WEBVTT - An Interview With Ken Feinberg: Masters in Business (Audio) 0:00:03.240 --> 0:00:07.560 This is Masters in Business with Barry Ridholds on Bloomberg Radio. 0:00:08.400 --> 0:00:11.800 This week on Masters in Business, I really have a 0:00:11.880 --> 0:00:14.520 special guest. Then. I know I say that every week, 0:00:14.960 --> 0:00:18.840 but this week our special guest is literally a special master. 0:00:19.560 --> 0:00:22.959 His name is Ken Feinberg, and you probably know him 0:00:23.000 --> 0:00:28.560 as the person who essentially handled some of the compensation 0:00:28.600 --> 0:00:32.920 claims of some of the most horrific experiences in in 0:00:32.960 --> 0:00:36.640 recent American history. He was the special Master of the 0:00:36.680 --> 0:00:42.440 September eleventh Victims compensation funds the BP Gulf Sentiment general motors. 0:00:42.520 --> 0:00:46.240 The pays are Boston Marathon, Barman, on and on down 0:00:46.240 --> 0:00:49.600 the whole list. And uh, I keep saying, I want 0:00:49.640 --> 0:00:53.800 to try and interview new and different people who might 0:00:54.200 --> 0:00:59.160 not be the usual economist, hedge fund manager, slash trader 0:00:59.200 --> 0:01:02.959 and go a loop will further Afield, And today we 0:01:03.000 --> 0:01:08.200 do just that. I think he's really a fascinating, fascinating gentleman. 0:01:08.959 --> 0:01:12.000 The country really owes him a debt of gratitude. You 0:01:12.040 --> 0:01:15.520 may not know this, but he did the entire September 0:01:15.600 --> 0:01:20.040 eleven compensation fund pro bono. That's him and his office 0:01:20.080 --> 0:01:24.440 working for thirty three months really to to help resolve 0:01:24.520 --> 0:01:28.120 one of the great tragedies in recent American history. And 0:01:28.200 --> 0:01:33.280 he did it a great personal um psychological cost to 0:01:33.360 --> 0:01:38.440 himself and and no compensation. And especially considering the government 0:01:38.480 --> 0:01:42.399 told out seven billion dollars in in victim compensation, he 0:01:42.520 --> 0:01:46.920 certainly was entitled to a reasonable fee. And and he decided, UH, 0:01:47.000 --> 0:01:48.960 as a patriot, this is what he wanted to do. 0:01:49.000 --> 0:01:51.760 This is how he wanted to give back to his country. 0:01:51.800 --> 0:01:55.800 And and that's really quite wonderful. I think you will 0:01:55.800 --> 0:02:01.520 find him to be a thoughtful, philosophical, interesting gentleman who 0:02:01.680 --> 0:02:03.960 who has just worked on some of the most amazing 0:02:04.960 --> 0:02:08.400 things in American history. So, rather than have me babbel 0:02:08.440 --> 0:02:13.480 without any further ado, my conversation with Special Master Ken Feinberg. 0:02:17.200 --> 0:02:21.560 This is Masters in Business with Barry Ridholts on Bloomberg Radio. 0:02:22.360 --> 0:02:24.959 I have a special guest. And when I say special, 0:02:25.160 --> 0:02:29.680 he is literally a special Master. One Ken Feinberg. You 0:02:29.840 --> 0:02:33.000 probably know the name, as I'm only going to do 0:02:33.040 --> 0:02:36.640 the short version of your curriculum vitae Special Master for 0:02:36.680 --> 0:02:40.680 the September eleven victims compensation funds. He handled the BP 0:02:40.840 --> 0:02:45.520 Gulf settlement, the g M ignition situation, the financial crisis 0:02:45.560 --> 0:02:48.200 known as the Paysar. We'll talk about why that's an 0:02:48.200 --> 0:02:54.280 inappropriate name. UM Boston Marathon, one, fun Fund bombing, Sandusky, 0:02:54.360 --> 0:02:58.160 pan State, Newton, Sandy Hook. The This is just the 0:02:58.760 --> 0:03:03.280 tip of the iceberg. There's many more. I'm gonna start 0:03:03.800 --> 0:03:07.600 with a quote from the Boston Globe that says, if 0:03:07.639 --> 0:03:11.480 scientists ever perfect human cloning, they should make copies of 0:03:11.560 --> 0:03:16.160 Kenneth Finberg, the Brocton Native informer Ted Kenney staffer who 0:03:16.240 --> 0:03:21.040 has become renowned for allocating money wisely amid political and 0:03:21.080 --> 0:03:26.000 emotional firestorms. Ken Finberg, Welcome to Bloomberg. Thank you glad 0:03:26.040 --> 0:03:30.840 to be here. So that's really quite an amazing curriculum, Vita, 