Hedgecock Confident : Testimony in Mayor’s Trial Ends

Testimony in the felony trial of Mayor Roger Hedgecock concluded Thursday, as Hedgecock emphasized to the jury that any errors on his personal or campaign financial statements were inadvertent ones similar to mistakes made by “almost every other” politician.

Saying “it’s now up to the jury, the judge and the lawyers,” Hedgecock expressed confidence that the six-man, six-woman jury will believe what he called his “logical, sensible explanations” in his felony perjury and conspiracy trial. The opposing lawyers’ closing arguments in the case are expected early next week.

As he completed nearly 6 1/2 hours of testimony over three days, Hedgecock, reinforced by a surprise defense witness, also sought to prove Thursday that he had properly repaid a $130,000 oral-agreement loan from Nancy Hoover that was used to renovate his South Mission Hills house.

The loan from Hoover, a former principal in the now-bankrupt La Jolla investment firm of J. David & Co., is one of the major points of contention in the trial, and was the subject of repeated verbal clashes between Hedgecock and Assistant Dist. Atty. Richard D. Huffman.

Hedgecock testified that he repaid Hoover by transferring a $50,000 J. David account to her and through the sale of an undeveloped piece of property near La Jolla Valley in the North City area.

During his cross-examination, however, Huffman suggested that Hoover’s loan was actually intended to be a gift, and contended that the transfer of the $50,000 investment account--a transaction that the mayor said he told Hoover to execute in October, 1983--never occurred.

Under questioning from Huffman, Hedgecock testified that Hoover forgot to make the transfer until he reminded her of the matter the following month and conceded that he had not documented the transfer in writing.

“I didn’t even think of that,” Hedgecock said. “She was the broker (who) opened the account, she was a friend of mine and she was the one lending me (the $130,000). She never indicated that it was necessary to give anything in writing.”

“So you’re telling us that you believed . . . that she could just simply transfer an account of one of the customers into her own name without any documentation at all?” Huffman asked, his voice laced with skepticism.

“The question never came up,” Hedgecock replied.

Because Hedgecock’s name was still listed on a J. David company ledger as the holder of the account in January, 1984--only one month before the firm went bankrupt --Huffman has argued that the mayor may have received preferential treatment from Hoover by getting full credit “on paper” for an account that may have been worthless.

A former J. David employee, however, later bolstered Hedgecock’s version of the transfer of the $50,000 account.

Anne Kinahan, an Irish citizen who formerly worked for J. David & Co. in London and Switzerland, testified that she had received a Dec. 1, 1983, document instructing her to switch Hedgecock’s account to Hoover’s name.

Flown to San Diego two days ago by defense attorney Michael Pancer, Kinahan explained that the account was officially transferred to Hoover in December, 1983, but said that the mayor’s name had not been immediately removed from the J. David account ledger because of a “bookkeeping error.”

“It should have been transferred to Nancy Hoover,” Kinahan said. Kinahan added that she found the December, 1983, document authorizing the transfer among records seized in Switzerland by U.S. officials when J. David & Co. was forced into involuntary bankruptcy.

As Hedgecock turned to flash a broad smile to his wife, Cindy, who was seated in the audience, Huffman asked Kinahan why, out of the numerous deals involved in the nearly 1,500 J. David accounts, she remembered “specifically this transaction.”

“The main reason I remember it is because I knew Nancy Hoover (and) I was curious why it was changed to her name,” Kinahan said.

The perjury charges facing Hedgecock also were the subject of many of Huffman’s questions Thursday. Prosecutors allege that Hedgecock intentionally falsified personal and campaign financial disclosure statements in an attempt to conceal his ties to Hoover and former financier J. David (Jerry) Dominelli, founder of the investment firm that bore his name.

One of the prosecution’s major contentions is that Hedgecock conspired with Hoover and Dominelli in a scheme to funnel tens of thousands of dollars in illegal contributions to his 1983 campaign via a political consulting firm owned by Tom Shepard, a close friend of the mayor. Hoover, Dominelli and Shepard will be tried separately on similar charges.

