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2002-01-15

UNITED STATES SENATE
Washington, Dc 20519-3204

January 15, 2002

The Honorable John Ashcroft
Attorney General
United States Department of Justice
950 Pennsylvania Avenue N.W.
Washington, D.C. 20530

Mr. Kenneth R. Feinberg
Special Master, Victim Compensation Fund
The Feinberg Group, LLP
Suite 740 South
1120 20th Street, N.W.
Washington, D.C. 20036

Dear Mr. Attorney General and Mr. Feinberg:

I appreciate having this opportunity to recommend changes to the Interim Final Rule of the
September 11th Victim Compensation Fund.

When we in Congress passed legislation creating the Victim Compensation Fund, we did so
because we felt passionately that the September 11th attacks on the World Trade Center and the
Pentagon were not simply directed at the victims of that tragic day; they were attacks on our
country.
For this reason, we believe it important that those who lost loved ones or were themselves
physically
harmed should have some relief from the financial burdens they now face and should also be
compensated for the losses and harm they endured.

I have been meeting with the families of the victims of September 11th to discuss a number of
concerns they are facing in the wake of this terrible tragedy. It is clear that no amount of money
can
truly make up for the suffering these families will face throughout their lives. Worries about
money,
however, should not be added to the physical and emotional burdens these families must carry.

While I am pleased with some of the provisions in the Interim Rule, in several important
ways,
your proposal contravenes both the spirit and express language of the law. For example:
1. The Interim Rule improperly narrows the definition of "eligible claimants" of the attack
by limiting the definition of what constitutes "physical harm." Specifically, you say that
physical harm must be defined as a temporary or permanent disability and must have
been treated within 24 hours of the attacks. Those restriction are not in the statute and
could eliminate people who are truly victims of September 11th from eligibility for
compensation.
2. The Interim Rule is written in a way that might result in zero compensation from the
Fund for a number of families of the victims of the attacks. That would run counter to
the intent of Congress and could undermine public confidence in the Fund itself. I am
recommending a change to ensure that every family can receive at least a basic level of
compensation from the Victim Compensation Fund, regardless of their circumstances.

3. Beyond its failure to create a floor of compensation, the Interim Rule improperly sets a
ceiling. This will put an unfair cap on compensation for many families and will likely
encourage many to resort to court instead of the Fund. That would be an unnecessary
burden on them and on our court dockets and runs against the spirit of this Fund, which
is designed to ensure that victims receive compensation fairly and promptly.

4. The Interim Rule does not account for the varied circumstances of the victims when
determining compensation for pain and suffering. Just as the Interim Rule provides that
compensation for economic damages will be determined based upon proof of economic
damages, such as lost wages, sustained by individual claimants, the Interim Rule should
provide that compensation for non-economic damages, such as pain and suffering, will
be based upon proof of the non-economic damages that individual victims suffered.
Compensation for pain and suffering should not be based upon a pre-determined
amount if claimants are able to demonstrate that the non-economic damages are greater
than that amount.

5. While it appears from some language in the rule as well as public statements by those
representing the Victim Compensation Fund that charitable donations to families will not
be subtracted from awards by the Fund, the Interim Rule does not clearly spell out such
assurances. There needs to be unequivocal language in the rule stating that charitable
contributions will not be subtracted from the amount of federal compensation.

6. The Interim Rule lacks specific guidelines covering domestic and same-sex partners of
victims who perished on September 11th. The vague language in the Interim Rule
could result in some partners receiving no compensation from the Fund.

7. The Interim Rule does not clearly protect the families of undocumented workers who
died September 11th from deportation if they apply for compensation from the Fund.
Such people may have suffered among the most grievous of economic losses on that
tragic day, yet fear of reprisal might prevent them from taking action to protect their
families' financial future.

