Hoover, Shepard Admit to Scheme in Funding Hedgecock Campaign

Two former political associates of convicted mayor Roger Hedgecock admitted in sworn statements Friday that they were aware they were breaking the law when they conspired to funnel hundreds of thousands of dollars into Hedgecock’s 1983 mayoral campaign.

In statements submitted to Municipal Court Judge Robert J. Stahl as part of guilty pleas, both Nancy Hoover and Tom Shepard detailed their knowledge and their participation in the scheme.

Hoover said she was well aware that “it was illegal for a company to make political contributions in the mayor’s campaign,” but nonetheless participated in the plan to use money from the J. David & Co. investment firm to support Hedgecock’s campaign. The firm, now bankrupt, was headed by convicted swindler J. David (Jerry) Dominelli, who earlier this year also pleaded guilty to illegally financing Hedgecock’s campaign.

Shepard admitted in his statement that he was familiar with campaign finance laws and “was aware that it was illegal for me, Nancy Hoover and Jerry Dominelli to contribute the amount of money to Roger Hedgecock’s campaign for mayor that was being supplied to Tom Shepard & Associates.”

But in an interview Friday, Hedgecock said that despite Hoover’s and Shepard’s admissions of a conspiracy, no such activity ever took place.

“We never at any time conspired to break the law,” Hedgecock stated emphatically while standing outside the offices of San Diego radio station KSDO, where he has worked as a talk show host since shortly after he was sentenced to one year in local custody on a 13-count felony conviction. He remains free while his case is on appeal.

“I haven’t talked to them . . . I don’t know why they’re making admissions to something they know is not true,” Hedgecock said, referring to the pleas Hoover and Shepard entered in San Diego Municipal Court on Friday.

“I think they want to get on with their lives . . . (and) desire to put this behind them,” he said.

Both Hoover, a former business associate of Dominelli, and Shepard, a former Hedgecock aide and political consultant, pleaded guilty to single counts of conspiracy to violate campaign spending and disclosure laws as part of a plea-bargain arrangement with the district attorney’s office. As part of the agreement, the district attorney dropped 14 perjury charges that were facing both defendants.

Until Friday, they had steadfastly proclaimed their innocence since 1984, when they were first indicted.

Hoover’s and Shepard’s recollection of events, contained in the separate, three-page sworn statements they submitted to the court, run contrary to Hedgecock’s denial.

Hoover said in her statement that behind the creation of the political consulting firm of Tom Shepard & Associates, which ran Hedgecock’s mayoral campaign, was “the idea that funding would be supplied by me and by Jerry Dominelli through me to make the firm viable.”

“I was aware at the time that I supplied funds to Tom Shepard & Associates that it was illegal for a company to make political contributions in the mayor’s campaign,” Hoover said in her statement. “I knew that the most I could give Roger Hedgecock as a contribution to his campaign was $250 in the primary and $250 in the general election, and that J. David & Co. could not contribute any money.

“Being aware of these rules, Jerry Dominelli and I supplied a substantial amount of money to Tom Shepard & Associates understanding that the funds would be used to pay employees who were working almost exclusively on Mr. Hedgecock’s campaign, and to pay other expenses Tom Shepard & Associates were incurring as a result of the Hedgecock campaign.”

Hoover said Hedgecock was aware of the arrangement, and she described a meeting held at the La Jolla offices of J. David & Co. the day after the 1983 mayoral primary election.

“One of the subjects discussed at this meeting was a provision of additional financial assistance to Mr. Hedgecock in his ongoing campaign,” Hoover said. “Mr. Dominelli offered financial support to Mr. Hedgecock and I agreed. Thereafter, additional funding was provided to Tom Shepard & Associates by Jerry Dominelli. Prior to and following this meeting, a majority of the money supplied to Tom Shepard & Associates was from Jerry Dominelli in the form of J. David & Co. checks.”

Shepard’s firm, founded in January, 1982, was kept afloat primarily through more than $350,000 supplied it by Dominelli, Hoover and the J. David firm in 1982 and 1983.

In his statement, Shepard, who before founding his political consulting firm was Hedgecock’s chief aide when he was a county supervisor, said part of his motivation in operating a successful mayoral campaign was that “I would become the preeminent political consultant in San Diego,” thereby ensuring him future business.

