[Federal Register Volume 86, Number 111 (Friday, June 11, 2021)]
[Notices]
[Pages 31312-31315]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-12109]


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GOVERNMENT ACCOUNTABILITY OFFICE


Notice of Estimated Lump Sum Catch-Up Payments to Eligible 9/11 
Victims, 9/11 Spouses, and 9/11 Dependents; Request for Comment

AGENCY: U.S. Government Accountability Office (GAO).

ACTION: Notice of estimated lump sum catch-up payments; request for 
comment.

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SUMMARY: GAO is now accepting comments on estimated potential lump sum 
catch-up payments to certain 9/11 victims, 9/11 spouses, and 9/11 
dependents who have submitted eligible claims for payment from the 
United States Victims of State Sponsored Terrorism Fund. GAO is 
conducting a review and publishing this notice pursuant to the 
requirements of the Sudan Claims Resolution Act. Comments should be 
sent to the email address below.

DATES: Interested persons are invited to submit comments on or before 
July 12, 2021.

ADDRESSES: Submit comments to [email protected] or in writing 
to Mr. Charles Michael Johnson, Jr. at 441 G Street NW, Washington, DC 
20548.

FOR FURTHER INFORMATION CONTACT: Charles Michael Johnson, Jr. at (202) 
512-7500 or [email protected] if you need additional information. For 
general information, contact GAO's Office of Public Affairs, 202-512-
4800.

SUPPLEMENTARY INFORMATION:

Background

    On March 26, 2021, GAO published a notice (86 FR 16211) of our 
methodology for estimating certain lump sum catch-up payments. The 
supplementary information included with the notice explained that, 
pursuant to Section 1705 of the Sudan Claims Resolution Act,\1\ GAO is 
conducting a review and publishing notices for estimating potential 
lump sum catch-up payments to 9/11 victims, 9/11 spouses, and 9/11 
dependents \2\ who have eligible claims for payment from the United 
States Victims of State Sponsored Terrorism Fund (Fund). The Fund, 
which is administered by a Special Master and supported by Department 
of Justice (DOJ) personnel,\3\ was established in 2015 by the Justice 
for United States Victims of State Sponsored Terrorism Act (Terrorism 
Act).\4\ In 2019, the United States Victims of State Sponsored 
Terrorism Fund Clarification Act (Clarification Act) removed language 
from the Terrorism Act precluding 9/11-related claimants \5\ who 
received awards from the Victim Compensation Fund (VCF) from receiving 
payments from the Fund.\6\ However, because 9/11 family members

[[Page 31313]]

(i.e., immediate family members of 9/11 victims who are not spouses or 
dependents, such as non-dependent parents and siblings) had not 
received awards from the VCF, they were not precluded from receiving 
payments from the Fund if their claims were determined eligible. The 
first round of payments was distributed in early 2017 and the second 
round in early 2019.\7\ As of June 2021, the Fund had allocated $1.075 
billion for third-round payments and was in the process of distributing 
payments on a rolling basis.\8\ According to comments received on our 
first notice, certain 9/11 victims, spouses, and dependents have worked 
with members of Congress related to these catch-up payments. While the 
Terrorism Act, as amended, contains a provision for us to estimate 
catch-up payments, it does not currently authorize such catch-up 
payments to be made. The Fund would be responsible for making actual 
payments if authorized.
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    \1\ Public Law 116-260, div. FF, tit. XVII, sec. 1705, 134 Stat. 
1182, 3293-3294, amending Public Law 114-113, div. O, tit. IV, sec. 
404, 129 Stat 2242, 3010-3011 (classified as amended at 34 U.S.C. 
20144(d)(4)(C)).
    \2\ See 34 U.S.C. 20144(j)(10)-(14) (defining the terms ``9/11 
victim,'' ``9/11 spouse,'' and ``9/11 dependent,'' among others); 
see also 28 CFR 104.2, 104.3.
    \3\ See 34 U.S.C. 20144(b)(1).
    \4\ Public Law 114-113, div. O, tit. IV, sec. 404, 129 Stat. 
2242, 3007-3017 (classified as amended at 34 U.S.C. 20144).
    \5\ ``Claimants'' hold final judgments issued by a United States 
district court under State or Federal Law against a foreign state 
that has been designated a state sponsor of terrorism and arising 
from acts of international terrorism. 34 U.S.C. 20144(c)(2). For 
purposes of the Fund, the term ``claim'' generally refers to a claim 
based on compensatory damages awarded to a United States person in a 
final judgment issued by a United States district court under State 
or Federal law against a foreign state that has been designated a 
state sponsor of terrorism and arising from acts of international 
terrorism. In general, a claim is determined eligible for payment 
from the Fund if the Special Master determines that the judgment 
holder (referred to as a ``claimant'') is a United States person, 
that the claim at issue meets the definition of claim above, and 
that the claim was submitted timely.
    \6\ Public Law 116-69, div. B, tit. VII, sec. 1701, 133 Stat. 
1134, 1140-1141. The VCF provides compensation to those present at 
the World Trade Center on September 11, 2001, at other crash sites, 
or in the New York City Exposure Zone, or their personal 
representative.
    \7\ The Fund allocated $1.1 billion for initial-round payments 
and $1.095 billion for second-round payments. See U.S. Victims of 
State Sponsored Terrorism Fund, ``Special Master Report Regarding 
the Third Distribution,'' at 2 (June 2020).
    \8\ See id.; U.S. Victims of State Sponsored Terrorism Fund, 
http://www.usvsst.com (last accessed June 1, 2021).
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Summary of Comments

