Policies covering a fund to help survivors of the Oklahoma City bombing limit total payments for living expenses, education and mental health care per person, but note "it is not a good policy" to discuss such limits, records show.

"Since the size of the group is really somewhat open-ended because of the unknown number of children of those permanently disabled, it is not a good policy to talk in terms of total dollar benefits which can be provided," states a memo dated Jan. 5, 1996. "However there might be an internal policy limit on total benefits in order for the actuarial projections and investment timing to work."

The memo to trustees of the Oklahoma Disaster Relief Fund Inc. was written nine months after the bombing by Nancy Anthony, secretary and treasurer of the fund, and Anna-Faye Rose, scholarships administrator for the Oklahoma City Community Foundation.

The nonprofit foundation administers the fund, which has about $10 million in remaining funds donated to help survivors of the bombing on April 19, 1995.

A Tulsa World investigation has found that numerous survivors of the bombing say their requests for help from the foundation were denied. Many said they did not know the fund existed and have struggled to pay for medical care and other expenses the fund was designed to help with.

Several survivors of the bombing interviewed by the World and The Oklahoman have praised the foundation, saying they had no problems getting funds for medical care and education.

In response to public criticism, the foundation announced it would seek an audit of the disaster fund. It has said auditors - chosen by the foundation in consultation with former Gov. Frank Keating and former Oklahoma City Mayor Ron Norick - will decide the scope of the audit.

Anthony has said claims by some survivors that the foundation refused to pay for legitimate expenses connected to the bombing are either inaccurate or misunderstandings. The foundation cannot address individual cases due to the need for confidentiality, she said.

Foundation officials have not responded to an offer by the World to submit signed waivers of confidentiality from survivors who are interviewed.

The bombing of the Murrah federal building killed 168 people and injured hundreds.

In the following months, Keating and others promised to provide funds to educate children of those killed in the bombing. Keating has said no limitations were discussed at the time. Records show foundation policies limit the age of recipients to 25 and under.

Anthony's 1996 memo states that instead of discussing dollar limits on the education funds, "it is suggested that the policy be phrased in terms of helping a student achieve the maximum of a four-year undergraduate education or the maximum level for which he or she is able." It recommends the fund develop a plan for each student to complete his or her education based on ability and availability of funds.

The foundation has declined requests by the World for an interview, agreeing to answer written questions.

A foundation spokeswoman, Cathy Nestlen, said in an email Friday: "The Survivors Education Fund will pay tuition, fees, books and room and board for full-time students attending an accredited U.S. academic institution."

She said the fund provides a $10,000 stipend to be used for tuition, fees and books for four years, or five if a student requests an extension.

"Students who are pursuing a professional course of graduate study such as medicine can request additional stipend assistance," Nestlen said.

Survivors have told the World they were told to take out loans and seek grants and other available assistance before requesting education funds from the foundation.

Anthony's 1996 memo states: "To best utilize all resources and to provide the maximum benefit for all eligible students, it seems appropriate for the Survivors' Education Fund 'to go last' ... after all other sources of scholarship assistance have been pursued."

Other foundation policies state that total assistance to survivors for living expenses would be limited to $10,000 unless exceptions were granted.

The policy states those eligible for help with living expenses - including food, utilities, housing and day care - are family members of wage earners who died or who were unable to work due to injuries from the bombing.

With regard to limits on spending for education, living expenses or other assistance, Nestlen said: "We don't know of any case where limits were applied."

The foundation does not keep records of requests for assistance that are denied, Nestlen said.

"We do not keep a tally on exceptions, requests denied etc. We assume that, based upon practicality and cost, the forensic auditors will address these questions in some fashion."

Survivors have sent letters to Keating, Norick and others requesting that the audit review documents to determine how many requests for help were denied.

'The books are closed'

An estimated $40 million was donated in the aftermath to a variety of funds, and the money was later consolidated among a few nonprofit organizations in Oklahoma City. The Oklahoma City Community Foundation received $14.6 million and incorporated the disaster fund June 15, 1995, records show.

The foundation reallocated $4.4 million in earnings from the bombing donation fund in 2005 for other purposes, records show. Funds were used to create an endowment for the bombing museum, a fund to pay future caseworkers and set aside for studies not yet conducted. The foundation has also contributed $20,000 from the bombing fund to disaster funds in other states.

The foundation said it has spent $11 million since 1995 to help 962 people and has not denied legitimate claims by survivors.

During the past three fiscal years, records show the foundation spent $1.1 million to help 166 survivors of the bombing, slightly more than it earned from investing the money during that time. It spent $60,000 during the three years on medical care for survivors, records show.