I have explained my concerns about the Interim Rule in the attached legal memorandum. I
hope you will address the shortcomings outlined herein, as well as other issues that have been
raised by
families of the victims and others who have taken the time to review your proposal. It is my
hope that
the final result will fulfill the mandate of the Congress and the will of the American people and
help to
provide all the victims of September 11th and their families compensation in a equitable and
speedy
manner. I would be happy to meet with you to discuss these issues in greater detail at any time.

Sincerely yours,

Comment By:
Hillary Rodham Clinton
UNITED STATE SENATE
WASHINGTON, DC


MEMORANDUM OF CONCERNS
REGARDING THE INTERIM RULE FOR THE
SEPTEMBER 11TH VICTIM COMPENSATION FUND

I. The Interim Rule Inappropriately and Unnecessarily Narrows the Class of
Victims Entitled to Seek Relief Under the Fund

The Interim Rule of the September 11th Victim Compensation Fund of 2001 (the "Interim
Rule") contains provisions concerning the eligibility of victims to receive compensation under
the
September 11th Victim Compensation Fund ("Fund") that are not only unduly restrictive but are
also
inconsistent with the Fund's statutory language, set forth in Title IV of the Air Transportation
Safety and
System Stabilization Act (Public Law 107-42, the "Act"). Title IV provides, for example, that if
a
victim, "suffered physical harm or death as a result" of the September 11th terrorist attack, he or
she, in
the case of harm, or his or her heirs, in the case of death, would be eligible to receive
compensation
from the Fund. There is no minimum threshold for physical harm in the Act.

In stark contrast to the statutory language, however, the Interim Rule defines "physical harm"
as
"physical injury to the body that was treated by a medical professional within 24 hours of the
injury
having been sustained or within 24 hours of rescue: and (i) [r]equired hospitalization as an
inpatient for
ast least 24 hours; or (ii)[c]aused, either temporarily or permanently, partial or total physical
disability,
incapacity or disfigurement." Interim Rule, at 104.2(c)(l). The Interim Rule further provides
that "[i]n
every case not involving death, the physical injury must be verified by contemporaneous medical
records created by or at the direction of the medical professional who provided the medical care."
Id.,
at 104.2(c)(2).

These provisions of the Interim Rule are faulty in a number of respects.

First, as noted above, nowhere in the statutory language is there any reference to a minimum
threshold for physical harm; specifically, the statute does not require a victim to demonstrate that
he or
she has sustained a temporary or permanent disability. If we in Congress had meant to limit
relief only
to those victims who sustained a temporary or permanent disability, we would have, and could
have,
easily said so in the authorization statute, but we did not. Imposing such a threshold in the
Interim Rule
goes beyond the administrative promulgation of regulations to implement Title IV of the Act.

Second these provisions are unnecessarily restrictive and will leave too many victims
victims
who were physically harmed by the terrorist attacks of September 11th but who did not become
temporarily or permanently disabled or for any number of reasons did not seek (or could not
seek)
medical treatment within 24 hours out in the cold with no possibility of receiving compensation
from
the Fund.

If these provisions were proposed because of a concern about the submission of fraudulent
claims, that concern can be addressed by procedures the Special Master will implement that are
designed, among other thing, "to [v]erify, authenticate, and audit claims."
id., at 104.71(a)(l). Concerns about the submission of fraudulent claims should not serve to
deny
victims with legitimate claims access to the Fund.

II. The Interim Rule Fails to Consider Lost Future Wages in Accordance with the
Statutory Language

As you know, the eligible claimants are entitled to receive economic and non-economic
damages from the Fund. Title IV of the Act defines "economic loss" as "any pecuniary loss
resulting
from harm (including the loss of earnings or other benefits related to employment, medical
expenses
loss, replacement services loss, loss due to death, burial costs, and loss of business or
employment
opportunities) to the extent recovery for such loss is allowed under applicable State law." Title
Iv.
Section 402.

