Government Executive - Authors - Alina Tugend

Patricia Healy

Alina Tugend — Thu, 15 Sep 2005 00:00:00 -0400

Agriculture
Patricia Healy
Acting Chief Financial Officer

Patricia Healy, acting chief financial officer at the Agriculture Department, spent a year in the private sector before joining the federal government in 1987. And, she says, she has no real desire to go back. "I'm very content to be a civil servant," Healy says. "One thing you can do in government is work on major efforts that have a serious impact."

Healy, who has been acting CFO since December 2003, was recognized by the Office of Personnel Management with a Presidential Rank Award two years ago for her accomplishments, including establishing an integrated financial management system and evaluating Agriculture's personal and real property.

But there is far more work to be done, as the agency's poor red rating in financial performance on the presidential management traffic-light-style score card indicates. Among other things, USDA must improve its system of internal control and data integrity. In 2002, USDA had its first ever clean audit and has continued on that path since. Healy also oversees the National Finance Center in New Orleans, which processes the payroll for about 550,000 employees. The center's 1,500 workers and services were relocated to Philadelphia in the aftermath of Hurricane Katrina in August.

Before joining USDA, Healy worked at the Internal Revenue Service as the national director for the systems and accounting standards division. She says it was quite a change to be responsible for an entire department. "I have to centralize financial management at a department level, where there are many different kinds of missions," she says. "I needed a broader perspective." Her goals are simple: "Refine the information and get it out to the people who need it-with some analysis so people can use it-so we're all looking at the same information, at the same time, with the same accuracy."

A native of New Jersey, Healy has a bachelor's degree in German from Ohio State University, a master's degree in library and information science from the University of Michigan and an MBA from the University of Maryland.

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Charles E. Johnson

Alina Tugend — Thu, 15 Sep 2005 00:00:00 -0400

Health and Human Services
Charles E. Johnson
Chief Financial Officer,
Assistant Secretary for Budget,
Technology and Finance

Charles E. Johnson, chief financial officer for the Health and Human Services Department, laughs when asked how his job differs from his similar post at the Environmental Protection Agency.

"There, I had an $8 billion budget. At HHS, I have a $660 billion budget," he says, adding that HHS is "much larger in size and more complex, and much more decentralized than EPA." Johnson's stint at both agencies, however, does have one thing in common: the same boss. Mike Leavitt, who was administrator at EPA, recently became secretary at HHS. It's not a coincidence. From 1992 to 1997, Johnson served as chief of staff when Leavitt was governor of Utah and then as director of his 2000 reelection campaign. He helped Leavitt win a third gubernatorial term, only the second time in Utah history that has happened.

Also assistant secretary for budget, technology and finance, Johnson says he is just settling into his new job-he came on board in July-but a key focus will be updating HHS technology to serve current as well as anticipated demands from the expansion of Medicare.

A more long-term goal, which is part of Leavitt's "500-day plan," is creating an electronic system for managing individual health records, replacing paperwork, to make the health care system more efficient while also protecting privacy, Johnson says.

Johnson spent 31 years in public accounting at firms, including KPMG. He says many of the skills he learned during his career-to communicate, to lead people, to delegate-are the same ones he needs in government. But, he says, one trait is far more necessary in his federal job: patience.

"There are many, many layers," he says. "I found it very hard at the beginning, but all I was doing was frustrating myself. I had to learn to work with it."

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Paul R. Corts

Alina Tugend — Thu, 15 Sep 2005 00:00:00 -0400

Justice
Paul R. Corts
Assistant Attorney General for Administration,
Chief Financial Officer,
Chief Acquisition Officer

It might not be the most important action Paul R. Corts ever took as the Justice Department's assistant attorney general for administration and chief financial officer, but it was one of the most newsworthy. In June, he recommended the removal of the blue drapes that had covered the scantily clad statues in Justice's ceremonial Great Hall for three years under the order of former Attorney General John Ashcroft. "I suggested some modifications," Corts modestly admits.

Corts, who also has the role of chief acquisition officer, now is dealing with far more complex and long-term issues. He has to improve his department's financial management following poor audits in 2002 and 2003.

In May, Corts told a House Government Reform subcommittee that he is aiming to attack the problems on several levels: ensure an early warning system exists to flag audit problems; establish a dedicated CFO internal evaluation and review group; and revise the department's scattered financial systems. "We have real challenges; we have a terribly antiquated and fragmented auditing," Corts said.

Corts came to Justice almost three years ago from his post as president of Palm Beach Atlantic University, a Christian school in Florida, for more than 11 years. Before that, he served as president and held administrative and teaching posts at several universities. He says his experience as a university president has served him well. "The person in this position before referred to it as 'the mayor of Justice,' " Corts says. "And that's what a college and university president is-supervising all sorts of departments."

A native of Indiana, Corts received his master's and doctoral degrees from Indiana University.

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Rita Reed

Alina Tugend — Thu, 15 Sep 2005 00:00:00 -0400

Veterans Affairs
Rita Reed
Deputy Assistant Secretary for Budget

Rita Reed, who has been working at the Veterans Affairs Department for 28 years, would love to be able to tell a good story about how she came to the agency. But really, she says, it was because a friend referred her. "It was only later that I came to appreciate the mission," says Reed, deputy assistant secretary for budget.

She began working at the agency in 1978 straight out of college, handling the budget for VA construction. During the past 11 years, she has managed operations for VA's benefits program and now oversees a $70 billion budget.

It's not an easy task. An internal review in April found that the VA is facing a $1 billion shortfall. Agency officials told Congress it had to shift $410 million intended for use in fiscal 2006 as well as $600 million from maintenance, repairs and equipment to meet this year's health care needs. The president has asked Congress for an additional $1.97 billion to make up the shortfall, but the request has not yet been approved.

Veterans Affairs has assisted about 103,000 veterans returning from Iraq. Because of new types of body armor and medical advances, more are surviving severe wounds than in the past, but that also places a potentially greater burden on the VA health care system, Reed says. "They are not creating an astronomical cost," she says, "but there is a great difference in the veterans returning from this war" in terms of health care needs.

Reed, whose brother is a Korean War veteran, says she feels one of the great successes of the VA has been "appropriately ensuring resources are available." For example, she notes, the VA increased the number of outpatient clinics nationwide from 673 in December 2003 to 702 a year later.

Reed earned a master's degree in public administration from George Mason University in Virginia in 1984.

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Tom Pyke

Alina Tugend — Thu, 15 Sep 2005 00:00:00 -0400

Commerce
Tom Pyke
Chief Information Officer

It began as a summer job at the then-Bureau of Standards. Just out of high school, Tom Pyke wrote the programming manual for a new computer that the agency, now the Commerce Department's National Institutes of Standards and Technology, was building for the National Weather Service. He got the job after receiving honors in the Westinghouse Science Talent Search. "I liked it so much that I went back every summer," Pyke says.

From the University of Pennsylvania, he earned a Master of Science in engineering in computer systems as a Ford Foundation Fellow and went to work at NIST full-time in 1965. He's never left the department. "I've always been in Commerce, but I've had a number of different jobs," he says, including director for high-performance computing and communications at the National Oceanic and Atmospheric Administration. Four years ago, he was named Commerce chief information officer.

When he started, Pyke says, information technology security was poor. "We gave it a very high priority," he says. "Now we have a good system. Each part has a plan that's been tested, and there are firewalls in place to protect our data."

What still needs to be improved, Pyke says, is the documentation that clearly shows the status of IT security for each system. Pyke says his job has become increasingly challenging as Commerce has moved from providing information such as Census and weather data to offering online transactions such as accepting applications for patents and licenses. "We've moved intensively in this direction over the past two to three years," Pyke says.

He's proud to note that Commerce's Web site is among the 70 most visited in the world, with 9 million to 10 million users monthly. And during weather emergencies like Hurricane Katrina, that number jumps even higher.

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Thomas P. Hughes

Alina Tugend — Thu, 15 Sep 2005 00:00:00 -0400

Social Security Administration
Thomas P. Hughes
Chief Information Officer

It was after the Sept. 11 terrorist attacks that Thomas P. Hughes decided he wanted to make a contribution by moving out of the private sector and into public service. So, in 2002, he joined the Social Security Administration as chief information officer.

