[Federal Register Volume 88, Number 248 (Thursday, December 28, 2023)]
[Notices]
[Pages 89693-89696]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-28674]


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GOVERNMENT ACCOUNTABILITY OFFICE


Notice of Planned Methodology for Estimating Lump Sum Catch-Up 
Payments to Eligible 1983 Beirut Barracks Bombing Victims and 1996 
Khobar Towers Bombing Victims; Request for Comment

AGENCY: Government Accountability Office (GAO).

ACTION: Notice of planned methodology for estimating lump sum catch-up 
payments; request for comment.

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SUMMARY: GAO is now accepting comments on our notice of planned 
methodology for estimating potential lump sum catch-up payments to 
certain 1983 Beirut Barracks bombing victims and certain 1996 Khobar 
Towers bombing victims who have submitted eligible claims for payment 
to the United States Victims of State Sponsored Terrorism Fund. We 
invite comments on all aspects of the planned methodologies proposed in 
this notice. GAO is publishing this notice pursuant to of the 
requirements of the Fairness For 9/11 Families Act (Fairness Act). 
Comments should be sent to the email address below.

DATES: Interested persons are invited to submit comments on or before 
January 28, 2024.

ADDRESSES: Submit comments to [email protected] or by U.S. 
mail to Ms. Triana McNeil at 441 G Street NW, Washington, DC 20548.

FOR FURTHER INFORMATION CONTACT: David Lutter, 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: Pursuant to sec. 101 of Fairness For 9/11 
Families Act (Fairness Act), GAO is publishing this notice of estimated 
potential lump

[[Page 89694]]

