Car Dealer Tells of Payments to Laguna Hills Man

Car dealer and NASCAR team owner Rick Hendrick has acknowledged that he made payments to two former Honda officials in the growing American Honda Motor Co. bribery and kickback scandal.

Federal prosecutors this week alleged that Hendrick made cash payments and other gifts to American Honda sales executives to secure “extraordinarily favorable treatment” for his national empire of auto dealerships. No charges have been filed.

From 1989 through April, 1992, Hendrick sent cash four times a year by Federal Express to Honda executive Stanley James Cardiges of Laguna Hills, assistant U.S. attorney Michael Connolly told a federal judge Tuesday in Concord, N.H.

In court, Connolly said the payments ranged from $15,000 to $20,000 and were made to pay the interest on the mortgage on Cardiges’ home in Laguna Hills.

Prosecutors said Hendrick paid $26,000 to another Honda executive, John Billmyer of Raleigh, N.C., to cover interest payments on his home at Palm Springs from January, 1987, to March, 1988.

On Thursday, Hendrick said that his generosity with friends--not a desire for personal gain--prompted him to make the payments to the two officials, both of whom he said he considered close friends.

Hendrick vigorously denied ever receiving dealerships or any kind of favorable treatment in return.

“I’ve done well,” Hendrick said. “So when someone comes to me in need, I have a hard time saying no.”

The government also said Billmyer transferred ownership of Honda dealerships at Rock Hill, S.C., and Anaheim to a “straw” owner. In fact, prosecutors allege, Hendrick was the true owner.

Prosecutors said the practice let Honda executives conceal their granting of favorable treatment to certain dealers.

They also said Hendrick let Billmyer use a new 1988 BMW, which Hendrick had leased, for his personal use.

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Between 1978 and 1992, Connolly told the court, Hendrick was granted 28 Honda dealerships to become the largest owner of Honda and Acura dealerships in the nation.

Hendrick also owns cars and sponsors the racing teams of NASCAR drivers Jeff Gordon and Terry Labonte.

Hendrick said Thursday that Honda has purged much of its sales force in the wake of the scandal and would not still be doing business with him if they had questions about his behavior.

“If I was one of those cloudy individuals, the Honda people wouldn’t still be calling me today to do other dealerships,” he said.

Honda spokesman Jeffrey Smith said Friday that he could not comment on Hendrick’s relations with Honda. “I don’t want to say anything that can jeopardize the litigation in process now,” he said.

The government’s allegations came after Cardiges pleaded guilty this week to conspiring with other company officials to solicit bribes and kickbacks in exchange for awarding dealerships. Cardiges faces a possible sentence of 35 years in prison, $1 million in fines and as much as $10 million in forfeiture payments.

His plea is part of a major federal investigation of corruption within the sales force of American Honda, based in Torrance. So far, 16 former Honda officials have pleaded guilty in the scandal, which involved as much as $15 million in bribes and kickbacks.