A widow's battle for compensation and the rules that say she should not receive a penny

Several weeks ago, the administrators of the fund created by the United States Congress to assist families of the victims of the 11 September 2001 terrorist attacks faced a dilemma.

Several weeks ago, the administrators of the fund created by the United States Congress to assist families of the victims of the 11 September 2001 terrorist attacks faced a dilemma.

There was a claim before them - No 212-005347 - that clearly did not fit the necessary criteria to qualify for any payment. On the other hand, the name at the top of the sheet was Pearl.

This was not a name that appeared in the lists of those who perished that day when al-Qa'ida sent its hijacked jets into the two towers of the World Trade Centre in New York or the Pentagon outside Washington DC. Nor did it belong to any of the passengers on the plane that crashed into a field in Pennsylvania. Yet it was a name everyone knew.

It was Daniel Pearl, the reporter for The Wall Street Journal who vanished on 23 January 2002 - four months after the terror attacks in America - while researching a story on Islamic extremism in Pakistan. Several weeks later, the mystery of what had befallen him cleared with abrupt and tragic clarity. Mr Pearl had been kidnapped by Islamic militants and subsequently executed by them.

His beheading by Khalid Shaikh Mohammed, once the top operational commander of al-Qa'ida and the alleged mastermind of the 11 September attacks, was shown on a grisly videotape acquired by investigators. The murder of this highly respected, 36-year-old, who was the Journal's South Asia bureau chief at the time, was a tragic coda to the attacks themselves, made all the more poignant by those he left behind - his new wife, Mariane Pearl, pregnant with their first child. All of America reacted with sympathy and anger.

As the bereaved widow - and now mother of Adam, who is now almost two - Ms Pearl would seem an obvious candidate for some bending of the rules when it comes to federal compassion. Yet, a few weeks ago, she received word that her application had been rejected and she would not be receiving any money from Washington.

It was not what she and her lawyers wanted to hear. They are not going to give up. This week, they decided to appeal against the decision and to ask Congress to rewrite the law to broaden the scope of the compensation umbrella to include anyone who suffers losses as a result of terrorist attacks aimed at America and Americans.

As it stands, the fund has no financial cap on it. Anyone who qualifies and who filed for assistance before a deadline of last December, should receive a generous cheque. Indeed, so far the 11 September fund has paid out 1,800 awards averaging almost £1m each. Eventually, as much as £3bn is expected to be disbursed from it.

The rejection of Ms Pearl's claim, reported yesterday by The New York Times, was justified by the chief administrator of the fund, Kenneth Feinberg, on the simple grounds that she was disqualified by the rules. Her husband did not die at any of three sites involved in the 11 September attacks. He died in Pakistan at a later date. "I'm very sympathetic to the inquiry, but the statute is the statute, and I do not have any discretion," Mr Feinberg said.

But the case will rekindle debate about what the purpose of the fund was in the first place. Why was Washington so quick to establish a pot of money for victims of the attacks, while there was nothing available to families affected other terrorist plots? What about the families bereaved by the 1993 World Trade Centre bombing, the 1995 Oklahoma city outrage, the 1998 bombings of US embassies in East Africa or the 2000 attack against the USS Cole in Yemen? Most particularly, the plight of Ms Pearl will renew criticism that in establishing the fund the government was motivated by far more than compassion. It was seen by many as an exercise in protecting the American airline industry, already grievously damaged by the fall-out of the attacks.

In the end, almost 98 per cent of the families who were eligible for assistance ended up applying for it before the December deadline. But many did so with considerable reluctance. Because by agreeing to accept cash from the government they were also undertaking to give up the right to seek financial redress in another way - by going to the courts and trying to extract cash from the airline industry by way of lawsuits.

Those few who decided to spurn the fund and take legal action instead face a longer wait for compensation. Their lawsuits may, in the end, succeed, but it could be many years before all the litigation, including inevitable appeals, are concluded. The fund offered a cheque, no questions asked, almost instantly. Mr Feinberg acknowledged that all these questions have been thrown into focus by the Pearl application. "It does raise the fundamental question as to why 9/11 - and not other terrorist attacks or other acts of terror both at home or abroad - is covered," he said. "I think Congress will address at some point whether the 9/11 compensation fund should be a precedent for future compensation or whether it is a unique response to a unique historical event."

Ms Pearl, who has written a memoir of her experience since her husband's murder called A Mighty Heart: The Brave Life and Death of My Husband, Danny Pearl, is pressing her case. She is being helped by her lawyer, Robert Kelner, who is working with her for no charge. Their main point is a simple one. Mr Pearl was a victim of al-Qa'ida, and its hatred for America, too. And so, therefore, were his widow and child.

"What's horribly, painfully obvious is that if Danny Pearl had come from any other country in the world, he'd be alive today," Mr Kelner told the Times. "And because there is a 9/11 fund which is compensating people for the exact same kind of death, we feel that Danny should be included as a victim in the same class as other victims." He added later: "It's obvious this was a targeted killing of an American citizen by al-Qa'ida with exactly the same motivation that occurred on 9/11." Four Islamic militants have so far been captured and convicted of the killing of Mr Pearl in Karachi. But seven others suspected of having had a role in the kidnapping and murder are still at large. Among those now serving sentences is Ahmed Omar Saeed Sheikh, a 29-year-old London-born militant who was allegedly a contemporary of Nasser Hussain, a former England cricket captain, at the private Forest School in Snaresbrook, east London. Sheikh dropped out of the London School of Economics after one year. He is now appealing against his conviction.

In an interview with the Times this week, Ms Pearl admitted that chasing money from the government was not an easy choice. "The whole bizarre thing of associating somebody's death and money is very difficult," she said. "It's unnatural. It's very uncomfortable. But I have good people around me, who say, 'Whatever my emotions, I have to think of my son'."

Some financial support has come from a memorial trust set up for her late husband. There is some insurance money as well as income from her memoir, which has enjoyed moderate success. However, she says that replacing her husband's salary from the Journal, of about £55,000 a year, remains a challenge.