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Injured Ground Zero Workers Slam WTC Captive Insurance Co. & Mayor Bloomberg Over Misuse Of FEMA Funds


For Immediate Release

New York, New York, July 17, 2007: Attorneys for several severely injured heroes of the “Ground Zero” rescue, recovery and removal efforts announced today that they have filed a multi-million dollar law suit against the WTC Captive Insurance Company, Inc., Mayor Bloomberg, and others for the continued waste and misuse of the billion dollar fund allocated by Congress to pay for the workers’ medical monitoring, medical treatment and compensation. The law suit, entitled John R. Walcott, Frank Maisano and Mary E. Bishop v. WTC Captive Insurance Company Inc., et al., Index No.: 109775/07 was filed today in the Supreme Court of the State of New York, County of New York. All three Plaintiffs face life-threatening illnesses from their exposure to toxins during their work on or at “the pile” at the World Trade Center site or at the Fresh Kills landfill in the weeks after the September 11, 2001 attacks but, like thousands of others, have received no compensation or reimbursement for medical treatment or testing nor even had their claims considered by the WTC Captive, despite its federal funding and creation nearly three years ago. Instead, the Plaintiffs allege that the WTC Captive’s funds have been used solely for the City’s benefit by virtue of the control wielded by Mayor Bloomberg over the Captive. The Plaintiffs allege that Mayor Bloomberg is using his control to prolong litigation and refuses to consider the merits of each and every claim to force the federal government and plaintiffs into providing for the City and contractors’ complete relief from all liability while shifting the burden of compensation back to federal agencies.

“The Captive and its management have spent over $74 million dollars of the heroes’ money on so-called ‘loss adjustment fees,’ including over $45 million in legal fees, to fight the ground zero workers’ claims, but they have not paid a single dollar to a Ground Zero worker who has become ill from exposure to toxic substances at the WTC and related sites,” said attorney Marc Jay Bern. The plaintiffs, John Walcott, Frank Maisano, both former New York City Police Detectives and Mary Bishop, a former health care worker assigned to the site, are only three of some 40,000 Ground Zero workers who sacrificed their health and their families’ futures when their City and their country needed them. “The Captive’s and the Mayor’s continued indifference to the suffering of the very people this Fund was created to help is appalling,” says Bern. Their firm, WORBY GRONER & NAPOLI BERN, LLP, also serves as Plaintiffs’ Co-Liaison Counsel in the pending litigation against the City of New York and its contractors for the failure to provide and enforce the use of adequate respirators and other personal protective equipment during the debris clean-up efforts at the World Trade Center site (In re: World Trade Center Disaster Site Litigation, 21-MC-100 [AKH], United States District Court for the Southern District of New York).

In the face of inquiries by New York’s then-Insurance Commissioner Howard Mills, Senators Schumer and Clinton, and by Representatives Carolyn Maloney and Jerrold Nadler, Captive President and CEO Christine LaSala has steadfastly maintained that FEMA allocated the billion dollar fund solely to provide for the defense of the City of New York and its Contractors, as if the Captive is nothing more than a legal defense fund. This is not the case, according to the very people who fought for the money for the Captive’s creation. In a July 31, 2006, letter from Senator Charles Schumer to LaSala, Senator Schumer wrote: “[w]hen I worked with the City and the contractors, my intent, along with that of my colleagues in Congress, was to use this federal money to pay appropriate claims, not to fight claims.” Indeed, the entire New York Congressional delegation fought for the federal funding, according other correspondence directed to FEMA and cited in the pleadings, to “ensure that sufficient resources will be available to satisfy legitimate claims by individuals affected by the recovery operations while safeguarding the fiscal health of the City and the contractors.” Thus far, because of the Captive’s refusal to consider a single claim for illness caused by toxic exposures at the WTC and related sites, that fight has proven to be in vain, leaving the Plaintiffs with no recourse but to file suit so that the funds can be freed for their intended purpose.
Among other things, the suit alleges that the Captive has violated the Freedom of Information Law and New York’s Open Meetings Law, by refusing to release or provide access to demanded documents and holding closed-door meetings, all of which would reveal the misuse of public funds. The suit claims that the Captive and its management have violated section 2824.1 of the Public Authorities Accountability Act of 2005, because the Captive and its officers, directors and managers were obligated – and failed -- to ensure that board members acted effectively, ethically and independently. Instead, because Mayor Bloomberg annually appoints the entire WTC Captive board, most of whom are City employees, the Captive merely does the Mayor’s bidding, even when the result is that there has been no provision of funds for needed medical testing, treatment or compensation to the heroes of 9/11.

The suit also alleges that the Captive has violated its fiduciary duties to protect and distribute the funds for the benefit of the injured Ground Zero workers; that the defendants have converted the funds intended for the Ground Zero workers to their own benefit; and seeks a return of the funds that were improperly paid out.

In addition to suing the Captive, LaSala and the Captive’s Board of Directors, the litigation seeks return of the millions of dollars paid to GAB Robbins, the Captive’s Third-Party Claims Administrator and Marsh Management Services, Inc., the Captive’s Administrator, all of whom have been paid millions of dollar to administer claims without any appreciable claim activity.

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Worby Groner & Napoli Bern, LLP
115 Broadway, 12th Floor
New York, New York 10006
Phone: (516) 361-4909

To obtain a copy of the Complaint, Contact:
Denise A. Rubin
Worby Groner & Napoli Bern, LLP
115 Broadway, 12th Floor
New York, New York 10006
Phone: (212) 267-3700


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