It wasn't his first foray into government work. From 1986 to 1994, he served in the elected post of state district court clerk in Texas. He helped reengineer the technology system to manage a $50 million budget and 50,000 pending court cases. From there, Hughes moved into private business. He was vice president of OCS Technologies in Cleveland, managed his own consulting firm and served as a senior consultant for PricewaterhouseCoopers.

In some ways, his role hasn't changed that much. "We struggle in both government and business not to just throw money and technology at a business problem, but to integrate the business with technology," Hughes says. But unlike business, he says, government has to make decisions based on "different value judgments. It has to give significant considerations to policies when making technological changes. In business, it's the bottom line."

His No. 1 concern, as for most CIOs, is security. "That includes disaster recovery, continuity of operation and maintaining integrity of the data," he notes. There's never any resting on one's laurels, because "You're only as good as, 'No one's broken in today,' " Hughes says. Most recently, SSA dropped from the top green score to the middle yellow score for e-government in the latest quarterly score card on the President's Management Agenda. Hughes attributes that to a conflict with the Office of Management and Budget on "the way we report certain projects," but declined to elaborate. He points out, however, that his agency scored well in the security area.

Hughes earned a master's at the University of Dallas and a master's in public administration at Harvard University's John F. Kennedy School of Government.

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Bruce Carnes

Alina Tugend — Thu, 15 Sep 2005 00:00:00 -0400

Energy
Bruce Carnes
Chief Acquisition Officer

Bruce Carnes credits his mother for any success he might have in his role as chief acquisition officer for the Energy Department. "I was nagged a lot by my mother," he says. "I'm pretty good at following up to make sure things get done."

Carnes says he is director of management as well as chief acquisition officer at Energy, "this week"-referring to his many changes in job titles during the past few years. His previous title was associate deputy secretary of the department. In his 29 years of federal service, starting at the Education Department, Carnes has been in and out of five agencies, including serving as chief financial officer in 2003 for the newly created Homeland Security Department.

Energy is different from the other government agencies he's worked for, Carnes says, because "nothing we do here is routine, from weapons to environmental cleanup. It's one of a kind, and no one has ever done it before. You're never certain what you're going to find when you start the cleanup. You may think you know what you're going to find, but you are often wrong."

His biggest challenge, he says, is determining what it will take to accomplish a particular job. "That's an issue we struggle with all the time," Carnes says. For that reason, he doesn't believe there's one right way to do a project. "We don't use the same hammer for every job," he says. "For some, we use fixed-price contracts. Others-for example, cleanups, which could take decades-we want to incentivize the contractors to move out smartly and not drag things out."

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Mari Barr Santangelo

Alina Tugend — Thu, 15 Sep 2005 00:00:00 -0400

Justice
Mari Barr Santangelo
Deputy Assistant Attorney General for Human Resources and Administration,
Chief Human Capital Officer

As director of human capital policy and programs in the newly established Homeland Security Department, Mari Barr Santangelo was responsible for, among other things, standardizing the policies and programs of 22 human resource systems.

What to do for an encore? In May 2005, she moved to the Justice Department as deputy assistant attorney general for human resources and administration and chief human capital officer. And she's juggling just as much.

"Most agencies have the chief human capital officer as one position," Santangelo says. "Here, it's only one of the hats I wear. I also have security and emergency planning and personnel operations. It's really exciting."

She joined the federal government in 1993 as senior adviser to then-Secretary Henry Cisneros at the Housing and Urban Development Department. Two years later, she faced one of the most difficult challenges of her life: the Oklahoma City bombings. HUD lost 35 employees in the blast, more than any other agency. "I think of the good I was able to do in the aftermath of the Oklahoma bombing and I think it's the reason I came here," she says.

Before joining the government, Santangelo worked at the University of Wisconsin-Green Bay for 19 years. Santangelo also was director of human resources and acting assistant secretary for administration at the Transportation Department, among the first agencies to achieve a green for human capital on the President's Management Agenda score card. Justice ranked yellow in the last review, but Santangelo says that it will soon move up to green.

At Justice, Santangelo is intensely focusing on customer service. "We needed to know that we're all headed in the same direction," she says.

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In the Hole

Alina Tugend — Mon, 01 Aug 2005 00:00:00 -0400

Bradley Belt struggles to keep the pension bailout fund afloat.

When Bradley Belt took over as executive director of the Pension Benefit Guaranty Corporation more than a year ago, it looked like he was going to have a tough time of it.

About 44 million workers and retirees are covered by the PBGC, established in 1974 as the federal safety net when companies fail to fund their pension programs. The agency had gone from a $10 billion surplus in 2000 to a $23 billion deficit in 2004. And that was before US Airways and United Air Lines filed for bankruptcy this year and announced that they would not be able to meet their pension obligations. "I don't think anyone would have envisioned the financial and operational challenges facing us," Belt says. "It's a deep hole and it's getting deeper."

Belt's unenviable job now is to figure out a way to keep his agency solvent while avoiding high premium hikes that might tempt large companies that contribute to the PBGC to walk away. The PBGC receives no government funding; companies pay a flat annual premium of $19 per employee or retiree to participate. The last rate hike was in 1994, up from $16 per employee.

The Government Accountability Office recently reported that even when the economy was stronger, many profitable companies failed to contribute adequately to their pension funds. By 2002, more than half of the largest pension plans were not fully funded, according to the report (GAO-05-772T). Pension plans were underfunded by more than $450 billion by September 2004, it added.

"The majority of companies appear to have taken full advantage of the rules to put a minimum amount into the pension fund," Belt says. "They're not acting illegally, but the companies have been perfectly willing to take advantage of that laxity in the rules."

Belt's task now is to save his agency. It has $44 billion in assets, but as GAO noted, its future is shaky unless changes are made. United, for example, paid $100 million into the fund over 30 years, Belt says, but PBGC will end up paying about $6.6 billion to fund pensions for United's 120,000 employees, retirees and former staff.

He is keeping a wary eye on the auto industry, too, where pension underfunding is rampant. "If we were a private insurer, we'd have been declared insolvent a long time ago," Belt says. "We have lots of assets, but our long-term viability is very much in question."

The Bush administration's proposal to save the agency would require companies to provide employees-and the PBGC-with more information about the stability of their pension programs. The plan would raise premiums to $30 per employee annually and offer varying risk-based premiums. Also, funding rules would be strengthened to give employers greater incentive to adequately fund pension plans.

Belt is determined to get Congress to adopt the plan. "He's great at putting very complicated concepts into very simple terms that the members can understand," says a senior aide to Senate Finance Committee Chairman Charles Grassley, R-Iowa. "He's got a tremendous amount of energy in an area that needs it."

Even Democrats who might not agree with Belt's proposals are impressed with his arguments. "He's very intense and creative," says a senior Democratic aide. "He's not just parroting lines . . . he has real depth of understanding."

Some of the PBGC's actions, such as taking over pension plans at companies like United, are unpopular among many union representatives. "We were completely blindsided by the [PBGC's] decision . . . to allow termination of our plan," Patricia Friend, president of the Association of Flight Attendants-Communications Workers of America, told the Senate Finance Committee in June. "I believe the PBGC failed in its No. 1 purpose of encouraging the continuation and maintenance of voluntary private pension plans."

Belt says the PBGC will pay most employees their full benefits-although they cannot accrue them in the future-but some will receive a significant reduction. The annual maximum the pension agency will pay is $45,614 for someone who retires at age 65. That means pilots, who must retire at 60 and would normally get a pension of about $100,000 annually, would be guaranteed only about $29,000 a year.

"It's easy to lose sight-but we don't-of the many people who had their retirement dreams shattered by a company reneging on its benefits," Belt says. He realizes that one option is for Congress to shut down the agency, but if it does, he says, "we're going to need to come up with $23 billion" to make good on broken promises.

Belt, 45, a Nebraska native, has a varied background. He was a financial services executive, general counsel and legislative director to Sen. John McCain, R-Ariz., and counsel to former commissioner of the Securities and Exchange Commission Charles Cox. He served as a senior vice president at the Center for Strategic and International Studies, a Washington think tank, and executive director of the National Commission on Retirement Policy. "I've been in and out of the federal arena for over 25 years. I've had pretty diverse roles, and I'm intimately familiar with the sausage-making on Capitol Hill," he says.

As for his own retirement, Belt says, he is in the Federal Employees Retirement System, has a 401(k) plan and the benefit of myriad pension plans over the years. But, he says, "I don't worry about retirement enough, which is far too true of too many Americans."

