Hedgecock Stuns Court; Takes Stand

In a dramatic development that electrified courtroom observers, San Diego Mayor Roger Hedgecock took the stand in his own defense Tuesday in his felony perjury and conspiracy trial to, in his attorney’s words, explain his version of the case to the jury “with his lips under oath.”

During nearly an hour of testimony late Tuesday afternoon, Hedgecock, who appeared relaxed and often turned to speak directly to jurors during his remarks, largely reiterated key points made earlier in the trial by other defense witnesses as he began what is expected to be a lengthy period on the witness stand.

Defense attorney Michael Pancer said he expects to conclude his questioning of Hedgecock this morning, after which Assistant Dist. Atty. Richard D. Huffman will begin his cross-examination--a compelling clash of words and personalities that is virtually certain to have a major impact on the trial’s outcome.

Pancer caught most courtroom observers--and Huffman--by surprise when he called Hedgecock to testify shortly after an accountant hired by the defense concluded nearly 3 1/2 hours of often mind-numbing testimony filled with a maze of numbers and accounting theories. Whether and when Hedgecock would testify had been the subject of intense speculation both inside and outside the courtroom since the defense began its case last week.

Sought to Testify

At the end of Tuesday’s Superior Court session, Pancer, characterizing the prosecution’s charges as “baseless” and “empty,” said that he had encouraged Hedgecock not to testify because “there was absolutely nothing he had to respond to.” Pancer added, however, that Hedgecock persuaded him that “other considerations” dictated that he should testify.

“He felt . . . that he owed it to the jurors to speak to them about the case . . . with his lips under oath,” Pancer said. “He insisted on testifying.”

Under admittedly friendly questioning from Pancer, Hedgecock, smiling often and speaking in a casual, conversational tone, sought to rebut a handful of the prosecution’s major charges, including Huffman’s allegations that:

- Tom Shepard & Associates, the political consulting firm that ran Hedgecock’s 1983 race, was, from its inception in January, 1982, little more than a vehicle to funnel illegal donations from former J. David & Co. principals Nancy Hoover and J. David (Jerry) Dominelli to Hedgecock’s campaign.

- Hedgecock knew that Dominelli planned to invest heavily in Shepard’s firm so that it would be able to run Hedgecock’s campaign.

- Shepard’s firm did not charge Hedgecock for work done on his behalf before August, 1982, when Hedgecock’s campaign committee signed a contract with the firm in anticipation that then-Mayor Pete Wilson might be successful in his U.S. Senate campaign.

- Shepard and Hedgecock fraudulently backdated a contract involving a computerized mailing list of voters that the mayor contends he allowed the consultant to use for other clients in return for Shepard’s agreement to maintain and update the list.

The mayor testified that in December, 1981, Shepard, at that time an aide to then-county Supervisor Hedgecock, told him that he planned to leave his county position to start a political consulting firm with financial support from Hoover. Expressing mixed feelings about Shepard’s decision, Hedgecock said he was sorry that Shepard would be leaving his county staff but was delighted that his friend was going to have an opportunity to start his own business.

The time period specified by the mayor is critical, because a key prosecution witness, investment counselor Harvey Schuster, testified last week that Hedgecock had told him in November, 1981, that he knew that Dominelli “was going to invest sufficient funds” in Tom Shepard & Associates so that the firm would be able to run Hedgecock’s 1983 campaign.

Although evidence introduced during the trial has shown that Hoover and Dominelli invested more than $360,000 in Shepard’s firm, Hedgecock has consistently denied knowing that Dominelli pumped money into the consulting business and has argued that Hoover’s name was not even mentioned as a potential investor until after the time Schuster claims to have discussed the subject with Hedgecock. The mayor has charged that Schuster lied in his testimony because of his anger over not being awarded a lucrative 1982 contract to develop the county’s bayfront parking lots.

Mayoral Aspirations

Hedgecock testified that his mayoral aspirations began in 1978 when there was “a flurry of activity among people eager to succeed Pete Wilson.” However, that “pre-planning” was rendered moot by Wilson’s loss in that year’s Republican gubernatorial primary--a defeat that kept Wilson at City Hall, Hedgecock said.

Hedgecock said he had “periodic discussions” with his political allies about a possible mayoral campaign again in 1980--when there was speculation that Wilson might get a Cabinet post in the Reagan Administration--and again in the early 1980s, as Wilson renewed his bid for statewide office.

Hedgecock emphasized, however, that a mayoral race was still “not a certainty” when Shepard began his firm in early 1982 and told the jury that the City Council did not schedule the special May, 1983, mayoral election until after Wilson’s victory in the November, 1982, U.S. Senate race.

As evidence of his contention that Shepard’s firm was not fully reimbursed for the work it did on Hedgecock’s campaign, Huffman has stressed that Shepard and his employees worked on Hedgecock’s behalf before Hedgecock’s campaign committee signed a contract with the firm in August, 1982.

‘Volunteer Basis’

However, bolstering the earlier testimony of several of Shepard’s former employees, the mayor said Tuesday that any pre-August, 1982, work was “very definitely done . . . on a volunteer basis” by Shepard’s staffers and other volunteers from Hedgecock’s supervisorial campaigns.

Most of that volunteer work, Hedgecock testified, involved updating a computerized mailing list--a document that is one of the major points of dispute in the trial.

The list includes addresses, telephone numbers, financial contributions and other data about voters. It was initially compiled by Hedgecock and Jim Bates, a former supervisor who is now in Congress. Hedgecock said that, when Shepard started his firm, the two agreed orally that the consultant could use the list to try to solicit other political clients in return for maintaining and updating it.

“It seemed like a fair bargain,” Hedgecock said. “(Shepard) indicated that having such a list would be a great value to his firm. What I was getting . . . was a list that would be maintained so that it would be available for . . . some future campaign.” In about August, 1982, Hedgecock testified, he signed a contract--dated January, 1982--confirming the details of their oral agreement, at Shepard’s request, so Shepard would have documented permission to use the list for another client.

Contradicting Huffman

Contrary to Huffman’s allegation that the two men fraudulently backdated the contract in an attempt to justify the pre-August work done by Shepard’s firm on Hedgecock’s behalf, the mayor testified that the written contract simply was a formality that memorialized the earlier oral pact.

As part of their agreement, Shepard agreed to pay Hedgecock $3,000 for the right to use the list, Hedgecock testified. Seeking to reinforce his allegation that Hedgecock was aware of Dominelli’s financial role in Shepard’s firm, Huffman has pointed out that the $3,000 check Hedgecock received was signed by Dominelli, not Shepard.

Hedgecock, however, said that Shepard had told him that the check would come from Dominelli because the financier was giving him temporary assistance in the early days after the founding of Shepard’s firm.

“I considered the check as having come from Tom Shepard,” Hedgecock said.

Earlier Tuesday, Pat Ford, an accountant hired by the defense as a consultant, conceded under cross-examination by Deputy Dist. Atty. Charles Wickersham that Shepard’s firm, measured by the standard of generally accepted accounting practices, treated thousands of dollars of “direct” costs spent on the Hedgecock campaign--polls, staff salaries, computer fees and other bills--as unreimbursed overhead expenses of the firm.

Ford stressed, however, that the firm’s contract with Hedgecock’s campaign committee did not specify that such internal expenses were to be billed to the committee. Prodded by Pancer, Ford also pointed out that Hedgecock’s campaign “paid all the bills submitted” to it by Tom Shepard & Associates.