the fastest way we could: 
by taking boats.
    We arrived at the piers off the West Side Highway around 
the time the towers had collapsed. The air was thick and 
burning, choking dust and smoke. I had to put my hand over my 
nose and mouth to even breathe.
    I worked for about 12 hours in these difficult conditions, 
all day and into the night, evacuating people from around the 
World Trade Center site or directing them away. I frequently 
washed my eyes out with running water.
    I was not provided any respirator or any other protection 
for my lungs and throat. I had to literally wash dust and 
debris out of my eyes and mouth and throat throughout the day, 
picking up a hose and letting the dirty, muddy water run out of 
my mouth and onto the ground.
    At one point, EMS rinsed my eyes out. They were swollen and 
the color of dark red crayons. But none of the rescue workers 
could stop doing what we had to do.
    I left the site at around 10 p.m. the first day. Five hours 
later, I reported back, arriving for work at 4 in the morning 
on September 12. We were assigned directly to the debris pile 
on the second day. I worked until late afternoon, removing 
debris, by hand and using buckets and shovels, and at no time 
was I provided with respiratory protection.
    I spent my weeks at the World Trade Center site in this 
routine: shoveling; clearing away debris; searching for 
survivors; and, later, sifting for the body parts of the dead.
    Different construction companies hired by the city guided, 
as well as many other police officers and firefighters, to 
certain areas so we could search and remove debris. We did just 
that. We really worked hand in hand and side by side with 
construction and iron workers.
    Air quality was never a concern for the city and its 
contractors, all of which allowed the work to continue 24/7.
    For their part, the city and construction firms never gave 
me a respirator. I live with the consequences of their failure 
today. I have been diagnosed with interstitial lung disease, 
more specifically, hypersensitivity pneumonitis, with fibrosis 
in my lungs.
    My lungs are scarred. I cannot move around my house without 
wheezing or gasping for breath. I take large doses of steroids 
that add to my weight. And I start each morning by connecting a 
nebulizer and inhaling multiple doses of medication.
    There is serious talk of me needing a lung transplant. I 
had no history of lung disease before the World Trade Center 
service. I never smoked. And, in fact, I had a physically 
demanding lifestyle and career.
    Allow me to explain. One of the highlights of my career was 
my assignment to plainclothes narcotics unit. During my years 
in narcotics, my assignment required me to walk up to 4 miles a 
day, standing ready to make arrests in buy-and-bust operations 
and search warrants.
    Making an arrest is tough, intense, and physical. I made 
over 200 arrests. I was recognized numerous times by the 
department for excellent police duty. And I have several medals 
for meritorious police duty.
    I was born and raised in Brooklyn, NY. All my life, I have 
enjoyed being an active person, whether it was on the job or 
playing sports, especially on the basketball court. In my 
senior year at John Jay High School, I was named to the New 
York All-City Basketball Team. I then set off for college on a 
4-year basketball scholarship, although my career was 
interrupted by an orthopedic injury.
    On July 11, 1988, a date I will never forget, I joined the 
NYPD. I earned my bachelor's degree in criminal justice from 
St. John's University, working full-time. As a detective, not 
only was I able to advance my career; I was able to enjoy the 
competition of organized basketball as a guard on the police 
league women's team.
    Life is very different now. I cannot walk up a flight of 
stairs or down the street without gasping for breath, let alone 
arrest a drug dealer or do most police work. Walking, a basic 
life activity, is extremely difficult for me, because my 
illness has, at times, caused me to black out.
    In September 2004, while working full duty, I experienced a 
blackout at work. There really wasn't any explanation for this. 
I underwent many medical tests and, in May 2005, having 
discovered inflammation in my bronchial passages, doctors at 
Mt. Sinai Center performed two bronchoscopies and an open-lung 
biopsy.
    Granulomas, abnormal tissue formations, were detected in my 
lungs, and I was placed on daily dosages of Prednisone to fight 
my inflammation. My condition worsened, and I began to realize 
I would never go back to work full duty as a detective.
    The police department agreed. And on August 11, 2006, its 
doctors determined that I was permanently disabled with an 
illness resulting from the World Trade Center site.
    As you know, the Victim Compensation Fund closed to 
applicants in December 2003. There was no reason for me to have 
even considered filing a claim. I was not sick at the time the 
fund was open.
    You should know that my first concern is my health, and I 
will continue to do everything I can to get better. At the same 
time, I am seeking justice.
    Along with thousands of other rescue, recovery and 
construction workers, I have filed an individual lawsuit in the 
southern district of New York seeking redress for my 
respiratory injuries.
    Injured, years later, we now count the dead and dying among 
our ranks. My case is now in its fourth year. It has been a 
long road, and I can tell you that I can't see an end.
    I respectfully ask you to do what you can to right this 
wrong.
    Thank you. [Applause.]
    [The prepared statement of Ms. Burnette follows:]
                 Prepared Statement of Barbara Burnette
    Thank you Chairman Nadler, Chairman Lofgren, Representatives 
Sensenbrenner and King, and members of the subcommittees for inviting 
me to appear before you today. My name is Barbara Burnette, and I live 
in Arverne, New York. I am 45 years old, a wife, and mother of three 
children. With me today are my husband, Lebro, Sr., my son, Lebro, Jr., 
and my daughter, Tara.
    I am a former New York City Police Detective, retired from the 
force after 18.5 years of service. My career ended because of injuries 
I developed from over three weeks of service, about 23 days in total, 
at the World Trade Center Site.
    On September 11, 2001, I was assigned to the Intelligence Division 
of the NYPD, working in Brooklyn, New York. That morning, when my 
fellow officers and I learned of the attacks, we rushed to Manhattan 
the fastest way we could, by taking boats. We arrived at the piers, off 
of the West Side Highway, around the time the towers had collapsed.
    The air was thick with burning, choking dust and smoke. I had to 
put my hand over my mouth and nose to even breathe. I worked for about 
twelve hours in these difficult conditions, all day and into the night, 
evacuating people from around the World Trade Center Site or directing 
them away. I frequently washed my eyes out with running water. I was 
not provided any respirator or other protection for my lungs and 
throat. I had to literally wash dust and debris out of my eyes, mouth 
and throat throughout the day, picking up a hose and letting the dirty, 
muddy water run out of my mouth onto the ground. At one point, EMS 
rinsed my eyes out. My eyes were swollen and the color of dark red 
crayons. But my fellow rescue workers and I could not stop doing what 
we had to do. I left the Site at around 10 pm that first day.
    Five hours later, I reported back, arriving for work at 4 in the 
morning on September 12th. We were assigned directly to the debris pile 
on the second day. I worked until late afternoon, removing debris, by 
hand and by using buckets and shovels. At no time was I provided with 
respiratory protection. Like the day before, I had to run water into my 
mouth and throat to wash away the dust, spitting it out. My eyes needed 
constant rinsing. If I wasn't crying over what I was seeing in the 
ruins, tears streamed down my face from the burning, irritating dust.
    I spent my weeks at the World Trade Center Site in this routine: 
shoveling; clearing away debris; searching for survivors; and, later, 
sifting for the body parts of the dead. Different construction 
companies hired by the City guided me, as well as many other police 
officers and firefighters, to certain areas so we could search and 
remove debris. We did just that. We really worked hand in hand and side 
by side with the construction and iron workers. For all of us, no 
matter what our job, each day was pretty much the same as we made our 
way across all parts of the rectangle-shaped field of debris, from 
north to south and east to west.
    People ask me now, in the legal proceedings, where exactly I was on 
the debris pile during those long weeks. Well, the answer is ``all over 
it.'' There were no landmarks or street signs there; nothing was the 
same as it had been. All I knew is that we were searching and removing 
the wreckage of the World Trade Center, and working right on top of the 
burning, smoking, hot rubble.
    Did conditions change down there during my time on the debris pile? 
No. The fires never stopped burning, and there was always dust and 
flying debris. Air quality was never a concern for the City and its 
contractors, all of which allowed the work to continue 24/7. From my 
view, the work was tough and dirty, choking and dangerous, but there 
was no way I would allow myself to stop and leave.
    I thought of the thousands of poor victims, including my fellow 
police officers, and thanked God that I was not one of them.
    For their part, the City and its construction firms never gave me a 
respirator. They sure relied on my work, though, and that of all of the 
other brave rescue and recovery personnel. We were a willing and 
courageous group.
    If our energy brought the debris removal and recovery efforts 
closer to completion, the City and construction companies should have 
taken the precautions necessary to protect all of us. We held up our 
end of the deal. The City and its contractors failed completely.
    I live with the consequences of their failure today. I have been 
diagnosed with interstitial lung disease, more specifically, 
hypersensitivity pneumonitis with fibrosis in my lungs. I fail the 
pulmonary function tests doctors give me. Inflammation in my lungs 
interferes with my breathing, and destroys the tissues that get oxygen 
to my blood.
    My lungs are scarred. I cannot move around my house without 
wheezing or gasping for breath. I take large doses of steroids that add 
to my weight. I start each morning by connecting to a nebulizer, and 
inhaling multiple doses of medications. There is serious talk of my 
needing a lung transplant.
    I had no history of lung disease before my World Trade Center 
Service. I never smoked. In fact, I had a physically demanding 
lifestyle and career. Allow me to explain.
    One of the highlights of my career was my assignment to two 
plainclothes Narcotics Units. During my five years in Narcotics, my 
assignments required me to walk up to 4 miles a day, standing ready to 
make arrests in buy and bust operations and search warrants. Making an 
arrest is tough, intense, and physical. I made over 200 arrests. I was 
recognized numerous times by the Department for Excellent Police Duty. 
In addition, I received several medals for Meritorious Police Duty.
    I was born and raised in Brooklyn, New York. All my life I have 
enjoyed being an active person, whether it was on the job or playing 
sports, especially on the basketball court. In my senior year at John 
Jay High School, I was named to the New York All City Basketball Team. 
I then set off for college on a four year basketball scholarship, 
although my college career was interrupted by an orthopedic injury. On 
July 11, 1988, a date I will never forget, I joined the NYPD. I earned 
my Bachelor's Degree in Criminal Justice from St. John's University 
while working full time. The Police Department was my second home, and 
I miss it so much. As a detective, not only was I able to advance my 
career, I was able to enjoy the competition of organized basketball as 
a guard on the Police League women's team. My squad competed across the 
United States and internationally, playing against Canada and 
Australia, and won four championships.
    Life is very different now. I cannot walk up a flight of stairs or 
down the street without gasping for breath, let alone arrest a drug 
dealer or do most police work. Walking, a basic life activity, is 
extremely difficult for me. Because my illness has, at times, caused me 
to black out, I avoid driving, and rely on my husband to get me where I 
need to go.
    In September 2004, while working full duty, I experienced a 
blackout at work. There wasn't really any explanation for this episode. 
I underwent many, many medical tests. In May 2005, having discovered 
inflammation in my bronchial passages, doctors at Mt. Sinai Medical 
Center performed two bronchoscopies and an open lung biopsy. 
Granulomas, abnormal tissue formations, were detected in my lungs, and 
I was placed on daily dosages of Prednisone to fight the inflammation. 
My condition worsened, and I began to realize that I would never go 
back to full duty as a detective.
    The Police Department agreed, and on August 11, 2006 its doctors 
determined that I was permanently disabled with an illness resulting 
from exposure at the World Trade Center Site.
    As you know, the Victim Compensation Fund closed to applicants in 
December 2003. There was no reason for me to have even considered 
filing a Fund claim. I was not sick at the time the Fund was open.
    You should know that my first concern is my health, and I will 
continue to do everything I can to get better. At the same time, I am 
seeking justice.
    Along with thousands of other rescue, recovery and construction 
workers, I have filed an individual lawsuit in the Southern District of 
New York, seeking redress for my respiratory injuries. In violation of 
New York's municipal and labor laws, the City and its construction 
companies failed to provide the World Trade Center workers with 
protective respirators. Injured, years later, we now count the dead and 
dying among our ranks. My case is now in its fourth year. It has been a 
long road, and I can't tell you that I see an end. During that time 
period, I have been questioned under oath by the City. My attorneys 
have taken dozens of depositions, briefed two appeals, and exchanged 
written responses to literally hundreds of questions about my medical 
condition and World Trade Center Service. The legal work continues 
today.
    After losing an earlier attempt, back in 2006, to dismiss all of 
the cases, the City and its contractors recently filed papers to 
dismiss the claims of police officers and firefighters, claiming that 
New York laws to protect workers do not apply to uniformed service 
personnel. My attorneys are preparing to fight that argument.
    Apart from the constant efforts by the City and its contractors to 
deprive the workers of justice, what is very frustrating to me is this: 
In February 2003, Congress approved payment of $1 billion to the City 
to insure injury claims arising from World Trade Center debris removal. 
In announcing the passage of the legislation, Mayor Bloomberg 
explained, ``This legislation is necessary for the City to expedite the 
payment of claims relating to this effort.'' To date, the City has not 
made payment to any one of the approximately 10,000 World Trade Center 
respiratory claims.
    I respectfully ask you to do what you can to right this wrong.
                               __________
    Mr. Nadler. Thank you very much.
    The audience will please refrain from expressing applause 
or condemnation or disapproval or approval.
    I now recognize Dr. Melius for 5 minutes.

