People v. Hedgecock

• Decision Date: 06 September 1990
• Docket Number: No. S005882,S005882
• Citation: 795 P.2d 1260,51 Cal.3d 395,272 Cal.Rptr. 803
• Court: California Supreme Court
• Parties: , 795 P.2d 1260 The PEOPLE, Plaintiff and Respondent, v. Roger HEDGECOCK, Defendant and Appellant. In re Roger HEDGECOCK on Habeas Corpus.

Page 803

272 Cal.Rptr. 803

51 Cal.3d 395, 795 P.2d 1260

The PEOPLE, Plaintiff and Respondent, v. Roger HEDGECOCK, Defendant and Appellant In re Roger HEDGECOCK on Habeas Corpus.

No. S005882.

Supreme Court of California In Bank.

Sept. 6, 1990.

Cleary & Sevilla and Charles M. Sevilla, San Diego, for defendant and appellant.

John K. Van de Kamp, Atty. Gen., Steve White, Chief Asst. Atty. Gen., Frederick R. Millar, Jr., and Robert M. Foster, Deputy Attys. Gen., San Diego, for plaintiff and respondent.

KENNARD, Associate Justice.

Defendant Roger Hedgecock, formerly mayor of the City of San Diego, was convicted by a jury of one count of conspiracy to violate state and local financial disclosure laws and twelve counts of perjury based on errors or omissions by him in disclosure statements required by the Political Reform Act of 1974 (Gov.Code, § 81000 et seq. [the Act] ). We granted review to address two questions.

First, in a perjury prosecution based on errors or omissions in disclosure statements required by the Act, is the materiality of the errors or omissions an element of the offense to be determined by the jury? We conclude that it is, and that in this case the trial court's failure to submit the materiality issue to the jury requires reversal of defendant's perjury convictions but not his conspiracy conviction.

Second, does a trial court have discretion to grant an evidentiary hearing on a new trial motion based on jury tampering or jury misconduct, and to have jurors called to testify at the hearing? We hold that, consistent with the practice predominating in the federal and state courts, a trial judge has such discretion. Because of the trial court's erroneous belief in this case that it lacked authority to grant defendant's request for an evidentiary hearing, the matter is remanded so the trial court can determine

whether there should be such a hearing.

FACTS

The Act requires all public officials to file annual statements of economic interests (SEI's) disclosing their investments, interests in real property, and income. (See Gov.Code, §§ 87200, 87203, 87206, 87207.) In addition, elected officials, candidates, and campaign committees must file periodic campaign disclosure statements (CDS's) regarding contributions and expenditures. (See Gov.Code, §§ 84200, 84211.) In compliance with the Act, defendant--first as a member of the San Diego County Board of Supervisors and later as a successful candidate for mayor of San Diego--filed a number of SEI's and CDS's during the years 1980 to 1984. Defendant verified each SEI and CDS under penalty of perjury, as required by Government Code section 81004.

The prosecution contended that defendant failed to disclose his receipt of substantial contributions in an effort to circumvent local ordinances (San Diego Mun. Elec. Control Ord., §§ 27.2941, 27.2942) that limited individual campaign contributions to $250 per person and prohibited contributions by businesses. Most of the undisclosed contributions came from Nancy Hoover, an old friend of defendant, and Jerry Dominelli, a stockbroker involved with Hoover. Hoover and Dominelli owned J. David and Company (ostensibly a foreign currency trading firm), and some of the contributions were made in the company's name.

The prosecution claimed that Hoover and Dominelli made unreported contributions as follows: (1) financial support for Tom Shepard and Associates, which provided consultation services for defendant's mayoral campaign; (2) a donation of $3,000 used to create a computer list of names for fundraising purposes; (3) Hoover's "purchase" of a promissory note owed to defendant, who continued to receive interest payments on the note after the purchase; and (4) financial assistance for the remodeling of defendant's home. In addition, the prosecution contended that Harvey Schuster, one of defendant's supporters, had paid $500 for legal services performed solely for defendant's benefit. A discussion of these five incidents follows.

A. Tom Shepard and Associates

In late 1981, when defendant (then a member of the San Diego County Board of Supervisors) began his campaign for mayor of San Diego, his administrative assistant, Tom Shepard, left to start Tom Shepard and Associates (TS & A), a political consulting firm. Nancy Hoover agreed to be a limited partner and the sole source of funding for the firm, with a capital contribution of $120,000. In January 1982, TS & A commenced operations in an office leased by J. David and Company. In the first six months of 1982, TS & A performed a substantial amount of campaign work for defendant, even though it had not been retained to do so.

