Kenneth Feinberg gets candid with The Citizen

 By Zaher Nahlé, MC/MPA’13, Staff Writer

 I sat down with Kenneth Feinberg, currently a lecturer of law at Harvard Law School (HLS), for an exclusive interview with The Citizen. Feinberg was teaching a J-term course on Advanced Dispute Systems Design at HLS.

Feinberg has a long list of accomplishments. He has served as the Special Master for the Sept. 11 Victim Compensation Fund and Special Master for executive compensation (Wall Street) under the Troubled Asset Relief Program (TARP). He was appointed by President Barack Obama and the oil and gas multinational BP to develop what was later known as the Gulf Coast Claims Facility (GCCF) in the aftermath of the 2010 Deepwater Horizon oil spill.

Other high-profile compensation cases in Feinberg’s portfolio include Agent Orange and the Vietnam War veterans, Virginia Tech (Hokie Spirit Memorial Fund) and the Aurora theater shooting massacres, and, more recently, the Penn State Sandusky case.

In this candid conversation, we discussed a myriad of topics including dispute resolutions, sound public policies, the role of government in crisis, and even his personal interests and hobbies. It is safe to say that Feinberg’s unbridled flair for showmanship is equally matched by an acute, exceptional ability to read people and the law.

At times, you also wonder if his imposing, larger-than-life personality somewhat overshadows that genuine – yet purposefully chary – sense of humility. When a classmate asked me to describe Feinberg to her, I unashamedly uttered what first came to mind. “Well Shannon”, I said, “it is like watching Picasso paint!”

The following is an excerpt from that interview.

Q: Thank you for sitting down for this interview Mr. Feinberg. You wear many hats but how do you define yourself in your own words. Who is Kenneth Feinberg?

A: Well, I am a lawyer licensed to practice law in Washington, Massachusetts and New York. My specialty is alternative dispute resolution (ADR), mediation arbitration and negotiation. But every once in a while, when there is a disaster in America – it may be man-made like the BP oil spill, or it could be a tornado or a hurricane or an earthquake – I am asked by policy makers (the judge, the legislator, or an executive authority like the President) to design, implement and administer a compensation program to pay eligible victims. And that is what I have been doing over the past 25 years.

Q: Could you talk to us a little about what you call ‘rough justice’ in these programs, a concept you describe in your writings, especially when dealing with the aforementioned compensation plans. How can we accept the concept of ‘rough justice’ and why?

A: First of all, I don’t decide whether these compensation programs are good or bad. Those decisions are made by policymakers and legislators: They decide for each particular tragedy (BP or 9/11 for example) from the perspective of the American people, the nation [and] if we want to do something out of the ordinary for the tragedy…My concern is, why just these victims? Bad things happen to good people every day in this country. They don’t have the benefit of the 9/11 fund or the BP oil spill fund. You have to question whether or not that is sound public policy; to carve out special compensation for just this segment of injured and dead victims when everybody else is not eligible.

Q: Let me ask you then, how can state and federal laws/policies be improved based on the experience gathered so far from the practice of ADR and special compensation programs?

A: I don’t think we need new laws. I think one step that our court systems can take to promote ‘rough justice’ and more equitable treatment of victims in timely fashion would be to acknowledge the importance of aggregating claims so that a huge volume of mass claims can be consolidated, aggregated and brought to the consideration of the court without resorting to special laws or special treatment for a select few. I think that is important.

Q: Even in a crisis, when money and speed are of the essence? How can such victims go through a mass tort system?

A: Well, that is a very good question. BP did just that. BP said in its settlement of litigations with private plaintiffs in the Gulf that they will settle with a class, aggregate everybody under rule 23, the federal rules for civil procedures class settlement, and will immediately begin making payments. We won’t even wait for the class to be certified and approved. We will start making payments immediately, just like the GCCF.

Q: In the vast repertoire of cases you have worked on from Agent Orange, to asbestos litigations, to 9/11, to GCCF, to Virginia Tech and Aurora massacres, even the Sandusky case, is there anything universal about these tragedies, other than the victims themselves?

A: Yes. [There are] two universals. One is that you mediate, you negotiate and you design a program in the shadow of great emotions. Be careful about bringing a lawyer’s skill to the table. Be careful about being reasonable about the merit of these compensations. You are dealing with very emotional, distraught, frustrated, angry victims. You have to factor that into any attempt to forge a solution. The second thing is that when you forge a solution, you’d better have the right people at the table with the authority to reach a compromise, and that is not always the case.

Q: You’ve actually written a book on this, “What is Life Worth?” So what is life worth Mr. Feinberg?

A: People have mistaken “What is Life Worth?” They think my role is to … place a value on the moral integrity of a human being. I can’t do that: Nobody can. Maybe a priest or a rabbi. I don’t even attempt to do it. All I am doing when I place value on life is what judges and jury do every day in our country: economic loss. What would a victim have earned over a lifetime? It is a rather mathematical calculation, you see. I don’t even try to evaluate the moral worthiness of the individual.

Q: Let me push back a little on that. In the 9/11 compensation fund for instance, you somehow weaved the concept of ‘need’ into these calculations of life’s worth.

A: That is because Congress invited me to do this, in an effort to use taxpayer’s money in a reasonable manner. I don’t think Congress wanted me to calculate awards without taking into account need and individual circumstances.

Q: In the BP oils spill disaster, your office received over a million filed claims; an overwhelming volume by any standard. Looking back, what would you have done differently in the GCCF, especially given that approximately 39 percent of the BP claims were actually denied in contrast to the 9/11 case where 97 percent of claims filed were appropriately awarded?