0:03:31.040 --> 0:03:33.200 all the different things you've worked on over the years, 0:03:33.280 --> 0:03:36.400 and and we're gonna spend a lot of time talking 0:03:36.400 --> 0:03:41.800 about that. But you once said something and it contradicts 0:03:41.920 --> 0:03:45.560 some common experience I've had, So I wanna have you 0:03:45.800 --> 0:03:50.040 start out with responding to this. I always believed that 0:03:50.200 --> 0:03:53.960 anytime someone says, look, it's not the money, it's the principle, 0:03:54.480 --> 0:03:57.600 it's almost always the money. But when that came up 0:03:57.800 --> 0:04:02.640 in the September eleven funds, you actually had an interesting quote. 0:04:02.680 --> 0:04:08.760 You said, it's not greed, but grief. Explain that money 0:04:08.760 --> 0:04:13.800 in our society viewed as a barometer or as a 0:04:13.880 --> 0:04:20.839 reflection on unanticipated, unpredicted grief resulting from the attacks that 0:04:20.920 --> 0:04:26.200 led to deaths and physical injuries, so that survivors, either 0:04:26.240 --> 0:04:29.880 of the attacks or the family of the dead, view 0:04:30.480 --> 0:04:35.440 the compensation as a reflection on the value of a 0:04:35.520 --> 0:04:39.240 lost loved one in times of grief. And that's why 0:04:39.320 --> 0:04:43.600 it's almost like an emotional salve to what they've confronted 0:04:43.600 --> 0:04:46.919 and faced. So it's really in that situation, it's not 0:04:47.040 --> 0:04:51.080 about the money. It's about what they're feeling and how 0:04:51.080 --> 0:04:53.520 could you possibly put a number on this? That's right. 0:04:53.640 --> 0:04:57.159 The toughest part in all of these programs, Barry, that 0:04:57.200 --> 0:05:01.520 you referenced in your introduction, the toughest pot clearly is 0:05:01.640 --> 0:05:06.360 not calculating damages or the amount of money that somebody 0:05:06.360 --> 0:05:10.400 should receive. I think that's not rocket science. It's done 0:05:10.400 --> 0:05:13.840 every day in our society. Or here, here's your earnings expectations, 0:05:14.000 --> 0:05:18.720 here's your life expectancy equals, here's an amount for pain 0:05:18.760 --> 0:05:22.400 and suffering ABC, and there's your award. No, it's the 0:05:22.480 --> 0:05:27.440 emotion that you confront when you sit one on one 0:05:27.640 --> 0:05:33.320 with people who have suffered horrible loss and listen to 0:05:33.440 --> 0:05:38.080 the tales of wool, validating the memory of a lost 0:05:38.160 --> 0:05:42.479 loved one, venting about life, sun fairness, that is what 0:05:42.600 --> 0:05:47.400 takes its toll, not calculating dollars. Fascinating. So so we're 0:05:47.400 --> 0:05:50.559 gonna come back to more of that, but let's let's 0:05:50.960 --> 0:05:54.720 roll back to your early career. You spent some time 0:05:54.760 --> 0:05:58.000 as administrative assistant in chief of staff for U S. 0:05:58.000 --> 0:06:01.640 Senator Ted Kennedy. You graduate n y U Law school. 0:06:01.640 --> 0:06:04.200 How did you make your way to Ted Kennedy's office. 0:06:04.520 --> 0:06:06.960 I was a prosecutor in the U. S. Attorney's office 0:06:06.960 --> 0:06:09.240 in the Southern District of New York and assistant U 0:06:09.240 --> 0:06:12.640 S Attorney, and I got word through the grape vine 0:06:12.800 --> 0:06:16.640 that Ted Kennedy was looking for an experienced criminal law 0:06:17.000 --> 0:06:23.760 practitioner to join his excellent staff on the Senate Judiciary 0:06:23.760 --> 0:06:28.320 Committee Criminal Law Issues. So I applied. While I'm a Brocton, 0:06:28.400 --> 0:06:32.760 mass Native, and I applied to Senator Kennedy's office, got 0:06:32.760 --> 0:06:36.840 an invitation, met with him, he hired me, and that 0:06:36.880 --> 0:06:41.880 was the beginning of my five years with this extraordinary man. 0:06:42.160 --> 0:06:45.279 And you eventually become chief of staff for his Senate office. 0:06:45.360 --> 0:06:48.760 The last two years nineteen seventy eight to nineteen eighty 0:06:48.920 --> 0:06:51.920 I was his chief of staff in the U. S. Senate, 0:06:52.600 --> 0:06:56.120 running his operation. And I must say it was a 0:06:56.240 --> 0:07:00.200 fabulous opportunity. So so here we are. You're you're now 0:07:00.440 --> 0:07:04.799 a known entity on Capitol Hill. September eleven comes along 0:07:05.040 --> 0:07:09.039 and uh the Attorney General the United States, John Ashcroft 0:07:09.080 --> 0:07:15.240 says to you, we need somebody to oversee this congressional funds. 