Bombing survivor Brandy Ligons said she was told last week by a foundation caseworker that "the books are closed" on the fund. Other survivors have said caseworkers used that phrase in responding to their requests and that denials are made verbally.

Ligons was 15 when she visited the Murrah Building's Social Security office. She was the last survivor rescued from the building alive and spent nearly a month in the hospital with critical injuries.

Ligons, now 33, said she received a small amount of help from the foundation before she turned 18. She said that since then her repeated requests for help with medical costs and other needs have been denied. Ligons said she is on Medicaid and unable to work.

"Why is it that we have to suffer and go through them to be able to survive in life?" Ligons said. "... They are distributing the money to other disasters and other states where people have been hurt. We were in a government building. Why don't we get anything from our suffering (from) being in that building?"

'Absolute discretion'

Records show the disaster fund was incorporated in 1995 by Oklahoma City attorney John Belt and two of his employees, Jamie Henry and Deborah Rodgers.

The bylaws state the fund is intended to benefit "those persons, real and corporate, as shall have been injured, suffered loss either of property or opportunity, as a result of the bombing."

"The trustees of the fund shall have complete and absolute discretion regarding the distribution of the funds or any portion thereof and such discretion shall not be subject to judicial evaluation or contrary determination," the bylaws state.

In addition to helping survivors of the bombing, the fund's purpose is to restore the area around the bomb site "including appropriate memorials for those whose lives were lost," according to the incorporation document. The records also state the fund is supposed to support "non-profit organizations with facilities and programs directly affected by the bombing."

Belt is an attorney for about 40 nonprofit companies, according to the website of the Kirkpatrick Foundation, where he is listed as a trustee. He remains a trustee of the Oklahoma City Disaster Relief Fund along with four other people.

All five trustees of the fund are unpaid, and none of Anthony's $232,000 salary comes from the fund, the foundation said.

Nestlen said the bombing fund has not been used to support other nonprofit organizations, aside from contributions to disaster funds in Joplin, Mo., and Alabama.

The foundation built an 18,000-square-foot office facility at 1000 N. Broadway Ave. in Oklahoma City in 1995. It purchased the land for about $200,000 a few months after trustees reallocated interest earnings from the bombing fund, records show.

The facility cost $6 million, including the land, and was built without having to raise funds, Nestlen's email says. An administrative fund established by John E. Kirkpatrick, the foundation's founder, paid for the facility, she sad.

"No portion of the Disaster Relief Fund (contributions or earnings) was used toward this project," Nestlen's email states.

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'Pay czar' shares two rules for distributing funds

Attorney Ken Feinberg said he has two cardinal rules in running compensation funds for survivors of disasters: get the money "out the door" quickly and put as few conditions on spending it as possible.

A group representing survivors of the Oklahoma City bombing, the Survivor Tree Committee, says $10 million remaining in a compensation fund should be distributed to survivors according to Feinberg's recommendations. Feinberg told the Survivor Tree group he would not charge for his services but must be requested to intervene by Oklahoma officials, which has not occurred.

Dubbed the "pay czar," Feinberg has operated compensation funds following 9/11, the BP oil spill, the Virginia Tech campus shootings and most recently a July movie theater shooting in Aurora, Colo.

Victims in the Aurora movie theater shooting were unhappy with the pace that donated funds were being distributed. Colorado's governor called Feinberg, who developed a plan to distribute $5 million. Distributions began last week, with 70 percent going to families of those who died and those with "life-altering" injuries, news reports state.

Feinberg said no IRS rules prevent direct payments to disaster victims in lump sum form. He said placing restrictions on how funds can be used is "a very bad idea."

"When money is available, there are two rules that should be followed," he said. "Get the money out the door to the victims as soon as possible, and when you do distribute the money, do not even attempt to condition how the money can be spent. ... Allow every innocent victim to decide for herself or himself."

Within months of the 1995 Oklahoma City bombing, local charities were advised by the IRS that using donated funds to make lump sum payments to survivors would not be proper.

"Lump sum benefits or other similar arrangements not specifically geared toward alleviating the specific distress would not be appropriate," the IRS said in an 18-page disaster relief guidance memorandum dated Aug. 25, 1995.

"An outright transfer of funds based solely on an individual's involvement in a disaster or without regard to meeting that individual's particular distress or financial needs would result in excessive private benefit," the memo stated. "Persons who have been affected by a disaster are not necessarily proper objects of charity."

Oklahoma City charities followed that IRS advice.

- ZIVA BRANSTETTER, World Enterprise Editor, and RANDY ELLIS, The Oklahoman

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Ziva Branstetter 918-581-8306
ziva.branstetter@tulsaworld.com