The World Trade Center Demolition as an Insurance Scam

Larry Silverstein and his partner Frank Lowy acquired a 99-year lease on the entire World Trade Center complex just weeks before the 9/11/01 attack. The deal was negotiated by Lewis Eisenberg, the former chairman of the Port Authority of New York and New Jersey. Eisenberg was recently appointed chairman of the Republican National Committee. Eisenberg had resigned from Goldman Sachs in the 1980s after his secretary accused him of sexually harassing her. When New Jersey Gov. Christine Todd Whitman appointed Eisenberg chairman of the Port Authority, in February of 1996, Forbes Magazine wrote that it was "a strange political appointment, considering the part he played in the sex scandal that rocked Goldman and the financial community in the late 1980s."

Silverstein had built Seven World Trade Center in 1987 on property leased from the Port Authority, but the six-building World Trade Center complex remained under public control until Silverstein and Lowy obtained the 99-year lease on July 26, 2001. The new deal left Silverstein in control of 10.6 million square feet of WTC office space, and gave Lowy control of the 427,000-square-foot retail mall in the WTC basement.

Return on Investment

Slightly more than a year after the attack, The New York Times reported that developer Larry Silverstein and investors Lloyd Goldman and Joseph Cayre were close to receiving about $98 million from their down payment of $124 million toward the 99-year lease of the World Trade Center. Under the arrangement Silverstein would retain control over rebuilding office space at the site. ¹  

Lender GMAC Commercial Mortgage Corporation accused Silverstein of misallocating insurance awarded him for the 9/11/01 attack. In a complaint filed on Jan. 14, 2002 in the State Supreme Court in Manhattan the lender maintains Silverstein used some of the insurance money to pay lobbyists in Washington and Albany to limit his liability to the victims.

See this archive of articles about the insurance aspects of the World Trade Center destruction.