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Blackberry Jam

Alina Tugend — Mon, 01 Nov 2004 00:00:00 -0500

How wireless e-mail devices are taking over the lives of some federal executives.

Four years ago, the only image conjured by the word "blackberry" was a small fruit. Then, suddenly, it took on a whole new meaning as the name of the little gadget that allowed cutting-edge technophiles to stay in e-mail contact from virtually anywhere. Now BlackBerry addicts are so obsessive about the device that they've given it a new name-CrackBerry-for the person who can't imagine functioning without his or her pocket-size portal to the world.

And many federal agencies, which are not always perceived as being at the forefront of the technological revolution, are jumping on the BlackBerry bandwagon with gusto. "I personally couldn't live without one," says Kim Nelson, chief information officer for the Environmental Protection Agency. "I think it's the greatest technical innovation. A lot of people complain about new systems, but BlackBerrys are almost universally raved about."

For the uninitiated, BlackBerrys are a brand of palm-size wireless computers that can connect to the Internet, send and receive e-mail, download and store documents, and serve as an address book. Newer models incorporate a cell phone, too. The devices, manufactured by Canadian company Research in Motion (RIM), cost between $250 and $600, depending on the features. They operate through phone services such as AT&T, Cingular and Verizon.

While other firms also offer personal digital assistants that can be used to access e-mail and surf the Web, the BlackBerry is the first to gain a widespread-and fanatical-following. There are no figures available on the number of BlackBerrys in use throughout the federal government, but numerous agencies have, over the past several years, started buying them in bulk and handing them out to senior executives. RIM says that of its 1.3 million BlackBerry customers worldwide, 100,000 are local, state and federal government personnel. The company counts among its customers the Justice, Defense and Homeland Security departments and the U.S. Postal Service.

For many users, BlackBerrys have become a timesaver and a lifesaver, allowing them to answer e-mails and respond to office needs while on the road or in airports and hotel rooms. Some go so far as to say the devices have transformed their agencies' operations.

"I picked up this thing, understood how it worked, and realized that it would change the lives of executives at the EPA-and frankly that's how it turned out," says Rick Martin, deputy director of information analysis in the EPA's Office of Environmental Information. For instance, Martin says, now when an employee leaves the office for vacation or business travel, there is no longer much need to designate a colleague to take over. "It's reduced the need for extensive backup," he says.

The devices also increase managers' flexibility, users say. Not only can they respond to e-mails while on the go, but they also can update their schedules using the calendar function, eliminating the need to call back and forth to a secretary. Robert Otto, vice president and chief technology officer for the Postal Service, says managers are now allowed to approve travel vouchers and purchases on their BlackBerrys rather than by using laptop computers.

Others, however, complain that BlackBerrys have become leashes that bind them to work 24 hours a day-whether they like it or not-and that the devices can become so addictive that they interfere with family time. "I still believe the premise that someone in my position is entitled to some personal time," says one Defense Department employee, who asked that her name not be used. "I've had guys say they'd kill for one, but I don't like the fact that I am electronically tethered 24 hours a day, seven days a week."

Always On

Most people acknowledge that Black-Berrys have advantages and disadvantages, but for many, including Otto, the positives far outweigh the negatives. Several years ago, after he became a convert, Otto started giving BlackBerrys to his information technology staff, "because I believe in eating my own dog food." The devices were very popular, and now 4,000 have been distributed agencywide. Otto expects that number will rise to 6,000 by next year. "Twenty-five of my managers were recently in Romania and using their BlackBerrys to e-mail back and forth," he says enthusiastically.

BlackBerrys have proved useful during emergencies, because the data sent to and from the devices rely on servers and satellite networks different from the ones cell phones use. During the August 2003 blackout in the Northeast and the recent hurricanes in the South, BlackBerrys were the only way postal employees could communicate, Otto says. BlackBerrys also were the only communication tools some agencies had that worked during the Sept. 11 terrorist attacks.

But Otto acknowledges that the devices can take a toll on spouses and children. "I've had managers' wives come up to me and say they hate me," he says. "They say their husbands pay more attention to their BlackBerrys than to [them] at dinner." His response? "I say [to managers], 'I gave you the opportunity. If you don't want to use it after 5:30 p.m., turn it off.' "

Michael Miller, chief technology officer of the National Defense University's Information Resource Management College and a devoted BlackBerry user, agrees. "People have to develop the discipline to turn them off," he says. "Having the capability brings with it some self-monitoring. You need to take control of the technology."

Miller, who is a cognitive psychologist by training, says he has set his BlackBerry so it automatically shuts off at 10 p.m. and on weekends. But many people say switching off is not as easy as it sounds. Peer pressure and expectations from above often make it difficult for an individual to set limits. "There is a blurring of distinction between work time and rest time," says Donald Tepas, professor emeritus of industrial psychology at the University of Connecticut. "With BlackBerrys and cell phones, it is easy to involve the workplace tasks and duties in areas where they normally would not be involved."

Tepas says, "None of these things are all good or all bad, but they were introduced into the workplace without thinking about it." What is needed, he argues, is for employers to set some rules and regulations about when and how new technologies should be used.

BlackBerrys can be even more intrusive than cell phones, because it is more socially acceptable to send e-mail messages late at night or during meetings than to call someone. The spouse of a high-level political appointee in the Energy Department says that when her husband has his BlackBerry with him, "It often feels like another person is in the room. I don't feel like he gets away from work until he gets to a place where he can't get reception."

Instant Gratification

The BlackBerry's very accessibility and simplicity-unlike many gadgets, it is fairly easy to figure out how to use-also make people love it. The EPA's Martin says that several years ago he was looking for "a killer application that would shake off our reputation for pushing old and slow technology." In January 2001, he saw a BlackBerry demonstrated at a conference. He liked it and started a pilot program at EPA.

"Pretty soon certain senior managers began to take these things to executive meetings, and that's all it took," he says. "We got calls that one regional administrator had seen that another regional administrator had one" and soon the ball was rolling. Now Martin has distributed more than 2,000 BlackBerrys throughout the EPA.

Martin says that people who use BlackBerrys make better use of their time away from the office, and they get a heads-up on what's happening when they return. He acknowledges, however, that some aren't thrilled to be on call all the time. "To some extent, most of the people who say they don't want to be 'tethered' say it in a rueful way," he says. "There is an enhanced expectation of availability-it's a mixed bag."

Not only are people expected to be available, they are expected to be available immediately. Waiting even an hour or two for an answer can begin to seem annoying and even impolite to the BlackBerry user. Patrick Libbey, executive director of the National Association of County and City Health Officials and an avid BlackBerry fan, says, "We have unwittingly created a cultural expectation that everything will be read and responded to immediately. That's true with e-mail in general, and BlackBerrys accelerated that in that you can communicate in close to real time.

"I hear stories-and to me they're just that, stories-of people who can open their e-mails once in the morning and once in the evening," Libbey says. For him, that's almost unimaginable.

Control the Technology

The trick with BlackBerrys-as with any other communications tool-say experts, is learning how to prioritize your needs. "People feel pretty comfortable not answering the phone," says the National Defense University's Miller. "You need to control the technology rather than having the technology control you."

Even the Defense Department, which one might think would shy away from wireless technology for security reasons, is embracing BlackBerrys. "We did a pilot program in 2000 and 2001, and then with the change of administration, senior people came in and had experience in business with them, and they really liked them," says Linton Wells II, acting assistant secretary of Defense for networks and information integration and Defense CIO.

Defense worked with RIM to come up with appropriate standards for secure e-mail communication. And the department insisted that it be supplied with black devices, rather than the standard blue ones, to fit in with mandatory dress codes for uniformed service members.

Although BlackBerrys are not used in combat situations, they have become part of an overall movement aimed at making Defense more "networkcentric," Wells says. That means, in part, using modern technology to change the decision-making process to improve the speed, coordination and accuracy of military operations.

Wells uses his BlackBerry the same way most other executives use theirs: "I do a fair amount of traveling, and this way I don't come into the office to a tidal wave of information."

BlackBerrys have another, less publicized function. They provide a way to pass the time during dull meetings or less-than-scintillating conference presentations. "I remember the first time we figured out that we could send messages during meetings," says the EPA's Martin. "We were videoconferencing with our boss and comments were going back and forth. He was not using a BlackBerry then, and he lost his temper. He tried to ban BlackBerrys."

"The indicator of a good speaker is how many BlackBerrys are out," adds the EPA's Nelson. "When you see half-a-dozen BlackBerrys come out, it's time to end the meeting."

