Newport Beach counsel fires back at complaint accusing councilmen of campaign violations

The Newport Beach resident accusing City Councilman Scott Peotter and Mayor Marshall “Duffy” Duffield of campaign finance violations — and city leaders of looking the other way — is barking up the wrong tree, a lawyer for the city says.

The city hit back at a lawsuit seeking a court-appointed special prosecutor to look into the alleged violations with a wide range of arguments filed Thursday:

• Newport Beach City Attorney Aaron Harp doesn’t have the legal authority to prosecute the alleged violations or take civil action against them as violations of the state Political Reform Act. Only an elected city attorney or the district attorney can do that, and the City Council can step in only if the district attorney can’t or won’t.
• A simultaneous complaint filed with the California Fair Political Practices Commission laying out the same allegations is pending, and the administrative body takes priority over the court. An FPPC spokesman has confirmed that the agency received the complaint and was investigating.
• The constitutional separation of powers doctrine bars direct judicial interference with the legislative City Council.

“ … This petition is improper, premature and attempts to insert the court into the political interworking of the Newport Beach City Council,” the city’s outside attorney, Patrick Bobko, wrote in his challenge.

Newport resident Martha Peyton claimed in a complaint filed last month in Orange County Superior Court that Peotter broke several state and local campaign finance rules by accepting noncash donations from Duffield and others in his bid for reelection this year that either pushed the donors over the contribution limit or were misreported, if they were reported at all.

Peotter has denied wrongdoing.

Peyton’s lawsuit also seeks a court-appointed special prosecutor to act in the place of Harp, who she said cannot enforce the city code covering the alleged violations because he is “beholden” to the City Council majority that ensures his continued employment.

Further, most of the council shares “close, almost incestuous political ties” with Peotter and Duffield, the complaint said.

This is the same case at the middle of an email imbroglio involving Councilman Jeff Herdman, who looped in Peyton’s attorney, Phil Greer, on messages with Harp about the suit. In light of that, the city is seeking to have Greer removed from the case.

Peyton alleged three violations against Peotter: an unreported campaign gathering for Peotter that Duffield hosted aboard his private yacht; an improperly reported reception beforehand at Woody’s Wharf that would have put restaurant co-owner and previous donor Greg Pappas past the maximum; and an unreported fundraiser at local activist Bob McCaffery’s home.

The alleged violations happened around the same time as an ultimately unsuccessful attempt to recall Peotter. Peotter said the donations were lawful contributions toward his anti-recall committee.

In February, the City Council decided to probe possible fraud related to the recall petitions in parallel with one by the Orange County district attorney’s office. Greer was involved in the recall effort and represents several parties subject to subpoena.

Greer has said Peyton’s complaints are unrelated to the city’s decision. He said he is seeking relief from the county court as well as the FPPC because the commission is “notoriously slow” and doesn’t take allegations as seriously as it should.

On the point of interference, Bobko said it would be up to the City Council to appoint a special counsel, and not doing so is not a failure of a compulsory duty that the court could correct.

Also, he wrote, Peyton’s complaint seeks penalties up to removing Peotter and Duffield from office, circumventing voters who elected both, despite the recall attempt against Peotter failing to gather enough signatures.

“It is a brazen attempt to have the court do something the voters of Newport Beach would not,” Bobko wrote.

A hearing on the city’s challenge is set for July 12.

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