July 13, 2013 in City

Gonzaga donor once convicted of 1993 money laundering

By The Spokesman-Review
 

A Gonzaga University trustee credited with the largest single donation to the school also has a criminal record of money laundering.

John J. Hemmingson was convicted by a New Orleans jury in 1996 for his role in trying to buy access to former U.S. Secretary of Agriculture Mike Espy, according to Spokesman-Review archives. He was appointed as a member of the Board of Regents for the university in 2008 and became a trustee in 2012.

Hemmingson was found guilty of laundering money through the company he chaired, Crop Growers Corp., an insurance underwriter for farmers. The company had corporate offices in Coeur d’Alene. Using company funds, he made $20,000 in political donations to Mike Espy’s brother, Henry Espy, who made an unsuccessful bid for Congress in 1993.

Hemmingson served a year in a halfway house in Spokane, according to Spokesman-Review archives. He was pardoned by outgoing President Bill Clinton in 2001.

His $25 million donation to help build Gonzaga’s new University Center was celebrated at a groundbreaking ceremony Thursday. The new building will replace the current student center and is slated to be completed by 2015.

Hemmingson could not be reached for comment Friday, but he issued a response through Gonzaga spokeswoman Mary Joan Hahn.

“That entire incident is in my past – it happened almost two decades ago,” the statement read. “I have maintained my innocence and was pardoned. Today, I am completely focused on moving on.”

University officials were also not available for direct comment, though Hahn provided a statement by university President Thayne McCulloh.

“These events took place nearly 20 years ago, and the due-diligence review of Mr. Hemmingson’s board candidacy addressed these matters to the University’s satisfaction,” the statement read.

Hemmingson recently moved to Liberty Lake and is the CEO of Lakeside Capital Group, a Coeur d’Alene-based investment company that manages more than $160 million in assets, according to its website.

Hemmingson isn’t the only controversial benefactor to Gonzaga. Angelo R. Mozilo, the former CEO for troubled mortgage lender Countrywide Financial, also served on the board of trustees. Mozilo funds a Gonzaga scholarship, according to the school’s website.

In a case that received national attention, Countrywide issued billions of dollars in loans to borrowers who were unable to repay them. Time magazine listed Mozilo among “25 People to Blame for the Financial Crisis.”

Mozilo paid nearly $70 million in fines and disgorgement to the U.S. Securities and Exchange Commission in 2010.

Hemmingson has supported a number of university projects, including athletic programs and the John J. Hemmingson Chair in Civil Liberties in the School of Law.

He is also a founding board member of the Rypien Foundation, a local organization that supports families with children who have cancer, and serves on the boards of the Boys & Girls Club of Spokane County, Mobius and Spokane Neighborhood Action Partners.

“My work today, as it has been for the last 15 years, is doing what I can to grow and improve our community,” Hemmingson’s statement read.


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