3 Stumbling Blocks Reported in Settlement of Mayor’s Case

Despite some promising turns in negotiations over Mayor Roger Hedgecock’s legal problems, there are at least three significant stumbling blocks to a successful out-of-court settlement of the criminal and civil charges facing the mayor, sources say.

Sources knowledgeable about the private negotiations have said there is essential agreement on some basic points of a possible out-of-court settlement of the 15 felony counts facing Hedgecock and the $1.2-million civil suit filed against the mayor and others by the state Fair Political Practices Commission (FPPC).

Attorneys and prominent businessmen involved in the negotiations have agreed that prosecutors would drop the 14 felony perjury charges against Hedgecock and allow him to choose a “trial by transcript” on the felony conspiracy charge. Such a procedure would require a judge to review the transcript from the mayor’s first trial and then determine whether Hedgecock is guilty. A conspiracy conviction at some point would be reduced to a misdemeanor.

Negotiators have also agreed that Hedgecock would sign a stipulated settlement with the FPPC calling for a substantial fine.

In exchange, Hedgecock would resign and promise not to run for public office for an as-yet-undetermined period.

But there still are major stumbling blocks to a full agreement. According to the sources, those are:

- How much of a fine would be levied against Hedgecock as part of a settlement of the FPPC civil suit. The agency filed suit in October against the mayor, his 1983 campaign treasurer Peter Q. Davis and others, alleging more than 450 campaign law violations and asking as much as $1.2 million in fines. The agency is asking nearly $900,000 from Hedgecock alone.

Businessmen involved in negotiations have proposed that Hedgecock be assessed a $50,000 penalty, while FPPC Chairman Dan Stanford has countered with a proposed fine of no less than $100,000.

- What the FPPC should do with Davis, who is president of the Bank of Commerce. The businessmen have proposed that the agency drop its charges against Davis and levy no fine against him. They argued that Davis had no way of knowing about any alleged violations. But Stanford insists that Davis be fined at least $5,000.

- On the criminal side, prosecutors and Hedgecock’s attorney, Michael Pancer, still disagree over how to sentence Hedgecock on the conspiracy charge. The mayor’s side wants to have a conviction immediately reduced to a misdemeanor, thus keeping a felony conviction off Hedgecock’s record. But sources say the district attorney’s office wants to wait at least six months before a felony conviction would be reduced.

John R. Wertz, one of Hedgecock’s civil attorneys, said Wednesday that “we have no agreement” with the FPPC. Although he declined to discuss details, he said that both sides are far apart.

Sources said Stanford’s insistence on the higher fine could be enough to unravel the delicate negotiations, since Hedgecock’s camp insists that the civil matter must be settled at the same time as the criminal.

The sources also said that, in effect, the higher fine would penalize people other than Hedgecock, since it is clear that the money will have to be raised from “the community,” including supporters.

“The thing I would emphasize is that Roger isn’t going to raise the money for the fine,” a source said. “It’s the community that is going to raise the money.”

At least one source said there will be little trouble raising money for Hedgecock’s fine from supporters and others. “There are enough people around town who feel that this is a settlement that Roger made not only for himself but for the city,” the source said.

Stanford declined to discuss the disagreement over the FPPC fine. He was not in his Sacramento office Wednesday, and FPPC spokesman Lynn Montgomery said Stanford had given orders not to disclose his whereabouts.

Through Montgomery, Stanford issued this statement: “Judge Tharp has ordered the parties and the attorneys not to discuss this matter and I therefore have no comment.”

For weeks, attorneys and the businessmen have been meeting privately--at times in the chambers of Superior Court Judge Ross G. Tharp--to hammer out settlements of both the criminal and civil cases.

Hedgecock faces a retrial on 13 counts of felony conspiracy and perjury in connection with what prosecutors say was a scheme to illegally launder thousands of dollars into his successful 1983 mayoral campaign. Hedgecock’s first trial ended in a hung jury Feb. 13, with the jury deadlocked 11-1 for conviction on all counts.

Prosecutors have also brought two additional felony perjury charges and a misdemeanor charges of conflict of interest against Hedgecock. The tentative trial date for all criminal charges is May 8.

Sources said there was no movement on the criminal negotiations Wednesday.

Tharp is on vacation in Mexico, but is due back by Monday, two days before Hedgecock is scheduled to appear in court to determine who will be his defense attorney at the second trial. The sources expressed some hope that Tharp’s presence and the deadline of the hearing would help spur the talks and clinch an agreement.