Can Ken Feinberg save the Aurora victims fund?

AURORA, Colo.—Across the street from the shuttered Century 16 movie theater in the Denver suburb of Aurora is an empty patch of brown grass. Until recently, the space was filled with stuffed animals, flowers, balloons, candles and even replicas of gravestones on which people could write messages. They were placed there by local residents in an outpouring of support after the shocking July 20 movie theater shooting that left 12 dead and 58 injured.

Two weeks ago, the Aurora government cleaned up the memorial and parceled out the offerings to family members of the victims. The movie theater will reopen, after a remodeling, next year.

Now, administrators of the nearly $5 million Aurora Victim Relief Fund, created from donations, hope to conclude another chapter of the tragedy by doling out the fund's remaining money in a process being overseen by Ken Feinberg, who has administered funds containing billions of dollars for victims of 9/11 and the BP oil spill.

And they hope that this time around, the Aurora victims fund's disbursement process, which has so far been contentious, will proceed without controversy.

"I'm looking forward, not looking backwards," Feinberg told Yahoo News. "What is done was done."

The controversy surrounding the fund began just a week after the shooting when a local charity, Community First—the official money raiser for Aurora victims—doled out $100,000 to a network of local nonprofits. A few weeks later, after families of victims pressured the group to provide direct support to them, Community First gave $5,000 each to the families of injured and killed moviegoers via another nonprofit in its network.

Bereaved relatives, struggling to cover funeral costs or hospital bills, were frustrated by the decisions. And on Aug. 28, families of 11 of the 12 people murdered in the theater held a tearful press conference to criticize the organization for its delay in disbursing the raised funds to victims and their families, as well as its lack of a public plan for when or if it planned to do so.

The families' spokesman, Tom Teves, whose 24-year-old son died while protecting his girlfriend from gunfire, said the way they'd been treated by Community First amounted to a "second tragedy."

Teves also said many felt Community First's solicitations were misleading because donors might have assumed all of their money was going directly to those affected, not to nonprofits that help victims.

Catlin Jenney, a spokeswoman for Community First, said in a statement that it funneled money through nonprofits because it doesn't have expertise "in victim assistance, medical treatment, mental health and other needs that have resulted from this tragedy." The organization's press releases have stated that the money goes to these nonprofits, and it has noted that it hasn't awarded itself any administrative fees for raising the funds.

A second press conference was held by the families on Sept. 14, calling on Colorado Gov. John Hickenlooper, who sits on the newly formed 7/20 Recovery Committee that oversees the fund, to nominate an independent arbitrator to take over the fund. Teves said that despite their pleas, families had still only received the initial $5,000 payment, and some were in dire need of financial help.

On Sept. 21, Feinberg was tapped.

Feinberg, who accepted the position pro bono, wouldn't comment on whether he thought it was appropriate that the fund initially gave its money to nonprofits, or that it waited weeks to send money to families and those injured. But he said that this time around, all of the money will be parceled out and sent directly to victims, and that he's learned the best way to avoid conflict with victims funds is to "get money out as soon as possible with few restrictions."

Even so, Feinberg says it's common for these funds to be surrounded by bad feeling and controversy, no matter how well-managed. "Human nature being what it is, it's a very raw emotional circumstance that gives rise to these programs," Feinberg said. "It's to be expected. I'm hoping that I'll be able to help the families with some of the financial uncertainties at least, but money is a pretty poor substitute for loss and pain and physical injury."

He will meet with families next week to hear their thoughts on the claims process, which he hopes to open on Oct. 15, with applications due Nov. 1. Hickenlooper's office will ultimately evaluate the claims and allocate the money by mid-November. A third party will later audit the claims and how the fund was handled.

Teves told Yahoo News that "if Feinberg continues being an independent person [per his reputation], it would be a positive." But he said he's still angry it took so much prodding for the funds to be used to directly compensate victims.

"It's a little sad that I have to spend so much time asking people to do what they need to do," Teves said.

It's still unclear how funds will be awarded. Feinberg said the fund's relatively small size means it's unlikely awards will be made to people reporting mental and not physical injury.

The $7 billion taxpayer-supported 9/11 fund awarded about $2 million each to the families of the dead and about $400,000 for the injured, according to The Associated Press. Feinberg has written that he prefers to award equal amounts for each killed victim of a tragedy, but that in the 9/11 fund, he was obliged to follow tort law and set a specific dollar value for each life lost, which included taking into account a victim's salary.

The way Feinberg handled the Virginia Tech shooting might be the best parallel to the Aurora case, since at $6.5 million, the fund was a similar size. Feinberg distributed money to 32 Virginia Tech families using a formula that weighted the length of hospital stay for injured victims and gave equal payouts to families of those who were killed.

Feinberg, meanwhile, worries about a more abstract problem, one that he explores in his recent book, "Who Gets What: Fair Compensation After Tragedy and Financial Upheaval."

"Why do we have these special funds for certain tragedies but not for other tragedies?" Feinberg asked. The victims of Hurricane Katrina and the recent tornado in Joplin, Mo., for example, did not attract special government-assisted victims funds, leaving those victims without the direct financial assistance that Aurora's injured will receive.

"That's the real dilemma," he said. "It raises questions of equal protection and fairness for all."