[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
U.S. GOVERNMENT PRINTING OFFICE
48-352 PDF WASHINGTON : 2009
----------------------------------------------------------------------
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800
Fax: (202) 512�092104 Mail: Stop IDCC, Washington, DC 20402�090001
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)