Ex-cop John Walcott now has leukemia
Ex-cop John Walcott, who worked at Ground Zero and now has leukemia, has joined
a suit against a WTC insurance fund.

Big SpenderJuly
17, 2007 — The $1 billion insurance fund set up for the World Trade Center cleanup has violated its congressional mandate to pay legitimate worker-injury claims and “squandered” millions on expenses, an explosive lawsuit is charging.

Controlled by Mayor Bloomberg, the WTC Captive Insurance Co. and its agents have “unethically profited” from the federal fund, draining money available for ill workers, alleges the suit, to be filed today in Manhattan Supreme Court.

The WTC insurance fund has spent close to $74 million on overhead and legal bills so far – but paid just $45,000 to one worker who fell off a ladder.

While letting the fund pay fat salaries and fees to its employees, consultants and lawyers, the mayor has wrongly exploited the unit to fight claims by thousands of workers with illnesses blamed on toxic exposure, the suit says.

“Congress gave Bloomberg a billion dollars to cover for the mistakes he and his predecessor, Mayor Giuliani, made in failing to protect tens of thousands of workers,” lawyer David Worby said. “Now, adding insult to injury, he refuses to use the funds intended for that exact purpose – to help the sick and dying 9/11 heroes.”

The suit will be filed by Worby Groner & Napoli Bern, a law firm already battling the city in a class-action negligence suit on behalf of nearly 10,000 ill WTC responders.

The plaintiffs in the new suit are former NYPD Detective John Walcott, who has leukemia, NYPD Detective Frank Maisano, who has severe lung disease, and Mary Bishop, a St. Vincent’s Hospital worker with cancer, lung and digestive diseases.

“If it wasn’t for the rescue workers and volunteers, our city would be in chaos,” said Walcott, 42, whose daughter was an infant when he was diagnosed in 2003. “How can Mayor Bloomberg justify not releasing the funds Congress gave us when he could save lives and homes and families?”

Besides the fund and Bloomberg, the suit names the outfit’s five-member board of directors – all appointed by Bloomberg – and Christine LaSala, the company’s president and CEO.

LaSala rakes in a salary of $350,000 a year, plus $20,000 in health benefits.

Citing city records, the suit traces the firm back to its origin to prove its claim that Bloomberg has twisted its mission.

In May 2002, the city made a request to feds, saying “toxic chemicals emanating from the WTC debris site” made insurance “absolutely vital to protect the city and its contractors.”

Congress appropriated $1 billion through FEMA.

Then-Gov. George Pataki pushed a bill to create the nonprofit firm to manage the fund. “This legislation is necessary for the city to expedite the payment of claims,” Pataki and Giuliani said in a 2003 press release.

At a meeting in December 2004, minutes show, LaSala declared the firm’s main purpose was to disburse the fund “in an equitable manner that maximizes compensation to those parties who suffered damages as a result of the WTC debris removal program.”

Overall, the WTC fund has spent $73.8 million as of March 31, including $45.7 million on law firms, records show.

Much of the money has been poured into an ongoing court battle in which the city contends it has immunity from all WTC suits because it was responding to a terror attack.

Other expenses include $8.5 million paid to GAB Robbins, a risk-management firm, for “claims adjusting.” But the firm has done little adjusting,
the suit says – WTC Captive Insurance has refused to review the medical records of sick workers.

LaSala has said the firm has a “duty to defend” the city and its WTC contractors, and has “faithfully followed its mandate.”

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Press Office

March 21, 2003


Bill Allows for Sponsored Captives for New York’s Businesses and the Creation of NYC Captive for WTC Response Providing Important Coverages

Governor George E. Pataki and New York City Mayor Michael R. Bloomberg today announced new legislation that will allow a wider range of businesses the opportunity to utilize captive insurance companies to retain, fund, and better manage some of their risk.

