September 11, 2012
Kenneth Feinberg: The 9/11 mediator who listens
When massive tragedy strikes in the United States, when half a dozen or a score or thousands of people are killed in a single incident, when disaster hits a region, Kenneth Feinberg often gets a call.
The Washington attorney is perhaps best known for his work as the administrator of the fund that paid restitution to the families of 9/11 victims and the one that compensated individuals and businesses harmed by the BP Oil spill in 2010, but his phone rings on all sorts of unhappy occasions, most recently in the wake of the shooting at a Wisconsin Sikh temple in August.
They call Feinberg because he has made a career in mediation, dealing with particularly complicated situations involving death, environmental disaster and financial upheaval. They call him because he’s been called “Solomonic” on more than a few occasions — a label that Feinberg rejects — and because he has demonstrated an ability to exercise and implement good, fair judgments.
But as Jews around the world, Feinberg included, prepare for another season of holidays centered on the theme of judgment, it’s notable that a major element of Feinberg’s process is something deceptively simple: He listens.
“When you have face-to-face meetings, you give victims an opportunity to vent, and they welcome that opportunity to vent,” Feinberg said, speaking to the Journal by phone from his Washington, D.C., office in August. “I find that these one-on-one meetings are very important in convincing claimants in grief about the bona fides of the program that you’re trying to run.”
Feinberg was referring to the more than 900 meetings he had in the aftermath of 9/11 with families of victims, a process he repeated in administering a much smaller fund compensating the victims injured and families of victims killed in the 2007 shooting on the campus of Virginia Tech. In both cases, Feinberg remembered that most of the people who chose to meet with him did not talk about dollars and cents, but came to tell stories, sometimes with photo albums and mementos in hand, “in order to validate — on the record, in writing, face-to-face — the memory, the good works of a lost loved one.”
In compensating individuals in the wake of tragedy, Feinberg has found the meetings to be essential, because they show that somebody is listening.
“There is an individual — not a bureaucratic device, but there is an actual human being listening to what I have to say about my dead wife or husband or brother or sister, son or daughter,” he said.
Individual meetings aren’t always possible, particularly when dealing with large numbers of claimants who have all suffered different kinds of damages, as Feinberg did when he administered the Gulf Coast Claims Facility, which paid out more than $6.14 billion from BP to more than 500,000 claimants from all 50 states and 38 foreign countries.
But in many instances, direct listening in face-to-face meetings can have a strategic purpose, as well. In his role as the U.S. Treasury Department’s “pay czar,” tasked with setting the compensation of 175 high-ranking executives at the largest of the financial firms bailed out by the American taxpayers in 2009, Feinberg heard petitions from CEOs, CFOs and their lawyers.
That role was a distinct reversal for Feinberg. “There I was fixing the compensation of alleged, not victims, but perpetrators, who had caused the 2009 financial meltdown,” Feinberg said.
Which is why, as he wrote in his book “Who Gets What: Fair Compensation After Tragedy and Financial Upheaval,” published by Public Affairs earlier this year, one of the ground rules Feinberg set for the meetings with the executives of bailed-out companies was that they had to take place in Washington, D.C.
The Tribute in Light is illuminated marking the 11th anniversary of the 9/11 attacks on the World Trade Center in New York, on Sept. 10. Photo by REUTERS/Gary Hershorn
“As an experienced mediator, I knew the importance of conducting meetings in the most effective venue,” Feinberg wrote. The “lavish and imposing” Treasury Building fit his aim perfectly, making immediately clear to the corporate officials “that they were up against a formidable negotiating partner — the federal government.”
In their own ways, the meetings Feinberg had with the companies’ officials didn’t focus on money — or at least not the immediate exchange value of money.
As the “special master” of an office in the Treasury Department overseeing executive compensation, Feinberg and his staff were dictating to these seven companies the exact amount they could pay their top employees. The goal was to balance the interests of the executives and the firms, who wanted to be able to compete on hiring with other corporations, against those of the taxpayers and congress, who had loaned these companies billions of dollars and wanted that money repaid as quickly as possible and in full but who also wouldn’t tolerate excessively lavish compensation.
In the meetings with executives, Feinberg said that the conversations were never about money or material gain — “I need money to buy another summer home, I need money to send my kinds to private school” — but instead were about compensation as a “litmus test of self-worth or integrity or contribution to society.”
“ ‘Look, Mr. Feinberg,’ ” Feinberg said, recalling the executives’ emotional pleas, “ ‘what you’re paying me demeans my value to society, it demeans my value to the community, to my family. You are getting very personal; you are reducing my compensation, thereby diminishing my overall self worth.’ ”
Feinberg’s ultimate decisions were, in his words, “very cold and calculating.”
“I looked at statistics governing compensation — what is a CFO worth, or a CEO worth — studied the competitive pay scale of others similarly situated, looked at what incentives should be incorporated into a compensation package, and calculated the actual awards,” he said.
In administering the September 11th Victim Compensation Fund — which Feinberg said is still the most challenging assignment he’s ever faced — Feinberg’s meetings were very different. They took place all over the country, often in the offices of law firms. And while the meetings were essential to convincing some of the families of victims (particularly those of the wealthier victims) to join the fund and not litigate their claims in court, it’s clear that the emotional tenor made them difficult for Feinberg.
“Unless you have a heart of stone, you can’t remain dispassionate,” he said. “You try and ... limit the impact of that emotion, but you cannot help but be affected by the death and tragedy involved.”
And, Feinberg learned, people react differently — unpredictably, even — to tragedy. The group meetings he held for victims’ families in California, Feinberg said, were “very touchy-feely,” particularly in contrast to the meetings he’d held in New York and Virginia.
“Everybody wanted to hold hands and pray collectively and to reinforce each other,” Feinberg recalled.
And if half of the families of 9/11 victims decided that the tragedy had “ended, once and for all, any belief they may have had in God or religion or an afterlife,” the other half, Feinberg said, told him that “the tragedies reinforced their religion and their beliefs.”
“Do not attempt to predict human nature,” Feinberg said.
Feinberg doesn’t keep in touch with the families of victims, nor does he have a particular way of commemorating the anniversary of 9/11. This year, on the 11th anniversary of the attacks, Feinberg was scheduled to speak at a conference organized by an insurance group in Canada.
On Rosh Hashanah, Feinberg said, he would be thinking about the future, not the past.
“I think about the year to come, in hopes that I and my family can enjoy health and happiness,” Feinberg said. “And on Yom Kippur, I sort of muse and reflect on the year gone by and what I could’ve done differently, or better.”
Feinberg described himself as “a believer,” so it seemed fair to ask him whether he feels that there is a listener to his prayers.
“I don’t put it in those terms, is someone listening,” Feinberg replied. “I’m hoping that — by raising the level of thought to a conscious level, so that I’m actually reflecting on the past and the future — I’m listening. And I think that’s what’s important.”