0:07:15.760 --> 0:07:19.520 And you said, yes, I'll do it, but only if 0:07:19.560 --> 0:07:22.440 I can do it without compensation. What was the thinking 0:07:22.480 --> 0:07:27.320 that My thinking was? I thought it highly inappropriate to 0:07:27.440 --> 0:07:31.520 be making money off of the dead and the injured 0:07:33.000 --> 0:07:35.880 resulting from a foreign terrorist attack. I thought it would 0:07:35.880 --> 0:07:40.320 be unpatriotic A and B. I thought that if I 0:07:40.360 --> 0:07:43.200 were getting money at the same time that I was 0:07:43.280 --> 0:07:48.400 calculating money for the victims and their families, there would 0:07:48.440 --> 0:07:52.960 be a firestorm that I'm making blood money. And I 0:07:53.080 --> 0:07:55.920 just thought I had enough challenges without being paid. But 0:07:56.000 --> 0:07:58.680 you did this for thirty three months plus, you and 0:07:58.880 --> 0:08:03.480 most of your office was running this that that's quite 0:08:03.520 --> 0:08:06.920 a commitment of time and energy and resources and money. 0:08:07.040 --> 0:08:09.560 It was. But on the other hand, there never was 0:08:09.640 --> 0:08:13.880 and there never will be a nine eleven precedent like 0:08:13.960 --> 0:08:16.560 that one. And and I think what the country went 0:08:16.600 --> 0:08:21.360 through and is still going through in terms of UM, 0:08:21.680 --> 0:08:26.200 the implications of the nine eleven attacks, UM made it 0:08:26.240 --> 0:08:28.720 imperative that I step up and do my job as 0:08:28.720 --> 0:08:31.560 a public citizen. When you graduated at n YU, did 0:08:31.600 --> 0:08:33.920 you ever imagine you'd find your way to being a 0:08:34.000 --> 0:08:36.760 Special Master? Is this what you thought your your career 0:08:36.760 --> 0:08:39.960 would be? Never? Ever? I am a post a child 0:08:40.559 --> 0:08:44.760 for the proposition that people should not plan their career 0:08:44.960 --> 0:08:48.240 more than one year in advance, and they shouldn't plan 0:08:48.520 --> 0:08:52.679 the life too far ahead, because life has a way 0:08:52.720 --> 0:08:56.720 of throwing curveballs at everybody and changing the best laid plans, 0:08:56.840 --> 0:09:00.160 to say the least. This is Masters in Business US 0:09:00.200 --> 0:09:04.200 on Bloomberg Radio. I'm Barry Ridholts. I'm speaking with Special 0:09:04.200 --> 0:09:07.160 Master Ken Feinberg, and in this segment we're going to 0:09:07.240 --> 0:09:13.080 discuss the nine eleven victims compensation funds. So obviously nine 0:09:13.080 --> 0:09:17.160 eleven is a horrific event. My office was headquartered in 0:09:17.200 --> 0:09:19.520 two World Trade. I was on in the Long Island 0:09:19.520 --> 0:09:22.800 office and had a running narrative from my head trader, 0:09:23.200 --> 0:09:26.760 who was um just outside the buildings as everything happened. 0:09:28.679 --> 0:09:34.240 Horrible seeing the entire country rallies around, uh up surge 0:09:34.240 --> 0:09:38.280 of patriotism. And now it lands on your lap to 0:09:38.400 --> 0:09:42.880 figure out how do you compensate three thousand plus victims 0:09:43.480 --> 0:09:47.080 seven billion dollars? Where do you even begin with something 0:09:47.120 --> 0:09:49.559 like that? You begin with the statute. Congress passed a 0:09:49.679 --> 0:09:53.679 law signed by President Bush, and the law said that 0:09:53.800 --> 0:09:59.280 anybody who wants to come into this fund voluntarily funded 0:09:59.640 --> 0:10:04.320 entire early by taxpayer public money. Anybody who wants to 0:10:04.360 --> 0:10:09.319 do it can voluntarily decide, and a special Master appointed 0:10:09.320 --> 0:10:14.199 by the Attorney General John Ashcroft will calculate individual awards, 0:10:14.360 --> 0:10:19.000 award compensation, and authorize the U. S. Treasury to cut 0:10:19.000 --> 0:10:23.480 a check over the thirty three month life of that statute, 0:10:23.600 --> 0:10:27.440 of that program, that was the