Of course, it can be very disconcerting for a speaker to look out at an audience and see a sea of heads bent over BlackBerrys. But Libbey sees it differently. "I can attend meetings and absorb information and read my BlackBerry at the same time," he says. "Talking on cell phones is rude, because it interferes with other people. Maybe we need to define what is rude."

Or maybe redefine what "free time" is. Martin offers a cautionary tale about bringing his trusted e-mail device on vacation. "I was on the fishing pier with my rod and BlackBerry," he says. Suddenly, Martin hooked a big fish and waded in to try to land it. He got the fish-but the BlackBerry got away.

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Beyond Branding

Alina Tugend — Thu, 15 Jul 2004 00:00:00 -0400

More controversy over national IDs-this time for cows, goats and pigs.

They've all weighed in: the National Pork Board, the American Association of Bovine Practitioners, the North American Elk Breeders Association, the American Dairy Goat Association and others.

Representatives from about 70 organizations with links to raising, breeding, caring for or slaughtering the nation's livestock have worked together during the past two years to develop industry guidelines for a national animal identification system.

The Agriculture Department, which formed the group's steering committee, says such a system is needed in case of an animal health crisis. The goal is to be able to track down any livestock-cow or pig or goat-within 48 hours of an outbreak of disease.

It hasn't been easy. The United States has no nationwide system but rather a state-by-state network. Most experts agree on the need, but opinions differ on how it should be carried out. Questions include:

Who should bear the brunt of funding a program?
Should it be voluntary or mandatory?
Exactly how much of the data collected on livestock should be made public?
Should a specific kind of electronic tagging be required?

In May 2002, a task force was created and by January 2003, it had evolved into the National Animal Identification Development Team. In December, it took on new importance when the USDA announced the first case of mad cow disease in the United States.

The disease, technically called bovine spongiform encephalopathy, is fatal in cattle and can in rare cases be transferred to humans. In the 1990s, the disease swept through the United Kingdom, creating havoc for cattle farmers as sales fell at home and abroad.

"The support from many of the stakeholders got much greater after December," says Neil Hammerschmidt, USDA coordinator for National Animal Identification Systems. Since then, most countries-including Japan and Korea, two of the largest importers of U.S. beef-have closed their doors. Only 10 percent of beef produced in the United States is exported. Those exports, however, account for 20 percent of the beef industry's revenues, because they tend to be the highest quality products, says Scott Stuart, president of the National Livestock Producers Association.

On April 27, Agriculture Secretary Ann Veneman announced that the agency would provide $18.8 million to implement the National Animal Identification System in fiscal 2004. The administration has proposed an additional $33 million for fiscal 2005. In August, USDA is expected to issue voluntary standards-incorporating many of the development team's recommendations-and evaluate existing systems, according to Hammerschmidt.

Only about 10 percent of all cattle today are electronically tagged. The rest are identified through plastic tags, branding, leg bands and other methods. An electronic tag works like a toll pass at a gate. Plastic tags and branding are simply visual markers.

But setting up a complete database requires money-at least $500 million, says Stuart. And that's just the government's share. Ranchers and producers would be expected to pay for tagging their animals, at an estimated cost of $3 to $5 a head, although some ranchers say it will be higher. Given that there are about 100 million cattle in the country, industry's tab could reach $500 million.

Many expect the government to enforce a national identification system, Hammerschmidt says, but the Agriculture Department thinks market access-if you don't participate, then you can't sell your beef-might provide enough impetus for producers. "To be successful, this [system] has to have an established level of participation," he says, adding that the current cost of a manda-tory system is "well beyond what we have budgeted. . . . There are other avenues besides government mandate."

Ironically, the producers who were expected to fight a mandatory system tooth and nail now say they want one. "Three to five years ago, if you mentioned mandatory ID, farmers and ranchers would have had such a fit," says Stuart. "When they realized there was such an outcry, the USDA backed off. Now it's turned 180 degrees. Farmers and ranchers say we need it, and the USDA says it should be voluntary."

Stuart says he anticipates that his organization will soon change its policy from supporting a voluntary system to favoring a mandatory program. "The reason is, in a word, international trade," he says. "If we can't trade, we're behind the eight ball."

Jay Truitt, executive director of legislative affairs for the National Cattlemen's Beef Association, disagrees. He expects that at some point a mandatory system will be needed, but for now a voluntary program will work fine.

For Truitt, it makes no sense for the government to spend the time and money to reinvent the wheel. "The system needs to be created in the private sector," he says. "We need to take the systems that work today and use the network as a backbone across the country, instead of trying to create something new that doesn't take advantage of something that's already there.

"We need some basic protocol everyone can go by, but it's counterintuitive to say government can do it cheaper and better," Truitt says. Another reason many producers want voluntary identification is their concern about confidentiality. Truitt says his organization and others fear animal activist groups or competitors could misuse information collected in the databases, including how many cows they have and where they have been. The data even could be used by a terrorist group, producers say, to pinpoint when animals are moving through a collection point and to introduce a disease.

Many producers want most of the information to be available exclusively to animal health inspectors-preferably at the state level only-and exempt from Freedom of Information Act disclosure rules.

As long as the program is voluntary, Hammerschmidt says, it can be confidential and Homeland Security can declare it "protected critical infrastructure information." If it becomes mandatory, then Congress would have to pass legislation exempting the data from FOIA.

Also of concern is how specific the standards will be. Numerous technology businesses are eager to get a bite of what promises to be a very big pie, and are lobbying heavily. For example, the National Animal Identification Development Team initially suggested using radio frequency identification tags, which can store a large amount of information. But companies that make retinal scanning equipment to identify animals protested. Now the Agriculture Department team uses the term "technology neutral" in its planning, saying the market will sort out which equipment should be used.

But some ranchers fear that failing to specify identification technology will result in another uncoordinated patchwork system. If the producers and government work hand-in-hand, Hammerschmidt says, "we can create a seamless system," but no one believes that will be simple. "If we're going to take time and energy and the cost borne by the private and public sector, we want to make sure it works," says Truitt. "Just putting tags all over the world doesn't do anything."

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EPA Air Wars

Alina Tugend — Sat, 15 May 2004 00:00:00 -0400

Longtime environmental enforcement officials choose sides in a battle over anti-pollution rules.

"One thing a bureaucrat learns," says Bruce Buckheit, "is patience." But in December, his patience ran out. Buckheit, 56, reluctantly took a buyout and left as head of EPA's air enforcement division.

"I had to defend something I didn't believe in," says Buckheit, who had spent the last eight years of his 30-year government career at the EPA. § His former assistant, Richard Biondi, a 32-year EPA employee, also retired in December. The two left unwillingly. At 57, Biondi says, "I felt I was still on the young side. There were things I wanted to accomplish. I was on the fence. If we could have continued to do some of the work we did, we would have stayed, but we couldn't make the contribution we thought we could make."

Buckheit and Biondi join a small band of EPA enforcement officials who have left the agency in the past two years frustrated with what they see as the Bush administration's efforts to soften enforcement of anti-pollution rules. Eric Schaeffer, former head of the Office of Regulatory Enforcement, resigned in February 2002. Schaeffer's former boss, Sylvia Lowrance, who served as acting assistant administrator for enforcement and compliance assurance, resigned six months later.

Schaeffer made public his resignation letter to then-EPA Administrator Christine Todd Whitman. "We seem about to snatch defeat from the jaws of victory," Shaeffer wrote. "[We are] fighting a White House that seems determined to weaken the rules we are trying to enforce."

This January, J.P. Suarez, 40, who had assumed the position Lowrance left, resigned to take a job as general counsel for a division of Wal-Mart stores. Former colleagues say Suarez was deeply frustrated by the direction of EPA, but publicly Suarez has said his decision to leave had nothing to do with administration policies. He declined to be interviewed for this article.

"I think this many senior people leaving is telling," says Lowrance, who was with EPA for 24 years.

Taking On Utilities

Buckheit started his government career in 1974 as a counsel in the National Highway Traffic Safety Administration after receiving a law degree from William and Mary College in Virginia where he also earned a master's in physics. From 1984 to 1996, he served in the Justice Department's environmental enforcement section primarily representing EPA, but also other agencies. He moved to EPA in 1996 to head the air enforcement unit.

