Firm's Ties to Hedgecock Questioned at Trial

Times Staff Writer

A former partner in Tom Shepard & Associates testified Thursday that the firm did work that benefited San Diego Mayor Roger Hedgecock before it had a contract to run his 1983 race, but emphasized that he "did not regard (Hedgecock) to be a client" at the time.

Completing the first full week of testimony in the mayor's felony conspiracy and perjury retrial, Del Mar newspaper editor Gregory Dennis, one of the original partners in Shepard's now-defunct political consulting firm, acknowledged that "there was a relationship of some sort" between Hedgecock and Shepard before August, 1982, when the company received a contract to run Hedgecock's 1983 campaign.

Confronted with company records that document some of the work apparently done on Hedgecock's behalf, Dennis noted that the firm paid a $2,000 bill for a video seminar for the Hedgecock campaign in the spring of 1982 and that Shepard helped prepare post cards used to solicit endorsements for a potential mayoral campaign.

However, Dennis parried Deputy Dist. Atty. Charles Wickersham's repeated efforts to get him to describe Hedgecock as a client of the firm during the first half of 1982, persistently using phraseology that stopped just short of that characterization. Dennis conceded, for example, that Shepard's firm did work for Hedgecock "of a similar nature to work done for other clients" during that period, but told Wickersham that the question of whether Hedgecock was an official client "is a little difficult to answer yes or no."

"I've looked at that question 100 different ways . . . (and) the answer appears to be more complicated than I thought," said Dennis, editor of The Citizen, a weekly newspaper. "There was a relationship of some sort between Mr. Shepard and Mr. Hedgecock. I regarded that relationship as Mr. Shepard's, not the firm's."

The question of when Tom Shepard & Associates began working on Hedgecock's behalf is a crucial one, because prosecutors allege that the firm illegally contributed to Hedgecock's campaign in the form of unreimbursed services and staff salaries before even receiving the August, 1982, contract to handle his campaign for the special May, 1983, race prompted by former Mayor Pete Wilson's election to the U.S. Senate.

However, during his cross-examination Thursday of Dennis and another former Shepard partner, Robin Franck, defense attorney Oscar Goodman argued that Hedgecock was unaware of any pre-August, 1982, work done on his behalf by Shepard's firm--work that apparently was not paid for by Hedgecock's campaign committee.

"It's irrelevant if there's no discussion by people saying that, 'Roger, you've got to pay the bill,' " Goodman said. "Just because things happen and you take them out of context, you can't attribute any bad to it. When the facts come out, if they're able to show that there was some subterfuge here and people knew that there was going to be some cheating, that's a different story. But for events to take place, there's absolutely nothing wrong with that."

During much of Dennis' nearly three hours on the witness stand, Wickersham repeatedly pressed him to explain the nature and extent of the relationship between Hedgecock and Tom Shepard & Associates. In addition to paying the $2,000 video seminar bill and preparing the pledge post cards, Shepard's firm also coordinated volunteers who updated a computerized mailing list, work that Dennis admitted was "of potential benefit to Mr. Hedgecock in the future."

Flustered by Dennis' refusal, in the face of that evidence, to confer official client status on Hedgecock during the critical early 1982 period, Wickersham showed Dennis a letter that he had written in June, 1982, in which he referred to Hedgecock as one of the firm's "present or former clients." In the letter, which listed the young firm' resources and clients in an attempt to attract new business, Dennis further described Hedgecock as "a noted county supervisor who will run for mayor when Pete Wilson moves on."

"Are you telling us that that representation is false?" Wickersham asked.

"Sometimes one says some things in letters looking for more clients that are not totally representative of the facts," Dennis said. As Wickersham bore in on the point, Dennis later added that the solicitation letter "is not precisely true."

"Was Roger Hedgecock a present or former client at the time that you wrote that letter?" Wickersham repeated.

"I did not regard him to be a client . . . It's something of a semantic question," Dennis responded.

Trying to help Dennis out of a difficult spot, Goodman asked him whether his listing of Hedgecock as one of the firm's clients was a simple matter of " 'puffing' on your part?"

"That's a fair word," Dennis replied.

Much of Dennis' testimony is prologue to evidence expected to be introduced later in the trial. Dennis testified, for example, that before Tom Shepard & Associates was founded in January, 1982, he and Shepard considered taking over the operation of Sea Coast Magazine, a former North County publication.

Former J. David & Co. principals J. David (Jerry) Dominelli and Nancy Hoover were to finance the magazine's purchase, but ultimately abandoned that plan in December, 1981, Dennis said. Later that month, Hoover, who had what Dennis described as a "longstanding and very friendly relationship" with Shepard, agreed to finance the consulting firm--a pact that led to the investment of more than $360,000 in Tom Shepard & Associates by Hoover and Dominelli.

In the first trial, the defense used that evidence in an attempt to rebut the testimony of key prosecution witness Harvey Schuster, who claims that Hedgecock told him in November, 1981, that Dominelli intended to finance Shepard's political consulting firm so that it would be able to run his 1983 mayoral race.

According to Hedgecock, that conversation with Schuster could not have occurred, because Shepard and Hoover did not even begin considering the possibility of forming a consulting firm until mid-December. Prosecutors, however, have suggested that Shepard and Hoover could have had earlier discussions about starting a consulting firm without Dennis or others knowing about it.

Goodman, meanwhile, continued his attempt to distance Hedgecock from any possible wrongdoing in the case by eliciting testimony from Dennis and Franck--similar to that heard from other witnesses--that, to the best of their knowledge, the mayor played no role in the establishment of Shepard's firm.

"The one thing that's absolutely clear to me is that nobody has talked to Roger Hedgecock about anything that has happened in this case so far," Goodman said.

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