whole statute. Under three years, 0:10:29.280 --> 0:10:33.560 seven percent of all the families that lost a loved 0:10:33.600 --> 0:10:36.200 one on nine eleven on the airplanes the World Trade 0:10:36.240 --> 0:10:40.200 Center of the Pentagon came into the fund. Only four 0:10:40.240 --> 0:10:45.559 people decided they'd rather sue then come into the fund, 0:10:45.800 --> 0:10:48.400 and they all settled their claims five years later. There 0:10:48.480 --> 0:10:52.600 never was a trial on responsibility for nine eleven how 0:10:52.640 --> 0:10:54.800 many of the three percent that didn't come into the 0:10:54.840 --> 0:10:58.520 fund were people that you described as so grief stricken 0:10:58.760 --> 0:11:01.600 they couldn't even sign. I think that was it, just 0:11:01.600 --> 0:11:04.120 just because you told the story of going to a 0:11:04.120 --> 0:11:07.520 woman's house and saying, I filled out the papers for you, 0:11:07.840 --> 0:11:11.200 this is two million dollars, just sign here, and she 0:11:11.320 --> 0:11:14.680 just said she couldn't do that. Woman was so grief stricken, Barry. 0:11:14.800 --> 0:11:18.880 She didn't sue either, She did nothing nothing. She and 0:11:19.000 --> 0:11:22.360 I believe a priest who lost a brother were the 0:11:22.520 --> 0:11:27.600 only two people that neither came into my fund nor 0:11:27.920 --> 0:11:31.560 litigated against the airlines in the World Trade Center. So 0:11:31.800 --> 0:11:35.640 paralyzed were they by grief they couldn't do it either. 0:11:35.800 --> 0:11:41.720 That's just just uh, you learn, you learn in doing 0:11:41.920 --> 0:11:46.079 what I do, that grief can paralyze people. It can 0:11:46.160 --> 0:11:50.079 make them act so unreasonably. I said to the woman, 0:11:51.360 --> 0:11:56.120 Mrs Jones, you're gonna get about three million dollars tax free, 0:11:57.679 --> 0:12:02.280 set up a fund in your son's name. Go away, 0:12:02.400 --> 0:12:04.960 Mr Finberg, I lost my son and you're here to 0:12:04.960 --> 0:12:08.560 talk about money. And she never filed. That's just amazing, 0:12:08.640 --> 0:12:13.520 that's just just astonishing. So thirty three months, seven billion 0:12:13.600 --> 0:12:19.679 dollars um. When you first started thinking about the awards, 0:12:20.280 --> 0:12:23.760 you approached this almost as if it was the regular 0:12:23.840 --> 0:12:27.680 calculations that courts make every day when there's any sort 0:12:27.720 --> 0:12:30.440 of wrongful death claim. Was it was that part of 0:12:30.480 --> 0:12:33.640 the congressional mandate. That was part of the congressional mandate 0:12:33.679 --> 0:12:39.600 that the congress the law instructed me in calculating damages 0:12:39.679 --> 0:12:42.440 to consider the torch system. Well, that's just what I did. 0:12:44.080 --> 0:12:49.280 Some people think that I placed a value on lives 0:12:49.320 --> 0:12:53.040 based on the moral integrity of an individual. I didn't 0:12:53.080 --> 0:12:55.240 do that. How do you evaluate the moral integrity of 0:12:55.280 --> 0:12:59.200 three thousand people, rabbis and priests making that. I don't 0:12:59.200 --> 0:13:02.000 do that. I simply did what you just said, what 0:13:02.120 --> 0:13:05.560 would the person have earned over a work life? But 0:13:05.800 --> 0:13:08.439 four nine eleven, so you got a lot of pushback 0:13:08.480 --> 0:13:12.439 from like fireman's wives and other people who were making, 0:13:13.200 --> 0:13:17.240 you know, middle class salaries versus investment bankers and bond 0:13:17.240 --> 0:13:21.160 traders were making ten and twenty times that amount. How 0:13:21.160 --> 0:13:23.880 did you deal with that sort of uh, that sort 0:13:23.880 --> 0:13:28.200 of response to this very very difficult Mr Finberg. My 0:13:28.400 --> 0:13:31.800 husband was a fireman. He died at the World Trade 0:13:31.800 --> 0:13:34.800 Center rushing in to save people. You're giving me two 0:13:34.880 --> 0:13:39.000 million dollars. You're giving my next door neighbor, whose wife 0:13:39.080 --> 0:13:42.719 was a bank of for Enron four million dollars. What 0:13:42.840 --> 0:13:45.640 do you have against my husband? You didn't even meet 0:13:45.679 --> 0:13:48.480 my husband, and yet you're giving me two million less. 0:13:48.920 --> 0:13:51.640 There is no justice here and you have to deal 0:13:51.679 --> 0:13:54.840 with that all the time. Always remember this, I've learned. 