The Interim Rule states, however, that "[t]he Special Master's methodology... shall yield
presumed determinations of loss earning or other benefits related to employment for annual
incomes up
to but not beyond the 98th percentile of individual income, " which is $231,000 for the year
2000.
Interim Rule, at 104.43(a). Economic damages based on loss of business or employment
opportunities are similarly treated. Id., at 104.43(e). As a practical matter, these provisions
mean
than few claimants would receive more than $3 million even though they would be entitled to
more than
this amount under the statute.

These provisions of the Interim Rule suffer from many of the same deficiencies as the
provisions
in the Interim Rule concerning physical harm in that they impose limitations that are absent fro
the
governing statute. When this legislation was being drafted, some expressed concern about how
much
compensation families of "high earners" would receive from the Fund, believing it would be
unfair for
high-income families to receive lost future wages and other collateral funds, such as pension and
life
insurance proceeds. That concern was addressed by requiring the Special Master to subtract
collateral
funds, such as life insurance proceeds, from the amount surviving family members would
otherwise
receive under the Fund. Imposing an artificial 98th percentile limit in the Interim Rule penalizes
the
surviving family members of decedents who were high-income earners, especially given that
most such
families will be disproportionately affected by the collateral source provision in the statute.

In short, if these provisions of the Interim Rule were made final, some surviving family
members
of deceased victims would receive far less compensation from the Fund than they are entitled to
receive
under the governing statute, especially when the Special Master considers collateral sources. I
believe
these provisions in their current form would also cause a number of victims who are entitled to
compensation under the Fund to instead seek compensation by filing suit in the Southern District
of
New York, which would only serve to further congest that overburdened court. For all these
reasons,
the 98th percentile cap (which effectively limits virtually all awards to $3 million) should be
deleted so
that all families can receive from the Fund the compensation to which they are entitled.

In addition, I believe it important that all eligible claimants receive some compensation from
the
Fund. Under the Interim Rule, it may be difficult for some surviving family members to receive
any
compensation because of the existence of collateral sources such as pension payments,
government
death benefits, life insurance proceeds, etc. For this reason, I ask that you subtract collateral
source
amounts from only the economic loss compensation (rather than form the total compensation,
which
would include compensation from economic and non-economic damages) that a surviving
family
is
eligible to receive. That will insure that all surviving families will receive at least the amount of
compensation for non-economic damages, regardless of the collateral sources that may exist.

Lastly, the Interim Rule provides that lost earnings for victims who perished be calculated
based
on the income of the decedent for the past three years. I have heard from a number of personal
representatives, however, of situations in which the persons on whose behalf is claim may be
filed that
the decedent to a voluntary reduction in pay or didn't work for a portion of the three-years period
to
perform charitable work. I ask, therefore, that the Final Rule provide claimants in the
circumstances
described above with the option of basing lost earnings on either the average of the last three
years or
one of the past three years.

III. The Interim Rule Does Not Account for the Varied Circumstances of the
Victims When Determining Compensation for Pain and Suffering

Just as the Interim Rule provides that compensation for economic damages will be determined
based upon proof of economic damages, such as lost wages, sustained by individual claimants,
the
Interim Rule should provide that compensation for non-economic damages, such as for pain and
suffering, will be based upon proof of the non-economic damages that individual victims
suffered.
Compensation for pain and suffering should not be based upon a predetermined amount if
claimants are
able to demonstrate that the non-economic damages are greater than the amount. Amending the
Interim Rule in this way would be in keeping with the statutory language, which contains no
restrictions
on compensation for pain and suffering.

IV. The Interim Rule Is Ambiguous as to How Charitable Contributions Will Be
Treated

Finally, although the Interim Rule states that charitable contributions will not be considered as
a
collateral source, the Interim Rule as a whole is ambiguous on this issue because of other
language in
the Interim Rule that unequivocally states that charitable contributions, depending on the
circumstances,
shall be deemed a collateral source.