Buckheit wanted to create consistent anti-pollution enforcement and to make his unit more proactive. "As an EPA lawyer at Justice, I was puzzled as to why things came through the loop," Buckheit says. "There seemed to be no rhyme or reason" about which cases were developed and which weren't. "There was no systemic targeting of violators," he says. "There might be a case against a grain elevator, then a bakery, then a cabinetmaker. There was no industrywide look."

He decided to restructure EPA's air enforcement system, to "look at specific industries to see if there is a problem, rather than waiting for a coconut to fall on our heads." A natural focus was old coal-fired power plants, which pump about 5 million tons of sulfur dioxide into the air annually-about a quarter of emissions in the nation. They also put out about 2 million tons of nitrogen oxide, according to EPA. "We're talking millions of tons of pollutants and tens of hundreds of premature deaths," Buckheit says.

In the 1960s and 1970s, coal-fired plants were thought to be on their way to extinction, edged out by cleaner nuclear energy. Assuming coal-fired plants weren't going to be around much longer, lawmakers excluded them from the anti-pollution regulations of the 1970 Clean Air Act, unless utilities made major repairs or modifications to the plants.

After the 1979 nuclear accident at the Three Mile Island nuclear reactor in Harrisburg, Pa., the worst in U.S. history, the gloss was off nuclear energy. Coal-fired plants were patched together and their lives extended into the 1980s and 1990s. As they continued in service, entire components were replaced. The question arose whether these changes should be considered routine maintenance or major modifications subject to Clean Air Act requirements.

In 1977, lawmakers had updated the Clean Air Act by adding a new source review rule, which allowed companies to operate older plants exempt from clean-air requirements until they made major modifications or replaced equipment. At that time, the new source rule would come into play requiring companies to install up-to-date anti-pollution equipment.

In 1996, Buckheit's unit began collecting industry information and subpoenaing company records and discovered that many utilities had failed to get new source permits when they undertook capital improvements. Between November 1999 and December 2000, the Justice Department, on EPA's behalf, sued nine power companies for expanding 51 plants without obtaining the required new source permits and installing state-of-the-art pollution controls required under the Clean Air Act. Potential penalties ran into the tens of millions of dollars in addition to the cost of new pollution-prevention equipment.

Two companies settled their cases, agreeing to greatly reduce their emissions over the next decade. Buckheit's work was lauded within EPA and even by Republicans who had taken over at the agency in 2001. "I have a lot of respect for Bruce," says Whitman, who headed EPA from January 2001 until she left in May 2003. "The information he brought to the table was honest and well thought out."

Rule Reversal

But even as Buckheit was beginning to have success in enforcing new source review requirements, the rule came under reconsideration. Shortly after George W. Bush took office, he established a task force, headed by Vice President Dick Cheney, to review U.S. energy policy. In 2001, the task force called on the EPA and the Energy Department to review the program and asked the Justice Department to decide whether the new source lawsuits were legitimate. In 2002, the Justice Department determined the lawsuits were valid. But the White House continued to seek changes.

Last October, the EPA published rule revisions that would have permitted utilities to pursue an unlimited number of projects, each of which can cost up to 20 percent of the price of a new plant-which can run as much as $1 billion-without triggering the new source requirements. Thus, violations under the old rule would not be considered violations under the revision.

When Buckheit was directed to follow the new rule last November, he felt frustrated and stymied. "It was my baby," Buckheit says of the campaign to reduce power plant emissions. "The EPA is a big ship, and I had worked for years to take on our biggest, most important polluters. We had put in a lot of creativity and energy, and then I had to explain to people why we shouldn't do it. I had to explain why the new rules were a good thing, or just stand mute." Buckheit decided to take a buyout under a program then in effect at EPA.

Biondi, former associate director of the air enforcement division, also took the buyout. He had started in 1971 as a civilian employee in the Navy after graduating from Newark College of Engineering in New Jersey with a degree in chemical engineering. His parents had a history of government employment: His father was a letter carrier and his mother worked for what is now the Veterans Affairs Department.

In mid-1971, Biondi went to work with the EPA in North Carolina reviewing state implementation of the Clean Air Act. Less than a year later, he moved to Washington and stayed with EPA for 31 years. "People were very, very mission-oriented. They came to the EPA because they wanted to do something about public health, and they were eager to do their job," Biondi says.

But increasingly under the Bush administration, Biondi felt he wasn't being allowed to do his job and his efforts to pursue violators were being undermined by White House policies, he says.

"We weren't given the latitude we had been, and the Bush administration was interfering more and more with the ability to get the job done. There were indications things were going to be reviewed a lot more carefully, and we needed a lot more justification to bring lawsuits."

In December 2003, a federal appeals court halted implementation of the new source review rule revision until it could hear a lawsuit brought in early 2003 by the attorneys general of nine states. They charged that the rule changes were so sweeping they could not be made without congressional approval. It's likely the court won't rule on the case for a year. The legal battle could continue even longer.

Policy Swings

Whitman says the issues that prompted Buckheit, Biondi, Schaeffer, and to some extent Lowrance, to leave are not as clear-cut as they appear. "New source review is cumbersome and haphazard," she says, "There's a pretty clear recognition on both sides of the aisle that it needed to change. But the devil is in the details."

Whitman says the White House wanted to move the EPA away from levying fines, fees and penalties on industry to a more flexible market-based system for reining in polluters called "cap and trade." Under such a system, the federal government sets a pollution standard for the entire country and those companies that reduce their emissions below the standard can sell their extra pollution allowance to firms that haven't met the standard.

Even as controversy over the new source rule has grown, the Bush administration has enacted other regulations to reduce air pollution. One calls for cleaner diesel engines in trucks and buses; another requires that power sources such as outboard motors and construction machine engines be cleaner; the third directs refineries to reduce the pollution in diesel fuel. In January, the administration proposed an interstate air quality rule to reduce emissions of sulfur dioxide, nitrogen oxides, and mercury and suggested states enforce the rule by regulating power plants using cap and trade programs.

"The Bush administration was not doing away with enforcement, but keeping it in place and also trying to find a better way to spur the creativity of the industry," Whitman says of the new source rule changes. She acknowledges that some EPA career staffers "who were doing it one way for years and years" might have found it difficult to adjust to the policy change.

Biondi and Buckheit disagree that the changes simply reflected a shift in policy. "This is hugely different," Buckheit says. "I started with Nixon and Ford. [Change] was cyclical, but it was 40 to 60, 60 to 40 in the swings from left to right of center. I'm not politically active and I was always trying to be a good bureaucrat. But now it's swinging 95 to 5 off the middle."

Schaeffer, who now works for the nonprofit Environmental Integrity Project, which he started, says that with a Republican House and Senate, there is no one on the Hill to whom EPA employees can appeal when they disagree with administration policies. In the past, "the EPA had the ability to say no to the White House and hold them at an arm's length," says Schaeffer. But after 2000, "those calling the shots on the Hill seemed very hostile to the EPA. We couldn't look to the Hill for any kind of balance."

Schaeffer doesn't want his departure to be viewed as denigrating those who choose to stay. "It's a very personal decision to leave," Schaeffer says. "People there can still do some good things."

Schaeffer wrote his resignation letter the night before he left. "I wanted them to see someone was going to say something. All these things were sitting on my chest, and I had to get it out there. . . . At 6 p.m., I sent it to Whitman's office and hit the send button to my staff." He says he never got a response from Whitman, but everyone else seemed to want to discuss the letter. "The next day the phones started ringing and all hell broke loose." Schaeffer appeared on NBC's "The Today Show," ABC's "This Week," and CNN. "It wasn't altogether enjoyable," he says. "I wasn't ready."

But Schaeffer says he doesn't regret writing and publicizing the letter, even though he realizes his chances of working in government again, at least under a Republican administration, are slim to none. "Sometimes you just need to go with your gut," he says.

Hard to Leave

Although critics say the Bush administration's policies are pushing out many of EPA's best people, Whitman attributes staff changes at the top of the agency to normal ebb and flow. "I don't think [the turnover in senior management] is as telling as people want it to be," she says. She says an unusually high number of employees have been with the agency since its inception in 1970, and are nearing retirement age. Also, she says, some of the departures are part of the natural exodus at the end of a presidential term. Buckheit disagrees: "If you look back at the leadership chain who advocated more robust enforcement-all are gone."

Both Buckheit and Biondi want to continue working on environmental issues. Buckheit is consulting on environmental policy for states and other clients. Biondi is considering a post as an environmental consultant. But that doesn't mean it was easy to walk away from federal environmental jobs that were all-consuming for decades.