0:13:56.120 --> 0:14:00.439 When you have a program that compensates victims, and there 0:14:00.480 --> 0:14:06.640 are numerous victims, everybody counts other people's money. It's not 0:14:06.760 --> 0:14:10.240 just what am I going to receive from Fineberg? What 0:14:10.360 --> 0:14:12.960 am I going to receive as opposed to my next 0:14:13.040 --> 0:14:16.720 door neighbor? And you better batten down the hatches, embrace 0:14:16.760 --> 0:14:20.640 yourself because that gets very, very emotional. The old joke 0:14:20.840 --> 0:14:23.280 defines wealth as a hundred dollars more than my brother 0:14:23.280 --> 0:14:26.080 in law, and people are looking at at other people now. 0:14:26.120 --> 0:14:31.080 In subsequent settlement cases, you basically came up with an 0:14:32.320 --> 0:14:36.440 the same number for everybody. Did did that experience impact 0:14:36.840 --> 0:14:41.000 subsequent not at all? Not at all. In subsequent matters 0:14:41.040 --> 0:14:45.640 in which I again I am compensating people as an 0:14:45.680 --> 0:14:51.920 alternative to the tort system bp GM, the same, everybody 0:14:51.960 --> 0:14:54.880 gets a different amount because you're trying to entice people 0:14:54.960 --> 0:14:57.840 out of litigating. What a bad Places like Sandy holl 0:14:59.160 --> 0:15:05.920 Datto or Sandy Hook, Aurora, Colorado, Virginia Tech, the Boston Marathon. 0:15:06.400 --> 0:15:10.960 Those aren't alternatives to the tort system. Those are gift programs. 0:15:11.240 --> 0:15:14.720 You don't waive your right to sue. Take the money 0:15:14.760 --> 0:15:18.760 and sue if you want. Those programs are very different. There. 0:15:19.400 --> 0:15:22.840 I design programs where one size does fit all because 0:15:22.920 --> 0:15:25.080 there's no obligation on the pot of the recipient to 0:15:25.120 --> 0:15:28.280 do anything but take the money. That's quite fascinating. So 0:15:28.680 --> 0:15:33.080 a gift program, it's it's an even divide. And did 0:15:33.080 --> 0:15:35.080 people complain about that? Did you get the same sort 0:15:35.080 --> 0:15:39.240 of thing or much much less? People complain and criticized 0:15:39.360 --> 0:15:41.320 no matter what you I wish people could see your 0:15:41.320 --> 0:15:45.280 face right now. People complain. Why shouldn't they complain, Barry? 0:15:45.280 --> 0:15:47.960 Why shouldn't Because it's a tragedy and this is a 0:15:48.040 --> 0:15:51.000 lovely gift and here this will make your life a 0:15:51.000 --> 0:15:54.800 little bit easier. And let's all start the healing. Prestof Heinberg. 0:15:55.040 --> 0:16:00.880 I lost my son driving a GM automobile. I lost 0:16:01.040 --> 0:16:05.400 my son on nine eleven, and you're offering me money 0:16:05.640 --> 0:16:09.040 bring my son back. How's that? Mr Finberg? And you 0:16:09.160 --> 0:16:11.560 dealt with that every day, every day the Boston Marathon. 0:16:11.720 --> 0:16:16.160 Mr Jones, you lost your leg when the Barrathon bombs 0:16:16.200 --> 0:16:19.120 went off. I'm here to let you know that you're 0:16:19.160 --> 0:16:23.280 going to receive from one fun Boston tax free, one million, 0:16:23.640 --> 0:16:28.400 one d and twenty five thousand dollars. I am, Mr Finberg. 0:16:28.520 --> 0:16:30.920 That's what you're gonna give me. I got a better idea. 0:16:32.600 --> 0:16:35.000 Keep the money, give me my leg back. How's that? 0:16:35.200 --> 0:16:37.440 I wish I could do that. If I had the 0:16:37.480 --> 0:16:39.200 power to do that, you'd have two legs. But I 0:16:39.240 --> 0:16:43.480 don't have that. I have this gift from people, and thanks, 0:16:43.560 --> 0:16:46.720 but no thanks. That's that's amazing. You're listening to Masters 0:16:46.760 --> 0:16:49.640 in Business on Bloomberg Radio. My special guest this week, 0:16:49.960 --> 0:16:54.040 Special Master Ken Finberg, who oversaw some of the most 0:16:54.720 --> 0:17:01.880 complex and complicated litigation and alternatives to litigation settlement cases 0:17:02.000 --> 0:17:07.000 of all time, everything from the September eleven