sum catch-up payments to certain 1983 Beirut Barracks bombing victims 
and certain 1996 Khobar Towers bombing victims who have submitted 
eligible claims to the United States Victims of State Sponsored 
Terrorism Fund (Fund), on or after December 29, 2022, and by June 27, 
2023.\1\
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    \1\ Public Law 117-328, div. MM, 136 Stat. 4459, 6106-6111 
(classified as amended at 34 U.S.C. 20144(d)(4)(D)). Other 1983 
Beirut Barracks bombing victims and 1996 Khobar Towers bombing 
victims have applied to and been determined eligible for payment 
from the Fund in prior rounds. Section 101 directs us to estimate 
catch-up payments for those who submitted eligible claims to the 
Fund between the date of enactment (December 29, 2022), and June 27, 
2023, which is the date the application period closed for catch-up 
payments. In general, the deadline for submitting a claim to the 
Fund is not later than 90 days after obtaining a final judgment. 
However, the Fairness Act reopened the application period for 1983 
Beirut Barracks bombing victims and 1996 Khobar Towers bombing 
victims awarded final judgments before December 29, 2022, providing 
that these victims had 180 days from the date of enactment of the 
Fairness Act (June 27, 2023) to submit an application for payment to 
the Fund. 34 U.S.C. 20144(c)(3)(A)(ii).
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    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.\2\ These judgments are 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.\3\ 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.\4\ All decisions made 
by the Special Master with regard to compensation from the Fund are 
final and not subject to administrative or judicial review.\5\ As of 
January 2023, the Fund has allocated to all eligible claimants 
approximately $3.4 billion in four payment rounds, which were 
authorized in 2017, 2019, 2020, and 2023. The Fund was established in 
2015 by the Justice for United States Victims of State Sponsored 
Terrorism Act (Victims Act).\6\ At the time of enactment, the Victims 
Act allowed plaintiffs in two identified lawsuits, In Re 650 Fifth 
Avenue and Related Properties and Peterson v. Islamic Republic of Iran 
(Peterson) \7\ to elect to participate in the Fund and assign any and 
all rights, title, and interest in the actions for the purposes of 
participating in the Fund.\8\ Plaintiffs in these actions who did not 
elect to participate in the Fund were also permitted to submit an 
application for conditional payment from the Fund in which initial 
payment amounts would be determined and set aside, pending a final 
determination in these actions.\9\ In the event that a final judgment 
was entered in favor of the plaintiffs in the actions and funds were 
distributed, the payments allocated to claimants who applied for a 
conditional payment were to be considered void, and any funds 
previously allocated to such conditional payments be made available and 
distributed to all other eligible claimants.\10\ A final judgment in 
favor of plaintiffs in Peterson was entered, appealed to the United 
States Court of Appeals for the Second Circuit, and ultimately affirmed 
by the United States Supreme Court on April 20, 2016.\11\ Distributions 
to the judgment creditor plaintiffs in Peterson commenced on October 
19, 2016.\12\ Accordingly, conditional claimants who were judgment 
creditors in Peterson did not receive award payments, and the Fund did 
not include them in award calculations in 2017 for the first round of 
payments or subsequent payment rounds.\13\ These conditional claimants 
include 1983 Beirut Barracks bombing victims and 1996 Khobar Towers 
bombing victims.
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    \2\ 34 U.S.C. 20144(c)(2).
    \3\ 34 U.S.C. 20144(c)(2).
    \4\ 34 U.S.C. 20144(c)(1).
    \5\ See 34 U.S.C. 20144(b)(3). Although not subject to 
administrative or judicial review, a claimant whose claim is denied 
in whole or in part by the Special Master may request a hearing 
before the Special Master not later than 30 days after receipt of a 
written decision. Id. 20144(b)(4). Not later than 90 days after any 
such hearing, the Special Master must issue a final written decision 
affirming or amending the original decision, and that written 
decision is final and nonreviewable. Id.
    \6\ Public Law 114-113, div. O, tit. IV, sec. 404, 129 Stat. 
2242, 3007-3017 (classified as amended at 34 U.S.C. 20144(d)(4)(C)).
    \7\ In Re 650 Fifth Avenue and Related Properties, No. 08 Civ. 
10934 (S.D.N.Y. filed Dec. 17, 2008) and Peterson v. Islamic 
Republic of Iran, No. 10 Civ. 4518 (S.D.N.Y.).
    \8\ Public Law 114-113, 129 Stat. at 3013.
    \9\ Public Law 114-113, 129 Stat. at 3013-14.
    \10\ Id. at 3014. In the event of an adverse final judgment in 
Peterson or In Re 650 Fifth Avenue and Related Properties, the 
Special Master was to release a portion of an eligible claimant's 
conditional payment to such eligible claimant if the Special Master 
anticipates that such claimant will receive less than the amount of 
the conditional payment from any proceeds from the final judgment 
that is entered in favor of the plaintiffs. Id. Such portion shall 
not exceed the difference between the amount of the conditional 
payment and the amount the Special Master anticipates such claimant 
will receive from the proceeds. Id.
    \11\ See Bank Markazi aka Central Bank of Iran v. Peterson, 578 
U.S. 212 (2016); U.S. Victims of State Sponsored Terrorism Fund, 
``Supplemental Report from the Special Master,'' at 6 (August 2017).
    \12\ U.S. Victims of State Sponsored Terrorism Fund, 
``Supplemental Report from the Special Master,'' at 6 (August 2017).
    \13\ Id. There were 78 conditional claimants who were Peterson 
judgment creditors who fell into this category. Id.
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    The Victims Act outlines minimum payment requirements in which any 
applicant with an eligible claim who has received, or is entitled or 
scheduled to receive, any payment that is equal to, or in excess of, 30 
percent of the total compensatory damages owed on the applicant's claim 
from any source other than the Fund \14\ shall not receive any payment 
from the Fund until all other eligible applicants have received from 
the Fund an amount equal to 30 percent of the compensatory damages 
awarded to those applicants pursuant to their final judgments.\15\ The 
Fairness Act amended the Victims Act to provide that the minimum 
payment requirements include the total amount received by applicants 
who are 1983 Beirut Barracks bombing victims or 1996 Khobar Towers 
bombing victims as a result of or in connection with Peterson or In Re 
650 Fifth Avenue and Related Properties.\16\ It further provides that 
any such applicant who has received or is entitled or scheduled to 
receive 30 percent or more of such applicant's compensatory damages 
judgment as a result of or in connection with such proceedings shall 
not receive any payment from the Fund, except as consistent with 
minimum payment requirements or as part of a lump sum catch-up payment 
under section 101 of the Fairness Act.\17\
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    \14\ Claimants are required to provide the Special Master with 
information regarding compensation from any source other than this 
Fund that the claimant (or, in the case of a personal 
representative, the victim's beneficiaries) has received or is 
entitled or scheduled to receive as a result of the act of 
international terrorism that gave rise to a claimant's final 
judgment, including information identifying the amount, nature, and 
source of such compensation. 34 U.S.C. 20144(b)(2)(B).
    \15\ 34 U.S.C. 20144(d)(3)(B)(i).
    \16\ 34 U.S.C. 20144(d)(3)(B)(iii).
    \17\ 34 U.S.C. 20144(d)(3)(B)(iii).
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    Section 101 of the Fairness Act contains a provision for GAO to 
conduct an audit and publish a notice estimating potential lump sum 
catch-up payments for 1983 Beirut Barracks bombing victims and 1996 
Khobar Towers bombing victims who submitted eligible applications to 
the Fund on or after December 29, 2022, and by June 27, 2023.\18\ This 
section also established a lump sum catch-up payment reserve fund 
within the Fund and appropriated

[[Page 89695]]