 TESTIMONY OF JAMES MELIUS, MD., ADMINISTRATOR, NEW YORK STATE 
             LABORERS' HEALTH AND SAFETY TRUST FUND

    Dr. Melius. Thank you, Chairman Nadler, Chairwoman Lofgren, 
other Members of the Subcommittees. I greatly appreciate the 
opportunity to appear before you this morning.
    I am an occupational physician, epidemiologist. I have been 
involved with issues at the World Trade Center since shortly 
after September 11th. Many of our union members work there. I 
have been very involved with the medical programs that have 
been developed to provide medical services to the responders 
and others and, more recently, to the community members living 
near the World Trade Center.
    We know that the exposures following the World Trade Center 
terrorist attack involved over 50,000 emergency responders, 
recovery workers, many tens of thousands of people living and 
working in the area around the World Trade Center.
    As a result of these exposures, we know through the medical 
programs and through peer-reviewed scientific studies that 
hundreds of these people have developed serious lung diseases, 
post-traumatic stress disorder, and other serious illnesses. 
Many of them have become disabled.
    We have, through Federal funding, established what I 
consider to be excellent medical programs that provide medical 
monitoring, diagnosis of World Trade Center-related conditions, 
and, for the past few years, providing outstanding medical 
treatment to people who have developed these World Trade Center 
medical conditions.
    However, these medical programs alone are not sufficient to 
address all of the harm being suffered by these workers and the 
others exposed by 9/11. Because so many of them are disabled or 
becoming disabled and are no longer able to work, they are 
suffering a great deal of economic hardship because of their 
illnesses.
    We know in looking at the records being kept by the--
through the various medical groups and the social agencies that 
are providing assistance to these people, that there are 
hundreds of them who are disabled, unable to work, and are not 
able so far to receive any assistance from workers' 
compensation, disability, retirement, or other similar 
programs.
    We know that many of them have lost their health insurance 
and coverage for their families. We know that many of them have 
had to move out of their homes because they can no longer 
afford their mortgage payments. These are for the most blue-
collar workers that don't have significant financial resources 
to fall back on.
    You have heard from Detective Burnette today about what 
happened to her. Another potential witness we talked to was a 
firefighter, fire officer who is not able to be here, because 
this weekend he underwent a lung transplant due to the serious 
lung disease that he suffered.
    I would like to talk about one other victim of 9/11. Leon 
Heyward was an inspector in the New York City Department of 
Consumer Affairs near the World Trade Center towers. September 
11th, he helped to evacuate disabled co-workers from Ground 
Zero. He later developed respiratory disease, something called 
sarcoidosis, which we have found through scientific studies 
that is related to 9/11 exposures.
    His disease got worse. He had to stop working. He was 
denied workers' compensation. He struggled to get by and needed 
to move to a smaller apartment. He later developed lymphoma and 
died last year.
    Even though he had been denied workers' compensation, the 
New York City medical examiner, at the request of Mr. Heyward's 
family, did an autopsy and reported a finding that his death 
was due to 9/11. Based on their findings at that autopsy, he 
was considered to be a homicide related to the 9/11 terrorist 
attack.
    So I think it is important to recognize that Mr. Heyward 
and many other people who are not receiving compensation are 
having a great deal of difficulty because of this.
    I would also add, by the way, that Mr. Heyward's sister, 
Leona Hull, is here today with us and come from New York to 
attend this hearing and is very involved in assisting him 
through the struggles and can relate firsthand all of his 
difficulties.
    I would just like to emphasize that there are many more 
people like Mr. Heyward, like Ms. Burnette, who have suffered, 
who have become ill, and that we need a system in place to 
provide not only the medical programs we have, but also the 
assistance to them, economic assistance.
    The New York Times this morning has an article on how 
difficult the New York state workers' compensation system is to 
navigate through, have long delays in that system. And I can 
tell you from some other work I have done with the Workers' 
Compensation Board in New York, it is even worse for World 
Trade Center-related illnesses.
    The difficulties there are that these are complicated 
conditions. Our knowledge of them is evolving over time. We 
don't know the prognosis for people. It is just more difficult 
to provide a proper assessment for that.
    I think of the time when the Captive Insurance Fund was set 
up. Many of us hoped that the Captive Insurance Fund would 
find--would be able to help many of these people through this. 
For various reasons which I personally fail to understand, it 
is not. It has been used --mainly to fight the litigation 
against the city of New York and against the contractors.
    I think that the legislation being introduced now provides 
the right approach. I think the Victims Compensation Fund, 
combined with the medical programs, would provide the necessary 
economic assistance to people that have been injured, developed 
illnesses as a result of 9/11.
    I think that by linking the medical programs to the Victims 
Compensation Fund, we can ensure that we can provide a fair 
assessment of people's eligibility for compensation, we can 
provide a fair and objective assessment of their medical 
conditions, and we can then, through the system that is the 
Victims Compensation Fund operated the first time, provide 
appropriate economic assistance to these people.
    It has been going on 8 years now after 9/11. Many people 
are continuing to suffer because of that, their illnesses as a 
result of that. And I think it really is time that we should be 
passing this legislation, getting what I think is excellent 
legislation in place that addresses these issues, and we will 
take care of these people for the future.
    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 
still do not know the full extent of their exposures. While we know 
much about the adverse health effects being experienced by this 
population, we remain very concerned about latent illnesses that may 
only become apparent many years after exposure, especially cancers. 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 based on research done by several 
independent research groups. Similar health problems have been 
documented among fire fighters, other responders and recovery workers, 
and WTC community residents, students, and workers.
    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 WTC related 
medical conditions are being diagnosed using standardized medical 
protocols by physicians at some of the leading medical institutions in 
the New York City metropolitan area.
    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 started some time after September 11 
have provided excellent medical care for thousands of these works. 
Initially, only medical monitoring was available. However, three years 
ago, Congress also provided funding for medical treatment programs for 
those with WTC-related medical conditions. In December 2007, Congress 
also provided funding 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 rescue 
and recovery workers and others exposed after 9/11. 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 900 fire fighters 
have received disability pensions because of health problems related to 
their 9/11 exposures. This is 100 more than when testified here a year 
ago. These are fire fighters whose illness is so severe that they are 
no longer capable of working as fire fighters. Among patients currently 
being treated at Mount Sinai Medical Center, over 1000 are currently 
out of work. Among those, less than half were receiving financial 
assistance from Workers' Compensation, Disability Retirement, or Social 
Security Disability. In other words, these ill police officers, 
construction workers, utility repair workers, and others are now 
without any 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.
    You have already heard from Ms. Burnette. Let me mention a few 
other individuals. Daniel Arrigo is a 51 year old construction laborer 
who worked at Ground Zero from September 13, 2001 until January 2002. 
At one point, he became trapped in an elevator in one of the buildings 
adjacent to the site and was overcome by smoke and fumes. Over the next 
few years, he gradually developed severe pulmonary health problems 
requiring repeated hospitalizations. In early 2008, he had to stop 
working because of his breathing difficulties. Once he stopped working, 
he could no longer afford his mortgage and is currently living with his 
wife and three children in a basement apartment in his brother's home. 
A few weeks ago, he thought that his workers compensation claim would 
finally be approved only to have the insurance company delay payments 
by filing yet another appeal.
    Leon Hayward was an inspector in the NYC Department of Consumer 
Affairs near the WTC towers. On September 11, he helped to evacuate co-
workers from Ground Zero to their homes. This involved numerous trips 
during the time when exposures to the dust cloud were at their highest 
levels. About one year later, he developed respiratory symptoms that 
were eventually diagnosed as pulmonary sarcoidosis, an often 
progressive fibrotic disease of the lungs that has been found to be 
significantly increased in WTC rescue workers especially in the first 
year after 9/11. His disease progressed, and he had to stop working in 
2005. His workers compensation claim was contested by the NYC 
Department of Law and denied. He struggled to get by and had to move to 
a smaller apartment. His sarcoidosis was complicated by the development 
of a cancer, lymphoma (which could very well also be caused by his WTC 
exposures), and he died last year at the age of 45. At the request of 
Mr. Hayward's family, the NYC medical examiner conducted an autopsy and 
reported the death as a homicide related to the terrorist attack on 9/
11 based on the autopsy findings of sarcoidosis caused by WTC dust 
exposures. While the NYC Medical Examiner recognized Mr. Hayward's 
illness as related to 9/11, the NYC Law Department had previously 
denied his worker's compensation claim. As a result, Mr. Hayward 
struggled to get by with little income and facing severe medical 
problems. Mr. Hayward's sister, who assisted him through his struggles, 
has come from New York City today to attend this hearing.
    These are just two of the many hundreds of WTC workers and 
community residents whose health has been seriously damaged by their 
WTC exposures, who have become disabled, and who now have to struggle 
to support themselves and their families. Many are not receiving any 
compensation from workers' compensation or other workplace disability 
programs. Based on what we have experienced to date in the medical 
programs, I expect this number to continue to gradually increase over 
the next several years.

                         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, in the NYS Workers' 
Compensation system, 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, three 
years ago New York State implemented some new programs that were 
deigned to improve coverage for WTC responders. These included an 
extension of the time to file a WTC-related 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. Most of these 
changes are just now going into effect, and it will take time to assess 
their impact.
    For the past year, I have served on a committee looking at some of 
the problems in handling of WTC claims. For various reasons, WTC claims 
are contested and appealed much more often than other claims. This 
leads to many claims being rejected and many more claims being 
significantly delayed. Although most claims that are pursued are 
ultimately approved, a disabled worker will often have spent many 
months or years without any income while waiting for their claim to be 
approved. Our committee has made a number of recommendations to 
alleviate these problems. Some of these recommendations will require 
legislative changes and will, therefore, take time to address.
    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 most 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 five years after its formation, the fund has paid 
out less than ten actual claims, all reportedly for musculoskeletal 
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 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 847 introduced by 
Representatives Maloney, Nadler, McMahon, and King provides a 
comprehensive legislative approach to accomplish that. In previous 
hearings, 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 and the Victims Compensation Fund (VCF) is the 
best mechanism for addressing economic losses. I believe that the VCF 
would provide the flexibility to properly and expeditiously 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. A number of the changes made in HR 847 
will help to ensure that sound diagnostic criteria will be used in the 
medical portion of the program and that the program will be carefully 
monitored. At the same time as the medical program will provide 
comprehensive, expert medical care for the responders and community 
residents, 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.
    I strongly urge you to pass HR 847 this year. It is over seven 
years since the 9/11 terrorist attacks. The health of the rescue and 
recovery workers and community residents was damaged as a result of 
these attacks. We should not wait any longer to implement a 
comprehensive solution to address their medical and personal needs.
    Thank you again for allowing me to testify. I would be glad to 
answer any questions.
                               __________
    Mr. Nadler. Thank you.
    I will now recognize Ms. LaSala for 5 minutes.