compensation fund 0:17:07.119 --> 0:17:10.560 to Agent Orange that was one of your early careers, 0:17:10.640 --> 0:17:12.840 the Dalkon shield. I went. I missed a lot of 0:17:12.920 --> 0:17:17.200 these um as bestos personal injury litigation. There's a ton 0:17:17.560 --> 0:17:20.480 Let's talk about the BP Gulf Fund that's still probably 0:17:20.520 --> 0:17:24.239 the most recent, although I guess GM is a little fresher. Um. 0:17:24.720 --> 0:17:27.320 What was your role in the BP case? The same? 0:17:27.680 --> 0:17:31.480 In BP, I was asked by the Obama administration I 0:17:31.760 --> 0:17:36.800 BP to design and administer a compensation program funded entirely 0:17:36.920 --> 0:17:41.520 by VP, to compensate the victims of the oil spill, 0:17:41.720 --> 0:17:47.080 those businesses and fishermen and shrimpers and hotels on the 0:17:47.119 --> 0:17:51.000 beach in Florida and the Gulf who were adversely impacted 0:17:51.080 --> 0:17:54.359 economically by the oil spill. And that's what I did 0:17:54.480 --> 0:17:58.080 for sixteen months. How much money was dispersed out of 0:17:58.160 --> 0:17:59.960 that fund while you were running it? While I was 0:18:00.119 --> 0:18:02.760 running it, we distributed in sixteen months six and a 0:18:02.800 --> 0:18:06.920 half billion dollars speak. He put up twenty billion, and 0:18:07.040 --> 0:18:09.680 I distributed the first six and a half billion and 0:18:09.880 --> 0:18:15.000 paid about a half a million claims um and received 0:18:15.040 --> 0:18:20.240 releases so people wouldn't sue. Were we we compensated of 0:18:20.320 --> 0:18:23.159 all the victims of the oil spill. So now this 0:18:23.400 --> 0:18:27.359 was a little different situation. In the nine eleven Victims 0:18:27.440 --> 0:18:31.080 Compensation Fund, you're appointed by the Attorney General, you do 0:18:31.200 --> 0:18:35.320 it pro bono. Here you're hired by BP. How is 0:18:35.400 --> 0:18:39.359 that process so different from each other? Oh? Very different 0:18:39.760 --> 0:18:42.119 as we as you pointed out, Berry nine eleven was 0:18:42.400 --> 0:18:47.920 a patriotic duty. This is a international oil company, UM 0:18:48.480 --> 0:18:53.920 flush who UM decided in its wisdom, we will pay 0:18:54.440 --> 0:18:59.480 Mr Fineberg and the entire staff to quickly and efficiently 0:18:59.680 --> 0:19:02.280 calm and said all the victims of the spill. We 0:19:02.400 --> 0:19:07.480 do not want a replication of excen Valdis litigating for 0:19:07.600 --> 0:19:10.560 twenty years. We want to get rid of this, and 0:19:10.640 --> 0:19:13.320 so we set it up, Wrap it up, move on. Now. 0:19:13.760 --> 0:19:18.080 There was some pushback because you're you're compensated as opposed 0:19:18.080 --> 0:19:19.800 to non eleven. How did how did you respond to 0:19:19.920 --> 0:19:22.960 people who said, oh, Finberg can't be fair because he's 0:19:23.000 --> 0:19:26.440 being paid by BP. Very difficult. First, don't take the money. 0:19:26.520 --> 0:19:29.840 It's voluntary. If you think that Feinberg is not being 0:19:29.960 --> 0:19:34.680 fair even though billions of dollars are going out the door, 0:19:35.480 --> 0:19:40.639 then by all means opt out. So did people have 0:19:40.760 --> 0:19:43.280 to make that opt interrupt out decision before they knew 0:19:43.320 --> 0:19:45.760 what their number was. If you present a number, you 0:19:45.800 --> 0:19:48.480 could take it, or you could see exactly. So I said, 0:19:48.560 --> 0:19:51.719 here seems pretty reasonable. Well, here's the money. A free preview, 0:19:52.000 --> 0:19:55.800 a free preview. If you think this adequately compensates you 0:19:56.080 --> 0:19:58.640 in Amanda, that will allow you to take the money 0:19:58.760 --> 0:20:04.160 in sixty days and wave your right to litigate. Well, virtually, 0:20:05.359 --> 0:20:08.040 virtually everybody took the money. Why wouldn't they take the money? 