In the summer of 1982, the "Roger Hedgecock for Mayor Committee" was formed. The committee agreed to pay TS & A a retainer of $750 per month for consultation services until defendant's formal announcement of his candidacy for mayor. In November 1982, when defendant officially declared his candidacy, the contract was modified to provide TS & A with a 15 percent commission on all media advertising placed during the campaign plus reimbursement of all direct costs. This agreement remained in effect through the mayoral election in May 1983. According to prosecution experts, the agreement differed from the standard industry contract in that it included no commission on services other than media advertising, and the terms of the contract made it inevitable that TS & A would sustain a loss on the campaign.

Before defendant's official declaration of his candidacy for mayor in November 1982, Hoover made capital contributions to TS & A at the rate of about $10,000 per month. Hoover and Dominelli wrote checks in excess of $352,000 to TS & A between January 1982 and December 1983.

During 1982 and the first half of 1983, TS & A suffered a substantial loss on defendant's account. A prosecution expert testified that from August 1982 (the month Defendant failed to report on any of his CDS's the financial support that Hoover and Dominelli provided to TS & A, the losses TS & A sustained while running defendant's campaign, or the uncompensated campaign work performed by TS & A.

TS & A was first retained by the Roger Hedgecock for Mayor Committee) to May 1983 (the month of the mayoral election) TS & A's loss on defendant's account was between $137,887 and $157,386, while its profit on other clients was between $19,958 and $39,457. In this period, defendant's account comprised nearly 85 percent of TS & A's revenues.

B. Donation for Computer List

In the spring of 1981, defendant and fellow supervisor Jim Bates agreed to merge their lists of campaign supporters to create a master computer file and to split the cost of preparing the file, which was not to be sold without the other's approval. Defendant paid the $2,700 bill with the proceeds of a $3,000 check he received from Dominelli on December 21, 1981. Defendant later told an aide he had sold the computer list to Tom Shepard for $3,000. Defendant's 1981 CDS showed a $3,000 "loan" from defendant to his campaign committee, but neither the 1981 CDS nor the 1981 SEI disclosed defendant's receipt of the $3,000 check.

C. Legal Consultation

In late 1981, defendant experienced serious personal financial difficulties. Because he was concerned about adverse effects on his political future if there were foreclosures on his real estate investments, he sought the advice of Harvey Schuster, one of his supporters. Schuster arranged a meeting between defendant and a real estate attorney in Los Angeles. Schuster paid for the trip and $500 in attorney fees. Defendant failed to disclose these payments on his 1981 SEI.

D. The Promissory Note

In March 1982, defendant and his wife began collecting monthly payments on a $22,500 promissory note secured by a third deed of trust on residential property. Later that year, defendant talked to Hoover about selling her the trust deed for $16,000. In November 1982, Hoover told her lawyer to prepare the necessary legal documents for the transfer but not to record the assignment of the deed until June 1983, so that defendant could realize a tax benefit. On December 17, 1982, Hoover paid defendant $16,000 for the trust deed. Defendant immediately invested $10,000 in a J. David and Company account. No one informed the property owners of the sale of the trust deed, so they continued making their interest payments to defendant.

In December 1982, the property owners offered to pay off the note, suggesting that it be discounted to $16,000. Defendant, however, insisted on full payment. He and Hoover then told Hoover's attorney they were modifying their agreement regarding the note to provide that, if defendant could get full value on the note, Hoover would return the note to defendant in exchange for $16,000 plus interest. The property later was sold, and the new buyers assumed the loan from defendant.

Defendant failed to disclose on his 1982 SEI the $16,000 he had received from Hoover, apparently on the theory that the transaction was not to be completed until 1983. He also failed to report on the appropriate SEI's his $10,000 investment in the J. David and Company account and the interest payments that he continued to receive on the note after Hoover's "purchase" of it.

E. Renovation of Defendant's Home

In the spring of 1983, Hoover agreed to lend defendant money to remodel his home. When Hoover told her attorney about the loan, he recommended that the transaction be documented. Hoover responded that defendant was going to turn over his original $10,000 J. David and Company investment (by then worth more than $48,000), which she expected to increase in size. She ignored her attorney's requests for documentation.

In July 1983, Columna Contractors, Inc. (Columna), in which Hoover had a 90 percent ownership interest, began the renovation project on defendant's home. Defendant's In February 1984, J. David and Company started to collapse after disclosures that Dominelli was...