 TESTIMONY OF CHRISTINE LASALA, CHIEF EXECUTIVE OFFICER, WORLD 
              TRADE CENTER CAPTIVE INSURANCE FUND

    Ms. Lasala. Chairman Nadler, Chairwoman Lofgren, Ranking 
Member Sensenbrenner and King, and Committee Members, my name 
is Christine LaSala, and I am the president and CEO of the WTC 
Captive Insurance Company.
    First, let me say that I fully support your effort in H.R. 
847 to reopen the Victims Compensation Fund and to limit the 
liability of the city of New York and its 9/11 contractors.
    As a New Yorker who lived through 9/11, I share your 
concern for the heroic Ground Zero workers.
    I also share your concern for the other heroes here today, 
the city of New York, and the private contractors who took on 
the dangerous rescue, recovery and debris removal operation. 
These private contractors ranged in size from one-man 
operations to small family-run businesses to larger companies.
    Unfortunately, these heroes are now pitted against each 
other in litigation. More than 10,800 workers have sued the 
city and its 9/11 contractors, claiming that they suffer 
respiratory and other ailments due to their work at Ground 
Zero.
    The city and the contractors have denied wrongdoing. For 
years, these lawsuits have proceeded, as they must, through the 
tort system. The tort system, however, is a costly, 
contentious, and time-consuming way to resolve disputes of such 
national significance, disputes in which only the terrorists 
are to blame.
    If Congress wants to compensate the Ground Zero workers who 
are injured, while protecting the city and contractors from 
significant financial hardship, then an alternative approach is 
needed: reopening the Victim Compensation Fund and limiting the 
liability of the city and its contractors.
    The WTC Captive was formed to address a specific problem. 
After 9/11, the city and contractors could not purchase a 
sufficient amount of insurance for the massive debris removal 
operation. Fortunately, the Federal Government stepped in to 
fill this insurance gap. Congress appropriated $1 billion to 
establish a captive insurance company for claims arising from 
debris removal. That money in turn was used by FEMA to set up 
the WTC Captive, an insurance company with a duty to defend any 
lawsuits filed against the city and its contractors.
    Recently, the Department of Homeland Security's Office of 
Inspector General concluded that the WTC Captive is operating 
in full compliance with its congressional mandate and the FEMA 
grant. Without question, acting as an insurance company for the 
city of New York and more than 100 sued contractors has cost a 
significant amount of money. But in defending this massive 
litigation, the WTC Captive has consistently sought to preserve 
taxpayer funds.
    We have insisted that the city and contractors primarily 
work through one lead law firm instead of 100 or more. In 
addition, we have obtained a judgment against other insurance 
companies for more than $100 million. With this recent victory 
added to our current assets, the total would be more than the 
initial $1 billion.
    But we cannot prevent the inevitable. The cost of these 
lawsuits will increase if these cases remain in the tort 
system. That is why the WTC Captive supports the prompt and 
reasonable solution to legitimate claims by those injured, but 
any resolution must take account of the reason that the WTC 
Captive was created, to protect the city and contractors from 
uninsured liability.
    Thus, any resolution cannot exceed our current assets and 
must also ensure that the city and contractors are protected 
from future lawsuits. The tort system does not offer any way to 
resolve future lawsuits. The WTC Captive would act contrary to 
its mandate if it distributed a disproportionate amount of its 
assets to the current plaintiffs and left the city and 
contractors to fend for themselves against the future lawsuits.
    In addition, because many serious illnesses, including most 
cancers, take years to develop, the WTC Captive cannot pay out 
all of its funds only to those who have shown signs of injury 
and leave those with latent injuries without any form of 
recovery.
    The allegations here are of a mass tort, and this mass tort 
requires a mass solution.
    By re-opening the Victims Compensation Fund and limiting 
liability for the city and its 9/11 contractors, this Congress 
will ensure that, if there is another terrorist attack, all of 
America's heroes will again respond, knowing that their Nation 
stands behind them as they rush into harm's way.
    I thank you for your time this morning and welcome your 
questions.
    [The prepared statement of Ms. LaSala follows:]

                 Prepared Statement of Christine LaSala

















                               __________
    Mr. Nadler. Thank you.
    I now recognize Mr. Cardozo for 5 minutes.

               TESTIMONY OF MICHAEL A. CARDOZO, 
             CORPORATION COUNSEL, CITY OF NEW YORK

    Mr. Cardozo. Thank you.
    Thank you, Mr. Chairman, Chairwoman Lofgren, Ranking 
Members Sensenbrenner and King, Members of the Committee.
    And I particularly want to thank 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 a top 
priority.
    About 7\1/2\ years ago, over 90,000 people took part in the 
rescue and debris removal effort at Ground Zero, including 
workers and volunteers from all 50 states and the constituents 
of every Member of these Subcommittees and virtually every 
Member of the House. They were all responding to an attack on 
America.
    As I know you all know, nearly 11,000 of those heroic 
responders have sued the city and the contractors, asking for 
compensation for illnesses they say they incurred as a result 
of their efforts.
    And I want to emphasize that there is not going to be any 
winners in this litigation, which pits one set of heroes, the 
rescue workers, against another set of heroes, the city and the 
contractors who responded in a time of need without a written 
contract and without insurance.
    For the plaintiffs to prevail, they will have to prove not 
only that they are sick and that the sickness stems from the 
dust at Ground Zero, but also that the city or the contractors 
were somehow negligent and not entitled to their civil defense 
immunities.
    If the city and the contractors win these litigations, 
these people who became sick will receive nothing. And if the 
plaintiffs win, after what promises to be years and years of 
further litigation, many of the contractors may face huge 
liability and damages.
    The answer to this problem is before us. It is in this bill 
to reopen the Victims Compensation Fund, with the critical 
point that you don't need to prove fault.
    And in answer to one of the prior questions as to how many 
people will opt in to the fund rather than litigation, well, of 
course, we have no guarantee, but the difference between the 
fund and the litigation is the fact that the plaintiffs will 
not have to prove fault.
    So in my judgment, an overwhelming number of would-be 
plaintiffs would, in fact, opt in to the fund.
    I also want to add that, in the fund as it existed before 
and as would exist now, there is an offset for the so-called 
collateral source that people might receive, such as pensions, 
workers' compensation, and we also must remember that in New 
York City police and firemen do not receive workers' 
compensation.
    And I correct my colleague, Mr. Feinberg, who apparently 
looks so much like me, but it is important to note that under 
New York City law, workers' compensation is not available to 
police and firemen.
    But the critical point, as Mr. Feinberg pointed out----
    Mr. Scott. Could you say that again?
    Mr. Cardozo. Under New York law, policemen and firemen do 
not receive workers' compensation. There is a separate law that 
provides them with separate pension benefits. If they become 
injured, they get what is called accidental disability pension 
if they are out for life, but they are not covered by workers' 
compensation.
    Other city workers, sanitation, law department, various 
other people, are covered. But firefighters and police are 
specifically not included.
    The VCF, as it existed, not only had a limitation with 
respect to having to file your claim before a certain period of 
time, but also that you had to be at Ground Zero within 4 days 
of the attack. And that means that, if you were at Ground Zero 
5 or 6 days after, you were not eligible.
    Let me just add to what Ms. LaSala said and what has been 
said before, reopening the Victims Compensation Fund must have 
with it a cap on the liability, which is what this bill 
provides, so that those who do not go into the fund and 
continue the litigation, so that the contractors and others 
will know that their liability will be capped by available 
insurance.
    We hope that 9/11 never happens again, but we must assure 
the country that, if it does, people will respond and we must 
treat the people who were not eligible for the Victims 
Compensation Fund, for the limitations, we must allow those 
people to be fairly compensated and not continue the litigation 
as it exists today.
    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 
Sensenbrenner and King, and committee members. I am Michael A. Cardozo, 
and I serve as 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 with respect 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 terrorist attack.
    The federal government contributed substantially to New York City's 
economic and physical recovery from the 9/11 attack. 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 
as Mayor Bloomberg has said for many years now, what is needed is long-
term, stable funding for these health-care programs, as well as a 
method to address overall compensation for those potentially injured. 
Several Representatives--led by Congresswoman Carolyn Maloney and 
Congressmen Jerry Nadler, Mike McMahon and Pete King--have introduced 
H.R. 847, the James Zadroga 9/11 Health and Compensation Act of 2009. 
That bill provides for reopening the Victim Compensation Fund and 
limiting liability, the provisions we are here today to discuss. The 
City of New York strongly supports those provisions. The bill also 
provides for a system of stable funding for the long-term health needs 
of those affected by the attacks of September 11. Those provisions are 
within the jurisdiction of the Energy and Commerce Committee. The City 
supports that effort, though we have concerns about the effect of that 
portion of the bill on the City's finances and on our ability to ensure 
the effective use of City funds. We are confident that these issues can 
be addressed when Congress takes up the health care portion of the 
bill.
    But I am here today to testify in support of the provisions of the 
bill that address compensation for the victims of the 9/11 terrorist 
attacks on our country. First, the bill 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 demonstrate 
that they were injured as a result of the terrorist attack. Second, the 
bill would broaden the existing limitation on liability for damages 
arising from the response to the terrorist attack, thereby protecting 
the contractors that came to the City's aid from potentially ruinous 
liability and helping to ensure that the City and other municipalities 
can get the help they need from the private sector in the event of a 
future disaster, an occasion that we hope will never, but unfortunately 
may, occur.
    Approximately seven-and-a-half years ago, over ninety thousand 
people took part in the rescue, recovery and debris removal effort at 
Ground Zero--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 that the City 
retained in the rescue, recovery and clean-up efforts in response to 
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, nearly 11,000 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--people and companies will once again quickly and selflessly 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 limitations 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. 
Almost 11,000 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, a number 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 in fact they were hurt as a result 
of their work in helping their country recover from a terrorist attack, 
or as a result of 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 from the fund, 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 in the suits now pending in the federal court in 
New York, must prove, in addition to establishing that his or her 
illness stemmed from the dust at Ground Zero:

        1.  that the City or its contractors are not entitled to the 
        civil defense immunities and other defenses 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 seven-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 trials on plaintiffs' 
claims, which plaintiffs' counsel say total billions of dollars, both 
sides must engage in extensive discovery, which is still in its early 
stages. Judge Alvin Hellerstein, who is presiding over these cases, has 
established an aggressive schedule for discovery during 2009 and for 
trial of thirty selected cases beginning in May 2010. However, even if 
those first thirty cases go to trial in 2010, as scheduled, the great 
majority of the cases will still need to be addressed.
    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 legally prove 
that the City or its contractors were at fault, the lawsuit necessarily 
pits the City and the patriotic companies that rushed to the City's aid 
without a written contract or an adequate amount of insurance against 
the heroic workers, who also rushed to the scene of the devastation. 
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 have 
experienced business difficulties and, especially in these difficult 
economic times, continue to do so. The City and its contractors all 
faced very substantial potential monetary exposure. To try to 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. The $1 billion provided was used, as the 
legislation required, to set up a captive insurance company. As the 
Inspector General of DHS has confirmed in his June 2008 report on the 
Captive, this is an insurance company set up under New York State law 
and regulated by the New York State Superintendent of Insurance 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 to be used to settle the claims brought by 
the nearly 11,000 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 each of the 
plaintiffs 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 
the claims.
    Second, even if the Captive were able to settle all of the current 
claims for $1 billion, that would not protect against any claim that 
might be filed in the future. New cases are literally being filed every 
month; more than 1,000 new complaints have been filed in the last year. 
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 a limitation on liability, which I will speak about 
shortly, even 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 responders and the 
City and its contractors. And there will be no need to continue using 
the valuable and limited resources of the federal judiciary.
    Limiting Liability
    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. As was said, 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 
City and its contractors remain exposed to potential liability for 
their patriotic actions.
    The Zadroga Act would eliminate this highly undesirable outcome by 
limiting liability for any remaining claims for those who decide not to 
pursue a VCF award. Liability would be capped at the amount of 
available insurance, including the insurance provided by the WTC 
Captive, plus an additional $350 million to be paid, if necessary, by 
the City.
    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. 
Indeed, I understand that, because of the lessons the contractors 
learned from 9/11, some engineering firms were reluctant to participate 
in the recovery following Hurricane Katrina.
    The bill you are considering today will address everyone's 
concerns. Re-opening the Victim Compensation Fund will provide fast, 
fair, and certain relief to the workers and area residents. And 
limiting the liability of 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. We all know who was responsible 
for 9/11--nineteen terrorists who carried out the attacks. Responders, 
workers and residents should not have to try to prove that the City or 
the contractors are somehow responsible for their harms--which we 
think, and are obligated to prove, is not the case. This bill 
eliminates that burden, and ensures that those harmed by 9/11 get the 
compensation they are entitled to.
    I will be happy to answer any questions you may have.
                               __________
    Mr. Nadler. Thank you.
    I now recognize Mr. Frank for 5 minutes.

