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Republican gubernatorial candidate Bill Simon on Thursday criticized a jury’s decision to levy $78 million in damages against his family’s investment firm in a fraud lawsuit. Simon, who is running against Democratic Gov. Gray Davis, called the decision “a bad verdict” and predicted it will be overturned. He sought to distance himself from the legal battle, emphasizing that although he was subpoenaed, he was not called to testify. “The fact that I wasn’t called is indicative of the fact that, frankly, I had very little involvement in this,” he said. A jury awarded a partnership controlled by businessman Paul Edward Hindelang $65 million in punitive damages from William E. Simon & Sons on Wednesday and $13.3 million in compensatory damages on Tuesday. The jury also awarded the plaintiff $18.9 million in damages from a second investment firm, B-R Partners. Simon started Simon & Sons with his brother and his father, a former U.S. Treasury secretary. He was not named in the lawsuit and is on leave from his post as co-chairman. Simon aides suggested Wednesday that the legal proceedings were politically tainted, alleging Hindelang’s law firm and the law firm’s publicists have ties to Davis. Davis aides denied any involvement and launched their own attack on Simon. “We’re starting to see a disturbing picture emerge. It seems Bill Simon is the Gordon Gekko of this generation,” said Davis campaign press secretary Roger Salazar, a reference to the ruthless businessman played by Michael Douglas in the movie “Wall Street.” Hindelang, who pleaded guilty in 1981 to federal drug smuggling charges and served about 2 1/2 years in prison, founded the pay phone company Pacific Coin. His lawsuit claimed Simon & Sons and B-R Investors Inc. acquired a controlling interest in Pacific Coin in 1998 with an aggressive — and ultimately disastrous — plan to take the company public and make huge profits. He said the investors misled him about their plans, and Hindelang lost more than $23 million. In a countersuit that jurors rejected, Simon & Sons contended that it was Hindelang who committed fraud by failing to disclose his troubled past. The verdict against Simon’s firm could damage him politically because the first-time candidate has stressed his business success in his campaign, analysts said. “The thing that he uses to separate himself from Gray Davis’ failings is Simon’s business expertise,” said Sherry Bebitch Jeffe, a political scientist at the University of Southern California. “And now what the voters will see is that the firm of which Bill Simon is a part has been basically, in their minds, convicted of fraud.” The court proceedings were the latest bad news for Simon. Last week he finally released his tax returns after facing a storm of criticism, but gave a select group of reporters just an afternoon to review the complex documents. Copyright 2002 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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