0:20:08.440 --> 0:20:14.280 They saw money flowing out of our office. Two thousands 0:20:14.359 --> 0:20:18.480 of people who were apparently satisfied with what they were receiving, 0:20:19.359 --> 0:20:22.359 took the money, signed a release not to litigate, and 0:20:22.480 --> 0:20:27.960 walked away. So subsequent to you leaving UM that compensation fund, 0:20:28.040 --> 0:20:33.040 sixty Minutes did a piece about how what happened afterwards, 0:20:33.119 --> 0:20:38.240 where people were making claims who essentially had no damage 0:20:38.320 --> 0:20:41.280 from or at least that was the argument by BP, 0:20:41.720 --> 0:20:44.000 that there was no damage from the oil spill. That 0:20:44.119 --> 0:20:48.200 was the argument I I explain to people I'm leaving now, 0:20:49.080 --> 0:20:53.680 I've resolved two percent of all the eligible victims of 0:20:53.760 --> 0:20:58.679 the spill, and now there's very few left. BP decided 0:20:58.840 --> 0:21:01.400 to continue a program, not with me but with others, 0:21:01.440 --> 0:21:05.560 as you say, and it unraveled. People started filing claims 0:21:05.640 --> 0:21:10.400 and making making claims on damage and it became pretty ugly. 0:21:10.520 --> 0:21:12.399 But my favorite version of that was the guy in 0:21:12.520 --> 0:21:16.280 Norway who claimed claimed damage from that so I received 0:21:16.840 --> 0:21:22.800 in sixteen months one million, two hundred thousand claims from 0:21:22.960 --> 0:21:26.280 fifty states. I got about three hundred claims from New York. 0:21:26.640 --> 0:21:28.560 I didn't know the oil had got here to New York. 0:21:28.880 --> 0:21:32.679 I got claims from thirty five foreign You got claims 0:21:32.680 --> 0:21:37.880 in Hawaii, everywhere, Alaska, twenty from Alaska. I got claims 0:21:38.040 --> 0:21:43.439 from Norway, Sweden, Denmark, China, Nigeria. I got claims from everywhere. Well, 0:21:43.440 --> 0:21:46.119 everybody gets claims from Nigeria. But um, that's usually just 0:21:46.400 --> 0:21:50.639 uh an emails fraud. Um. What percentage of the initial 0:21:50.720 --> 0:21:53.639 claims were junk claims? How many claims did you have 0:21:53.720 --> 0:21:55.879 to throw I think I threw out two thirds of 0:21:55.920 --> 0:21:58.960 the Really that many people see money and they that's it. 0:21:59.080 --> 0:22:02.280 They just go after it. Either they file a claim 0:22:02.359 --> 0:22:06.800 that makes no sense, or or they file a claim 0:22:06.920 --> 0:22:11.840 that may make sense, but they have no proof. Mr Feinberg, 0:22:11.880 --> 0:22:14.480 I lost a hundred thousand dollars because I couldn't fish. 0:22:15.440 --> 0:22:18.000 I see, well, do you have a tax return or 0:22:18.080 --> 0:22:21.960 a profit? We do things with a handshake down. Here. 0:22:22.480 --> 0:22:26.520 This is Masters in Business on Bloomberg Radio. I'm Barry Ridhalts. 0:22:26.680 --> 0:22:30.320 I'm here speaking with Ken Feinberg special master. You know, 0:22:30.400 --> 0:22:35.040 the American Bar Association called you the master of disaster 0:22:35.200 --> 0:22:39.359 and said that Ken Feinberg is changing the course of 0:22:39.600 --> 0:22:44.480 mass toward resolution. Are you? Why do you say that? Why? 0:22:45.840 --> 0:22:51.840 I did nine eleven, I did BP, I did GM. 0:22:52.680 --> 0:22:57.040 That's almost wrapped up now, right, these three mass towards 0:22:57.800 --> 0:23:02.120 that's it, Agent Orange, DALC on Shield. Wait a minute, 0:23:02.400 --> 0:23:07.639 asbestos litigations Agian Orange, DL con Shield and asbestos litigation 0:23:08.400 --> 0:23:12.399 all were settled under the auspices of a mass taught court. 0:23:13.520 --> 0:23:22.080 Only nine eleven, BP and um GM are alternative programs, 0:23:22.760 --> 0:23:27.040 divorced from the courts, separate. So when people say to me, 0:23:27.200 --> 0:23:29.800 this is the wave of the future, you're changing the law, 0:23:29.960 --> 0:23:35.080 I'm changing nothing. These programs are aberrations, Barry, they are not. 0:23:36.119 --> 0:23:39.919 Let me push back on that. So the the Agan 0:23:39.960 --> 0:23:43.040 Orange case went on for how many years after Vietnam 0:23:43.520 --> 0:23:46.520 before some young kid named Ken Feinberg comes along and says, 0:23:47.200 --> 0:23:51.679 to the chemistry companies who only offered twenty five dollars 0:23:51.800 --> 0:23:54.600 for all of them, versus the veterans who wanted a 0:23:54.680 --> 0:23:58.040 billion dollars, you said, oh, that's a range I could 0:23:58.119 --> 0:24:00.480 work with. And so you have to look at this 0:24:00.600 --> 0:24:03.800 on an I don't need to lecture you on a continuum. 