Giuliani Yielding, Speeds Payments to Tower Widows

Since Sept. 11, Rudolph Giuliani has been lauded by the public,

exalted in the media and knighted by the Queen of England. Always a formidable

figure, he has been all but unassailable since leaving office. Yet on the

morning of Feb. 26, five modestly dressed women sitting in a midtown lawyer’s

office were less than 30 minutes away from a potentially hostile meeting with

Mr. Giuliani-and they were spoiling for a fight.

The five women were widows of police officers killed in the World

Trade Center attack.

“I’m ready for anything,” said Jessica Ferenczy. Her collegues

nodded their assent. Their lawyer, Ed Hayes, engaged in a little last-minute

coaching, advising them to speak forcefully in order to make their demands

clear. And they were off.

As it turned out, the meeting later in the day turned out to be

mercifully anticlimactic. The family members were skeptical about Mr.

Giuliani’s role in the distribution of funds raised for their benefit, but in

the end the former Mayor assuaged their concerns. He promised to increase their

involvement in the management of the fund and to distribute the funds within 60

days. The widows got what they wanted, but only after a struggle that

represented the first real public relations setback for Mr. Giuliani since he

became a private citizen.

At issue was $160 million donated from all over the world to the

city-run Twin Towers Fund to benefit the families of some 400 uniformed rescue

workers killed in the attack on the World Trade Center. Mr. Giuliani, never

content to exit quietly from the public arena, wanted to retain control of the

funds by having the money transferred to a private charity, which would retain

the name Twin Towers Fund, under his direction. Then, according to the plan, he

would be able to parcel out the money at his discretion. In the meantime, his

allies would oversee the not-for-profit entity, with several of them receiving

six-figure salaries to do so.

Some of the widows-for whom the money was intended-were having

none of it, and they mobilized to stop the transfer of funds. On Feb. 20, they

announced that they would try to block a court order releasing the funds from

the Bloomberg administration to Mr. Giuliani’s charity. The protests received

the backing of the Uniformed Firefighters Association and, more recently, the

Patrolmen’s Benevolent Association of the Port Authority. They also attracted

the attention of State Attorney General Eliot Spitzer, who said he would review

the propriety of the maneuver.

After a week of mounting protest, the Feb. 26 meeting with Mr.

Giuliani in the charity’s Fifth Avenue headquarters was surprisingly

diplomatic, with a few exceptions. Mr. Giuliani and several of his appointees

to the charity’s board of directors, including former Police Commissioner

Bernard Kerik and former Deputy Counsel Larry Levy, personally welcomed the

widows and their lawyer.

According to people who attended the meeting, Mr. Giuliani said

that the disagreement was simply a misunderstanding. The former Mayor also said

that the timing of the payouts was not an issue, because he and his colleagues

already had resolved to distribute the money within 60 days. (Several family

members were skeptical, wondering aloud why they had not heard anything about

any such a commitment despite repeated inquiries and highly public protests.)

Mr. Giuliani also promised to give the intended recipients a

bigger say in how the organization is run. And, he said, the overhead costs,

including salaries, would not be taken from the existing fund, but would come

solely from funds raised for that specific purpose.

In the end, an agreement was reached to transfer the money,

providing that the conditions laid out at the meeting were included in the

court order allowing the deal to proceed.

The family members said they were happy with the result. “The

Mayor seemed to be sincere and upset at whatever problems we had,” said Ms.

Ferenczy. “It remains to be seen if what he said will happen is going to

happen, but we’re feeling pretty good about this.” 

So was their lawyer. “They promised to give us everything we

wanted, and more,” said Mr. Hayes, who played a lead role throughout the week

in orchestrating opposition to the unilateral transfer of funds.

A Clear Victory

It seemed to be a clear

victory for the families of the police officers, firefighters and other

uniformed rescue workers killed at the World Trade Center. After the uneven and

somewhat disorganized dispersal of the money raised at the end of 2001, the 60-day

time limit should ensure that the payments are sped, in large installments, to

their intended recipients.

For Mr. Giuliani, by contrast, the result was more complicated.

On one hand, he will be able to remain involved with New York’s recovery

efforts, a cause he’s embraced and has benefited from. On the other hand, the

pointed and often personal criticism of his actions by the people he was

professing to help represented the most painful sort of contrast to the

adulation he’s received for his performance on and after Sept. 11.

Jonathan Prince, a spokesman for the Twin Towers Fund, said that

the apparent disagreements were only the result of miscommunication, and that

there were never any substantial differences between Mr. Giuliani’s position

and that of the victims’ families. “As the meeting progressed and a lot of

misinformation was cleaned up, it became clear that the Mayor was deeply

committed to getting money to the families as quickly as possible, and to

making sure that what he referred to as his moral obligation is met.”

Mr. Prince also denied that Mr. Giuliani’s agreement to a time

limit for payments was a reaction to the torrent of criticism leading up to the

meeting. “Mayor Giuliani has always been the one leading the charge to raise

money and distribute it rapidly,” he said. “He said at the outset that he

wanted to distribute the money quickly, even if there was no hard number put on

it at the time. It’s unfortunate that it wasn’t communicated better to

families.”

Some backers of the victims are unimpressed. “I’ve been a cop for

28 years, and as soon as I heard about this, my scam alarm went off,” said Port

Authority P.B.A. president Gus Danese, who has feuded with Mr. Giuliani in the

past. “Where does Giuliani come off saying that because his friends donated to

the fund, he should control it? People would have responded even if Giuliani

wasn’t the Mayor-he didn’t do anything special to go out and raise that money.

He was concentrating on sticking his face in the camera.”

Mr. Danese also rejected Mr.

Giuliani’s insistence that he had a “sacred obligation” to the victims’

families to keep charge of the fund. “Nobody asked him to be guardian of the

fund, nobody wants him to be guardian of the fund,” said Mr. Danese. “Why would

any victim want him to manage the fund, rather than just having the city divide

up the remaining money equally? Where did he come up with this information that

the family members wanted him to do this, and why didn’t he share this poll

with everyone else?”

For now, though, the battle over the money seems to be over,

perhaps bringing a small measure of satisfaction to people still coping with

extremely grim circumstances. But the widows essentially proved that W.T.C.

family members are powerful in practice as well as in theory, perhaps

foreshadowing the role they intend to play when it comes time to discuss topics

from the reconstruction of lower Manhattan to reforms in the rules that govern

rescue workers.

“I think this increases their profile and their influence

hugely,” said Mr. Hayes. “They wanted a dramatic move from Rudy Giuliani, one

of the most powerful and hard-headed individuals in the country, and they got

it.”