Jury Told of Hedgecock’s Meeting at J. David Office

The day after Roger Hedgecock qualified for the runoff in the 1983 mayoral race, he told top executives of J. David & Co. that he expected the race to be expensive, but that he believed that he would be able to raise the necessary funds through his “existing campaign machinery,” a former J. David lawyer testified on Wednesday.

Frederick R. Storm, the former general counsel of the now-bankrupt company, testified that then-county Supervisor Hedgecock was “quite happy, celebratory” when he arrived at the firm’s La Jolla offices on March 16, 1983, the day after former San Diego City Councilwoman Maureen F. O’Connor and Hedgecock finished first and second, respectively, in a 20-candidate primary to qualify for a May 3 runoff.

The ensuing conversation at that meeting, filtered through the divergent perspectives of the prosecution and defense, illustrates one feature of the mayor’s felony conspiracy and perjury retrial--namely, how heavily the case hinges on conflicting interpretations of events.

Both sides can point to parts of Storm’s description of that meeting--attended by, among others, former J. David principals Nancy Hoover and J. David (Jerry) Dominelli--as evidence that bolsters their viewpoints. The meeting, and what the two sides believe it shows, is a microcosm of a case built on circumstantial evidence.

Prosecutors argue that Hedgecock’s discussion of the financial needs of his upcoming runoff at the meeting--combined with what Storm described as Hoover’s promises of aid and Dominelli’s uncharacteristic “animated, talkative” mood--is one piece in a puzzle that, when completed, illustrates a conspiracy in which the two J. David executives purportedly funneled illegal contributions to Hedgecock’s campaign through a political consulting firm owned by Tom Shepard, a close friend of the mayor.

The defense contends that the essence of Storm’s testimony can be found in the three words he used to describe how Hedgecock planned to raise the money he needed for the runoff--”existing campaign machinery.” Storm’s emphasis that Hedgecock was confident that his political organization “was going to be able to raise” the needed contributions, the defense argues, refutes the prosecution’s implications of impropriety.

Similarly, prosecutors attach significance to the fact that at that meeting, Hedgecock, in Storm’s words, thanked Hoover and Dominelli “for all they’d done for his campaign”--words that, to Deputy Dist. Attys. Charles Wickersham and David Cox, are a suggestive wisp of the purported scheme to circumvent local campaign laws.

To defense attorney Oscar Goodman, that interpretation of Storm’s remark is merely one of many instances in which prosecutors see intrigue where there is none, or hint at sinister motives in innocuous actions. Hedgecock’s expressions of thanks to the J. David officials, Goodman says, are similar to comments that Hedgecock made to dozens of other supporters after the primary, and were nothing more than the type of remarks that he or any other politician would make in the wake of a successful campaign.

During his testimony, Storm told the eight-woman, four-man jury that he, Hoover, Dominelli and two other J. David officials--public affairs director George Mitrovich and Mark Yarry, a top Dominelli aide--were discussing company business when Hedgecock arrived at the firm’s office in the late morning on March 16, 1983.

“Everybody got up and congratulated (Hedgecock),” said Storm, a San Francisco lawyer who served as J. David’s general counsel from May, 1982, through May, 1983. “He was quite happy. He’d just made it through the San Diego mayoral primary. I’d probably be happy too.”

Storm said that Hedgecock thanked Hoover and Dominelli “for what he called their support during the primary campaign, and for their assistance in rallies and things. I generally recall that he . . . thanked them for their support and for all they’d done for his campaign.”

The normally quiet and reclusive Dominelli was “quite animated and talkative and actively participated in the discussion” at the meeting, Storm testified.

Dominelli “was excited about a good old-fashioned dog-fight campaign,” Storm added. “The two leading candidates came out on top. The issues were clearly defined. He was happy to be involved in the campaign.”

When the focus of the discussion shifted to the challenge of the runoff campaign, Hedgecock “indicated it would be a difficult and expensive general election,” Storm said. Noting that O’Connor’s husband is multimillionaire businessman Robert O. Peterson, founder of the Jack in the Box fast-food chain, Hedgecock added that he expected his opponent to rely heavily on her personal wealth in financing her campaign.

“He (Hedgecock) talked about trying to reach as many people as possible” to solicit contributions for his own campaign, Storm said. “He said that he and his campaign were going to have to raise substantial money. But he also said he was quite confident that his existing campaign machinery was going to be able to raise that money.”

After Hedgecock’s general description of the financial needs of his campaign, Hoover “indicated that she wanted to do what she could, as she put it, to help the campaign,” Storm testified.

After remaining in the meeting for about 20 minutes while Hedgecock and the others discussed campaign finances, Storm said he gradually became uncomfortable and decided to leave the room--partly because “the topic that was being discussed had nothing whatsoever to do with me . . . and I had other work to do,” but also because he said he felt that “the participants in the conversation wanted privacy.”

Storm formed that impression, he explained, based on the others’ “body language, the way people were looking at me.”

“It was my general sense and impression that the participants . . . would have preferred that I not be in the room,” Storm said. “It was not my normal course and habit to participate in meetings in the executive offices. I made a determination that it was time for me to go.”

Storm’s feeling of discomfort, like much else in the case, lends itself to opposing interpretations by the competing attorneys. To prosecutors, it again is suggestive of the secretive atmosphere of a conspiracy. To the defense, the proper interpretation may simply be that, as Storm himself put it, “the purpose for my being there was over” because J. David business was no longer being discussed.

Before Storm left the meeting, one other person joined the gathering, the lawyer testified. Storm said that he did not know the person at the time but added that he now believes--based on subsequent introductions--that the latecomer was political consultant Shepard.

Storm also testified about another central issue in the case--the controversial oral-agreement loan from Hoover that Hedgecock used to renovate his South Mission Hills house. Shortly before he resigned from J. David in the spring of 1983, Storm said, Hoover told him that she was interested in loaning Hedgecock $120,000 to $175,000 to finance the renovation of his house--a plan that she envisioned would help both Hedgecock and Parin Columna, a J. David worker who supervised the project.

Storm said he recommended that Hoover not pursue that plan, but suggested that if she did loan Hedgecock the money, she should secure the loan by a second trust deed on the mayor’s house. Storm also encouraged Hoover, he said, to have Columna bid against other construction firms for the project “to make sure it was a fair bid.”

Hoover, however, failed to heed that advice, deciding instead to make a $130,000 oral-agreement loan to Hedgecock. Although the mayor has since repaid the loan with interest, Wickersham alleges that the money was intended to be a gift and probably would never have come to light were it not for J. David’s collapse in early 1984. In addition, there is no evidence that anyone other than Columna was asked to bid on the renovation project.

“Is it a fair statement to say you thought it (the loan) was a bad idea?” Cox asked.

“That’s a fair statement,” Storm replied.