                TESTIMONY OF THEODORE H. FRANK, 
                 AMERICAN ENTERPRISE INSTITUTE

    Mr. Frank. Thank you, Mr. Chairman, Chairwoman Lofgren, and 
distinguished Members of the Subcommittee for your kind 
invitation to testify today.
    I serve as a resident fellow at the American Enterprise 
Institute, but I am not testifying here on its behalf, and the 
views that I am sharing here are my own.
    The September 11th Victim Compensation Fund, or VCF, 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. 847 fails to fully protect innocent 
third parties from unfair litigation, does not have many of the 
advantages that made the fund successful, and magnifies the 
disadvantages and fairness problems of the fund.
    The original fund used a non-adversarial structure to 
compensate a limited set of claimants in time and place with 
relatively unconventional 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.
    While H.R. 847 is a substantial improvement over the 
earlier version of the bill in the last Congress, it still has 
many problems. I discussed these problems in much more detail 
in my written testimony, but let me touch on a few of them 
briefly.
    First of all, the compensation program created by H.R. 847 
is especially susceptible to error and fraud. The fund was not 
designed to resolve causation issues. Someone on the September 
11th planes or killed or injured in the towers or Pentagon was 
plainly entitled to compensation from the fund. Thus, for the 
most part, determining eligibility for compensation was largely 
a ministerial function.
    The fund's structure was not designed to vet recipients' 
claims, but it is not the case that anyone with a pulmonary or 
cancerous ailment who worked at Ground Zero 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 the claims made against it.
    This creates a ``Field of Dreams'' problem. If you build 
it, they will come. If Congress creates a system where 
geographic proximity and a diagnosis are the only prerequisites 
for a large government check and an attorney's contingent fees, 
attorneys will have every incentive to manufacture such 
diagnoses.
    The law firm behind many of the thousands of pending 9/11 
lawsuits of plaintiffs who will be eligible for reopened fund 
compensation have previously used questionable medical 
diagnoses to attain huge sums in the Fen-phen litigation.
    If the bill is passed in its current form, trial lawyers 
will steal billions from taxpayers. H.R. 847 fails to provide 
adequate protection to taxpayers that taxpayer money will be 
spent on compensation of victims rather than on attorneys' 
fees.
    And to the extent that the bill is modified to protect the 
Federal Government against fraud, the program will be unlikely 
to end the third-party litigation unless the bill is also 
amended to make the fund the exclusive remedy for September 
11th-related injuries.
    Two, the bill fails to correct the problem of the original 
stabilization act, which gave unbounded authority to the 
special master. Now, this was perhaps forgivable in the rush to 
provide compensation in September 2001. The bill was passed 
that very same month. But if a program is to be reopened for 2 
more decades, Congress has the time to define more structure 
for it.
    For example, a 2-pack-a-day smoker working 1 day as a 
construction worker directing traffic at the debris removal 
site in August 2002, long after the fires were out, may, if the 
special master's regulations and adjudications are generous 
enough, receive fund compensation for pulmonary disease.
    And as Special Master Feinberg testified, the average--we 
are talking $1 billion for 2,000 claimants the last time 
around. That is $500,000 a person.
    Even the original fund failed to stay within its original 
estimates for expense, which were $4.8 billion in 2001, but 
ended up paying out $7 billion when it closed.
    Three, the bill fails to fully protect the innocent 
subcontractors who are faced with tremendous liability simply 
for volunteering to help New York City in its hour of need, 
often without pay.
    Many of the lawsuits against contractors and subcontractors 
include claims for punitive damages, which is left out of the 
exemption in the bill, so plaintiffs' attorneys will still have 
that leverage against those innocent parties. The exception 
just about swallows the rule.
    Four, the liability limitations provisions of the bill, by 
leaving insurers of these innocent parties on the hook, fails 
to solve the problem of future subcontractors being deterred 
from volunteering to help the government, raises insurance 
costs, and creates moral hazard problems.
    Five, Section 408(a)(5)'s proposal in the bill to create 
tranches of priority for claims payments through litigation 
presents additional problems of moral hazard and risks of 
collusion that could mean that unimpaired claimants receive 
government funding while leaving true victims entirely 
uncompensated by litigation.
    My time is just about up. There are many more issues that 
outstrip the time that I have, and I welcome your questions.
    [The prepared statement of Mr. Frank follows:]

                Prepared Statement of Theodore H. Frank

































                               __________
    Mr. Nadler. I thank the gentleman.
    And our final witness is Mr. Wood, who is recognized for 5 
minutes.

             TESTIMONY OF RICHARD WOOD, PRESIDENT, 
                 PLAZA CONSTRUCTION CORPORATION

    Mr. Wood. Madam Chairwoman, Mr. Chairman, distinguished 
Members, good morning. My name is Richard Wood, and I am 
president of Plaza Construction Corporation.
    My company is one of the five major contractors that 
responded immediately after our country was attacked by 
terrorists in New York City on September 11, 2001.
    I am here representing Plaza, but I am speaking on behalf 
of all the prime contractors--Bovis Lend Lease, LMB; Turner 
Construction; Tully Construction; AMEC Construction 
Management--in offering our full support and endorsement of 
H.R. 847, the bill before you today.
    Thanks to the steadfast work of Representatives Maloney, 
Peter King, and Nadler, as well as the tremendous efforts of 
Speaker Pelosi, you are considering this bipartisan bill. This 
bill comprehensively addresses the basic needs and concerns of 
those who immediately responded to the attack on our Nation and 
our great city.
    We urge your Committee, as well as the Energy and Commerce 
Committee, to act quickly to pass this desperately needed bill. 
We urge Speaker Pelosi, who has been extraordinarily sensitive 
to our plight, to schedule this bill for a vote as soon as 
possible.
    In my mind, our Federal Government has the responsibility 
to do so. The attacks on September 11th were attacks on our 
country. The companies and individuals who responded 
immediately did so because we were attacked and because our 
first concern was that of everyone, to save lives and to rescue 
people from the unprecedented and massive destruction caused by 
the foreign enemy attack.
    Thousands of people showed up to help as they could. Our 
companies showed up because we had access to the equipment, the 
trained manpower, and the expertise to best negotiate the 
rescue and then recovery efforts at the 14-story-high pile of 
burning wreckage where the Twin Towers once stood.
    I was one of those people who rushed out to help on 
September 11th. I worked at the site, side by side with our 
city's uniformed and emergency workers, construction workers, 
and all of the other volunteers, every day for the first month.
    I came home to eat, shower, and rest for a few hours when I 
was able to, and then I went right back. I believed this was my 
duty as an American. After this time, I was down at the site 
nearly every day for the next few months, and all of the 
contractors acted similarly and did so at the expense of 
running their companies and businesses.
    You have my written testimony, but I would like to talk to 
you about my personal experience. I was in a meeting at the 
Fisher Brothers offices, the parent company of Plaza 
Construction, when Arnold Fisher's assistant whispered in his 
ear that a second plane had hit the buildings. He immediately 
canceled the meeting, and we went in front of the TV to see the 
news coverage to find out what was happening.
    As we were there watching the towers burn, having seen a 
fire in an office building before, we knew that there was 
devastating damage occurring to those buildings, but nobody 
knew exactly what could happen to those buildings.
    I received a call from my office and was told to get right 
back to the office. I walked up Madison Avenue about a 10-block 
walk, and there were people from the first tower already 
streaming up Madison Avenue. We knew that something dramatic 
had happened, but I really didn't know exactly what it was.
    I got back to my office. My reception area was filled with 
100 people, and they were very upset, and some of them were 
crying. I immediately said to them, ``Everybody, go home to 
your families. Make sure they are safe. Take care of them, but 
get back to work tomorrow. Get on your buses and trains. Do not 
let whoever did this to us affect our lives.''
    As I was talking, somebody mentioned to me that I needed to 
get to my office right away to speak to Chris Mills. Chris 
Mills is a young man that worked for me. Chris had his head in 
his hands, saying, ``What happened? What happened?'' His 
girlfriend, soon-to-be-fiancee Danielle was in one of the 
towers on the 104th floor, and he was on the phone with her as 
the towers collapsed.
    At that moment, I asked Chris what he wanted to do. I said, 
``Would you like to go down and look for her?'' And he said, 
``Yes.''
    I went back into the reception area, and I told everybody 
in the reception area that we are a construction company. There 
is mass devastation downtown. They could use our expertise. I 
said, ``Anybody who wants to go down there with me to try to 
help, please join me. And those of you that will remain behind, 
please call our subcontractors, the unions, and mobilize as 
many people and as much equipment as you possibly can.''
    Getting down to the site, you couldn't imagine the 
devastation that was in front of you. TV and pictures could not 
describe the massive destruction and the smoke clouds and fires 
that existed downtown.
    We met up with other contractors and immediately formed a 
bond that we were going to work together not as competitors, 
but as one large unit to make sure that we mobilize this place 
and assist the emergency workers as much as we possibly can.
    The Department of Design and Construction, DDC, was the 
lead agency and ultimately was the group that hired us. We 
worked under their direction. We were directed to work with 
emergency personnel and were directed to different quadrants. 
Each one of us had a quadrant.
    There was a lead fire department person and police 
department person in each one of the quadrants. I recall seeing 
the bridge that led from the towers to the world financial 
center collapsed on top of two fire trucks that were completely 
obliterated and stood there as a fire captain watched those two 
fire trucks, wondering what happened to his people.
    While we are sitting there and as equipment is arriving and 
people are showing up and burning equipment is there, we are 
trying to figure out how to move these massive members that are 
disorganized in a way that wouldn't damage people, were they 
still to be alive.
    Much to our dismay, there were not many people alive. But 
we worked together as a group.
    I recall the first meeting that we had. It was in a 
kindergarten class in a school just south of Stuyvesant High 
School. It was quite a scene to see the largest contractors in 
the city and some in the country sitting in kindergarten 
chairs, figuring out how to solve the problems that we had down 
there.
    After the first couple of days, I realized what a soldier 
feels like at war. My second day down there, I was walking past 
an area, and I saw what appeared to be the trunk of a body with 
the head still attached. A fireman standing next to me said, 
``She was a woman.'' Immediately, I felt what happened to her 
family? What is her family going to think? What was this 
person's life like?
    We were very committed. It was a very serious place. This 
was not something to be taken lightly.
    For months, we worked down there. And this was an emergency 
for months. The fires burned in the quadrant I was at for many 
months. We used steel from the center of the pile long after 9/
11 to keep our hands warm when it started getting cold later 
into the fall.
    This was never a cleanup. It was an emergency, and it was a 
recovery. The entire time we were there, I had FBI agents, CIA 
agents, and Secret Service agents standing by my side. The 
quadrant we were assigned to clean up was 7 World Trade; 7 
World Trade had the offices of those groups in it.
    We responded to this attack. This was an attack on our 
country. This was an attack by foreign terrorists. We 
completely support this bill. And I appreciate the opportunity 
to address you today.
    In closing, let me say that support for this bill should be 
universal. There should be no divide along party lines. I 
submit to you that this bill protects Americans, both 
individuals and companies, who serve their country in a time of 
crisis. And this bill also protects America.
    In the event some future attack or disaster should occur, 
people and companies need to know that their country they are 
striving to protect will do the right thing and protect them in 
return. The injured need care and support, and the companies 
upon which people rely for their livelihoods and support for 
their families need to know that the next time they are needed, 
they can again respond without a moment's hesitation.
    I ask all of you and all the Members of Congress to 
appreciate both the importance of this bill, as well as the 
need to move it quickly to passage. The situation of protracted 
litigation in which we now find ourselves is wasteful and 
protects no one. Our resources are better spent caring for the 
sick and protecting those who deserve our protection.
    Ladies and gentlemen, if this happens again, I assure you, 
as an individual, I will show up to the next disaster that 
occurs in this country, and I can assure you there will be many 
volunteers from my company. But I will have to think twice 
about dedicating the resources of my company and putting it at 
risk for fear of the litigation that may ensue.
    I appreciate your time listening to us today, and thank you 
for your efforts.
    [The prepared statement of Mr. Wood follows:]