"The EPA is a pretty young agency and the senior executives [now] at or near retirement saw the first Clean Air Act, the first Superfund. They nurtured [them]," says Lowrance. "It's very, very hard, for senior executives in particular, to reach the decision to leave a place where they feel they are saving lives and making a real difference to people. It's very important work, and people are passionate about it."

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Making amends

Alina Tugend — Mon, 01 Mar 2004 00:00:00 -0500

As the window closes on victims' compensation, lawyers for the Sept. 11 fund sift through thousands of last-minute claims.

s the Dec. 22, 2003, deadline for filing claims with the Sept. 11 Victim Compensation Fund approached, Special Master Kenneth Feinberg worried and watched.

Those final days would determine the success or failure of the unique fund that Congress set up to compensate the people injured or families of those killed in the terrorist attacks in New York, Washington and Pennsylvania.

Claims trickled in slowly at first-only 2,191 were filed by August 2003-and Feinberg, a Washington lawyer who has lived and breathed the fund for more than two years, had sent out a mere 720 award letters.

But as the deadline neared, claims flooded in. As of Feb. 10, 2004, the final count was 7,312. Families of those who were killed filed 2,941 claims, 98 percent of those eligible. No one knows how many were injured in the World Trade Center, the Pentagon and the Shanksville, Pa., crash, but 4,371 of those victims filed claims.

Although the deadline for submitting claims has passed, Feinberg's office will hold hearings and process the applications for several more months. As of February, his office had resolved 3,280 cases for those seeking compensation, which required about 500 hearings. Deborah Greenspan, Feinberg's law partner, expects about 500 more hearings before all claims are settled.

"We're pleased," Greenspan says. "It was good people made it within the deadline. We were worried people would miss it and trot in a week later wanting to file a claim."

Of the 2,049 award letters issued, the highest amount, $7.9 million, went to a burn victim, Greenspan says. The largest award going to the family of a person killed in the attacks was just under $7 million. The average amount issued was $1.8 million, compared with Feinberg's initial estimate of $1.4 million.

Feinberg had predicted he would award $3 billion to $4 billion, but the total is likely to range around $5 billion, Greenspan says.

When Congress established the victims' fund with the passage of the Air Transportation Safety and Stabilization Bill on Sept. 22, 2001, it didn't cap the amounts Feinberg could distribute. Lawmakers hoped that victims would choose to receive an amount guaranteed by the fund, rather than sue-perhaps bankrupting-the airlines.

The amount a family or victim can receive depends on age, income and number of dependents, among other considerations. Those who accept the money are prohibited from suing anyone, except the terrorists themselves.

But as the months-and then the anniversary-passed, Feinberg and others grew concerned that people were slow to file their claims. And some families challenged Feinberg's administration of the fund, bringing the matter before Judge Alvin Hellerstein of the U.S. District Court for the Southern District of New York, who is overseeing all the Sept. 11 cases. The judge dismissed the lawsuits in May 2003, rejecting plaintiffs' claims that Feinberg had abused his discretion.

Many victims and families did turn to the compensation fund, figuring that even if the amount they received was less than what they could win in a lawsuit against the airlines, it would be awarded much quicker.

But others-in particular, some families of victims who earned more than $250,000 annually-chose to sue. Some lawyers predicted that the family of someone who had several dependents and a large income could receive as much as $30 million in court.

Others chose to sue because they wanted to see the airlines held accountable, says Marc Moller, a lawyer with the Manhattan-based law firm of Kreindler & Kreindler. Moller is the plaintiff liaison for the victims and families who are suing.

Greenspan is proud that so many people chose to use the victims' fund, which is slated to fold by June 15. Those in Feinberg's office, who have devoted much of their time to the fund during the past two years, will focus on their law practice. Working closely with victims of the attacks was "challenging and sorrowful," Greenspan says.

Only about 2 percent of families who lost a relative opted out of the fund, making it "an unprecedented and historic success," says Leo Boyle, past president of the Association of Trial Lawyers of America.

Case by Case

7,312 Claims submitted
3,280 Claims resolved
2,049 Award letters issued
$1.8 million Average award for families of victims killed

Note: Figures as of Feb. 10, 2004
Source: Sept. 11 Victim Compensation Fund

Alina Tugend is a New York-based writer who has written for the American Journalism Review, the Los Angeles Times and The New York Times.

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Lives in the Balance

Alina Tugend — Mon, 01 Sep 2003 00:00:00 -0400

Kenneth Feinberg has negotiated settlements in many large injury cases, including Agent Orange and asbestos, but none of them prepared him for the intensity of running the Sept. 11 Victim Compensation Fund.

enneth Feinberg, a slight, balding man, constantly fidgets with his cell phone and pens and shifts back and forth in his chair. He is not a man of Solomonic bearing. With his thick Boston accent and lawyerly delivery, Feinberg, 57, doesn't have the aura of a man weighing the value of human lives. But for the past two years, Feinberg has been listening to the often heart-wrenching claims of victims of the Sept. 11 terrorist attacks in order to determine how much money they should receive for their injuries or for the loss of loved ones. Feinberg was appointed special master of the federal Victim Compensation Fund in November 2001.

Physically injured victims who were at the World Trade Center or the Pentagon are eligible for compensation from the fund. In addition, the "personal representatives" of those who died on the airplanes used in the attacks, or those who were killed at the World Trade Center or the Pentagon can receive compensation. The fund does not cover those who were emotionally traumatized but not physically injured, nor does it cover those who lost businesses or jobs as a result of the attacks.

More than 3,000 people are estimated to be eligible to apply for compensation from the fund. By late July, 2,116 claims had been submitted. Of those, 991 were for injuries and 1,105 were for deaths. Of the 180 victims of the Pentagon attack eligible to apply for funds, 80 had done so. Of the representatives of 39 victims of the crash in Shanksville, Pa., eligible for compensation, six had filed claims.

Earlier in the summer, Feinberg said the average compensation for a death is $1.4 million after offsets. He predicts that amount may rise to nearly $1.6 million by Dec. 22, the final date to apply to the fund. He believes many of those waiting until the last moment to apply have high incomes and are therefore eligible for the most compensation. Currently, the awards for those who lost loved ones range from about $250,000 to about $6.1 million, while the compensation for injuries ranges from $500 for minor injuries such as cuts and mild abrasions to more than $6.8 for permanent disability. The largest overall award so far-$6.8 million-has gone to a Pentagon employee, Juan Cruz-Santiago, who was horribly burned. A supervising accountant for the Army, Cruz-Santiago, 52, was one of the most badly injured victims-he never will work again and will require medical treatment for decades.

The Victim Compensation Fund was rushed into being after Sept. 11 as part of a measure designed to protect U.S. airlines from the devastating effects of lost business and possible lawsuits. In the frantic days after the attacks, Congress realized something had to be done to ensure that the airlines did not go bankrupt. The airlines already were struggling before Sept. 11, and Congress and airline officials feared the attacks would be the final blow as planes flew virtually empty and the threat of thousands of lawsuits loomed.

Thus was born the Air Transportation Safety and System Stabilization Act, passed by Congress on Sept. 22, 2001, and signed into law by President Bush on Sept. 24. "In less than two days from the inception of the idea, the United States had enacted the largest single corporate bailout bill in history and the largest public entitlement program-the victims fund-in decades," writes journalist Steven Brill in his book, After: How America Confronted the September 12 Era (Simon and Schuster, 2003).

It is not until Part 4 of the seven-part law that the "September 11 Victim Compensation Fund of 2001" is mentioned and defined. It requires victims who choose to go through the fund to give up their right to sue the airlines or any other defendants-except the terrorists. "It was a novel approach to compensating victims in the wake of a terrorist attack," says Paul Harris, formerly deputy associate attorney general in the current administration. "It would compensate them without the additional ordeal of litigation." Harris, who was deeply involved in developing the details of the fund, has since moved into private practice. The fund, which was to be overseen by the Justice Department with input from the Office of Management and Budget and the White House, was not capped, and Congress did not appropriate any money for it.

"It's all paid out of petty cash," Feinberg notes. "It isn't as if I have a certain amount of money and I have to distribute it. [It's] whatever it costs." OMB officials expected that Feinberg might have to spend up to $6 billion. The actual number probably will be closer to $3 billion or $4 billion, Feinberg says, because fewer people died or were injured than initially feared.