The ambiguous language is as follows:
"(a) Payments that constitute collateral source compensation. The amount of
compensation shall be reduced by all collateral source compensation, including
life insurance, pension funds, death benefits programs, and payments by federal,
state, or local governments related to the terrorist-related aircraft crashes of
September 11, 2001.

(b) Payments that do not constitute collateral source compensation. The
following payments received by claimants do not constitute collateral source
compensation:

(1) The value of services or in-kind charitable gifts such as
provision of emergency housing, food, or clothing; and

(2) Charitable donations distributed to the beneficiaries of the
decedent, to the injured claimant, or the beneficiaries of the
injured claimant by private charitable entities; provided,
however, that the Special Master may determine that
funds provided to victims or their families through
private charitable entity constitute, in substance, a
payment described in paragraph (a) of ths section.

id., at 104.47 (Italics in original; language italicized and bolder for emphasis).

This language does not convey a clear message about how charitable contributions will be
treated. As you know, I believe that such contributions should not be considered a
collateral source for a number of reasons, but primarily because considering such contributions
as
a collateral source would, in effect, nullify the wonderful acts of charity by hundreds of thousand
of
people, both here in the United States and elsewhere.

I ask that you amend the Interim Rule by simply striking the last clause of section
104.47(b)(2)
of the Interim Rule.

V. Interim Rule Lacks Specific Guidelines Covering Surviving Domestic Partners
of Victims Who Perished.

Though I am pleased to see that domestic partner (including same-sex partners, fiancee, and
fiancee's) can file claims with the Fund, I am concerned that the Interim Rule lacks provisions
making it
clear in all circumstances that surviving domestic partners are entitled to receive compensation
from the
Fund.

Under the statute, the personal representative of a deceased victim can file a claim for
compensation under the Fund. Ad you know, the Interim Rule defines "personal representative"
as
"[an individual appointed by a court of competent jurisdiction as the personal representative of
the
decedent or as the executor or administrator of the decedent will or estate," (28 C.F.R.
104.4(a)(1)),
and if no personal representative, executor or administrator has been appointed by a court, then
the
Special Master may determine that the personal representative for purposes of the Fund is the
person
named in the decedent's will as the executor or administrator of the decedents's estate. If no will
exists,
the Special Master may determine that the personal representative is the first person in the line of
succession established by the law of the decedent's domicile governing the intestacy. Id. at
104.4(a)(2).

While these provisions will in most instances result in the appropriate person being named as
the personal representative of a deceased victim, in those instances involving a surviving
domestic
partner of a decedent with no will, the surviving partner may not be named as the personal
representative. For this reason, I ask that you amend the Interim Rule to provide specific
guidance to
surviving domestic partners so that they may be deemed personal representative and receive the
appropriate compensation.

VI. The Interim Rule Fails to Provide Any Protection for Undocumented
Immigrants Who are Entitled to Relief Under the Fund

It is clear that undocumented immigrants who were physically harmed by the September 11th
terrorist attacks and the surviving family members of undocumented immigrants who died as a
result of
the September 11th terrorist attacks may receive compensation under the Fund. Indeed, in
determining
eligibility under the Fund, no distinction is made in the statute among citizens of the United
States,
foreign nationals, and undocumented immigrants. The Interim Rule is consistent with the
statutory
language in this regard.

Unfortunately, however, there are no protections from arrest and/or deportation for
undocumented immigrants who were victims of the terrorist attacks and who have a legitimate
claim for
relief under the Fund. Thus, for example, a surviving wife of an undocumented worker who was
killed
is faced with caring for her children on her own, without any assistance, or filing a claim under
the Fund
and facing deportation. Such a result would be inconsistent with the spirit of the Fund. I hope,
therefore, that the Final Rule will have provisions that will protect undocumented immigrants
from
deportation, including, for example, a provision, stating that information obtained from the
submission of
a claim cannot be used in deportation proceedings.

2002-01-15