Hedgecock Convicted in 2nd San Diego Trial : Mayor Faces Ouster After Jury Finds Him Guilty on 13 Counts in Campaign Contribution Scheme

Mayor Roger Hedgecock, a controversial politician who never lost an election during nine years in public life, on Wednesday was convicted of conspiring to accept illegal campaign donations to his 1983 mayoral race and falsifying financial disclosure statements to conceal the scheme.

The conviction will force Hedgecock to resign as mayor of California’s second-largest city when Superior Court Judge William L. Todd Jr. sentences him on Nov. 6, according to City Atty. John W. Witt.

The mayor was released on his own recognizance after the verdicts were returned early Wednesday afternoon following 6 1/2 days of deliberations by the jury. Hedgecock was convicted on one count of conspiracy and 12 counts of perjury. He was acquitted of two other perjury charges and a misdemeanor count of conflict of interest.

Prosecutors said he faces a maximum of eight years in prison.

Illegal Contributions

The jury decided that Hedgecock, in winning the mayor’s office 2 1/2 years ago, conspired with three of his closest backers to evade the city’s $250-per-person campaign contribution limit and other laws and to funnel tens of thousands of dollars in illegal contributions to his 1983 campaign through a political consulting firm owned by a close friend of the mayor.

Hedgecock was generally impassive as the verdicts were read, although at one point he closed his eyes and gently shook his head.

Longtime Hedgecock aide Kevin Sweeney, seated with the mayor’s family in the front row, began to sob. Hedgecock’s wife, Cindy, managed to hold her composure in the courtroom, but then fell sobbing into the arms of J. Michael McDade, for many years one of the mayor’s closest friends and his former chief of staff.

At a brief news conference in his City Hall office shortly after the verdict, Hedgecock, a 39-year-old moderate Republican first elected to succeed Pete Wilson after Wilson’s election to the U.S. Senate, thanked his family and friends for being “so supportive during this anguish in this time of our lives.”

“There are no words that can express the sense of disappointment,” said Hedgecock, whose first trial on the charges ended last February in a mistrial with the jury deadlocked 11 to 1 in favor of conviction. Saying that he needed time to “regroup my thoughts,” Hedgecock promised to make “a more extensive statement on a lot of very obvious questions in a day or two.”

One of the most obvious unanswered questions is whether Hedgecock will attempt to fight to retain his office while he appeals the verdict, or resign. Among those calling for Hedgecock’s immediate resignation was Bill Mitchell, the city councilman who holds the largely ceremonial post of deputy mayor and would become acting mayor if Hedgecock steps down.

Hedgecock’s legal misfortune also activated the political ambitions of a handful of other local public figures. Within minutes of the verdict, Police Chief William Kolender and City Councilman Bill Cleator expressed interest in running for mayor if a special election is called by the City Council.

Other potential candidates include Assemblyman Larry Stirling (R-San Diego), City Councilmen Mike Gotch and Ed Struiksma, and Maureen O’Connor, the former councilwoman who lost to Hedgecock in a 1983 campaign to fill the vacancy created when Wilson was elected to the U.S. Senate.

The council could appoint a successor, but that is considered unlikely.

Deputy Dist. Atty. Charles Wickersham, who prosecuted the case, described the verdict as “an excellent result . . . that delighted me.”

‘Just, Fair, True Result’

“I do feel sorry for (Hedgecock),” Wickersham said. “But I feel in my heart it was a just, fair, true result.”

The mayor’s attorney, Oscar Goodman, who presented no defense witnesses in the case, was unavailable for comment after the verdicts.

As the verdicts were read in court, most of the jurors sat solemnly with their eyes cast downward. One juror quietly wept, wiping her eyes with a handkerchief handed to her by one of the alternate jurors, while another juror’s hands shook in her lap when she was asked to verbally affirm her votes on the 16 counts facing Hedgecock.

“It was a painful experience,” said juror Karon Dyer, 46, of La Mesa, a project manager for a computer systems house. “It was nothing anyone enjoyed. But we did our job.”

Jury foreman Richard Stark of San Diego, asked to explain what convinced the jury, said, “The tremendous cash flow, his house and everything.”

In an interview, Stark said the jurors were simply determined not to become deadlocked, as had the panel in Hedgecock’s first trial. “We didn’t want that,” the weary foreman said.

He said that at least two of the jurors believed as late as Sunday night--four days into their deliberations at Mission Valley’s Hanalei Hotel--that Hedgecock was innocent. The pair changed their minds, Stark said, after a meticulous review of the stacks of evidence and the testimony of 61 witnesses.

The charges against Hedgecock stemmed from allegations that he conspired with Nancy Hoover and J. David (Jerry) Dominelli, former principals in the now-bankrupt La Jolla investment firm of J. David & Co., in a scheme to use the political consulting firm of Tom Shepard & Associates as a laundry for illegal donations to Hedgecock’s 1983 mayoral campaign.

Grand Jury Indictments

On Sept. 19, 1984, the San Diego County Grand Jury indicted Hedgecock, Hoover, Dominelli and Shepard on charges that they used Shepard’s firm as a conduit for tens of thousands of dollars.