                   Prepared Statement of Richard Wood

    Madam Chairwoman, Mr. Chairman: Good morning. My name is Richard 
Wood, and I am the President of Plaza Construction Corporation. My 
company is one of the five major construction contractors that 
responded immediately after our country was attacked by Al-Qaida 
terrorists in New York City on September 11, 2001.
    I am here representing Plaza. But I am speaking on behalf of all of 
the prime contractors--Bovis Lend Lease, LMB, Turner Construction, 
Tully Construction, and AMEC Construction Management--in offering our 
full support and endorsement of H.R. 847, the bill before you today.
    Thanks to the steadfast work of Representatives Maloney, Peter King 
and Nadler--as well as the tremendous efforts of Speaker Pelosi--you 
are considering this bipartisan bill. This bill comprehensively 
addresses the basic needs and concerns of those who immediately 
responded to the attack on our nation and our great city.
    We urge your committee, as well as the Energy and Commerce 
Committee, to act quickly to pass this desperately needed bill. We urge 
Speaker Pelosi, who has been extraordinarily sensitive to our plight, 
to schedule this bill for a vote as soon as possible. In my mind, our 
federal government has the responsibility to do so. The attacks on 
September 11th were attacks on our country. The companies and 
individuals who responded immediately did so because we were attacked, 
and because their first concern was that of everyone: To save lives and 
to rescue people from the unprecedented and massive destruction caused 
by a foreign enemy attack.
    Thousands of people showed up to help in any way they could. Our 
companies showed up because we had access to the equipment, the trained 
manpower and the expertise to best negotiate the rescue and then 
recovery efforts at the 14-story high pile of burning wreckage where 
the twin towers once stood.
    I was one of those people who rushed down to help on September 
11th. I worked at the site, side by side with our city's uniformed and 
emergency workers, construction workers, and all of the other 
volunteers, every day for at least a month. I came home to eat, shower 
and rest for a few hours when I was able to, and then I went right 
back. I believe this was my duty as an American. After this time, I was 
down at the site just about every day for the next few months laboring 
and organizing the clean up efforts. All of the contractors--our 
executives, engineers, and workers--did so at the expense of running 
our companies' businesses.
    On the morning of September 11th, I was in a meeting at the offices 
of Fisher Brothers on Park Avenue and 49th Street. As many of you know, 
the Fisher family lends tremendous support to our nation's military and 
their families. At the time of the first strike, we all thought that a 
small plane had crashed into the side of one of the World Trade Center 
buildings. When we learned that the second tower had been hit, Mr. 
Arnold Fisher ended the meeting and we turned on the television to 
watch the coverage. We knew immediately that our country was under 
attack by terrorists.
    While construction is my business and I knew that the fires would 
have a dramatic impact on steel structure of the towers, I did not 
imagine that the towers were going to fall as they did. I received an 
urgent call from Plaza's offices and I returned there immediately. When 
I arrived, I addressed a group of nearly 100 people gathered in our 
reception area, many of whom were crying. I told them to go home to 
their families and to make sure everyone is safe--and then to return 
here to work the next day. I told them that we could not and would not 
let those who attacked us win by allowing their actions to alter our 
lives. Someone came up to me and said ``Go see Mills,'' referring to 
Chris Mills, a colleague and a friend.
    Chris was sitting in my office with his head in his hands. ``She's 
gone,'' he said. ``She's gone.'' He told me that he had been speaking 
on the phone with his girlfriend, Danielle, who was on the 104th floor 
of the North Tower, just before it collapsed. Chris said he didn't know 
what to do. I went back out to the reception area and told people about 
Chris and Danielle. I told them that I was going downtown to help, and 
that anyone who wanted to should come with me. A number of us headed 
down to the site. I told those remaining at our offices to call the 
unions and tell them to mobilize and start sending people down. I knew 
we needed to assist in what was sure to be a massive rescue operation.
    I attended meetings downtown with the other prime contractors and 
the City's Department of Design and Construction (DDC). The contractors 
assisted the DDC and emergency services personnel to get as close to 
the epicenter as possible to join the rescue effort. We also met with 
city officials, including officials from the Mayor's office. The 
contractors there--Bovis, Tully, AMEC, and the Turner and Plaza joint 
venture--were each assigned an area to organize at the direction of the 
DDC. We were working under the direction of the FDNY and NYPD and our 
focus was to rescue any survivors.
    I did not for a moment think of this tragedy, this attack on our 
country, as an opportunity to make money. We were there, as were the 
other contractors, because we were attacked and because there was work 
that needed to be done that we were in the best position to do. We were 
there because it was the right thing to do.
    I can best describe what we found as a war zone. I now believe I 
know how a soldier must feel who has witnessed death and must continue 
to go on. I saw maimed bodies. I saw the torso of what I was told was a 
woman's body with no limbs. I saw a body with his or her face burnt 
off. I felt paralyzed that day.
    The next day was more of the same, though the horrors were no 
longer new to me. Every once in a while a horn would go off, signaling 
an emergency. We were all supposed to run up West Street when we heard 
it. Hordes of people would run, and then come back. There were rumors 
that there were terrorists ``in the wire,'' meaning inside the area and 
on ``the pile.'' We had no feeling of security. We believed we were 
still under attack.
    My company was operating under emergency conditions the entire time 
we were there. I worked alongside FBI, CIA and Secret Service agents. 
We were told that sensitive information may be in the pile and that it 
needed to be retrieved. Building #7 came down because of a massive 
internal fire. Steel that was cherry red from the heat was still being 
pulled from the pile long after September 11th. We would sometimes use 
it to keep ourselves, particularly our hands, warm. At one point in the 
fall, before our work was completed, we asked the city if we should 
start to work eight to twelve hour days. We were directed by the DDC to 
continue working 24 hours a day.
    We felt like we were doing something for our country. I still know 
that we were, and that we stood tall at a time when our nation and the 
world were watching. We are proud of our accomplishments. We performed 
the work more safely and efficiently than anyone expected. In fact, 
there was not a single fatality at the site during the entire clean 
up--a tremendous accomplishment given the dangerous conditions at the 
site. And we did not do the work to make a profit. We were there 
because thousands of people needed to be organized and the city needed 
our companies and our expertise to help do that. We were there because 
the people of our city and our country needed us to be there.
    What happened on September 11th was unprecedented. The immediate 
mobilization of forces from both the public and private sectors in the 
aftermath, however, is something from which we need to learn. When our 
companies, our people, our equipment and our expertise were needed, we 
were there. Now, as we face thousands of lawsuits that could 
potentially bankrupt our businesses, we need and ask for your help and 
support today. We all want to be in a position to help our country 
again if called upon to do so.
    Litigation is simply not the solution to the position we all find 
ourselves in. The World Trade Center Captive Insurance Company, which 
was created by Congress, is defending our companies and the City of New 
York in the thousands of individual lawsuits that have been brought 
against us. Nonetheless, we have all been forced to hire lawyers and 
expend our corporate assets in these troubled economic times to defend 
ourselves, despite the fact that we dropped everything to answer the 
call for help. We came to the aid of our country, our city and its 
people immediately after we were attacked. And now we are being forced 
to defend ourselves and our companies' very existences in court.
    Our companies believe that anyone who may have been injured as a 
result of their work on the pile--anyone who came to help others at the 
expense of their own health--deserves to be taken care of medically and 
to be fairly compensated for their injuries. These people should not be 
forced into the legal system to be treated fairly any more than our 
companies should be forced to litigate against them. Collectively, we 
were the ones who showed up on September 11th and beyond. Any injuries 
sustained were directly caused by the terrorists, and it would be an 
injustice to hold our companies responsible in their place.
    These are some of the reasons why we support the reopening of the 
Victim Compensation Fund in Title II of this Bill. The Victim 
Compensation Fund will provide, as it did for those killed or injured 
on September 11th, fair compensation for the injured without raising 
issues of fault and liability. We can and should all agree that the 
fault lies with the terrorists. We may offer some technical suggestions 
on the provision in Title II which limits the liability of the 
companies, but we believe that it largely hits the mark. We want to 
ensure that the final language of the bill is fair and achieves the 
goal of fully protecting our companies as well as the injured.
    We also fully support the concept of a medical program in Title I 
of the bill for people who were injured at the site. Ironically, I may 
be one who might someday qualify for that program.
    I appreciate the opportunity to address you today. In closing, let 
me say that support for this bill should be universal. There should be 
no divide along party lines. I submit to you that this bill protects 
Americans, both individuals and companies, who served their country in 
a time of crisis. And this bill also protects America. In the event 
that some future attack or disaster should occur, people and companies 
need to know that their country, which they are striving to protect, 
will do the right thing and protect them in return. The injured need 
care and support, and the companies--upon which so many people rely for 
their livelihoods and support for their families--need to know that the 
next time they are needed they can again respond without a moment's 
hesitation.
    I ask all of you, and all members of Congress, to appreciate both 
the substantive importance of this bill as well as the need to move it 
quickly to passage. The situation of protracted litigation in which we 
now find ourselves is wasteful and protects no one. Our resources are 
better spent caring for the sick and protecting those who deserve our 
protection.
    Thank you.
                               __________
    Mr. Nadler. Thank you.
    I will now recognize myself for 5 minutes to begin the 
questioning. My first questions will be to everybody, and I 
would just ask for a yes-or-no answer. Does anyone think that 
the current situation is working well, with 11,000 lawsuits and 
victims not being compensated?
    [Witnesses jointly respond, ``No.'']
    Mr. Nadler. Does everyone agree that we need to do 
something different?
    [Witnesses jointly respond, ``Yes.'']
    Mr. Nadler. Does everyone agree that the current bill is an 
improvement to the current situation, that by reopening the VCF 
we can reduce the number of lawsuits and ensure a speedy 
payment to those in need?
    [Witnesses jointly respond, ``Yes.'']
    Mr. Nadler. No one disagrees with that? Maybe?
    Mr. Frank. Maybe.
    Mr. Nadler. Mr. Frank says, ``Maybe.'' Okay. Does everyone 
agree the current bill is better than the previous bills?
    [Witnesses jointly respond, ``Yes.'']
    Mr. Nadler. And I think we can all acknowledge that the 
bill can stand to be improved, and that is what this hearing is 
about, and I want to hear your comments and suggestions on the 
bills, but now I have a number of specific questions.
    Dr. Melius, Mr. Frank said that it is not the case that 
anyone involved in debris removal with a pulmonary ailment is 
an appropriate claim, and lung disease is common without 
exposure to Ground Zero. And, in fact, he said we can't tell 
who among those who present all the symptoms, the sarcoidosis 
or whatever, are victims of 9/11.
    Could you comment on that? And, therefore, it would be 
compensated. Could you comment on that, please?
    Dr. Melius. Yes, I can. First of all, I think--well, made 
one sort of misstatement, mischaracterization. The original VCF 
actually did compensate a significant number of people with 
illnesses. I think Mr. Feinberg said that. I think it was about 
2,500 people that were ill.
    Mr. Nadler. Thank you.
    Dr. Melius. I have evaluated what he has done, and it has 
been in some of the reports, and I think he did an excellent 
job taking the----
    Mr. Nadler. Thank you. Could you answer about what Mr. 
Franks said about----
    Dr. Melius. Frank, excuse me, yes.
    Mr. Nadler [continuing]. We don't know who the--we don't 
know who is a victim.
    Dr. Melius. Right. And I think that, with the current 
protocols that are in place, medical protocols, the current 
ways for ascertaining whether people were working there and 
were exposed, I think that there should not be a great deal of 
difficulty determining whether or not people's health problems 
were related to their exposures at 9/11, as opposed to 
cigarette smoking or some other----
    Mr. Nadler. It is not a great problem?
    Dr. Melius. It is not a great problem.
    Mr. Nadler. Thank you.
    Mr. Frank, you said a number of things which were 
interesting. H.R. 847 fails to fully protect the innocent 
subcontractors. The liability provisions leave some insurers of 
innocent parties on the hook, and fails to solve the problem of 
future subcontractors. The program is unlikely to end the 
third-party litigation. It fails to provide adequate protection 
to taxpayers that taxpayer money will be spent on compensation 
of victims, rather than attorneys' fees.
    Wouldn't you agree that, even though it doesn't do enough 
or might not do enough, in each of these situations, it 
improves on the existing situation?
    Mr. Frank. Not necessarily. It depends on the regulation 
that the special master passes. And that is a complete unknown, 
because they are not defined here. They will be promulgated by 
the special master, and the special master has tremendous 
discretion to do that.
    He could create a program that wastes tens of billions of 
dollars of taxpayer money, makes matter much worse, or you 
could create a very wise program----
    Mr. Nadler. I will come back to my questioning of you in a 
moment.
    Ms. Lofgren has to leave, so let me recognize Ms. Lofgren.
    Ms. Lofgren. Thank you for yielding, Mr. Chairman.
    I would just----
    Mr. Nadler. I am not yielding. I am--well----
    Ms. Lofgren [continuing]. Take 30 seconds to thank this 
panel. Mr. Wood, your description actually brought me back to 
that scene so vividly. And I think all the testimony here has 
been enormously valuable and compelling.
    And I was supportive of this bill when I walked in. I now 
am more than supportive. I just want to thank the witnesses for 
an excellent job.
    And I thank you, Mr. Chairman, and yield back.
    Mr. Nadler. Well, I thank you for all your work on this and 
for your support of this. Let me resume my questioning.
    Mr. Frank, you are saying that this might not necessarily 
be an improvement, even though the alternative is unlimited 
tort liability lawsuits, as we see now, by 10,000 people or 
11,000 people?
    Mr. Frank. It is entirely possible the southern district in 
New York gets it right and finds the city and the contractors--
--
    Mr. Nadler. Okay. May I ask Mr. Wood, how would you respond 
to Mr. Frank's argument that this bill is not good for the 9/11 
contractors, that it doesn't sufficiently protect you, that it 
wouldn't help?
    Mr. Wood. As I understand the bill, it would limit the 
liability to what is left in the Captive. And the Victims 
Compensation Fund would take a lot of the litigants away, 
leaving the Captive available for those who opted out, to 
continue with and pursue legal means, and therefore the Captive 
still in place would be what would defend us in the future. And 
we would be capped at the value left in the Captive.
    So, therefore, I do believe, from my understanding, that it 
would defend us.
    Mr. Nadler. Thank you very much.
    And I would like to make, before my time expires, just one 
comment, because I think that Mr. Frank didn't quite understand 
one provision of the bill, perhaps.
    He says in his testimony Section 408 does not sufficiently 
change the dynamic of punishing the subcontractors by 
subjecting them to lawsuits. Trial lawyers will still be able 
to use the threat of decades of endless litigation against 
contractors and subcontractors. The liability limits will be 
illusory. The liability limits in the bill would be illusory. 
Once they are reached, contractors will face crippling legal 
expenses when insurers no longer have a duty to defend.
    Well, the fact is, in this bill, once the legal liability 
limits are reached, there is no further possibility of 
lawsuits. There is complete indemnity at that point. So this 
should put your mind at ease, sir.
    Mr. Frank. Well, there is an exception in the bill for 
punitive damages. And most of----
    Mr. Nadler. All right. Punitive damages for deliberate--or 
for deliberate tort, yes, but nobody is talking about that. No 
one is aware of that.
    Mr. Frank. The bill doesn't say----
    Mr. Nadler. I see my time has expired.
    I now recognize the distinguished Ranking minority Member 
of the Immigration Subcommittee, Mr. King.
    Mr. King. Thank you, Mr. Chairman.
    And I think to start this out, I would like to turn to Mr. 
Frank and ask him, would you like to explain your concern about 
the gross negligence provisions in the bill?
    Mr. Frank. Certainly. The Chair seems to think that the 
