Grassley, Tillis, Cornyn Reintroduce Bill to Protect Asbestos Victims Trust Fund
WASHINGTON – U.S.
Sen. Chuck Grassley (R-Iowa) this week joined, U.S. Sens. Thom Tillis (R-N.C.)
and John Cornyn (R-Texas) to reintroduce the PROTECT Asbestos Victims Act, commonsense legislation that provides
much-needed oversight of asbestos bankruptcy trusts to ensure victims
receive fair and just compensation.
“Fraudsters
and poor management cannot be allowed to cheat victims of asbestos-related
diseases out of the assistance Congress established for them years ago through
the Asbestos Bankruptcy Trust system. We need commonsense accountability
measures to ensure that the trust fund is not syphoned away from the victims it
was intended to help. And we need independent oversight to protect against any
waste, fraud, and abuse. This bill accomplishes these much needed reforms.
Additionally, since late 2018 the Department of Justice has increased scrutiny
of asbestos trust funds, urging more accountability. I hope these
investigation will continue under the new Administration without interference.”
Grassley said.
“This
commonsense legislation ensures that the asbestos bankruptcy trusts will
benefit victims of asbestos exposure, not trial lawyers. The PROTECT Asbestos Victims Act will reform
the asbestos bankruptcy trust system by adding in layers of oversight,
accountability, and transparency, which in turn will help eliminate fraud and
ensure that trusts can compensate present and future asbestos victims,” Tillis said.
“Fraud
has run rampant in the system, eroding victims’ ability to access the
compensation they deserve. By increasing oversight, we can help ensure
asbestos victims receive the support they need during their treatment,” Cornyn
said.
In
1994, Congress created a system of bankruptcy trusts to ensure that current and
future victims of asbestos-related diseases could receive compensation from
corporations with liability exposure. Unfortunately, the asbestos bankruptcy
trust system lacks any independent oversight by a neutral third party to ensure
that the trusts are not deceived into paying erroneous or false claims for
compensation.
Because
there is no effective oversight of the trusts, there are widespread reports of
fraud and mismanagement. In fact, one former trial lawyer turned whistleblower
has described
the schemes used to cheat trusts as
“institutionalized fraud.” Fraudulent claims deplete the fixed amount of money
in the trusts, potentially causing compensation for future victims to be
reduced or unavailable altogether.
The PROTECT Asbestos Victims Act protects
future asbestos victims by implementing several key reforms to the bankruptcy
trust system.
- Empowers the US Trustee Program of the Department of Justice to investigate fraud against asbestos trusts, which they are prevented from doing under current law.
- Makes it a crime to knowingly submit a false claim to a trust.
- Allows for the appointment of a special representative to advise future victims in a bankruptcy case – this person must be completely disinterested to ensure the most effective advocacy for future victims.
- Mandates that trusts report claims information to CMS to ensure Medicare and Medicaid are properly reimbursed. Currently, the Medicare and Medicaid programs are being financially harmed because asbestos trusts have failed to reimburse the programs.
- In order to prevent fraudulent claims in both state and federal proceedings, requires trusts to comply with subpoenas from state courts seeking information (under seal) related to trusts payments and ensures that the party requesting the information pays reasonable costs to the trust.
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