    GAO received a total of 1,925 comments by the closing date of April 
26, 2021.\9\ GAO received 1,910 comments from individuals or anonymous 
commenters and 15 comments from organizations.\10\ GAO received about 
94 percent of comments by email; the remaining comments were received 
in voicemails or letters. GAO has carefully considered all comments 
received. Below is a summary of the types of comments GAO received and 
GAO's response.
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    \9\ A summary of these comments are captured below; however, 
some comments fell into multiple categories and are included in all 
applicable categories.
    \10\ GAO counted comments received multiple times with the same 
content and sender as one comment.
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Opposition to Use of Second Round Judgment Date

    The great majority of comments received expressed disagreement with 
the proposed use of September 14, 2018, the close of the application 
period for the second round of payments, as the date by which claimants 
must have had a final judgment to be eligible for catch-up payments. 
Commentators opposing this date raised two consistent arguments for why 
the date should not be used. First, commentators explained that, 
because of the statutory bar that was in place at the time of the first 
and second rounds of payments from the Fund, the majority of otherwise 
eligible victims, spouses, and dependents did not seek final damages 
judgments before September 14, 2018, on the advice of counsel. They 
explained that such claims for damages would have been frivolous and 
administratively burdensome given the bar to recovery from the Fund. 
Second, commentators opposing this date also argued that Congress' 
intent in passing the Sudan Claims Resolution Act was to provide for 
the estimation of catch-up payments for 9/11 victims, spouses, and 
dependents who had received payments from the VCF and had not received 
payments from the Fund in rounds one or two. Commentators said that by 
using September 14, 2018 as the cut-off date, GAO would exclude most of 
this population and underestimate the number of individuals eligible 
for catch-up payments.
    GAO Response: GAO's calculation will now include all eligible 
claimants who are 9/11 victims, spouses, and dependents who submitted 
applications by February 19, 2020, the deadline for the third round 
distribution of the Fund.\11\ We previously limited the population to 
those 9/11 victims, spouses and dependents who would have been eligible 
to receive a payment from the Fund in the first or second round but for 
the language in the Terrorism Act precluding claimants who received 
awards from the VCF from receiving payments from the Fund. For that 
reason, we had planned to limit the population to 9/11 victims, spouses 
and dependents who had eligible final judgments prior to the close of 
the application period for the second round of payments, September 14, 
2018, and therefore would have been eligible for payment by that 
time.\12\ We based this approach on our understanding of the specific 
procedures for obtaining payments as set forth in the Terrorism Act and 
described by DOJ officials supporting the Fund.
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    \11\ According to the Fund's June 2020 congressional report, the 
applications of eligible claimants who applied in rounds one or two 
are carried forward into subsequent payment rounds. U.S. Victims of 
State Sponsored Terrorism Fund, ``Special Master Report Regarding 
the Third Distribution,'' at 2 (June 2020).
    \12\ As discussed in footnote 5, in general the Fund determines 
the eligibility of a claim for payment in each round by determining 
that the claimant holds a final judgment issued by a United States 
district court under State or Federal Law against a foreign state 
that has been designated a state sponsor of terrorism and arising 
from acts of international terrorism and that the claim was 
submitted timely.
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    GAO revised the population for the purposes of this estimation 
partially in response to the arguments raised by commentators opposed 
to the September 14, 2018 cut-off date explaining the reasons why 
eligible claimants generally would not have pursued final judgments by 
this date. In addition, according to GAO's analysis, the Fund's summary 
data on the dates of certain claimants' final judgments included only 
the most recent judgment date. According to the DOJ officials that 
support the Fund, the summary data on these judgments were compiled for 
internal purposes and not for the purpose of calculating payments to 
individual claimants. Instead, the Fund reviews each individual 
claimant's application and documentation when determining eligibility 
and payment amounts. The limitations of the Fund's summary data on the 
date of the claimants' final judgments are discussed further in the 
data limitations section of this notice.

