Va. Republicans Sue Insurer for $1M Cost of Eavesdropping Scandal

July 27, 2005

The Republican Party of Virginia is suing its liability insurance carrier, seeking nearly $1 million in reimbursement for the GOP’s payout to settle a lawsuit over the eavesdropping scandal and attorneys’ fees the insurer refused to cover.

The state GOP contends in a complaint filed in U.S. District Court in Richmond that the Union Insurance Co. of Lincoln, Neb., breached its contract by not covering the $750,000 the party paid in December to Virginia Democrats who sued over two intercepted conference calls.

The lawsuit also seeks $200,000 for legal bills from RPV’s nine-month court battle with Democratic legislators and other party officials who alleged top GOP operatives violated their privacy rights.

The party contends it should have been covered because it did not know about or condone the espionage on calls made March 22 and 25, 2002, among Democratic lawmakers and, briefly, Gov. Mark R. Warner. The Democrats from across the state met by phone to discuss legal strategy for challenging the 2001 Republican-authored legislative redistricting plan.

As RPV’s former executive director, Edmund A. Matricardi III secretly monitored the calls and pleaded guilty in 2003 to a single federal count of intercepting a wire communication.

His boss at the time, former state GOP Chairman Gary R. Thomson, pleaded guilty to a related misdemeanor and stepped down as chairman. He listened with Matricardi to part of the second Democratic conference call.

The Republican Party contends that as a corporation, it was harmed by the unsanctioned mischief of rogue operatives.

“The insurance carrier refused to provide coverage and we are asking the courts to interpret the terms of our insurance policy,” said Shawn M. Smith, RPV’s current executive director.

John Thelen, a representative of the insurance company in Des Moines, Iowa, had not seen the lawsuit and could not comment.

The lawsuit was filed July 18, less than four months before Virginians elect their next governor in a race that the year’s first independent, scientific statewide poll shows is virtually deadlocked between Democrat Timothy M. Kaine and Republican Jerry W. Kilgore.

A poll of 625 likely voters late last week by Mason-Dixon Polling & Research Inc. showed 38 percent of the respondents backed Kaine and 37 percent supported Kilgore.

Kilgore, then attorney general, alerted state police to the eavesdropping. Kaine and other Democrats, however, have criticized Kilgore for not acting quickly enough to foil the second intercepted call.

The case is Republican Party of Virginia, Inc. v. Union Insurance Co., Civil Action No. 3:05CV508

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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