The perjury charges filed against Hedgecock alleged that he intentionally falsified financial disclosure statements to conceal that scheme and other purportedly illegal personal financial aid from the two former J. David executives. About a month later, the state Fair Political Practices Commission filed a nearly $1-million civil lawsuit against Hedgecock on similar charges. That suit is still pending.

Although Hedgecock was reelected by a 58%-42% margin over La Jolla millionaire Dick Carlson only seven weeks after his indictment, the mayor then was forced to battle in the courtroom to preserve what he had won at the polls.

After the mayor’s seven-week first trial ended in a hung jury, Hedgecock argued that the district attorney’s office “had its shot and missed.”

But Dist. Atty. Edwin Miller decided to press for a second trial.

Wickersham Got Case

When Assistant Dist. Atty. Richard D. Huffman, who prosecuted the first trial, was appointed to the Superior Court bench by Gov. George Deukmejian in the spring, Wickersham, who assisted Huffman in the first case, took over.

The case against Hedgecock turned on one major question: Was the more than $360,000 that Hoover and Dominelli invested in Tom Shepard & Associates in 1982 and 1983 a legitimate business investment or an illegal subsidy of Hedgecock’s campaign designed to circumvent the city’s contribution limit?

According to the prosecution’s theory, the conspiracy had several purposes: Hedgecock would become mayor, Shepard would have a successful business, and Hoover--and, by extension, J. David & Co.--would become a major behind-the-scenes political power broker in San Diego.

Because Hedgecock’s mayoral campaign was Tom Shepard & Associates’ major client during most of the period in which Hoover and Dominelli pumped money into the firm, Wickersham argued that those investments were tantamount to illegal campaign donations that helped prop up an integral element of Hedgecock’s 1983 campaign.

Hedgecock consistently denied knowing that any J. David money was flowing into Shepard’s firm, saying that he believed that Hoover was underwriting the company primarily to help Shepard start his own business. The firm was founded in January, 1982--10 months before a mayoral race became a certainty when Wilson was elected to the Senate. In a special May, 1983, election to replace Wilson, then-County Supervisor Hedgecock narrowly defeated O’Connor.

Timing of Investments

The defense also pointed out that $189,000 of Hoover’s and Dominelli’s investments were made before and after Hedgecock’s race.

A key prosecution witness, however, testified that Hedgecock had boasted to him in November, 1981, that Dominelli planned to bankroll Tom Shepard & Associates so that the firm would be able to run Hedgecock’s 1983 race.

San Diego investment counselor Harvey Schuster said Hedgecock told him that month that Dominelli “was like putty in Nancy Hoover’s hands, and anything that Nancy wanted, Jerry would do.”

In a case built on circumstantial evidence, that assertion by Schuster, arguably the major witness in the case, was the only direct evidence linking Hedgecock to the alleged conspiracy.

Seeking to refute the damaging testimony, Goodman denounced Schuster in his closing argument as “a liar (and) a sleaze bag” who lied because of his anger over not receiving a 1982 contract to develop the county’s bayfront parking lots. That contract was awarded while Hedgecock was a county supervisor. Hedgecock voted against Schuster’s bid.

Although the second trial featured a handful of new witnesses and several revelations, the evidence presented in the retrial was largely similar to that heard in the first case.

No Defense Witnesses

Goodman, however, ensured that the retrial would not be perceived as simply a replica of the earlier case by providing the most dramatic moment in either trial when he stunned courtroom observers by resting his case without presenting a single witness.

Describing the prosecution’s case as a “sand castle . . . that crumbled,” Goodman argued that “there was no need to present a defense” because he had already built his case through his cross-examination of prosecution witnesses.

Because Hedgecock has stirred passionate feelings of devotion from his supporters and hate from his enemies, there was a torrent of expression following Wednesday’s courtroom drama.

Former Supervisor Paul Fordem, who served--and clashed--with Hedgecock on the county board, said, “The man generated more strong feelings pro and con than any other politician I can remember. He was so impatient and ambitious. To those of us whom he gave tongue-lashings, this is an ironic piece of justice.”

Gotch, the mayor’s closest political ally on the City Council, said Hedgecock “remains a friend . . . . He will be remembered at City Hall for attempting more than any mayor before him in modern times to involve the average person in the working of government.”

But County Supervisor Paul Eckert, whos vitriolic exchanges with Hedgecock regularly rocked the County Administration Building during the years that both served on the Board of Supervisors, said he had “no regrets” about the mayor’s downfall.

“I have no outpouring of sympathy for the man,” Eckert said. He recalled that his first reaction to the verdicts was, “Gee, maybe somebody will believe me now . . . . I’ve been saying all along they would find him guilty.”

Times staff writers Armando Acuna, Glenn F. Bunting, Kathleen H. Cooley, Ralph Frammolino, Tom Greeley, Tom Gorman, H. G. Reza, Janny Scott, and Daniel M. Weintraub in San Diego and Jack Jones in Los Angeles contributed to this story.