Request To Use the Fund's Payment Percentage in the First and Second 
Round

    GAO received comments about the use of the Fund's payment 
percentage for our estimation lump sum catch-up payment.\13\ For 
example, commentators suggested that GAO add the payment percentages 
calculated by the Fund in the first and second rounds to determine the 
percentage needed for catch-up payments.
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    \13\ The Fund's ``payment percentage'' is the amount of funds 
available to pay all eligible claimants in a given round divided by 
compensatory damages after accounting for the individual and family 
caps, compensation from other sources, and prior payments from the 
Fund. The payment percentage for the initial round of payments was 
13.6561 percent (generally rounded to 13.66 percent in USVSST Fund 
communications). The payment percentage for the second round of 
payments is 4.1955 percent (rounded to 4.2 percent in USVSST Fund 
communications). The payment percentage total for both rounds is 
17.8516 percent, rounded here to 17.85 percent. See U.S. Victims of 
State Sponsored Terrorism Fund, ``Payment Calculation Explanation,'' 
at 4 (December 2018).
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    GAO Response: The mandate calls for GAO to estimate potential lump 
sum catch-up payments in ``amounts that, after receiving the lump sum 
catch-up payments, would result in the percentage of the claims of 9/11 
victims, 9/11 spouses, and 9/11 dependents received from the Fund being 
equal to the percentage of the claims of 9/11 family members received 
from the fund, [as of the date of enactment].'' \14\ Thus,

[[Page 31314]]

GAO estimated the amount needed to provide potential lump sum catch-up 
payments so that these payments to 9/11 victims, spouses, and 
dependents would represent an equal percentage of their net eligible 
claims as the amounts received by 9/11 family members. GAO did not 
combine the Fund's payment percentages, which were based on payments to 
all eligible claimants in each round because the mandate calls for GAO 
to calculate a specific percentage for these catch-up payments that is 
based on payments to certain 9/11 claimants only.
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    \14\ 34 U.S.C. 20144(d)(4)(C)(i). Further, section 1705 provides 
for GAO to conduct this audit in accordance with 34 U.S.C. 
20144(d)(3)(A), which generally places limits on the amount of 
eligible claims (referred to as ``statutory caps''). For example, 
for individuals, the cap is generally $20,000,000 and for claims of 
family members when aggregated, the cap is generally $35,000,000. As 
such, we used data from the Fund on the claim amounts after the 
application of statutory caps.
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Methodology To Produce Estimates for Lump Sum Catch-Up Payments

    To estimate the amount(s) called for in the mandate, GAO used data 
obtained from the Fund on the following amounts: (1) Payments received 
by 9/11 family members in rounds one and two; (2) net eligible claims 
\15\ of 9/11 family members who received payments in rounds one and 
two; and (3) net eligible claims of 9/11 victims, spouses, and 
dependents who have not received payments in rounds one or two. To 
calculate the first two amounts, GAO identified the population of 
claimants who were 9/11 family members and received payments in rounds 
one and two. GAO divided the payments received by 9/11 family members 
in rounds one and two by the net eligible claims of 9/11 family members 
who received payments in rounds one and two to calculate the percentage 
called for in the mandate. To calculate the third amount, GAO 
calculated the total net eligible claims of 9/11 victims, spouses and 
dependents who had not received payments in rounds one or two. GAO 
multiplied the percentage above by the total net eligible claims of 9/
11 victims, spouses, and dependents who submitted eligible applications 
by the February 19, 2020 deadline for the third round distribution of 
the Fund.\16\ This generated an estimate of the total amount needed to 
provide lump sum catch-up payments for 9/11 victims, spouses, and 
dependents.
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    \15\ For the purposes of our analysis, ``net eligible claims'' 
refers to the monetary amount of all eligible claims after the 
application of relevant statutory caps by the Fund, if applicable. 
34 U.S.C. 20144(d)(3)(A). For example, for individuals, the cap is 
generally $20,000,000 and for claims of family members when 
aggregated, the cap is generally $35,000,000. To calculate the 
amount of 9/11 family members' net eligible claims, we used rounds 
one and two data, the rounds in which the family members' payments 
were received, from the Fund on the claim amounts after the 
application of statutory caps. To calculate the amount of 9/11 
victims, spouses and dependents' net eligible claims, we used round 
three data from the Fund on the claim amounts after the application 
of statutory caps.
    \16\ The population for which we are estimating ``catch-up 
payments'' are 9/11 victims, spouses, and dependents who applied for 
payments in the first, second, or third round of payments from the 
Fund and who did not receive payments from the Fund in rounds one or 
two. See 34 U.S.C. 20144(c), (d)(4)(C); U.S. Victims of State 
Sponsored Terrorism Fund, ``Special Master Report Regarding the 
Third Distribution,'' at 2 (June 2020). According to the Fund's June 
2020 congressional report, the applications of eligible claimants 
who applied in rounds one or two are carried forward into subsequent 
payment rounds. GAO used the amount of net eligible claims 
calculated in the third round for 9/11 victims, spouses, and 
dependents.
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    GAO also calculated the amount needed to provide lump sum catch-up 
payments by group (i.e., 9/11 victims, spouses, and dependents) 
utilizing the percentage calculated above.\17\ To estimate the average 
lump sum catch-up payments by individual for each group in our 
forthcoming report to Congress, GAO will multiply the net eligible 
claim of each claimant by the same percentage and then calculate the 
average catch-up payment for individuals within each group.
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    \17\ As noted above, while the Terrorism Act, as amended, 
contains a provision for us to estimate catch-up payments, it does 
not currently authorize such catch-up payments to be made.
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Data Limitations