$3 billion to this reserve fund.\19\ Specifically, we are publishing 
for comment our methodology for estimating lump sum catch-up payments 
for eligible 1983 Beirut Barracks bombing victims and 1996 Khobar 
Towers bombing victims in ``amounts that, after receiving the lump sum 
catch-up payments, would result in the percentage of the claims of such 
victims received from the Fund being equal to the percentage of the 
claims of non-9/11 victims of state sponsored terrorism received from 
the Fund, as of the date of enactment.'' \20\ For the purposes of this 
analysis and consistent with the Fairness Act, ``1983 Beirut Barracks 
bombing victim'' means ``a plaintiff, or estate or successor in 
interest thereof, who has an eligible claim to the Fund that arises out 
of the October 23, 1983, bombing of the United States Marine Corps 
Barracks in Beirut, Lebanon, and includes a plaintiff, estate, or 
successor in interest who is a judgment creditor in Peterson v. Islamic 
Republic of Iran or a settling judgment creditor as identified in the 
order dated May 27, 2014, in In Re 650 Fifth Avenue & Related 
Properties.'' \21\ The term ``1996 Khobar Towers bombing victim'' means 
``a plaintiff, or estate or successor in interest thereof, who has an 
eligible claim to the Fund that arises out of the June 25, 1996 bombing 
of the Khobar Tower housing complex in Saudi Arabia, and includes a 
plaintiff, estate, or successor in interest who is a judgment creditor 
in Peterson v. Islamic Republic of Iran or a settling judgment creditor 
as identified in the order dated May 27, 2014, in In Re 650 Fifth 
Avenue & Related Properties.'' \22\
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    \18\ 34 U.S.C. 20144(d)(4)(D)(i). As discussed in footnote 1, 
section 101 directs us to estimate catch-up payments for those who 
submitted eligible claims to the Fund between the date of enactment 
(December 29, 2022), and June 27, 2023, which is the date the 
application period closed for catch-up payments. See 34 U.S.C. 
20144(c)(3)(A)(ii).
    \19\ 34 U.S.C. 20144(d)(4)(D)(iv). The Fairness Act directed the 
Special Master to authorize lump sum catch-up payments to 9/11 
victims, spouses and dependents in amounts equal to those previously 
estimated by GAO. GAO, U.S. Victims of State Sponsored Terrorism 
Fund: Estimated Lump Sum Catch-Up Payments, GAO-21-105306 (Aug. 11, 
2021). Additionally, not earlier than 90 days and not later than 1 
year after submission of the report that is to follow this notice 
the Special Master is to authorize lump sum catch-up payments from 
the reserve fund in amounts equal to those estimated by GAO. 34 
U.S.C. 20144(d)(4)(D)(iv)(II).
    \20\ 34 U.S.C. 20144(d)(4)(D)(i). Further, section 101 provides 
for GAO to conduct this audit in accordance with 34 U.S.C. 
20144(d)(3)(A), which generally requires that distributions be made 
on a pro rata basis and also places limits on the amount of eligible 
claims (referred to as ``statutory caps''). For example, for 
individuals, the cap is $20,000,000 and for claims of non-9/11 
family members when aggregated, the cap is $35,000,000. As such, we 
plan to use data from the Fund, to the extent available, on the 
claim amounts after the application of statutory caps.
    \21\ 34 U.S.C. 20144(j)(15).
    \22\ 34 U.S.C. 20144(j)(16).
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Methodology To Produce Estimates for Lump Sum Catch-Up Payments

