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Chief voices doubts on Sept. 11 fund rules

Says varying sums led to resentments

WASHINGTON -- The families of victims in the Sept. 11 attacks would have been treated more fairly had they all received the same amount from the government's compensation fund rather than sums based on income, the program's administrator said yesterday.

Kenneth Feinberg, special master of the compensation program, recommended in a final report that if Congress ever considers such a program again, it should offer a flat amount to all the victims, regardless of how much they earned, how much life insurance they carried, or their individual family obligations.

Under the rules of the program, the grants were made after considering a host of factors, which often led the families of emergency personnel to complain that the more affluent families of financial executives received far greater payouts.

The average grant to families of those killed was $2.1 million, though the 2,880 individual payouts ranged from $250,000 up to $7.1 million.

The fund also paid an average of about $400,000 each for the 2,680 accepted claims of injuries stemming from the attacks. The smallest injury payout was $500, the largest $8.6 million, according to the report.

For families of those killed, the fund deducted any life insurance payment from the final amount, an offset that many felt punished those who had been more careful to provide for their families.

Such conditions ''inevitably resulted in finger-pointing and a sense among many that the life of their loved one had been demeaned and undervalued relative to others also receiving compensation from the fund," the report said.

''A better approach might be to provide the same amount for all eligible claimants," it concluded.

Feinberg said in an interview, ''If it does happen again, God forbid, and if Congress decides to do anything, which is not a sure thing, they may not want to replicate this."

The program was designed to compensate families and protect the airline industry from crippling litigation. Feinberg said the 97 percent participation rate by families of those killed showed the fund was an overwhelming success. The fund, which also paid for injuries suffered during or immediately following the attacks, finished processing applications in June.

Only about 80 lawsuits rose from the attacks, which killed nearly 3,000 people. ''If the genesis of all this was to protect the airlines from lawsuits, they certainly did that," said Feinberg.

Charles Wolf, whose wife worked and died in the World Trade Center, said there was some finger-pointing in the beginning, and additional resentments among some families because charity groups often gave greater sums to families of emergency workers killed.

''I do think the way it was set up was fair, but I don't think it was fair at all to deduct for insurance," said Wolf. ''The guy who spends $3,000 a year on life insurance gets penalized, as opposed to the guy who spends $3,000 on car payments."

Congress created the fund shortly after the attacks, and those who signed up for compensation had to give up the right to sue US entities like airport security firms.

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