exception only applies to intentional torts, but the exception 
explicitly states that it includes acts of gross negligence.
    And as I discussed in my written testimony, New York 
state's definition of gross negligence is relatively broad and 
could arguably--and certainly the plaintiffs are claiming--
includes what the contractors and subcontractors did on the 
site.
    Mr. King. If I might follow up on that, Mr. Frank, also 
looking at language under the exception language you are 
referring to that accepts acts of gross negligence. And then 
here is an even broader one, ``or other such acts to the extent 
to which punitive damages are awarded.'' Could it be more 
broad?
    Mr. Frank. Well, it could be more broad, but it is 
certainly an exception that comes close to swallowing the rule. 
There will be additional indemnity. It is an improvement. But 
because it is very likely that the limits of liability will be 
reached, and there will be likely thousands and thousands more 
claims as the years go on, the exception is enough that 
subcontractors and contractors still face danger of liability.
    Mr. King. And that being my concern--and I think about 
this. Let's just say there are 11,000 cases, and perhaps this 
legislation passes, and all but one of them would go into the 
fund and opt into the fund that is established under the bill. 
The other one might sue Mr. Wood.
    And might appear through the insurance protection that is 
there, under these open--under gross negligence or other such 
acts, to the extent to which punitive damages are awarded, then 
it would be such that one individual out of 11,000 could get 
grossly rich, to use a term, while the others opt for a far 
more modest compensation.
    Is that a possibility, to make it an extreme case so that 
we can talk about the----
    Mr. Frank. That is an extreme case, certainly. What is more 
likely is, because the bill is structured to incentivize people 
to go into the fund by giving them sort of a free bite at the 
fund--they can go into the fund. And if the fund denies their 
claim, they can reinstitute the litigation. And that is the 
most likely source of additional litigation.
    Mr. King. And I hope to work with some of the protections 
that I think we need, because I am concerned about Mr. Wood. I 
am impressed by everybody's testimony, and service here. I 
think Mr. Wood brought out what I see as the events and the 
emotion of the time.
    And having run to the sound of the guns as you did, as the 
other contractors did, and being faced with this, it is got to 
be a weight on you every day. And you know where I stand on 
wanting to protect the contractors in particular.
    And, Mr. Wood, I would ask you: Have you looked at this 
language that we are talking about that allows for punitive 
damages that could potentially still be your liability if this 
bill passes?
    Mr. Wood. I have not looked at it. I have not read that 
particular provision, but I share with you the long-term 
concerns. It has been 7\1/2\ years now that we have had this 
weighing on it, and, you know, we do want to see people who are 
sick taken care of, and we think that should be done right 
away.
    And we want to be able to respond in the future. And having 
this hang over our head, if there is a loophole in the bill, I 
would like to see it closed.
    Mr. King. Thank you. It looks to me like there is, and I 
don't think it is intentional at all, and that is what happens 
around here, unintended consequences.
    But I think it will be a particular nightmare to go through 
7\1/2\ years of this liability hanging over your head, finally 
get a bill passed, breathe a sigh of relief, and find out the 
litigation is coming at you again.
    Mr. Wood. We are very happy that we are finally having the 
chance to figure out how to protect people and protect 
ourselves. And we are here sitting very happy that we have a 
bill in front of you. And if it can be improved, great, but we 
are still very, very pleased that there is a bill out there.
    Mr. King. And I thank you, Mr. Wood.
    And is there anyone in the panel that would object to 
capping attorney fees under the fund at 5 percent?
    Hearing no response, let the record reflect that no one 
volunteered to take up that issue.
    And so I would just conclude, there are some things that I 
am looking at. One of them is the gross negligence provision 
and the broader language that is part of the bill and then my 
concern that we don't have protection that if one receives 
medical care until Title I of the bill that they--I would want 
them to automatically then opt into Title II of the bill, 
rather than be able to litigate.
    And the limit to economic damages would be another piece 
that I would want to stand, cap the attorney fees, and I have a 
couple other ideas, but that gives you a sense of what I pull 
out of here as I listen to the witnesses.
    If the Chairman is all right, I would be happy to recognize 
Mr. Cardozo for his response.
    Mr. Cardozo. I just wanted to make one point. I think, if 
you study the bill carefully, the concern you expressed before, 
that if you opt into Title I that somehow you have, in effect, 
have admitted or not admitted in Title II, the standards in 
those sections are very different, so that if you have opt into 
Title I for health care purposes, I don't think that has any 
effect at all, if you read the fine print of the bill, at least 
as I have read it.
    I don't think that has an impact one way or the other. The 
standards are different. The presumptions are different. So I 
don't think that that concern--I think, as drafted, that is not 
a problem.
    I would also like to point out to you that, in the 
regulations that Mr. Feinberg had--I don't remember if it was 
in the bill or not--once you opted into the fund, before you 
knew what your award would be, you made an unequivocal choice. 
You could not say, ``Oh, I only got $100. I am going to forget 
it and sue.'' You cannot--as structured, once you went into the 
fund, you made an unequivocal choice.
    So I don't think the other concern that--the concern you 
expressed in that regard is one that need concern you.
    Mr. King. Thank you, Mr. Cardozo.
    And in response, I will say that I think the statutory 
construction on it, you are correct. I think there would still 
be a de facto presumption that may exist in the litigation.
    I thank you, Mr. Chairman, and I yield back.
    Mr. Nadler. I thank the gentleman.
    Who is next?
    The gentleman from Virginia is recognized for 5 minutes.
    Mr. Scott. Thank you. Thank you, Mr. Chairman.
    Mr. Cardozo, you indicated that police officers and firemen 
were not covered by workers' comp. They are, in fact, covered 
by another plan----
    Mr. Cardozo. Yes.
    Mr. Scott [continuing]. That is actually more generous 
than----
    Mr. Cardozo. Yes, that is what I was trying to intimate.
    Mr. Scott. So they are not--we don't want to leave the 
impression that they are out in the cold.
    Mr. Cardozo. No, I just wanted to suggest to you, because 
it was a collateral source offset issue that you had raised.
    Mr. Scott. But it was--it would be the same--it is workers' 
comp-like. If they are on the job, injured on the job, they get 
coverage?
    Mr. Cardozo. That is correct.
    Mr. Scott. Okay.
    Mr. Wood, you responded, your company responded and many 
employees responded to this situation. Would you have responded 
and sent your workers into the World Trade Center area if you 
had been told accurately of the danger rather than being told 
by Federal officials that it was okay for employees to be in 
that area?
    Mr. Wood. I personally would have responded regardless.
    Mr. Scott. Would you have sent your employees knowing that 
it was a present danger to their health?
    Mr. Wood. When we went down there, I requested volunteers.
    Mr. Scott. Would you have----
    Mr. Wood. I didn't direct anybody to go down.
    Mr. Scott. Okay. Would you have better protected your 
employees had you known what the danger was?
    Mr. Wood. I would have protected my employees with whatever 
means possible. There were 50,000 people down at the site, you 
know, and, you know, we were there responding to emergencies 
and making sure people were trying to be saved.
    Mr. Scott. Now, a lot of companies in your position are 
being sued. Have there been any plaintiffs' verdicts against 
companies like yours?
    Mr. Wood. No.
    Mr. Scott. Are these class actions or individual lawsuits?
    Mr. Wood. I wouldn't know how to classify, you know, 
whether it is a class action or not. We know there are over 
10,000 litigants.
    Mr. Scott. Mr. Cardozo?
    Mr. Cardozo. These are all individual cases, since it is a 
tort case and you have to analyze each person's individual 
problems. Judge Hellerstein has ruled that it could not be 
brought as a class action, but they are all consolidated cases 
before him that are presently in----
    Mr. Scott. Have they consolidated on the issue of 
liability?
    Mr. Cardozo. Well, the liability issues, of course, will 
depend--and that is one of the basic problems we have--among 
the many issues are, when did someone work? When was he 
exposed? Was he or she given a mask? At what point in time? So 
to make general determinations about liability is simply not 
feasible.
    Mr. Scott. Okay. Were all of those who were actually 
working that day covered by workers' comp?
    Mr. Cardozo. Well, the city----
    Mr. Scott [continuing]. Collapse of the building something 
that arises out of or in the course of employment?
    Mr. Cardozo. From the city--those who were city employees, 
if they had filed a workers' comp claim within the statutory 
time limits and a statutory time limit was then subsequently 
extended, they would have been entitled to what is relatively 
modest benefits of the workers' comp.
    Mr. Scott. But they would be covered by workers' comp? Now, 
have any insurance companies been unable to pay because of the 
catastrophic nature of this event?
    Mr. Cardozo. I am not familiar with that.
    Mr. Scott. I mean, everybody who worked with workers' comp 
at least got those benefits? No?
    Mr. Cardozo. Well, the workers' comp--of course, people had 
to recognize that, in fact, they had been ill. And that was, of 
course, one of the problems that we have.
    There have been--I can get you the statistics in a moment--
there have been workers' comp claims that have been made and 
paid out that total in about $9 million in total. But there are 
severe statutory limitations as to how much each individual's 
workers' comp can be.
    Mr. Scott. Say again? I am sorry?
    I will yield to the gentleman from New York.
    Mr. Nadler. Thank you. I just wanted to suggest that Dr. 
Melius might want to answer the question about workers' comp.
    Dr. Melius. Yes, sorry. I said in my testimony and the 
experience that there are literally thousands of people who 
have not been able to get their workers' comp claims recognized 
in the system. There are various statutory issues. There are 
various issues with the private insurance companies, the city 
of New York contesting those claims.
    Mr. Hayward, who I talk about in my testimony, his claim 
was denied. I am not sure the exact reasons for that. But there 
are many that have been unable to get the workers' compensation 
system to recognize their claim.
    There are also people within the police, fire and 
sanitation departments who have had difficulty with their line-
of-duty disability pension claims being recognized. So it is an 
ongoing problem. It is complicated by some of the timing issues 
and complicated by the nature of these illnesses that don't 
quite fit the normal system.
    Mr. Scott. Mr. Chairman, are you going to have another 
round?
    Mr. Nadler. No. Without objection, I will grant the 
gentleman an additional 2 minutes.
    Mr. Scott. Thank you.
    Doctor, as I understand the progression of the respiratory 
diseases, you start with non-symptomatic changes in your lungs 
and progress gradually into symptoms and more and more 
problems.
    Can you accurately predict who will progress from one stage 
to another?
    Dr. Melius. No. We cannot. Through the medical monitoring 
programs, we can carefully track people----
    Mr. Scott. Okay.
    Dr. Melius [continuing]. And follow what happens to them. 
But predicting who is going to go into a more serious decline 
in their pulmonary function is different.
    Mr. Scott. And for smokers subjected to asbestos, the 
problem may be that you are not compensating them for smoking, 
because asbestosis for a smoker does a lot more damage than the 
smoking would have done. Is that right?
    Dr. Melius. Correct.
    Mr. Scott. And one of the problems with dealing with this--
because you can't predict who is going to be who--is the 
requirement that somebody sign a release as a condition of 
getting any payment. I mean, that is a normal practice in most 
lawsuits, but it certainly creates a hardship on the plaintiff 
if you can't calculate who is going to need the payments in the 
future.
    So, Mr. Cardozo, let me ask you. Would it be more desirable 
in this to allow partial payments as you go along, as the 
patients actually need it?
    Mr. Cardozo. Well, I am not sure you are ending the 
constant litigation problem that you have. As Mr. Feinberg 
said, you--any, really, even in a tort case, you do try to make 
judgments as to what is going to happen down the road.
    Mr. Scott. But if you have 100 plaintiffs and some are 
going to get a lot sicker and some aren't, how do you fairly 
compensate them without overcompensating everybody or 
undercompensating everybody?
    Mr. Cardozo. I think you have to rely upon the best medical 
evidence that is available to you at the time. But it is 
another thing to keep in mind is the other part of this bill 
dealing with the whole health benefits. If, in fact, that part 
of the bill is enacted, that with an assurance of the ability 
for Congress and the city jointly to be funding the health part 
of this, there will also be an assurance that, to the extent 
that people need future health care, that that would be 
available.
    Mr. Scott. And that wouldn't be part of the relief?
    Mr. Cardozo. Pardon me? I don't believe so, no.
    Mr. Scott. That would not be part of the relief?
    Thank you, Mr. Chairman.
    Mr. Nadler. Without objection, the gentleman's extended 1 
additional minute. Would the gentleman yield to me?
    Mr. Scott. I yield.
    Mr. Nadler. Thank you.
    Ms. LaSala, I have three quick questions for you. How much 
have you paid--has the Captive paid out in recoveries?
    Ms. Lasala. It has paid a modest amount, Congressman 
Nadler, about $350,000.
    Mr. Nadler. Three hundred and fifty thousand dollars. And 
is it correct you have spent in legal defense defending against 
claims about $260 million?
    Ms. Lasala. I think that is a slight----
    Mr. Nadler. Over $200 million?
    Ms. Lasala. Nearly $200 million is the accurate number.
    Mr. Nadler. Okay. And would you agree that $200 million is 
more than 5 percent of $300,000?
    Ms. Lasala. Whatever the math is, I would agree, yes.
    Mr. Nadler. Thank you very much.
    Mr. Lungren. Thank you very much, Mr. Chairman.
    Mr. Wood, as I suggested earlier in my question to Mr. 
Feinberg, there is no perfect solution here, but we want to see 
how we can compensate people in a reasonable manner, but at the 
same time due it in such a way that does not bankrupt companies 
that assisted, as your company did and as you did.
    So, Mr. Wood, could you actually give us some details about 
what the continuing threat of litigation truly means to you? 
There has been some discussion here about, have you been sued? 
Have there been plaintiffs claims against you, et cetera?
    But just in terms of somebody who wants to keep a company 
together, number one, and as I understand it, you represent 
other companies here, not just your own company----
    Mr. Wood. That is correct.
    Mr. Lungren, What is the reality of the situation that 
faces you now with respect to this continuing uncertainty with 
respect to litigation, both in terms of keeping the company 
together and other companies that you represent here, and also 
in terms of the ability to respond to emergency requests such 
as this?
    I hope we are not going to get in a situation where next 
time we have a disaster the first thing you do is call up your 
attorney, rather than calling your people together to try and 
respond.
    Mr. Wood. Unfortunately, we may have to. You know, just the 
fact that I am here today, you know, takes away from our 
ability to do business. And this has been ongoing for 7\1/2\ 
years. And all the contractors are living a similar fate.
    I know, right after Katrina, one of the contractors that I 
am speaking for today had a local office near New Orleans. And 
they had to question themselves about whether or not to go in 
to help in the aftermath of Katrina. They made a decision to 
take care of their own people and make sure that they properly 
got evacuated and didn't run in to help after Katrina because 
of their experiences at 9/11.
    Many of the companies that are represented here are also 
national companies. And we have offices in other places in the 
country. And I am concerned that a mass mobilization of this 
kind, where tens of thousands of workers and hundreds or 
thousands of pieces of equipment showed up immediately, which 
was really the--us being the only resource that could properly 
provide that in a massive disaster, whether it be natural or 
another terrorist attack. I am concerned that it may not be 
there.
    I truly believe that every major contractor in the country 
is waiting to see what happens here today. And, you know, like 
I said to you, I will be there myself, and I know thousands 
will come as volunteers, but we are not going to dedicate the 
resources of our company until we know that the Federal 
Government is going to stand behind us.
    This was a massive attack by a foreign entity. It was an 
act of war. And we responded to an act of war. Looking to find 
blame at this point is really counter to what we did. I am very 
pleased for this opportunity for this bill is out there.
    Did I answer your question?
    Mr. Lungren. I think you did. In another life, I did tort 
litigation, both plaintiff and defendant. And from the outside 
looking in, I think some people get the idea that the system is 
set up so that it is almost perfect, that somehow we can figure 
out exactly what an individual has suffered, what they are 
going to suffer in the future, what the loss of income is going 
to be, and somehow we come to this judgment.
