Challenger Settlements Disclosed : U.S. and Rocket Maker Paid $7.7 Million to 4 Families

The government and rocket manufacturer Morton Thiokol paid $7,735,000 in cash and annuities, dividing the cost 40-60, to settle all claims with the families of four of the crew members who died in the explosion of the shuttle Challenger, documents released Monday showed.

Morton Thiokol, maker of the faulty booster rocket that was 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 among them because each was paid an annuity, which yields benefits larger than its cost over a period of many years.

The total dollar amount the families ultimately will receive and how much each will get were not disclosed.

Media Won Release

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 had kept details of the settlements and negotiations secret, arguing that it needed to keep its internal deliberations confidential and that the company and families demanded secrecy.

The documents, with some deletions to preserve privacy, show the final settlements with the families and the company, some correspondence between the government and the company and several Justice Department statements on the negotiations.

The settlements were reached on Dec. 29, 1986, with the immediate survivors of the spacecraft commander, Francis R. 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 B. Jarvis, 41, an employee of Hughes Aircraft Co.; and Sharon Christa McAuliffe, 37, a Concord, N. H., schoolteacher.

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.

Details of Agreements

Among the disclosures:

--The four families used no lawyers in the negotiations but relied 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 no member of any of the families spoke with company representatives.

--Although the Justice Department takes the position that the government may not be sued by survivors of military or federal civilian employees who die on duty, it contributed 40% of each of the settlements. Only the Jarvis and McAuliffe relatives had a right to sue the government; all the astronauts’ families could sue Morton Thiokol.

Ronald D. Krist, a Houston attorney who represented survivors of the astronauts killed in the Apollo fire in 1967, as well as three families from the Challenger disaster, said the four Challenger families should have received more money and would have if they had had formal legal representation.

“If they’re happy, I’m happy for them,” Krist said of the four families that settled without filing lawsuits, “but I would never have put my stamp of approval for a settlement at the level that they received.”

Represented 3 Survivors

Krist had been hired by the widow of mission specialist Ronald E. McNair, a NASA employee, the father of Jarvis and the mother of mission specialist Judith A. Resnik to file separate suits against Morton Thiokol only. Their suits were settled out of court, and Krist said he was under court order not to discuss the amount paid.

But he was blunt about the government-negotiated settlement.

“That settlement is woefully inadequate,” he said. “I’m suggesting that if I was representing them, I would not have allowed any of them to settle for the amount they received, of less than $2 million (per family).”

Yet Betty Grissom, whose husband, Gus, died in the Apollo spacecraft fire in 1967, said: “It sounds like they did OK.” She said she received $350,000 in the settlement of her suit.

Jane Smith, wife of pilot Michael J. Smith, 40, a Navy commander, has a claim against the company pending in federal court. The government last month was dropped as a defendant in the Smith case because military personnel have no right to sue the government for wrongful death.