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Thiokol, U.S. Paid $7.7 Million To Settle With Four Challenger Families

March 7, 1988

WASHINGTON (AP) _ The federal government and rocket maker Morton Thiokol Inc. paid $7,735,000 in cash and annuities and divided the cost 40-60 to settle all claims by the families of four of the astronauts who died in the Challenger explosion.

Documents released Monday showed that Morton Thiokol, which produced the faulty booster rocket blamed for the Jan. 28, 1986, explosion, paid $4,641,000. The government’s share of the settlements was $3,094,000.

A lawyer who represented other family members called the settlements ″woefully inadequate.″

The surviving four spouses and six children actually will receive more than $7.7 million. This is because each was given an annuity, which pays benefits larger than its cost but over a period of many years.

The total dollar amount the families will receive over time and the breakdown by family were not released.

With the release of the documents, the Justice Department settled a civil suit brought under the Freedom of Information Act by The Associated Press and six other news organizations. The government originally had kept details of the settlements and negotiations secret, saying it needed to keep its internal deliberations confidential and that the company and families demanded secrecy.

The documents, with some deletions to preserve family privacy, included the final settlement agreements with the families and the company, some correspondence between the government and the company, and several Justice Department statements concerning the negotiations.

The settlements were reached Dec. 29, 1986, with the immediate survivors of spacecraft commander Dick Scobee, 46, a retired Air Force officer employed by the National Aeronautics and Space Administration; mission specialist Ellison S. Onizuka, 39, an Air Force lieutenant colonel; payload specialist Gregory Jarvis, 41, an employee of Hughes Aircraft Co.; and Christa McAuliffe, 37, a Concord, N.H., public high school teacher.

Scobee is survived by his wife, June, and two adult children; Onizuka left his wife, Lorna, and two minor children; Jarvis left his wife, Marcia; and McAuliffe left her husband, Steven, and two minor children.

Among the disclosures:

-The four families had no lawyers during the negotiations. They relied instead on informal advice from Leo B. Lind Jr., the law partner of McAuliffe’s husband and executor of her estate.

-The Justice Department did all the negotiating for Morton Thiokol as well as the government. Lind said in an affidavit that the families never spoke to company officials.

-The rocket maker and its insurers twice tried to have the settlements cover any property damage Morton Thiokol might have caused, such as destruction of the orbiter and payload. The government refused, and those claims are still in negotiation.

-Although the Justice Department claims it cannot legally be sued by the families of military or federal civilian employees who die on duty, it contributed 40 percent to each of the settlements. Only the Jarvis and McAuliffe relatives had a right to sue the government; all the astronaut families could sue the company.

-Even Morton Thiokol’s attorneys said the government was being unfair to the divorced parents of mission specialist Judith A. Resnik, 36, a civilian NASA employee. ″My negotiations on behalf of Morton Thiokol have been constrained by the government’s refusal to participate to any degree at all″ in a settlement the company considered acceptable, company attorney John W. Adler wrote Justice last July.

Michael D. Oldak, Resnik’s ex-husband, represented her father, Marvin, and last month reached a settlement with the company to which the government did not contribute.

Asked about the document release, Oldak said Monday, ″It confirmed our suspicion that the government had made a contribution to people in Judy’s situation, that is, government employees, and that we were being treated unfairly.″

Marvin Resnik said that settlement was ″commensurate with what some of the others got - from $2 million to $3.5 million.″

In January, Resnik’s mother, Sarah Resnik Belfer, and Jarvis’ father, Bruce, settled with Morton Thiokol but the government did not contribute.

Last May, the company settled a suit by Cheryl McNair, wife of mission specialist Ronald E. McNair, 35, a civilian NASA employee who also left two infant children.

Ronald Krist, the Houston lawyer who represented Bruce Jarvis, Sarah Belfer and the McNairs, said he would not have allowed his clients to accept such a ″woefully inadequate″ settlement as the four did.

″They would have netted more money if they had been adequately represented,″ Krist said, even taking attorneys fees into account.

Betty Grissom, whose husband Gus was killed in the Apollo One fire on the launch pad in 1967, said she was treated unjustly when it came to settlement of her claim against North American Rockwell. ″It kind of hurts .... It hurts when I think that they’re getting that much money,″ she said. She and her two children received $350,000.

Jane Smith, wife of pilot Michael J. Smith, 40, a Navy commander, has a suit pending in federal court against the company. The government last month was dismissed as a defendant, because military personnel may not sue the government for wrongful death.

A presidential commission said the explosion occurred when hot gas leaked through a joint in a booster rocket built by Thiokol and ignited the main fuel tank.

A separate agreement between the government and Morton Thiokol asserted that disposal of the four claims in no way ″abrogates any claim of any nature which the United States may have against MTI for property damage associated with the Challenger accident, including but not limited to any claims for the loss of the orbiter itself,″ the document said. The replacement orbiter now under construction is expected to cost $3 billion.

NASA spokesman David Garrett said Monday that negotiations are continuing between NASA and Thiokol lawyers on the type and amount of penalties that will be imposed on the Utah rocket-maker’s contract with the government.

A NASA statement in February 1987 said Thiokol would forfeit $10 million in profit and receive no profit from $409 million worth of redesign work. But Garrett said that does not end the matter.

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