Time after time, when judges, attorneys general, or others have needed to compensate victims or determine the fair value of anything from the Zapruder film to a bailed-out bank’s executive pay, they turn to the blunt-spoken and opinionated founder of Feinberg Rozen. Since 1988 Kenneth Feinberg, 64, has directed compensation funds for victims of Agent Orange, the Dalkon Shield, and, most notably, 9/11. A one-time chief of staff for Senator Ted Kennedy, Feinberg spoke this April with our Michael Orey about his high-profile undertakings. In June, Feinberg announced he would step down after more than a year as the Treasury Department’s special master for TARP executive compensation to accept President Obama’s request to administer the $20 billion fund created by BP to pay victims of the massive Gulf of Mexico oil spill.
What are the common strategies you employ to deal with these unique assignments?
Get very, very good people to help you. Think out of the box, because the problems are out of the box. Maintain a high degree of creativity in developing procedures and substantive solutions. Promote transparency and open handedness. Make sure you apply principles consistently, so there’s not the slightest tint of bias or favoritism.
What is a fair resolution?
Now that could be a law school seminar! The elements are: 1. The statute, which in most cases circumscribes my authority. 2. The objective—what do we seek to achieve by valuing lives, distributing money? 3. The politics—what does the public, the taxpayer, expect? And, 4. apply consistency and openness as a surrogate for fairness, so that the process is transparent and people view it as appropriate and just.
You’ve said you emerged after 9/11 “not the same person.” How so?
I’ve become much more fatalistic. Those victims left their homes that morning, said goodbye to loved ones, and never saw them again. I tell students, “Don’t plan too far ahead.” I’m also a better listener. At the beginning of the 9/11 fund, I dictated like a lawyer; after a while I learned that most victims wanted to vent and I was better off listening, which I did.
How do you talk a banker into forgoing his pay for a year?
One, he has no choice but to accept it; I have the power under the law to impose it. But more important, I try to minimize the downstream consequences of pay. I’ll say, “Look, if you don’t do it, Congress will call a hearing, ask you to testify, make you a political target, and there will be pickets at your house.” Why not do it? At a time when there is such economic uncertainty and populist anger, I try to be viewed as a friend, not a foe.
Has being pay czar changed your views?
What I’ve learned is there’s a huge gap between Wall Street perceptions of worth and Main Street perceptions. It is not a gap; it is a chasm. Wall Street pay is all out of proportion. It is excessive.
How do you deal with the very public criticism of you, your manner, your methodology, your sensitivity?
hat criticism is balanced by the fact that you have others who are very supportive. Anybody trying to distribute money to Vietnam veterans; anybody reducing pay on Wall Street, but not reducing it to the level that Main Street would like to see; anybody distributing money to grieving families months after 9/11—criticism goes with the territory. You come to expect it, you can’t let it influence you.
You often try to achieve consensus. Why is there so much polarization in Washington on so many issues now?
A couple of reasons. The extraordinary growth and transformation of the media—with cable and 24-hour news bites—invite newsworthiness in the form of polarization, criticism; and historically, right now you lack the type of moral leaders, institutional leaders of the Senate who are able through force of personality to forge consensus. There is no Senator Kennedy, no Scoop Jackson, no Jacob Javits. There are no, or few, giants who are able to forge that type of bipartisanship now.
Why do you keep taking these daunting assignments?
It’s not easy to say no to Secretary Timothy Geithner, Attorney General John Ashcroft, and particularly Judge Jack Weinstein. And these are discrete assignments; it’s not like a 10-year litigation. You come in, study it, propose a resolution, resolve it, and get out. Plus, I say half jokingly that the bar of success is quite low.
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