Shepard admitted that his company “was to a very great extent financed by Nancy Hoover and J. David & Co.” In describing several instances in which Hoover and Dominelli supplied his firm money for specific campaign needs, Shepard said he was aware they were breaking the law.

“From my prior experience and familiarity with the Political Reform Act and the City of San Diego’s election ordinance, I was aware that it was illegal for me, Nancy Hoover and Jerry Dominelli to contribute the amount of money to Roger Hedgecock’s campaign for mayor that was being supplied to Tom Shepard & Associates,” Shepard said in his statement.

“I sought to do everything possible to have Roger Hedgecock be successful in his candidacy for the mayor . . . and my firm’s effort(s) for a substantial part of the years of 1982 and 1983 were directed primarily with that in mind. While my firm would benefit as a result of this candidacy being successful, Roger Hedgecock also benefited.

“This could not have occurred without the large contributions of money that were made through Nancy Hoover to my firm which were intended for use in the Hedgecock campaign.”

Neither Shepard nor Hoover would answer reporters’ questions after the 25-minute court session.

In the courtroom, Hoover, dressed in a blue-and-white checkered skirt and jacket, answered Stahl’s questions in either one-word replies or short sentences, and at one point--when the judge explained the severity of a guilty plea--appeared to be sniffling.

The sport coat-clad Shepard, in contrast, was almost military-like as he loudly responded to the judge’s questions.

Although Hoover pleaded guilty to a felony, Stahl said that if she doesn’t violate the terms of her three-year probation for one year, she can petition the court to have the felony reduced to a misdemeanor. Hoover will have to pay a $10,000 fine and serve 350 hours of community service. She will not, however, go to jail.

Shepard pleaded guilty to a misdemeanor count of conspiracy, and agreed to pay a $1,000 fine as well as provide 200 hours of community service and serve three years’ probation. He, too, avoided jail.

The formal sentencing date was set for May 16.

The judge warned both defendants that their admissions of guilt “could have an adverse affect” on their standing in a civil lawsuit filed by the state Fair Political Practices Commission, in which they are accused of various campaign law violations. Stahl also told them their pleas could harm them in the current federal grand jury investigation into J. David & Co.

Targets of that probe, according to sources close to the case, include Hoover, former J. David executive Mark Yarry, former Rogers & Wells law firm partner Norman Nouskajian, current Rogers & Wells attorney Don Augustine and former Wiles Circuit & Trembley attorney Mike Clark.

George Wetzel, Shepard’s attorney, said later in a telephone interview that discussions are under way between the FPPC and the defendants to settle that lawsuit.

Deputy Dist. Atty. Charles Wickersham said in court that the “pleas are in the best interest of the community and . . . the interests of justice.”

After the hearing, Wickersham said the plea bargain was “extremely fair,” although he acknowledged there would be some criticism that Hoover and Shepard were spared from jail.

He said that after Hedgecock’s first trial in 1984, which ended in a hung jury, the district attorney’s office had offered the former mayor essentially the same plea-bargain offer given Hoover and Shepard but that Hedgecock turned it down. Hedgecock’s second trial last year ended in his conviction.

Wickersham said that in pushing for the plea bargain, he wanted to avoid a time-consuming and costly preliminary hearing and trial that may have resulted in little more than what was gained through the guilty pleas.

“We made our point, and we feel good about it,” Wickersham said.

According to Wickersham and Wetzel, negotiations on the plea bargain began in earnest shortly after Hedgecock was sentenced in December. “For the last three months we were talking almost every day,” Wetzel said, noting that agreement wasn’t finally reached until Thursday.

The main obstacle to the agreement, Wickersham explained, was Shepard’s demand that his conspiracy count be reduced from a felony to a misdemeanor. “That was a very big stumbling block,” Wickersham said. “We resisted to giving him a misdemeanor. It came down to working everything else out and my thinking was, ‘Am I going to to hang it all up over that?’ ”

Hedgecock said that regardless of the guilty pleas entered by Hoover, Shepard and Dominelli, he will continue fighting the case.

“I’m going to keep fighting the rest of my life . . . if that’s what it takes,” the former mayor said.