0:24:03.880 --> 0:24:07.200 Starting with agent orange and then going to asbestos. You 0:24:07.520 --> 0:24:11.480 basically took the concept of, hey, there's a better way 0:24:11.520 --> 0:24:14.439 than everybody banging heads and courts, and let's see if 0:24:14.520 --> 0:24:18.280 we can find some middle grounds that will allow everyone 0:24:18.400 --> 0:24:21.240 to get on with their lives. There are mass toart 0:24:21.359 --> 0:24:25.400 cases like agent Orange, like delk on Shield, like asbestos. 0:24:26.040 --> 0:24:29.320 We are the parties, I think realize you're better off 0:24:29.640 --> 0:24:34.080 mediating a settlement with Ken Feinberg or a judge or whoever, 0:24:35.119 --> 0:24:38.480 rather than litigate for years and years and roll the 0:24:38.600 --> 0:24:41.280 dice and pay the lawyers and who knows how to 0:24:41.480 --> 0:24:47.160 end up. That's true now, I think most mass towards 0:24:47.560 --> 0:24:52.000 end up being resolved. Most cases, most litigation, most litigation 0:24:52.080 --> 0:24:55.920 gets solved in that sense, I mean there there there's 0:24:55.920 --> 0:24:59.840 a recognition that litigation doesn't work, it's not efficient. But 0:25:00.119 --> 0:25:05.720 these special programs enacted by Congress or set up by GMA, 0:25:05.800 --> 0:25:10.520 by BP, I think they're a precedent for nothing, really nothing. 0:25:10.840 --> 0:25:13.119 So I'm wondering, are you waiting for the phones to 0:25:13.240 --> 0:25:15.680 ring from Volkswagen? Are you gonna have to settle their 0:25:15.720 --> 0:25:18.800 case for them. I'll say one thing about Volkswagen which 0:25:18.880 --> 0:25:23.600 people shouldn't lose sight of. No matter what Volkswagen decides 0:25:23.680 --> 0:25:28.240 to do about this problem, there are no deaths, there 0:25:28.320 --> 0:25:32.520 are no injuries. These are problems of property value. Some 0:25:32.680 --> 0:25:36.080 economists did a study that said, based on the falsification, 0:25:36.520 --> 0:25:38.840 there's this much more pollution and we could figure out 0:25:38.880 --> 0:25:42.280 statistically a hundred and thirty five more people died from 0:25:42.320 --> 0:25:45.760 air pollution than whatever. Interesting a model that I think 0:25:45.840 --> 0:25:50.639 you're chuckling a little bit. But the Volkswagen problem is 0:25:50.800 --> 0:25:55.560 overwhelmingly a pr problem and an environmental problem, with the 0:25:55.640 --> 0:25:57.879 e p A and the Justice Department of looking at it. 0:25:58.160 --> 0:26:01.919 But in terms of individual will damage to the auto owner, 0:26:02.720 --> 0:26:05.920 it is a property claim. Now there may be different values, 0:26:06.280 --> 0:26:10.080 but it's a property claim. You're not involved with calculating, 0:26:10.119 --> 0:26:13.560 as we did earlier in the segment, calculating lost live 0:26:14.200 --> 0:26:17.959 physical injury. This is an easy, much easier so al right, 0:26:18.000 --> 0:26:21.000 so you know, emotionally much easier. That's the Fineberg Law 0:26:21.000 --> 0:26:23.359 Office in Washington, d C. Volkswagen, if you want to 0:26:24.040 --> 0:26:28.000 resolve this sooner rather than later. Um, let's let's come 0:26:28.080 --> 0:26:31.440 back to this. So so we we said earlier. It's 0:26:31.480 --> 0:26:34.600 easy to calculate the economic value of a life. You 0:26:34.760 --> 0:26:38.280 look at life expectancy and future earnings, and you could 0:26:38.320 --> 0:26:43.399 you could do the math philosophically working with all these tragedies. 0:26:43.840 --> 0:26:48.040 How has that impacted you as the media? Has it 0:26:48.320 --> 0:26:52.600 changed your perspective on the value of how we all 0:26:52.680 --> 0:26:59.280 live our lives? Yes, what I do is extremely debilitating, debilitating. 0:26:59.400 --> 0:27:02.840 Oh my good to shoot. You can't sleep. You're dealing 0:27:02.920 --> 0:27:06.840 with people who lost loved ones who are venting to 0:27:07.040 --> 0:27:11.480 you about life sunfairness, validating the memory of a lost 0:27:11.600 --> 0:27:16.760 loved one, raising issues that Solomon would have trouble resolving. 0:27:16.880 --> 0:27:20.560