Mayor Repeatedly Denies Charges in 4 Hours on Stand

Appearing composed and relaxed during a grueling day on the witness stand in his felony trial, Mayor Roger Hedgecock on Wednesday vigorously denied any wrongdoing in his personal or campaign finances, saying he constantly sought to “rightly pay . . . what was owed.”

Parrying prosecutors’ charges with his own spirited professions of innocence, Hedgecock repeatedly denied the myriad allegations that Assistant Dist. Atty. Richard D. Huffman offered as evidence that Hedgecock conspired with former investment executives Nancy Hoover and J. David (Jerry) Dominelli to illegally funnel money into his 1983 campaign via a political consulting firm owned by Tom Shepard, a close friend of the mayor.

Although Wednesday’s Superior Court session was dominated by a nearly three-hour verbal confrontation between Hedgecock and Huffman, defense attorney Michael Pancer effectively set the stage for that showdown with one question that he posed as he completed his questioning.

“Mr. Hedgecock, did you ever conspire with Tom Shepard or Nancy Hoover or Jerry Dominelli to have funds put illegally into your campaign?” Pancer asked.

“Absolutely not,” Hedgecock replied.

He is expected to return to the stand today for additional questioning by Huffman and Pancer.

The lengthy cross-examination clash between Hedgecock and Huffman provided some of the most dramatic moments to date in the mayor’s felony perjury and conspiracy trial. Constantly probing for inconsistencies in Hedgecock’s explanations of his controversial financial dealings, Huffman was relentless in his attempts to weave a web of conspiracy between the mayor and his allies. Hedgecock, however, just as staunchly held his ground and repeatedly sought to provide simple, legal explanations for actions that Huffman characterized as complex, illegal transactions.

Dozens of times Wednesday, Huffman, altering his voice inflection and cadence for impact, began sharply worded accusatory questions to Hedgecock with the words, “Isn’t it a fact that . . .” Alternately smiling wryly toward the jury or simply locking eyes with Huffman, Hedgecock, sometimes slightly raising his voice for emphasis, repeatedly answered, “No, sir, that is not a fact!”

Hedgecock, whose occasional abrasiveness and public displays of temper are well known, never lost his composure during nearly 4 1/2 hours on the witness stand Wednesday, the second day of his testimony. Aware that his demeanor could have as much impact on the jurors as his actual testimony, the mayor constantly called Huffman “sir” and reacted in a calm, confident fashion to even the most pointed questions.

For his part, Huffman effectively conveyed to the jury his skepticism toward some of the mayor’s explanations through repeated use of phrases such as, “You don’t mean to tell us . . . “ or “Now, Mr. Hedgecock, didn’t you really . . . “ And, while he elicited no major admissions of impropriety from Hedgecock, Huffman appeared to succeed in painting the mayor’s financial transactions, frequently handled through private deals with friends rather than through banks, as an amalgam of unorthodox, convoluted and sometimes ethically--if not legally--questionable deals. Huffman thereby sought to create the kind of murky atmosphere that meshes with the prosecution’s conspiracy theory.

Huffman’s questions often focused on the prosecutors’ allegation that much of the $360,000 that Dominelli and Hoover, former principals in the now-bankrupt La Jolla investment firm of J. David & Co., invested in Tom Shepard & Associates in 1982 and 1983 was tantamount to an illegal contribution to Hedgecock’s campaign because the campaign was the firm’s major client during most of that period.

Describing Shepard and Hoover as “virtually brother and sister,” Hedgecock said he knew that Hoover invested in the consulting firm, but that he believed that her financial aid was designed to help Shepard start his own business, not to get Hedgecock elected to the mayoral vacancy created by former Mayor Pete Wilson’s victory in the November, 1982, U.S. Senate race.

However, Hedgecock has consistently denied knowing that Dominelli also invested in Shepard’s firm --a contention that conflicts with the testimony of a key prosecution witness, investment counselor Harvey Schuster, who said the mayor told him in November, 1981, that Dominelli planned to invest heavily in Shepard’s company so that it could run Hedgecock’s mayoral campaign. The mayor has charged that Schuster lied because of his anger over not receiving a lucrative contract to develop the county’s bay-front parking lots awarded in 1982 when Hedgecock was a county supervisor.

