IG's Verdict On WTC Captive Due By Year's End

WASHINGTON--The Inspector General's Office of the Department of Homeland Security said a report on its lengthy investigation into whether the World Trade Captive Insurance Company is handling illness claims from Ground Zero workers properly won't be out for weeks.

It was revealed that since 2006 the IG has been examining the question of whether the federally funded captive unit should be spending more on paying claims and less on legal fees to contest them.

Tamara Faulkner, a spokesperson for the Office of the Inspector General of the Department of Homeland Security, said the agency hopes to release its report on the issue by the end of the year.

The OIG probe was confirmed in the release of the OIG's 2008 annual performance plan. The report said that it was working--at the request of a congressman--to determine whether the captive insurance fund was acting appropriately in litigating claims stemming from a $1 billion fund provided by the Federal Emergency Management Agency to compensate people involved in the cleanup from the Sept. 11, 2001 disaster, the OIG performance plan said.

The OIG said it is seeking to determine (1) "why the World Trade Center Captive Insurance Company has chosen to litigate all claims instead of settling whenever possible, and (2) what procedures have been established to receive, review and pay medical, hospital, surgical and disability benefits to injured persons, and funeral and death benefits to dependents, beneficiaries, or personal representatives of people who were killed."

Ms. Faulkner said the report was requested by Rep. Jerrold Nadler, D-N.Y., in September 2006.

"I eagerly await the release of the review of the Captive Fund by the DHS Inspector General," said Rep. Nadler. "This report that I requested will hopefully shed some light on the activities and actions of the fund."

A spokesman for the World Trade Center Captive Insurance Company, which is the object of the report, said that nothing has changed since it was informed in September 2006 that the inspector general of DHS is studying whether its handling of the government funds was appropriate.

In a statement, WTC Captive management commented that it has said "for over a year that these claims would be better resolved by granting protection to the city and contractors and converting the WTC Captive's funds into a renewed Victim Compensation Fund."

The statement explained, "A renewed Victim Compensation Fund would not have to find fault to grant help for those in need, and might significantly increase the recoveries for the sick rather than fees for lawyers."

"Unless and until such a Victim Compensation Fund exists, however, the WTC Captive is legally and ethically required to faithfully execute its mandate as an insurance company protecting the city and its post-9/11 contractors from uninsured liability," the statement added.

The report was requested by Rep. Nadler after workers complained that their claims were not being paid and that the insurance captive formed to handle the claims was instead forcing them to litigate their injury claims.

A lawsuit was filed in July on behalf of several workers seeking compensation from the fund. The suit alleges that the captive and its management have "knowingly wasted and squandered a large amount of the money and have used and expended for unauthorized and unlawful purposes a large portion of the sums received [by the captive] at the expense of persons who were intended to benefit from these funds, including the plaintiffs..."