$1B FEMA "Fund" To Defend NYC Against WTC Victims' Lawsuits

Crossposted from LEAVWORLD: GRAFFITI POLITTI

Here's another outrage that you won't hear much about in the MSM. It seems that one billion federal dollars are being held by an entity called the WTC Captive Insurance Company. It seems to have been set up between 2002, when NYC requested the money, and 2004, when the NY Post quotes minutes from a meeting. The company has spent 74 million on overhead and legal expenses, while paying out 45 thousand to one person.

Here's where it gets ugly. Mayor Bloomberg is saying that "The truth of the matter is Congress didn't set up a victims compensation fund." It looks as if he sees this money as a "legal defense fund" to fight WTC lawsuits. "They've set up a captive insurance company. And the insurance company can only pay out money if somebody sues us in court and wins a judgment against us." Who are "they" in that sentence?

Why was money appropriated from FEMA used to set up an insurance company? As the NY Post reports (see link above):

In May 2002, the city made a request to feds, saying "toxic chemicals emanating from the WTC debris site" made insurance "absolutely vital to protect the city and its contractors."

Congress appropriated $1 billion through FEMA.

Then-Gov. George Pataki pushed a bill to create the nonprofit firm to manage the fund. "This legislation is necessary for the city to expedite the payment of claims," Pataki and Giuliani said in a 2003 press release.

At a meeting in December 2004, minutes show, LaSala declared the firm's main purpose was to disburse the fund "in an equitable manner that maximizes compensation to those parties who suffered damages as a result of the WTC debris removal program."

Now, if the fund's purpose is "to protect the city and its contractors," then Mayor Bloomberg is correct in his defense of it, because it is indeed a legal defense fund for NYC, against WTC victims. The LaSala mentioned in the quote is Christine LaSala, president and CEO of the company, who makes $350,000 a year, plus $20,000 in health benefits.

Besides the fund, LaSala, and Bloomberg, the outfit's five-member board of directors - all appointed by Bloomberg, are now being sued by the same law firm already battling the city in a class-action negligence suit on behalf of nearly 10,000 ill WTC responders. They have some help from several congressmen, as well, according to this further report, from the Post:

[S]everal New York members of Congress quickly jumped on the mayor's comments, insisting he is wrong - and that the city-run WTC Captive Insurance Company has the freedom to settle all valid claims from Ground Zero workers as quickly as possible.

David Worby, a lawyer for the WTC workers who filed the suit, called Bloomberg's rationale "preposterous."

"Insurance companies are supposed to pay just claims. If you run someone over in your car and Allstate is your company, Allstate doesn't have to wait for a lawsuit to pay," Worby said.

Apparently, public "captive insurance companies" funded by FEMA do. Please read the whole story in the links, because this is worth knowing about. I smell collusion between the government and the trial lawyers' lobby. I wonder what the insurance lobby thinks of this. They fight claims viciously, I hear.

Another NYC hornet's nest, with blatant misfeasance getting little news coverage. It was hard to find these articles in the Post online, and I had the exact titles from the paper version!

Just remember that as things stand now, the WTC Captive Insurance Company is a one billion dollar "deep pocket" for the city to use against WTC victims. It might make sense, because the city is the deepest pocket that people will sue. I'm not sure who's right, because I don't trust any of the politicians involved, and Giuliani gets a pass because he wasn't in office when this thing happened.

If it's supposed to be a "fund" to aid WTC victims, it is the biggest scandal to come out of the 9/11 aftermath directly, and Bloomberg has much to answer for. Anyone want to call their Congressman? If you do, ask them why they appropriated $1 Bil of FEMA money to fight AGAINST WTC victims' claims for compensation of medical treatment, or why the money they appropriated is being used that way.

It's probably all Pres. Bush's fault, I'm sure.