A: Well, those were denied because they lacked proof of eligibility or proof of damage. So that was a relatively straightforward denial, based on the fact that claimants did not comply.

I did make some mistakes with the GCCF. First, I made the cardinal mistake of over promising. You do not tell people who are vulnerable in the gulf, confronting great financial uncertainties, that you will be paid in two days or one week. You can’t deliver that promise. The applications are too complicated. The calculations of damage are too difficult.

The second mistake I made is that I should have made a greater effort to involve the lawyers and the trial bar in those efforts. My initial efforts were rebuffed by the plaintiff lawyers and I did not do more to bring them into the mix.

Q: Thank you for being so candid with us on this. On the same point, to what extent do uncapped special compensation programs invite or facilitate fraud?

A: It always invites fraud and every one of these programs must be prepared to combat fraud. It is human nature. In BP, we had 18,000 suspicious cases. Now, 18,000 out of a million claims is not acutely bad, but still anti-fraud initiatives must be part of any compensation program. The GCCFhad an anti-fraud specialty, designed to weed out and combat fraudulent applications.

Q: Staying on the topic of crisis management, we recently had the presidential inauguration with great hopes for the next four years, but also trepidation and many challenges. Some are calling for a special master, not committees, to fix this paralysis. What do you think about this ‘outside the box (and the constitution)’ idea?

A: I am very skeptical. We have elected officials whose purpose is to come together and make government work. If they can’t work out a public policy to work out the logjam you mentioned, no mediator, no individual is going to accomplish this and I am very skeptical about the notion of delegating to one person.

Q: There is clearly room for ADR in the American legal system. Is there room for ADR in international law and practices overseas?

A: Yes, I think there is. I think the need is not as acute. Because of the American legal system, ADR is an alternative to that system. That legal system is unique to the United States. Having said that, I do think that congenital resolution of disputes, ADR, is preferable in any country to imposing one’s will of results on the claimants and I think some form of ADR might be worthwhile not only in western Europe but in Asia and in the Middle East and elsewhere.

Q: So do you see the United Nations, or its Secretary General, as the ‘Special Master’ of the world per ADR definition? Incidentally, any interest in that job?

A: No, ADR is more substantive dispute resolution and I think the UN is a political responsibility, although the Secretary General can have great force in trying to make settlements.  I don’t think that an ADR official has the criteria required to be the head of the UN.

Q: Switching gears now, I am going to turn to the personal. How do you protect yourself from being desensitized dealing with all these tragedies? Beyond hard techniques or cost-benefit analysis, what do you do to stay in touch with your humane side and that of the victims, or is this by nature a dispassionate process?

A: Oh no, the question I usually get is the opposite, not how to be objective and clinical and dispassionate, but rather, how do you prevent yourself from being overwhelmed by emotions. That is the problem, and that is very difficult. I don’t claim to be immune from the personal angst and tragedy. You can’t be, unless you have a heart of stone. But you try to be as professional as you can. You have been asked by the President or attorney generals or judges to do this in a very professional way. You have an obligation to America to do the best you can, as objectively as you can. But you can’t help it. It affects you. You are a human being.

Q: To many you are a super hero, a Robin Hood (and I mean this in a good way). What scares you though? What keeps you up at night?

A: Hmmm. Have I done right by the victims? Have my decisions been fair and also have I done right by the President or the Congress or the Attorney General? You are constantly wondering because you have no other source of input. It is you. Have you done right by those who asked you, and expect you, to do justice?

Q: Any self-doubt?

A: Self-doubt always, always self-doubt!

Q: Our research tells us that you are a huge Opera fan, with a sound-proof room at home dedicated to the music you play regularly?

A: Yes. Yes.

Q: When did this love affair with classical music start?

A: I was nine years old. I can tell you exactly when it started. The cantor in my synagogue was a Viennese immigrant from Austria. He introduced me to classical music and guided me over the years.

Q: How do you balance work and life? Do you have the formula for this too?

A: Not very well. Unfortunately, I don’t have the formula. I spend, many would say, too much time in working and teaching commitments, with not enough personal and social time. The balance is not appropriate.

Q: Aha! What does Mrs. Feinberg say about this?

A: Mrs. Feinberg is a ‘Saint’. Mrs. Feinberg has a career. She acknowledges my work ethics. We have been married for almost 40 years and she is an extraordinary person.

Q: That is wonderful. We wish you both continued happiness. Now, I have to ask you this. You are an expensive man, and I don’t only mean the suits. You charge handsomely for your services. Here, I must note that you volunteered your time for three years, completely pro bono, working on the 9/11 victims’ compensation fund, which is admirable. But what are your views on pay and prosperity in public service jobs? Is there a problem in the compensation system in the public sector now?

A: Yes. My thoughts are that government employees are underpaid. Government service is a wonderful thing: It is a noble undertaking,. The government helps people every day in our country and I think that the compensation should be commensurate with that service. I think there is a growing gap between the private sector and the government sector, which is too bad because the government sector is part of an important partnership.

Q: Your relationship to Harvard Kennedy School is in fact personal. Leslie, your daughter, is one of the star students in the MC/MPA program. Will we see you again at graduation in a few months?

A: Zaher, you will see me at her graduation and you will see me at a mutually convenient time when I am invited to the Kennedy School. There is no school quite like it in the United States or the world. It is a unique, unique learning experience and to be part of the Kennedy School in any way, I believe, is a glorious opportunity and I will take advantage of it.

Q: We look forward to this. Thank you so much for your kind words about our school. Any final comment?

A: Just that the work I do is very satisfying because you are trying to get individuals to agree voluntarily on resolution without combat, without advocacy or bomb throwing, and I find that this is very satisfying.