Ralph Nader last week called on Attorney General Merrick Garland to take control of the $500 million compensation fund that grew out of the Boeing deferred prosecution agreement.

Under that agreement, Boeing was required to pay the $500 million to the 346 victim families – $1.45 million per victim.

The $500 million fund is separate and apart from the wrongful death cases now making their way through federal court in Chicago.

Boeing hired Kenneth Feinberg to make sure that each family received their $1.45 million share.

“As you might have read recently, some attorneys representing families of the victims of the Boeing 737 MAX crashes are charging ten percent ($145,000.00) or more to secure the $1.45 million each victim was guaranteed under the deferred prosecution agreement the Justice Department negotiated with Boeing earlier this year under the Trump Administration,” Nader wrote to Garland.

“Some families have expressed outrage at this excessive fee charge, especially since many attorneys are justifiably not charging anything for filling out paperwork, and Kenneth Feinberg’s law firm, which Boeing hired to administer the fund when requested, has helped 25 of the families fill out the paperwork without charging anything.”

“I was surprised to hear from Kenneth Feinberg that the Justice Department has shown no interest in this matter of the disbursement of the $500 million set aside for the victims families by the deferred prosecution agreement especially since the agreement specifically gives the Department’s Fraud Section final say in the matter.”

According to the Boeing deferred prosecution agreement, only the Fraud Section of the Department of Justice “shall be empowered to make final decisions regarding a) the individuals who should receive the victim payments from the Crash-Victims Beneficiaries Compensation Amount and b) the compensation amounts that these victims should receive.” 

“Why then is the Justice Department saying ‘no comment’ to inquiring reporters?” Nader asked.

“As of last week, Ken Feinberg had disbursed funds to 211 of the 346 families. I urge you to take charge of this matter and make sure that the lawyers representing the remaining 135 families do not take a percentage fee,” Nader wrote. “I have urged Ken Feinberg to help these remaining families fill out the necessary paperwork as he did with 25 other pro se families. And I urge you to have the lawyers who charged the $145,000 return that money to the families.”

“You should exercise the authority granted to you in the deferred prosecution agreement and return the funds justifiably due to the victims’ families,” Nader wrote.

In a separate letter to Feinberg, Nader asked – “Since Boeing is required to pay all of your expenses, why couldn’t your office have done these form filing services without charge to the claimants? If there were a few complications, as you said in Somalia, local counsel could be retained at Boeing’s expense.”

“It seems that some of these charging lawyers are justifying this overreach, to put it mildly, by referring to you as the authority for what is a reasonable fee – e.g., ten percent or $145,000 – plus a similar percentage earlier on the $150,000, if that was the case. This should bring you to a reconsideration of this development and whether this should lead to a different kind of advisory from your office. There are knowledgeable people in legal ethics who believe that the ten percent lawyers should be refunding that sum, minus a few by the hour charges.”

“What makes this story so heartbreaking, Ken, is that it comes after a sweetheart settlement by the Department of Justice, dashing the expectations of the families for punitive justice on the company and its top culpable officials. They then receive in toto a far smaller sum than did the airlines – already the recipients of some $50 billion in pandemic subsidies, in spite of $45 billion in stock buybacks over a few past years. Then comes the carve out from lawyers at levels that can only be called ‘larcenous.’”

“You’ve had to deal over the years with many sticky issues inside the personal tragedies that require judgment calls which are not easy to make.” 

“I urge you to put your experience and sense of equity to work to produce restitutions that are clearly equitable and needed. For those families not yet in receipt of their awards, you can forestall the ten percent problem and proactively provide pro se services.”

“After all, your calls are not always entirely excellent and perfect. No one is perfect. Mistakes under pressure are understandable,” Nader wrote.  “Let’s hear from you.”

Corporate Crime Reporter contacted both the Justice Department and Feinberg’s office for comment on the story — and to get a list of lawyers involved and how much they charged their clients to secure the $1.45 million.

The Justice Department did not respond to an inquiry.

Feinberg asked that we call before deadline, which we did.

We wanted to question Feinberg about his claim on the Boeing Compensation Fund web site that the attorneys’ fees “should not be excessive.”

But how can he know whether the fees are excessive or not if he doesn’t know what the fees are? (Which is what Feinberg claimed to Nader.)

“I can’t speak at all about the letter to Merrick Garland,” Feinberg said. “That’s beyond my jurisdiction. As for the letter I received from Ralph Nader, I will tell you on the record that Ralph Nader is a great American. He has transformed the American legal system and I’m always glad to receive a letter from Ralph Nader. And I’ll take the letter under advisement. That’s it.”

“Okay thank you,” Feinberg said.

Wait a second. Before you go.

You say the attorneys’ fees should not be excessive.

How would you know whether or not they are excessive if you don’t know what they are?

“I have nothing further to add,” Feinberg said. “I did not want you to write a sentence in any story saying – Feinberg did not respond.”

“I responded and that’s my statement,” Feinberg said. “I have no comment on the details other than to say I’m always pleased to receive a letter from Ralph Nader.”

We have interviewed Feinberg’s law partner Camille Biros in detail in the past about the Boeing case. 

Will Camille Biros answer some of these questions?

“No,” Feinberg said. “She will just refer you to Ken’s on the record quote about Ralph Nader.”

You are not going to release the list of the lawyer fees?

“You have my statement,” Feinberg said.