The law stipulated that the attorney general would appoint a special master to oversee and administer the fund and "within a week or two, they went shopping for one," says Joshua Gotbaum, former executive associate director and controller at OMB under President Clinton. Gotbaum oversaw the September 11th Fund, an unrelated private charity set up after the attacks. "At first, they thought they needed a Republican expert. Then, they discovered they needed a mediator, and Ken is a mediator and a very good one," Gotbaum says.

Feinberg, a Democrat, had the backing of Sen. Edward Kennedy, D-Mass.-he used to be Kennedy's chief of staff-and a few other powerful members of Congress. Feinberg's wealth of experience soon overcame concerns about his party affiliation. He has negotiated settlements on such complex and emotional class actions as Agent Orange (an herbicide used during the Vietnam War that has been implicated in soldiers' illnesses) and the Dalkon Shield (an intrauterine birth control device associated with pelvic disease and septic abortion) as well as cases involving health problems related to breast implants and asbestos. What's more, Feinberg offered to run the victims fund pro bono. Attorney General John Ashcroft appointed him special master on Nov. 26, 2001.

CONQUERING CONTROVERSIES

With Feinberg on board, the next step was "to put flesh on the statute," says Deborah Greenspan, Feinberg's law partner. For such an exceptional piece of legislation, the details were remarkably sketchy. And Feinberg had only until Dec. 21, 2001, to submit the first draft of the fund's regulations for public comment. "In three weeks [after Feinberg was appointed], it was important to meet with as many different groups as possible and find out what would divide people, what kind of information people needed," Greenspan recalls. "We had to deal with massive computations, and we didn't have access to all the information you do when doing damages in individual tort cases. It was important to come up with a consistent approach," Greenspan adds, so that the amount a victim receives "isn't based on whether he or she brings a good or bad economist to the table."

Every point, every detail, had to be decided, from basic terminology to the overall plan for determining the size of awards. Even before Feinberg was appointed, a major and still highly contentious issue arose: the question of offsets. According to the law, "collateral sources" of compensation related to the attacks must be deducted from any award from the federal fund. Life insurance, pension funds and death benefit programs are specifically mentioned in the law, so Feinberg had no discretion about deducting them. Many victims were outraged such benefits would count against their final award.

But what about the millions of dollars available from charities? Could charity money reduce the size of payments from the fund? Congress' intent was not explicitly stated in the statute. After much back and forth, Feinberg says, the decision was that charity money would not be included in calculating the size of an award from the fund. "There were two reasons we didn't offset charity," he says. "One, we felt it was not the donors' intention to have charitable money to merely subsidize the federal tax payout, that people wouldn't give the money if they thought it was going to be offset against the federal program. And secondly, it was a Machiavellian matter: the threat from the charities that if I did offset their money, they would hold back the charity and not distribute the money until after I distributed my money so it couldn't be offset. When I heard that, I blinked," Feinberg says.

The offset question was one of many difficult issues Feinberg has dealt with. "There's been a debate on every single issue," Harris says. The statute required that claimants suffer physical injury," Harris says. "What is the scope? Is it if someone inhaled dust from the collapse of the towers? Is a hospital stay required? Did they have to be admitted to an emergency room? What if someone was witnessing the collapse and had a heart attack?" The statute called for an injury in "the immediate aftermath." Is this 24 hours? 96 hours? And the recovery workers? Where do they stand?"

The question of payments for pain and suffering arose. How much should they be? Should they be graduated? How do you determine who suffered more: someone who jumped from a tower, was burned to death in the Pentagon or crashed in a plane?

"Ultimately I looked to the federal legislative precedent," Feinberg says, referring to the Public Safety Officers Benefit Program. "The policemen and firemen's death benefit bill is $250,000, the military insurance program, if you're killed in Afghanistan [for example], is $250,000." So every victim's family received a base amount of $250,000, with another $100,000 for a spouse and each additional dependent.

What about same-sex partners? Could they receive benefits for the death of a partner? In what gay rights groups considered a landmark decision, Feinberg decided that the answer was yes when, in January 2003, he awarded the lesbian partner of an Army employee who was killed in the Pentagon attack $577,000. His rationale? He would follow state law regarding same-sex partners. For example, Virginia, unlike New York, does not allow state compensation to be granted to domestic partners. However, state laws would only apply in the absence of a valid will. In this case, the partner was named as the beneficiary of the will and therefore was entitled to compensation from the fund.

How about illegal immigrants who wanted to apply for funds but were afraid they might be deported? The Immigration and Naturalization Service assured Feinberg that it would not use any information submitted to the fund to initiate deportation procedures.

All these decisions were controversial, but most difficult of all was coming up with a formula to determine how much each victim could get. With the help of OMB, the Justice Department and the White House created a chart that factored in such details as a victim's age, salary and number of dependents, and then stipulated an amount based on those factors, barring special circumstances. The box's formula only goes up to a top salary of $231,000, because that was the 98th percentile of earnings according to 2000 figures from the Internal Revenue Service.

For example, if a married 25-year-old who was killed in the attacks left behind a spouse and two dependent children, that surviving family would receive $4.5 million-the highest amount shown on the chart for a person killed in the attacks.

The final rules published in the Federal Register on March 13, 2002, spell out the reasoning: Feinberg decided to calculate awards only up to the 98th percentile because "providing compensation above that level would rarely be necessary to ensure that the financial needs of a claimant are met." In addition, Feinberg notes, determining an award beyond the 98th percentile using the standard award calculation "could very well produce inappropriate results." However, Feinberg stresses that the $231,000 salary is not a cap-although some lawyers contend it essentially is-and notes that anyone who believes they deserve more can provide detailed records to demonstrate extraordinary circumstances.

The chart, which was published in newspapers across the country, caused a furor by assigning vastly different dollar values to the lives of people killed in the attacks. In finalizing the regulations, fund officials weathered the public outcry as well as a range of lengthy and intense discussions with a vast array of groups. More than 8,000 comments came in. What was remarkable, according to Feinberg, was that the many heated conversations remained respectful. "There was a lot of arguing, a lot of discussion, [which] was intellectually and emotionally the right thing to do, [but it was] never personal, never political. [It was] just 'how can we get this done?'"

Harris, the Justice official most deeply involved at the time, agrees. "A thick layer of emotion was overlaid on all discussions, whether internal or with advocates, but I would never describe it as acrimonious," he says. "I met with hundreds of victims from the Pentagon. At one of those meetings in a congressman's office, four or five women who lost their husbands came with two or three kids. At one point, one woman took off a wedding band and gave it to me. She said 'this they gave me with his remains.' It was charred and scratched. She said, 'Just hold it and feel what we lost.'"

The draft regulations came out in the Federal Register less than three months after the law was passed and three weeks after Feinberg was appointed to his post. The next hurdle was to create an application for funds that would elicit enough information to enable Feinberg and his team to determine the appropriate amount without making the process so burdensome that applicants simply would give up. The application also had to be accessible to people of widely varying abilities and education.

The fund came up with a basic form, but most families wanted to attach additional information, so some applications ran thousands of pages. PwC Consulting, then part of PricewaterhouseCoopers but later acquired by IBM, was hired to review the applications to ensure they were readable and complete. Then PwC passed them on to Feinberg's staff. "Sometimes we'd get 6,000 pages from one client," says Camille Biros, office administrator for Feinberg's law firm. "Each claim is an individual story and all are very, very involved. Many [applicants] are not from traditional families, and there's always extenuating circumstances."

For example, she notes, some victims might have been supporting a family not just in the United States, but in another country as well. The families of the victims, "come in here and tell Ken a story of how [the victim] sent money back to Mexico, and he's got to listen and decide," Biros says. "Every single case is reviewed and reviewed."

Victims and victims' families also can choose to go before a hearing officer to explain their cases. Greenspan estimates that about 100 people have requested hearings. In many instances, victims' families have brought lawyers and economists to these hearings to explain why they should get more than the formula allowed. Each person who applies to the fund also is logged onto the fund's Web site, so anyone with a competing claim can view it. For example, a parent or a former spouse might decide he or she should receive the compensation rather than a live-in partner.

'VERY RAW'

So far, just 65 plaintiffs have filed lawsuits related to Sept. 11 against the airlines and other defendants. Most people attribute the limited number of lawsuits to the fund's success, and they ascribe that success to Feinberg. "He has been the glue to the entire Victim Compensation Fund," Harris says. "He has the experience and the practical know-how. His choice was critical to the entire process." Adds Brill: "If they had gotten some graybeard to run the fund, I think it would have been mired in disaster-this needed a hands-on lawyer."