    To estimate the amount(s) called for in section 101, GAO will 
utilize data from the Fund on the following amounts: (1) payments from 
the Fund received by non-9/11 claimants in the first through fourth 
payment rounds; \23\ (2) net eligible claims \24\ of these non-9/11 
claimants in the first through fourth payment rounds; (3) net eligible 
claims \25\ of the 1983 Beirut Barracks bombing victims and 1996 Khobar 
Towers bombing victims who were deemed eligible by the Fund and applied 
between December 29, 2022, and June 27, 2023; \26\ and (4) compensation 
from other sources \27\ received by the 1983 Beirut Barracks bombing 
victims and 1996 Khobar Towers bombing victims who were deemed eligible 
by the Fund and applied between December 29, 2022, and June 27, 2023.
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    \23\ As discussed in footnote 1, this includes some 1983 Beirut 
Barracks bombing victims and 1996 Khobar Towers bombing victims who 
applied to and received payment from the Fund in prior rounds. If 
claimants applied to the Fund more than once, they only appear in 
the data we received the first time they applied and were determined 
eligible. For example, the data we received show 12 claimants of the 
1983 Beirut Barracks bombing or 1996 Khobar Towers bombing attacks 
who received a payment in round 1, 141 in round 2, 423 in round 3, 
and 708 in round 4.
    \24\ For the purposes of our analysis, ``net eligible claims'' 
refers to the monetary amount of all eligible claims after the 
application of statutory caps by the Fund, if applicable. 34 U.S.C. 
20144(d)(3)(A). In accordance with GAO standards, we will assess the 
reliability and completeness of the data from the Fund to ensure 
that it is appropriate for these purposes.
    \25\ As of December 2023, data from the Fund on the claim 
amounts after the application of statutory caps (``net eligible 
claims'') for 1983 Beirut Barracks bombing victims and 1996 Khobar 
Towers bombing victims who are potentially eligible for lump sum 
catch-up payments was not available. This is because these claimants 
have not yet been included in a payment distribution that would 
require the application of statutory caps by the Fund. While we have 
data from the Fund on compensatory damages awards, we do not yet 
have the data with claim amounts after the application of statutory 
caps. We plan to work with the Fund to generate these data and to 
incorporate these updated claim amounts into our analysis when 
available.
    \26\ We received data from the Fund as of December 2023 for 
1,362 claimants for the 1983 Beirut barracks bombing and 159 
claimants for the 1996 Khobar Towers bombing who were deemed 
eligible by the Fund and applied between December 29, 2022, and June 
27, 2023. We also received data on 60 victims of these attacks whose 
eligibility for the Fund is still being determined as of November 
2023. These applications are pending because the Fund is awaiting 
additional documentation from these individuals that is needed to 
determine their claims' eligibility. Some of these 1,581 claimants 
may be judgment creditors in Peterson. We also received data from 
the Fund on the 78 conditional claimants who are Peterson judgment 
creditors discussed in footnote 13. Because eligibility for some of 
these victims is still being determined, we refer to the group as a 
whole as ``potentially eligible'' for catch-up payments.
    \27\ Claimants are required to provide the Special Master with 
information regarding compensation from any source other than this 
Fund that the claimant (or, in the case of a personal 
representative, the victim's beneficiaries) has received or is 
entitled or scheduled to receive as a result of the act of 
international terrorism that gave rise to a claimant's final 
judgment, including information identifying the amount, nature, and 
source of such compensation. 34 U.S.C. 20144(b)(2)(B). We received 
data from the Fund on compensation from other sources for claimants 
who are potentially eligible for catch-up payments.
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    Using these data, we estimated that the amount of payments that 
non-9/11 claimants received, as a percentage of their net eligible 
claims in the first four rounds of Fund distributions, was 4.6122 
percent (referred to as ``GAO percentage calculation''). To estimate 
GAO's payment percentage, we determined the payment amounts received by 
non-9/11 claimants from the Fund in the first through fourth payment 
rounds. Next, we determined the net eligible claims of these non-9/11 
claimants in each round. We divided the amount of payments by the net 
eligible claims to determine GAO's percentage calculation.
    Using the GAO percentage calculation, we plan to estimate two 
amounts for purposes of the second notice: (1) the total amount needed 
to provide lump sum catch-up payments to potentially eligible 1983 
Beirut Barracks bombing victims and 1996 Khobar Towers bombing victims 
based on these victims' net eligible claims; and (2) the total amount 
needed to provide lump sum catch-up payments to potentially eligible 
1983 Beirut Barracks bombing victims and 1996 Khobar Towers bombing 
victims based on these victims' net eligible claims offset by 
compensation from other sources.\28\ In the data provided, 1,417 of the 
potentially eligible 1983 Beirut Barracks bombing victims and 1996 
Khobar Towers bombing victims have reported compensation from other 
sources, such as court-awarded compensation.\29\
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    \28\ In our prior work, we did not offset eligible 9/11 victims, 
spouses and dependents' net eligible claims with compensation from 
other sources because this population did not have qualifying 
compensation from other sources. Although some 9/11 claimants may 
have received awards from the 9/11 Victims Compensation Fund (VCF), 
money received from the VCF is not considered an offset for the 
Fund's award calculations. See U.S. Victims of State Sponsored 
Terrorism Fund, Frequently Asked Questions, http://www.usvsst.com/faq.php (last accessed Dec. 4, 2023) (see 4.8 *Updated* What is a 
source of compensation other than the USVSST Fund?).
    \29\ According to Fund data, compensation from other sources 
received by potentially eligible 1983 Beirut Barracks bombing 
victims and 1996 Khobar Towers bombing victims range from $0 to 
approximately $5 million.
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    After consideration of the comments from this notice, we will issue 
a second

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Federal Register notice, utilizing data from the Fund to report 
estimated lump sum catch-up payments based on these methodologies with 
any changes we determine appropriate. We invite comments on all aspects 
of the planned methodologies proposed in this notice. After 
consideration of the comments from this notice, we will again seek 
public comment on the second Federal Register notice.
    Authority: Pub. L. 117-328, div. MM, 136 Stat. 4459, 6106-6111 (34 
U.S.C. 20144(d)(4)(D)).

Triana McNeil,
Director, Homeland Security and Justice, U.S. Government Accountability 
Office.
[FR Doc. 2023-28674 Filed 12-27-23; 8:45 am]
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