The proposed bill will also allow for the formation of a pure captive insurance company by New York City to provide coverages for liability relating to or arising out of activities in or near the World Trade Center site in response to the attacks of September 11, 2001.

“The new legislation will mean New York City will now have important insurance coverages it greatly needs relating to the tragedies of September 11th,”Governor Pataki said. “The Federal Emergency Management Agency specifically authorized the creation of a New York City captive and the City explored various options and decided that the formation of a captive insurance company was in its best interest for claims arising out of the clean-up effort at and near the World Trade Center.

“Our policies of cutting taxes, controlling spending, and eliminating red tape have strengthened the State’s business climate. This bill reaffirms my commitment to pursuing policies that result in creating business opportunities and jobs in the State of New York,” Governor Pataki said.

New York City Mayor Michael Bloomberg said, “The City of New York, together with State officials and the New York Congressional delegation, has fought long and hard for federally-paid insurance to protect the City and its contractors for claims arising from the massive debris removal work done in the World Trade Center. This legislation is necessary for the City to expedite the payment of claims relating to this effort.”

The new State captive legislation contains several provisions to help the State’s business community. The bill provides a new risk transfer vehicle, known as a sponsored captive insurance company, which permits various participants to use the same vehicle to self-fund their risks. The bill in addition, creates additional flexibility by lowering the threshold for businesses to form single parent captives and to participate in a group captive. As well, public entities that meet appropriate standards will also be permitted to form captives.

The U.S. Congress recently passed legislation directing the Federal Emergency Management Agency (FEMA) to provide the City of New York with up to $1 billion in coverage for the City and its contractors for claims arising from debris removal performed after the collapse of the World Trade Center buildings. The federal legislation also directs the City of New York to use such funds to establish a captive insurance company or other such appropriate insurance mechanism.

Superintendent of Insurance Gregory V. Serio said, “The new State captive legislation also creates greater flexibility and allows businesses and public entities new opportunities to avail themselves of greater choices for more efficiency in managing and financing risk. Given the contraction of the commercial insurance market around the country, the new legislation affords even more of New York’s businesses a valuable option by offering the use of captives as an alternativeform of insurance. The New York State Insurance Department is proud of its status as both a facilitator of insurance coverage for New York’s businesses and industry regulator of safety and soundness in the best traditions of financial regulation. The Department stands ready to help New York’s businesses manage their risk, save money and gain greater control of their corporate futures.”

Empire State Development Corporation Chairman Charles A. Gargano said, Companies from across the State, across the Nation, and around the world are expanding their operations and investing their futures in New York. This important legislation is yet another example of Governor Pataki working to improve the business climate of New York and his commitment to pursuing pro-business, pro-growth policies.”

Governor Pataki signed New York’s first captive legislation in August 1997, authorizing the formation of captive insurance companies in the State. Captives are created when a business or groups of businesses join to insure or reinsure their own risk. And allowing these insurers and their managers to operate free of most regulatory constraints, serving exclusively the companies or industries that form them.

Superintendent Serio added, “The Department’s streamlined licensing process will allow New York’s business community to benefit from captive formation. Once formed, a captive can reduce a business’ insurance costs by reducing premiums, accessing the reinsurance market, and centralizing the enterprise’s risk management operation. I encourage the State’s business community to explore the possibilities and the advantages associated with the creation of captives.”

The Insurance Department recently announced a newly dedicated “captive group” and the launch of a new Web site designed to fast-track applications for captive formation. In order to be even more responsive to the needs of a rapidly changing insurance marketplace, New York’s businesses now have dedicated contacts in the Department of Insurance to answer all captive insurance questions and process captive applications within 30 days of the receipt of a fully completed application. The web address is

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Susan Edelman
NY Post Metro New York Crime and Justice reporter. You can also find her work published in: New York Post, Fox News, The Sun, MarketWatch,, The Daily Beast, Page Six, The Herald Sun, RealClearPolitics, The Scottish Sun, The Advertiser (South Australia) and more