    But having been a part of it, I realize that you have a 
plaintiff, you have a defendant, you have lawyers, you have 
juries, you have a judge. You do the best you can. Our system 
is set up to try and do rough justice, if you will, but it is 
an extremely difficult thing.
    Why do we say that somebody gets a bigger settlement or a 
bigger judgment because they happen to have a job that has a 
greater income than somebody else? Because we are trying to 
give people recompense for the lost earnings and we do the best 
job we can.
    Who knows? Maybe that person would have changed their job. 
Maybe they would have invented something. Maybe they would have 
made more--we don't know those things, so we do the best we 
can.
    And here we have the same sort of situation, except it 
appears that everybody believes that extended litigation over a 
long period of time defeats the very purposes of what we are 
attempting to do. At least that is the way I see why we are 
here doing this.
    So I would like to ask the panelists this: Is there any 
concern any of you have that this bill, as we attempt to do 
that, gives too great a discretion to the special master? Or 
should we in Congress do more of a job of trying to fill in the 
detail?
    This is giving a special master tremendous leeway over an 
extended period of time. It is a tremendous power. And I just 
wonder if anybody would have any comments on that from the 
panel.
    Mr. Cardozo. Well, we are going to give the discretion to 
somebody. And we have, I think, a very positive experience with 
Mr. Feinberg, who dealt in an extraordinarily difficult case 
and different situation. And as he pointed out, about 2,700 of 
the people who he made awards to were people who were injured 
at Ground Zero.
    Yes, he had enormous discretion. After he did promulgate 
regulations that had been preceded by some hearings, he did an 
extraordinary job.
    If we continue down this front, that is going to be up to 
Judge Hellerstein and the jury, assuming that they are--proving 
that someone did something wrong, is going to have to do 
exactly the same thing. They are going to have to, when the--
under the limits of the tort system, make the same kind of 
judgment.
    So I think your question really is, yes, you could perhaps 
write in more safeguards in this legislation. I think we could 
be having a debate for years of each particular potential 
safeguard, which is why you have regulations.
    So, yes, there is going to be discretion to the special 
master, but I think it is an infinitely more preferable 
approach than what we have now.
    Dr. Melius. Can I just add that, from a medical 
perspective, given the uncertainties about what is going to 
happen in the future with the illnesses and how these illnesses 
may develop over time, may get better, may get worse, and so 
forth, I think having this type of system is preferable to 
other, more static compensation systems.
    For this particular situation, it can work. And you need 
the discretion and the flexibility to be able to respond.
    Mr. Frank. I would say that there is a happy medium between 
what Congress should be doing and what the regulators should be 
doing. And in particular, the special master here is outside 
many of the protections of the Administrative Procedure Act, so 
even as a regulator, there is unusual discretion being vested 
in the special master by the original stabilization act.
    And as I discuss in my written testimony, that is one thing 
when you are trying to quickly pass legislation, within a 
couple of weeks of 9/11, but we are talking here about a 22-
year program. And Congress should take the time to get some of 
the details right.
    Mr. Nadler. The time of the gentleman has expired.
    I now recognize the gentlelady from Texas for 5 minutes.
    Ms. Jackson Lee. Mr. Chairman, let me thank you very much 
for what I think is a very instructive hearing, and also 
Chairwoman Lofgren, as well, both Committees I serve as a 
Member on both Subcommittees
    Call me a soft sap, but I will stand alongside a suffering 
people any day against tall buildings and, if you will, 
corporate blockades. I do recall that this bill was sent in or 
introduced some years ago, and we look forward to the 
bipartisan assistance of our good friends on the other side of 
the aisle.
    But I recall the testimony of the special master that 
indicated that most of the early practitioners who helped did 
it pro bono. And he felt very comfortable in working through 
not only through his process, but I believe state law may, in 
fact, govern compensation. And I am understanding that New York 
state law in tort actions is not, if you will, a softie.
    So I would like to move on to the human suffering. Mr. 
Wood, I really believe that Mr. Scott's question was not a 
fault question. It was simply a question saying or asking--and 
I had just wanted to make sure you understood it was not blame.
    It was that, if you had been notified, you might have 
stopped at the local hardware store or wherever you might stop, 
might have had a mask or otherwise, you would have gone because 
of your patriotism.
    But what we are asking is, if you had any notice--we are 
trying to suggest--or let me not put words in your mouth--that 
you are not to blame. You came down as a volunteer, and so did 
your workers, because you were called. If you had a big red 
sign or a SOS that said, ``On the way down, get a mask, it is 
absolutely imperative,'' you might have done that. Is that my 
understanding, sir?
    Mr. Wood. I would have offered that to anybody else who was 
a volunteer. I would have kept going. It truly was an act of 
war, ma'am.
    Ms. Jackson Lee. And I don't take that away from you. Thank 
you so very much, sir. I just wanted to make sure that, if you 
had that notice, you would have provided for others, maybe not 
yourself. And we do appreciate it.
    Let me ask--to just give me that number again so that I 
could hear it clearly. And then--I think it is Ms. LaSala? Ms. 
LaSala?
    Ms. Lasala. Yes, LaSala.
    Ms. Jackson Lee. Yes. Could you give me--you paid how much, 
please?
    Ms. Lasala. In claims?
    Ms. Jackson Lee. Yes.
    Ms. Lasala. We have paid approximately $350,000.
    Ms. Jackson Lee. And then what did you utilize for defense 
fees or lawyers that were involved in the matter?
    Ms. Lasala. In the management of this company since its 
inception, we have spent close to $200 million both in defense 
of the litigation, understanding the nature of the injuries, 
the management of the company, the preservation of the corpus 
that was entrusted to us.
    Ms. Jackson Lee. And, Ms. LaSala, I never attempt to 
reproach anyone personally. I will not ask you any more 
questions. I will just editorialize as I ask Ms. Barbara 
Burnette questions about the human suffering.
    But right now, my stomach is churning. If I was not 
appropriate and respectful of my Chairman, I might run out of 
the room. My hair is on fire. And that would be very disastrous 
for this. I have indigestion. I can't even speak. Three hundred 
thousand dollars?
    [Applause.]
    Three hundred thousand dollars and $200 million plus for 
defense and understanding someone's pain and suffering is 
obscene. And so I am hoping we can work across the aisle on 
this legislation.
    Let me quickly go to Ms. Burnette, who played basketball, 
played on behalf of the New York City Police Department. When 
you went there, were you told or did you see other people 
wearing respirators, Ms. Burnette? And thank you for being 
here.
    Ms. Burnette. No, I didn't. I was just concerned with 
rescue and recovery.
    Ms. Jackson Lee. And you got right in the middle of it?
    Ms. Burnette. Yes.
    Ms. Jackson Lee. And you are now--are you retired? Are you 
still working for the----
    Ms. Burnette. Retired.
    Ms. Jackson Lee. You are now retired. Would you have 
retired this early in life? Obviously, you look like a very 
young woman, but----
    Ms. Burnette. No.
    Ms. Jackson Lee. You would not have retired. Were you used 
to looking out the window at the crime or the criminal or were 
you used to tracking him down, running him down, and getting 
him?
    Ms. Burnette. Running him down and getting him.
    Ms. Jackson Lee. And in terms of the impact on your family 
and the kind of medication that you are taking, do you see your 
life being changed, between night and day, pre-9/11, which I 
want you to get on the record that you would have, if 9/11 came 
again, God forbid, you were in that capacity as a detective, 
you would go down there again. I want that to be on the record. 
I don't want to put words in your mouth.
    Ms. Burnette. Yes, I would go down there.
    Ms. Jackson Lee. You would go down again. But do you see a 
difference between your life pre-9/11, your physical condition, 
and where you are today?
    Ms. Burnette. Yes, I do. I can't do anything I did pre-9/
11.
    Ms. Jackson Lee. Why don't you tell us?
    Ms. Burnette. Pre-9/11, I still played basketball. I was 
able to play with my kids and my grandkids. Now, the most I do 
is cough. I am taking my medications. I don't breathe well. I 
am suffering because I am still in denial that I am sick. I 
know that there is talk of me needing a double lung transplant, 
because I am scarred--three-quarters scarred on both lungs.
    Ms. Jackson Lee. Your family is impacted?
    Ms. Burnette. Yes, they are.
    Ms. Jackson Lee. And my last--you understand the bill that 
is before us?
    Ms. Burnette. Yes.
    Ms. Jackson Lee. And would this legislation going through 
the Congress, signed by the President of the United States, 
would this, you believe, help you and your fellow victims who 
are now still in pain after 9/11?
    Ms. Burnette. Yes.
    Ms. Jackson Lee. Mr. Chairman, let me indicate, as 
indicated, that I think Ms. Burnette and, obviously, Mr. Wood 
have spoken for thousands who cannot be here.
    But I would think, in the cost analysis that we in Congress 
have to do, to juxtapose going forward and helping victims 
versus a past history of $200 million for lawyers' fees and 
only $300,000 for victims, I think we would be in good stead 
for any decision made on this particular legislation.
    And I want to offer my enthusiast support for H.R. 847. I 
yield back to the gentleman.
    Mr. Nadler. I thank the gentlelady for her support and for 
yielding back.
    The gentleman from New York, Mr. Weiner, is recognized.
    Mr. Weiner. Thank you, Mr. Chairman.
    And I think that the gentlelady from Texas I think launched 
a good way for us to wrap up this hearing, and that is by 
focusing on the victims. You know, we are going to have a 
chance to vet the legislation here, but, you know, when the 
financial markets had a heart attack, we responded in about 72 
hours with about $700 billion of funds.
    We have a situation where thousands of our neighbors, 70 
percent of the first responders, have some form of respiratory 
ailment. And we seem to want to delay and delay and delay.
    This is an acknowledgement--this hearing is an 
acknowledgement that the delay has to come to an end, that this 
is a question of whether or not we are going to help people who 
are being slowly, but surely killed by the events of September 
11th.
    We have to make sure that, in the future, Mr. Wood and his 
colleagues are protected. There is no doubt about that. I would 
love to be in the room as we are making an emergency response 
plan that involves private contractors and see how many times 
someone asks, ``Well, are we going to be covered if we do A, B 
and C?''
    But there is also an imperative to take care of the victims 
today. And we have the benefit that we rarely have with 
legislation, in that we have a sample of model that worked. And 
I think we have to move quickly to replicate it.
    Detective Burnette, you, I think, are on this panel not 
just for yourself, but for hundreds, if not thousands of your 
fellow first responders, of people who did their job.
    Ms. Burnette. Yes.
    Mr. Weiner. You know, you expressed in your testimony, you 
know, having dirt come out of your lungs--well, not all of it 
came out, I think you are learning. I think a lot of it is 
still in there.
    You know, it takes scientists months to figure out what was 
in the dust at Ground Zero. Well, now they can go back and find 
thousands of firefighters, police officers, of contractors, of 
volunteers who were in that same situation.
    You were given on your best day, probably a paper mask, the 
kind of which they give out at Home Depot for when you are 
painting at home. We know that the Environmental Protection 
Agency didn't protect citizens from the environment during 
those periods, in fact, went on television and said quite the 
opposite, ``Everyone is safe. You can go ahead and go down 
there.''
    I think the fact is that we have let you down. I think 
there is no other way to say it, except that we have let you 
and the other victims down for too long. And while we stroke 
our beards and think about the legislation and make sure every 
word is right, I think the first imperative we have to take 
care of is to make sure that the victims are made whole to the 
best extent that we can.
    You are a hero, Detective Burnette. The many people who are 
here in this audience and those that you represent are heroes, 
the people that worked for the city and people that volunteered 
in their off-hours and people who worked for Mr. Wood. You are 
a hero.
    And we are not treating you that way right now. We are 
treating you like cogs in a legislative machine that turns ever 
so slowly, so slowly, so slowly. And I think that Congressman 
Nadler and Congresswoman Maloney, Congressman Fossella, who 
used to serve here, Congressman King, I think all of us--Mayor 
Bloomberg, Mr. Cardozo, all of us are at the point where we 
have to now push it into the end zone.
    We have been, in a football metaphor, playing in the red 
zone for the last 5 years. It is enough already. Let's just get 
this bill out, get it to the floor. Let's put smart people in 
charge. Let's get people--you know, we can do oversight, I say 
to my colleagues, and I want to thank Congressman King and 
Congressman Lungren, who have expressed the right tone.
    We want to get this right, but let's get it done already. 
And I yield back, Mr. Chairman.
    Mr. Nadler. I thank the gentleman for his questions and for 
his comments.
    I certainly want to express my hope--we have been working 
on this legislation and on this problem with the fact that so 
many of the heroes of 9/11 have gone through so much suffering 
unnecessarily and without the help that they are entitled to 
get from their government----
    Ms. Jackson Lee. Mr. Chairman? Mr. Chairman?
    Mr. Nadler. Yes?
    Ms. Jackson Lee. May I have unanimous consent to make an 
inquiry of you for clarification on the record, please, that I 
did not----
    Mr. Nadler. Without objection.
    Ms. Jackson Lee. I understand, on the Captive fund, there 
was an expenditure of $300,000--I am seeking a clarification--
that the lawyers' fees might have been utilized out of 
interest, which means there is still $1 billion left. Maybe I 
can have a clarification. This is a question that I posed that 
said there was $200 million in lawyers' fees, but it almost 
seems to me that the fund is not barely touched.
    Can I have a clarification on that, Mr. Chairman, or----
    Mr. Nadler. Well, for clarification for the record, Ms. 
LaSala, how much is left now?
    Ms. Lasala. There is approximately $940 million in the 
fund.
    Mr. Nadler. Of the original billion, there is $940 million 
left, minus the $200 million--minus the payouts and plus the 
interest?
    Ms. Jackson Lee. And, Mr. Chairman, if I can further----
    Ms. Lasala. And, Congressman Nadler, if I could just add 
one point, that we are the beneficiaries of a significant 
ruling in favor of the Captive of $100 million, a judgment from 
other insurance companies. That judgment is on appeal, but with 
it added to the current assets of the company, we will be in 
excess of the billion dollars we were initially entrusted with.
    Mr. Nadler. Thank you.
    Ms. Jackson Lee. Mr. Chairman, further clarifying. That 
means that we have at least $1 billion still sitting? Is that 
right?
    Mr. Nadler. There is about $1 billion still sitting, $900 
million or $1 billion, depending on the outcome of that 
litigation. In the legislation, it provides that that $1 
billion, plus some other pots, would be used in an ordered way, 
without being the first, for compensation of the victims who do 
not go into the VCF, but elect to maintain litigation.
    Ms. Jackson Lee. Well, I----
    Mr. Nadler. And the liability of the contractors and the 
city is capped at the amount in those pots, the $1 billion, 
plus a few other pots.
    Ms. Jackson Lee. Well, concluding and yielding back, I 
think what that notes is that the victims who are in this 
audience and these sponsors, yourselves, Ms. Maloney and I 
think Mr. King, are----
    Mr. Nadler. You are talking about Peter King, not----
    Ms. Jackson Lee. He is standing here with a green tie on.
    Mr. Nadler. Oh.
    Ms. Jackson Lee. But Mr. King----
    Mr. Nadler. Let the record reflect that our colleague from 
New York, Representative Peter King, who is a sponsor of the 
legislation, is standing over there.
    [Applause.]
    Ms. Jackson Lee. That you are also being responsible in the 
approach that is being taken through this legislation. I just 
wanted to make sure that was on the record----
    Mr. Nadler. Thank you.
    Ms. Jackson Lee [continuing]. And wanted to clarify the 
amount of money that is still remaining that is available in 
certain instances.
    I thank you. And I yield back. Thank you, Mr. Chairman.
    Mr. Nadler. I thank the gentlelady.
    And, again, I would hope that this hearing has been 
productive and conducive to passing this legislation so that 
both the victims, the heroes of 9/11, and the contractors, who 
were also both heroes and victims, can be dealt with fairly and 
decently, as this society should.
    Without objection, all Members have 5 legislative days to 
submit to the Chair additional written questions for the 
witnesses, which we will forward, and ask the witnesses to 
respond as promptly as they can, so that their answers may be 
made part of the record.
    Without objection, all Members will have 5 legislative days 
to submit any additional materials for inclusion in the record.
    And with that--and, again, thanking our witnesses and 
thanking the people, the 9/11 workers and others who have come 
here to witness this hearing--this hearing is adjourned.
    [Whereupon, at 12:38 p.m., the Subcommittees were 
adjourned.]