As the hands-on lawyer, however, Feinberg has been the target of victims' anger and grief. Feinberg attended hundreds of meetings with victims across the country and met numerous families individually. Although he has worked on many cases where people died or were severely injured, this one was different. "I underestimated the degree to which families in grief would respond the way they did," he says. "I've dealt with it for 20 years, but this is the first time that a compensation scheme was established so soon after the triggering event. Usually these cases percolate for years in the litigation system and work their way up to the point where the families have sort of come to peace with the event, [have] moved on. It's like the closing of the last chapter. This was Chapter One. It was very raw, very raw."

Sept. 11 widow Irene Golinski is furious at Feinberg and disappointed in the fund. Her husband, Ronald, 60, was a retired Army colonel who had returned to work at the Pentagon in personnel management with the Army. His wife was on the phone with him when the plane slammed into the Pentagon, killing him. His remains never were found.

Golinski says that when she takes into account the offsets from her husband's life insurance and pension, her payout from the fund will be much less than the $1.4 million average Feinberg cites. "The fund is a slap in the face," she says. "It's a bigger slap in the face than what happened." Golinski, 52, has attended numerous meetings where Feinberg presided and has come away unimpressed. At one meeting, she says, Feinberg gave out his personal phone number and said, "Call any time." "Just try to get a hold of him," she says. "I tried three different times. He's not available."

Golinski has not filed suit, but is working with a lawyer, Keith Franz of the Baltimore law firm of Azrael, Gann & Franz. Franz represents seven other Pentagon victims, and he is going down a dual path-helping his clients get their compensation cases together and preparing to sue. He is awaiting a ruling by Judge Alvin Hellerstein of the U.S. District Court for the Southern District of New York, who oversees all Sept. 11-related litigation.

Hellerstein will rule on a motion submitted by the airlines on whether the victims who were killed on the ground can have standing in the case-in effect, whether the airlines can be held responsible for such deaths. Arguments were held in May, and Hellerstein is expected to rule anytime.

"Feinberg's staff gave us good ballpark figures of what they will get," Franz says, and based on those estimates, he says, he believes his clients will get far more by going to court. "We have clients who would likely get $10 million," he says. But if Hellerstein agrees with the airlines, then Golinksi and Franz's other clients will have to go with the compensation fund.

Golinski, who has three daughters, two of whom are in college, declined to state an exact amount she would receive from the fund, but said it would be "far less" than $500,000, and she disputes Feinberg's assertion that the average payout-after offsets-will be about $1.4 million. "I feel like at the beginning I didn't respond to any of this-I was in shock or something," she says. "Now as time goes on, and I see the injustice, it really, really upsets me. I think there should be a flat amount for each person."

Others have been equally dissatisfied with the fund. Marc Moller, a lawyer with the Manhattan-based law firm of Kreindler & Kreindler, is the plaintiff liaison for the 65 plaintiffs suing the airlines and other defendants. He says that the real problem is that the fund doesn't address the needs of those in the top 2 percent of income. "The high earners would not recover their loss, and while the special master denies it, he will not go above $6 million," Moller says. "If they sued, some cases are worth $10, $15, $20 million. In the currency of the courtroom, you could go about $30 million if you have a high earner with children. Notwithstanding denials, the fund will not recognize awards that high."

Some victims' families were so unhappy with Feinberg's decisions that they brought the matter before Hellerstein earlier this year, claiming that Feinberg abused his discretion. In May, Hellerstein dismissed the lawsuits, saying the fund's regulations were lawful and valid.

Feinberg listens to the critiques, absorbs them and, when applicable, incorporates them into the fund, he says. Even though he is used to being in the middle of very tough cases, he says, this job has caused him many sleepless nights. "I don't doubt if I'm doing it the right way," he says, "but it's trying to come to grips with the depth of emotional tragedy."

FACTORING FAIRNESS

All those involved realize that no one program could make everyone happy, especially with the huge disparities in wealth among the victims. "This is the fairest program he could think of," says Philip Perry, who was acting associate attorney general at Justice when the fund regulations were being developed and now is the general counsel at OMB. "Ken was intent that everyone get a fair recovery and recognized at the high [income] end there were a much more complicated set of issues than at the low end. There was recognition that people who had extraordinary talents and income could not be treated in a cookie-cutter fashion."

The problem, many say, is that in its haste to get the fund written into law, Congress didn't decide what role the fund was meant to play. "Is it a tort-based system or is it a social-welfare safety-net system? One can read the statute any way you want." Feinberg says. "[It includes] tort-based concepts, but then Congress says, 'You'll offset all collateral sources of income.' That's social welfare! 'We'll make sure you're not destitute, but if you've got other sources of income like life insurance, that should serve you fine.' I would have urged Congress to pay everybody the same amount and let them sue. But once Congress decided that lawsuits against the airlines were inappropriate, [were] contrary to the public interest, would be damaging to the transportation infrastructure of the country [and] would send the wrong signal to the terrorists, I'm not sure Congress could do anything but what it did. [When] you eliminate a lawsuit, you've got to put something in its place. Since the Congress raised formidable obstacles to suing the airlines, to giving people their day in court, it was felt in part, that the compensation mechanism established by the statute should track some of the loss-based concepts, like economic and noneconomic loss," he adds.

Leo Boyle, president of Trial Lawyers Care, which was set up in the wake of the attacks to provide free legal advice, says the fund has been "an economic lifesaver to hundreds and hundreds of families. It was pretty clear right from the beginning that lawsuits were not a reasonable option," he adds. "In my opinion, the fund has been extraordinarily successful in particular for families whose incomes were between the 1st and 98th percentile nationally. No one plan is right for everyone."

NEXT TIME?

And for those who wonder why the Sept. 11 victims should receive funds when those killed in the 1993 World Trade Center bombing, or Oklahoma City, or by the embassy bombings in Kenya didn't, Boyle, a past president of the Association of Trial Lawyers of America, has a response: "We owe something. We need to recognize that those 3,000 to 4,000 families took this hit for everyone-there but for the grace of God, go I."

But what about next time? Another terrorist attack on American soil is possible, and those victims will no doubt expect similar treatment to the Sept. 11 victims.

Feinberg calls Sen. Don Nickles, R-Okla., one of the most thoughtful critics of the fund. Nickles thinks his initial fear-that the fund would set a bad precedent-has been borne out, according to his counsel, Bini Zomer. "Every other group wants to come on board, and there's not the appetite among the members of Congress to do that," Zomer says. In fact, a bill introduced by Sen. Charles Schumer, D-N.Y., to include the 1993 World Trade Center victims in the Sept. 11 compensation fund has been stuck in the Senate Judiciary Committee, Zomer says.

For Brill, "the real failure of the government's response is not the response itself, but making it so exceptional. It's a marked contrast to the Oklahoma City bombings and the embassy bombings, and a marked contrast to how the next ones will be handled," he says. The fear of the airlines going bankrupt made this a unique situation, Brill says. Next time, Congress might not be so eager to set up an uncapped compensation fund. And next time, how will the victims be defined? Would they be any American victims of terrorist attacks anywhere in the world? Do the terrorists need to be foreign, or could they be domestic, like Timothy McVeigh? What about embassy bombings that are technically on American soil, but in foreign lands?

Feinberg believes compensation should kick in next time only if there is a foreign attack against Americans on American soil. "But maybe that's a lawyer's gloss on all this," he says. "9/11 was like Pearl Harbor and the Kennedy assassination, a unique historical tragedy. If you accept the notion of uniqueness, then the program is a one-off. But I think the genie is out of the bottle. It's hard next time there's a foreign attack not to come with some variation of the program, and I think Congress will."

Brill agrees, but says the time to develop such a program is now "when people can talk about it calmly and rationally. It's a terribly complex and emotional issue and we really need to have a big discussion. We can't do it in the dead of night."

The fund is still a work in progress; it's too early to determine its success. Nevertheless, "a lot of what you don't see is how things would have worked without the fund," says Boyle of Trial Lawyers Care. "It would have been a nightmare. There's some rough spots around the edges, but this country has never taken care of its fallen people the way we did on Sept. 11."

Alina Tugend is is a New York-based writer who has written for The New York Times, the Los Angeles Times and the American Journalism Review.

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