    In accordance with GAO standards, we assessed the reliability, 
accuracy, and completeness of the readily available electronic data DOJ 
provided from the Fund to ensure that it is appropriate for our 
purposes. Specifically, we reviewed relevant documentation from the 
Fund, including data on net eligible claims, judgment dates, and 
payment distributions across three payment rounds, conducted interviews 
with agency officials, and checked the data for outliers. Our review of 
the data found it to be sufficiently reliable for the purposes of 
estimating potential catch-up payments for eligible claimants.
    However, with regard to summary data that the Fund provided on the 
dates of claimants' final judgments, GAO found limitations with the 
completeness of this data for the purposes of determining which 
claimants had final judgments prior to September 14, 2018. According to 
the DOJ officials that support the Fund, the summary data provided by 
the Fund on these judgments was compiled for internal purposes and not 
for the purposes of calculating individual payments to individual 
claimants. Instead, the Fund reviews each individual claimant's 
application and documentation when determining eligibility and payment 
amounts.
    The summary data contained information on judgments for each 
claimant in the third distribution, but for some claimants who had 
multiple judgments, only the most recent judgment was included as it 
incorporated the amounts of any prior judgments. For example, a 
claimant may have received one judgment in 2016 for pain and suffering 
damages in the amount of $2 million and then received a second judgment 
after September 14, 2018, which added an additional $15 million in 
economic damages to the previous pain and suffering damages judgment, 
totaling $17 million. In that case, DOJ officials supporting the Fund 
told us that, for their purposes, they only needed to record the most 
recent judgment and the total amount (in the example about, $17 
million), and thus use of this summary data to determine the population 
of those eligible for catch-up payments could have resulted in a 
potential underestimate of eligible claimants. It would not have been 
practicable for us to conduct a case-by-case review of individual 
judgments to determine which claimants had multiple judgments, with one 
prior to the September 14, 2018 date used in our prior notice and one 
after that date.
    Given these limitations, and the arguments raised by commentators 
opposed to the September 14, 2018 date discussed above, GAO developed a 
more inclusive estimate that included eligible 9/11 victims, spouses, 
and dependents from all three payment rounds who did not receive a 
payment in the first two rounds of the Fund.

Estimates for Lump Sum Catch-up Payments

    GAO calculated 3,288 9/11 family members received total payments of 
$1,155,264,392 in rounds one and two. The total net eligible claims of 
these 9/11 family members was $19,723,494,745. Using these amounts, we 
calculated the percentage called for in the mandate of 5.8573 percent. 
We then estimated the 5,364 9/11 victims, spouses, and dependents had 
total net eligible claims of $45,287,995,177 and multiplied the 5.8573 
percentage to generate $2,652,653,742, the total amount needed to 
provide lump sum catch-up payments for 9/11 victims, spouses, and 
dependents, so that the percentage of net eligible claims received by 
9/11 family members is equal to the percentage of net eligible claims 
received by the 9/11 victims, spouses, and dependents in the population 
(see Table 1).

[[Page 31315]]



 Table 1--Estimated Amount Needed To Provide Lump Sum Catch-Up Payments
       by Group to Eligible 9/11 Victims, Spouses, and Dependents
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                                                         Total amount
                                                       needed to provide
                        Group                          lump sum catch-up
                                                           payments
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9/11 Victims........................................        $811,945,396
9/11 Spouses........................................         859,813,713
9/11 Dependents.....................................         980,894,632
                                                     -------------------
    Total...........................................       2,652,653,742
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    Authority: Pub. L. 116-260, div. FF, tit. XVII, 1705, 134 Stat. 
1182, 3293-3294 (34 U.S.C. 20144(d)(4)(C)).

Charles Michael Johnson, Jr.,
Managing Director, Homeland Security and Justice, U.S. Government 
Accountability Office.
[FR Doc. 2021-12109 Filed 6-10-21; 8:45 am]
BILLING CODE 1610-02-P