Ex-J. David Aide Opens Mayor’s Trial

Testimony in the felony retrial of San Diego Mayor Roger Hedgecock began on Wednesday, as a former J. David & Co. executive testified that the firm’s former publicist told Hedgecock in late 1981 that he “ought to smoke the peace pipe” with Nancy Hoover if he hoped to become mayor.

The testimony by Alfred O’Brien, the former president of J. David Mercantile, came after the first prosecution witness in the case, Diane Barlow, an aide to Hedgecock during his years as a county supervisor, said that she became concerned in the summer of 1981 that two county-paid interns on Hedgecock’s staff were doing political work in preparation for a possible mayoral campaign.

However, Barlow later admitted to Oscar Goodman, Hedgecock’s attorney, that she “had no direct knowledge” of the two interns’ activities and that the possible problem stemming from county workers handling political tasks was “corrected quickly.”

Similarly, Goodman sought to neutralize O’Brien’s testimony by getting him to concede during cross-examination that he never saw Hoover or J. David (Jerry) Dominelli, former principals of the bankrupt La Jolla investment firm that bore Dominelli’s name, meet with Hedgecock “in a political context.”

As they did in the first trial, prosecutors attempted to use O’Brien’s and Barlow’s testimony to bolster their allegations that Hedgecock participated in a conspiracy to funnel illegal contributions to his 1983 mayoral campaign through the political consulting firm of Tom Shepard & Associates.

One of the cornerstones of the alleged conspiracy, prosecutors charge, was a reconciliation between Hedgecock and Hoover following Hoover’s separation from her husband to live with Dominelli.

That truce, according to prosecutors, ultimately led to a scheme to use Shepard’s firm as a political laundering service through which Hoover and Dominelli could circumvent the city’s $250-per-person campaign contribution limit in Hedgecock’s subsequent mayoral campaign.

O’Brien, a wise-cracking stockbroker with thick gray hair and bushy eyebrows, was one of the most colorful witnesses in the first trial, a role he repeated with aplomb Wednesday.

Under questioning by Deputy Dist. Atty. Charles Wickersham, O’Brien testified that Hedgecock was harshly critical of Hoover in the early 1980s after she became romantically involved with Dominelli.

Hedgecock “referred to (Hoover) as a slut, a whore, and other verbiage,” said O’Brien, the mayor’s former stockbroker and a financial contributor to past campaigns.

However, political activist George Mitrovich, founder of the San Diego City Club, attempted to mend relations between Hedgecock and Hoover shortly after he became J. David’s public affairs director in November, 1981, O’Brien added. At a luncheon that month at the Hilton Hotel on Mission Bay, Mitrovich told Hedgecock that his bad-mouthing of Hoover could damage his political future, O’Brien said.

“He (Mitrovich) said that the vilification of Nancy Hoover had to stop and it had to stop now,” O’Brien testified. Mitrovich also told Hedgecock that “if he hoped to advance himself in the political atmosphere in San Diego, he ought to smoke the peace pipe and do it quickly,” the stockbroker added.

During the mayor’s first trial, which ended in February in a mistrial with the jury deadlocked 11-1 in favor of conviction, Mitrovich testified that the status of Hedgecock’s and Hoover’s relationship “wasn’t the purpose” of the 1981 lunch. He conceded, however, that the subject came up. In his opening argument in the mayor’s retrial, Wickersham told the eight-woman, four-man jury on Tuesday that Hoover and Dominelli pumped nearly $267,000 into Shepard’s firm during the 17 months preceding the special May, 1983, mayoral race won by Hedgecock. Because Hedgecock was the Shepard firm’s major client during that period, prosecutors charge that the $267,000 was tantamount to an illegal donation to Hedgecock’s campaign.

The mayor, however, has characterized the two former J. David executives’ capital infusions in Tom Shepard & Associates as a routine business investment designed primarily to help Shepard, a close friend of both Hoover and Hedgecock, establish his own business.

The focus of Barlow’s testimony--the purported political nature of the activities of the two 1981 summer interns in Hedgecock’s supervisorial office--is not directly related to any of the 15 felony charges or single misdemeanor conflict-of-interest count facing the mayor. However, repeating a strategic tactic used in the first trial, Wickersham appeared to use her testimony for two major purposes:

- To demonstrate that the planning of Hedgecock’s 1983 campaign began years earlier. Evidence about that early preparatory work is crucial, because prosecutors contend that at the time Shepard left Hedgecock’s supervisorial staff in January, 1982, to form his consulting firm, the company was intended to be more an arm of a future mayoral campaign than a “normal” business.

- To portray Hedgecock as someone who, to use Wickersham’s words, was not above “bending the rules,” as illustrated by the alleged improper delegation of political work to county employees. That so-called “state of mind” theory is integral to the allegations that Hedgecock later committed much more serious transgressions in his personal and campaign finances.

Barlow told Wickersham that she became concerned about the work of the two interns--Dan Frahm and Michael Gardiner--because “I didn’t see any county government-related work coming out of either of them.” Shepard, who supervised the interns’ work, told Barlow that the two young men were analyzing precinct voting patterns, occasionally using a computer owned by Hedgecock’s wife, Cindy.

When Barlow and another Hedgecock staffer expressed concern that “the political nature” of the interns’ work, if discovered by reporters, could produce negative news stories, Shepard told her that he “was carrying out Roger’s directions . . . and had no power to change the work they were doing,” said Barlow, now an aide to Supervisor George Bailey.

At a July, 1981, meeting, Barlow, Shepard and a third Hedgecock staffer, Priscilla Brown, later relayed their concerns to J. Michael McDade, a former aide and confidant of Hedgecock. At McDade’s suggestion, Gardiner’s duties were refocused on general office tasks, while Frahm was removed from the county payroll and paid by Hedgecock’s political committee to continue working on the precinct analysis, Barlow said.

During his cross-examination, Goodman emphasized the fact that the perceived problem was quickly corrected--evidence elicited to display a good-faith effort to adhere to, not break, the law--and that Hedgecock was not even in San Diego at the time, but rather was attending a political seminar at Harvard University.

O’Brien testified that Hedgecock began discussing a possible mayoral campaign as early as 1979. The stockbroker said that he introduced Hedgecock as “the next mayor of San Diego” at an October, 1981, fund-raiser that he hosted to help the then-supervisor raise about $15,000 to try to buy a computer that Hedgecock told him would “have a great bearing on his future political campaign.”

Hedgecock has insisted that serious planning for his mayoral campaign did not begin until mid-1982. In accordance with that contention, Goodman suggested Wednesday that the pre-1982 political discussions among Hedgecock and his supporters was merely the kind of “what-if” thinking common in politics.

Rejecting Goodman’s interpretation, O’Brien replied, “It’s not just general talk when you start putting the bite on people for a non-campaign.”