                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

    Prepared Statement of Prepared Statement of Christine C. Quinn, 
                     Speaker, New York City Council

    I write today to express the City Council's support for HR 847, the 
9/11 Health and Compensation Act, and more specifically the portion of 
it that would reopen the 9/11 Victims Compensation Fund. I first must 
applaud the tireless advocacy of the main sponsors of this bill, 
Congress Members Carolyn Maloney and Jerrold Nadler.
    This bill must pass for a variety of reasons. First and foremost, 
it is quite simply a moral imperative that our government takes care of 
those from around the country who risked their lives and have become 
ill as a result of their efforts to recover bodies and remains and to 
help put out the fires.
    Secondly, this bill must pass so that there may be a comprehensive 
revenue stream to provide for those who have been made sick as a result 
of their efforts on 9/11 and the recovery and cleanup efforts that 
followed. Our members of Congress who advocate for such funding should 
not be required to come hat in hand every year to try to obtain funding 
for First Responders, construction workers, volunteers, and others who 
have become ill as a result of 9/11 and its aftermath. The bill that 
you are considering would recognize that there will be ongoing needs 
for funding for many years to come and will provide for those needs.
    Third, the bill provides for science to take priority in 
determining the best action to take. The events of 9/11 and the toxins 
released were unprecedented. There must be continuing research to deal 
with the scientific challenges that have occurred as a result of this 
event.
    Fourth, the re-opening of the 9/11 Victims Compensation fund is 
necessary. Presently, the City of New York is involved in litigating 
claims brought by First Responders and others who have become ill after 
9/11. Re-opening the Victims Compensation Fund is necessary to put the 
adversarial nature of these proceedings to an end, and finally provide 
compensation for those who are becoming sick and will become sick in 
the future.
    Finally I must note that the issue of First Responders becoming ill 
as a result of 9/11 is not just a New York issue, but a national one. 
People from around the nation responded to this crisis by coming here 
to help and as a result, are now sick and are in need of our 
government's assistance. In fact, enrollment in the WTC Health Registry 
spans all 50 states.
    I urge you to support the 9/11 Health and Compensation and pass it 
as quickly as possible. Thank you.

                                

    Prepared Statement of Associated Builders and Contractors (ABC)







                                


































































































































































































































                                 
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