Huffman also has charged that some of the money used to remodel Hedgecock’s home actually came from Dominelli, and that the mayor received much more than $130,000 for the project from Hoover and Dominelli. In an attempt to prove that contention, Huffman elicited testimony Thursday from several contractors who worked on the house. They said some of the invoices for the project were, in the prosecutor’s words, “doctored” to conform to the $130,000 figure.

Pancer said he could not explain the inaccurate invoices, but he stressed that most of the subcontractors were paid the full amount they were owed. “Clearly, there’s no bad intent,” Pancer said.

Shortly after his finances came under scrutiny by local and state officials in 1984, Hedgecock filed more than one dozen amendments to his previous personal and campaign reports. Noting that such amendments are relatively common, Hedgecock testified that his amended statements corrected inadvertent errors and omissions and demonstrate his good-faith effort to comply with complex regulations.

“When you sat down to . . . complete your (financial) statements . . . what did you think was the consequence of an inadvertent or an unintentional error?” Pancer asked.

“The consequence would have been . . . (to) file an amendment,” Hedgecock said. “Everybody I’d ever served with (in public office) I think had filed amendments. I had filed (past) amendments.”

Pancer later added that Hedgecock’s “state of mind” when he filled out the forms “was that if he made a mistake, it would not be the end of the world.”

Huffman, however, emphasized that Hedgecock had signed the original statements under oath and penalty of perjury.

“So you knew that it was an important event to sign your name to that statement?” Huffman asked.

“I did, it was and I understood it, and those reports at the time I filed them were filled out to the best of my ability,” Hedgecock replied.

One of the errors that Hedgecock corrected on his reports involved the sale of a controversial $16,000 promissory note to Hoover--a transaction that led to one sharp exchange between Hedgecock and Huffman.

Hedgecock sold the note to Hoover in late 1982, but delayed the public recording of the transaction until June, 1983. The mayor contends the delay was caused by tax considerations, and has pointed out that he handled two other transactions in a similar fashion.

Huffman, though, argues that because Hoover paid Hedgecock $16,000 in 1982, that transaction should have been reported on his financial statements for that year, regardless of when the deal was officially recorded.

“You made a conscious decision not to do that, didn’t you?” Huffman asked, pacing before the jurors.

“No, sir,” Hedgecock said.

“I’m sorry . . . You knew that you had received the money as of the time you filled out that statement, didn’t you?” Huffman asked.

“Yes, sir,” Hedgecock answered.

“And you knew you had asked somebody not to record the assignment of deed of trust, didn’t you?” Huffman asked.

“Yes, sir,” Hedgecock said.

“And you knew that you were not including Nancy Hoover as the source of $16,000 in income, isn’t that right?” Huffman asked.

“That’s turning it around, Mr. Huffman,” Hedgecock replied. “What I knew was that when I responded to that form . . . the information that I was required to put down there was all down there. I knew when I signed it that all the information required on that form was there.”

“And that information did not include $16,000 from Nancy Hoover you received on Dec. 20, 1982, right?” Huffman asked.

“It did not,” Hedgecock said.

After Huffman’s cross-examination, Pancer posed a few final questions intended to focus jurors’ attention on the defense’s position on several key issues in the case. For example, Huffman has alleged that Shepard’s political consulting firm worked on Hedgecock’s behalf for free before it had a contract to run his campaign. Several of the firm’s former staffers, however, have testified that that work was done on a volunteer basis--a point Pancer sought to reinforce Thursday.

“Did Tom Shepard in the early part of 1982 complain to you that you were making too many demands on his time?” Pancer asked.

“Yes he did,” Hedgecock replied. “I think he told me once or twice he didn’t work for me anymore.” Before starting his business in January, 1982, Shepard served on Hedgecock’s supervisorial staff.

At the conclusion of Thursday’s court session, Hedgecock said he was “very happy” that he had decided to testify, and added that he is “delighted that this is through and now the lawyers take over.” Hedgecock acknowledged, though, that he is nervous as the trial nears the stage when it goes to the jury.

“If I told you I wasn’t nervous, I’d be lying and you’d know it,” Hedgecock said. “It was a very lengthy trial, but I think a complicated story got out.

“I think we’ve presented sufficient facts on each and every one of