Boring in on the question of how much Hedgecock knew about the financial background of Shepard’s firm, Huffman doggedly posed questions on the subject, refusing to accept the mayor’s unswerving denial that he was unaware of Dominelli’s role. Although the prosecutor failed to shake Hedgecock’s story, Huffman clearly used his questions to make his points with the six-man, six-woman jury, as illustrated by the following exchange:

“Now, Mr. Hedgecock, isn’t it a fact that Mr. Shepard told you that Jerry Dominelli was willing to put in as much money as necessary (for Shepard’s firm) to run your campaign?” Huffman asked.

“Sir, that is not a fact,” Hedgecock replied.

“And you didn’t tell Mr. Schuster then that Jerry Dominelli was going to put in as much money as is necessary to make Shepard’s business effective?” Huffman asked.

“Sir, I never said that to him or anyone else,” Hedgecock answered.

“Never in your life?” Huffman asked.

“I don’t believe so,” Hedgecock said.

“You never told Mr. Schuster that the reason that Dominelli was doing it was that he was putty in Nancy Hoover’s hands?” Huffman asked, quoting a phrase Schuster used in his testimony.

“No,” Hedgecock said, smiling.

“Well, now, it turns out that the bulk of the money . . . going into Mr. Shepard’s firm came from the J. David company, not Nancy Hoover. Are you sure you didn’t tell Mr. Schuster that in 1981?

“Mr. Huffman, I am dead sure,” Hedgecock replied emphatically.

Denying other allegations from Huffman, Hedgecock also testified that he never asked Shepard to cut his profit or delay submission of bills because of his campaign committee’s chronic cash flow problems during the 1983 campaign.

“You knew that . . . the J. David company was putting the money in to keep Tom Shepard afloat (and) that Tom Shepard would be willing to lose money in order to support the campaign. You knew that, didn’t you?” Huffman asked.

“Absolutely not,” Hedgecock said.

Throughout his testimony, Hedgecock, reiterating details provided by other defense witnesses, argued that a $130,000 loan that he used to renovate his South Mission Hills house came from Hoover and not, as Huffman charged, the J. David company. And, contrary to Huffman’s contention that Hedgecock delayed the public recording of his 1982 sale of a $16,000 trust deed to Hoover to conceal their financial ties until after the May, 1983, election, Hedgecock said the delay was motivated by tax considerations.

Hedgecock’s explanations of those transactions also precipitated frequent skeptical questions from Huffman, who suggested that the mayor may have violated federal income tax regulations through the method by which he handled the sale of the $16,000 note.

“Now, Mr. Hedgecock, you knew that if you sold (the note) in 1982 . . . and simply delayed reporting it until 1983 . . . that would be a tax violation, didn’t you?”

“No, sir, I didn’t,” Hedgecock said.

Huffman was similarly unpersuaded by Hedgecock’s explanations of his $130,000 loan from Hoover.

“You’re telling us . . . that you didn’t know that J. David money was funding the remodeling of your house?” Huffman asked.

“Sir, the J. David company was funding no part of my house as far as I was concerned, then or now,” Hedgecock replied.

Faced with the impending collapse of J. David & Co. in early 1984, Hoover was forced to ask Hedgecock for immediate repayment of the $130,000 loan. On Feb. 12, Hedgecock and a handful of his closest political advisers gathered at his house to discuss how the mayor could repay Hoover--which he did through the transfer of a $50,000 J. David account and the sale of an undeveloped piece of property.

“Now, this Feb. 12 meeting was designed in part to find a way to put some distance between you and the J. David company, wasn’t it?” Huffman asked.

“The Feb. 12 meeting, sir, was designed . . . to assist me in paying off a friend who had fallen on hard times,” Hedgecock said.

“And you weren’t concerned for your political future about your name being caught up in the dealings with the J. David company, were you?” Huffman asked.

“I didn’t think it would be caught up in the J. David issue,” Hedgecock answered. Then, after a short pause, Hedgecock added, “And I was mistaken.”