Newport Councilman Peotter says he returned Woody’s Wharf campaign donation

Responding to a resident’s accusations that he didn’t return a campaign contribution to a local business engaged in litigation with the city, Newport Beach Councilman Scott Peotter on Monday produced a copy of a check he says shows that he gave back the money.

Peotter provided the Daily Pilot with a copy of a $1,100 check dated Aug. 4 and made out to Woody’s Wharf, a popular Balboa Peninsula restaurant that has been engaged in a legal battle over extended hours and dancing with City Hall.

A dust-up over the donation remerged this week when

Balboa Island resident Jeff Herdman lodged several allegations of municipal code and Political Reform Act violations against Peotter in a letter to the Fair Political Practices Commission and Orange County District Attorney Tony Rackauckas.

Herdman centered his complaint on contributions received by Peotter from Woody’s Wharf and its owners.

Woody’s Wharf owners Greg Pappas, Ralph Nudo, Christopher Pappas and Mark Serventi each contributed $1,100 — the maximum allowed by city code — to Peotter’s campaign in June 2014, according to campaign filing form 460, which details campaign expenditures and income.

The filing also shows a $1,100 contribution from Woody’s Wharf as an entity, the legality of which was called into question by the city clerk in an August letter to the then-council candidate.

City Clerk Leilani Brown advised Peotter that the donations from Woody’s owners and the restaurant itself violated the limit for campaign contributions because it was attributable to the same people.

Failure to return the funds could result in criminal prosecution and forfeiture of office under city rules, Brown wrote.

Although Peotter said he did not agree with Brown’s interpretation of the law, he announced in August that he would return the $1,100 contribution.

However, none of Peotter’s forms published on the city’s website show that he returned the funds.

“Although the violation of law occurred when Peotter deposited the check in June, and it is not clear that he could remedy the violation by returning the check more than two months later, it was assumed that he had done so,” Herdman argued in his letter. “Except he didn’t. At least there is not evidence that he did from his official campaign reports.”

In response to that allegation, Peotter sent the Daily Pilot a copy of the check.

Nevertheless, Herdman argued that the Political Reform Act, which requires that candidates disclose donations and expenditures, was not followed because the return of the money was not detailed on Peotter’s campaign forms on the city website.

Peotter said his campaign accountant mistakenly submitted the wrong version of his 460 form and is submitting a revised form this week.

Herdman also takes issue with a September fundraiser at Woody’s Wharf hosted for Peotter’s campaign.

Herdman wrote that a few days after the event, Peotter posted photos on social media showing him pictured with Woody’s owners with “plates on a table for food and guests enjoying beverages.”

No in-kind expenses, non-monetary contributions or payments are reported on Peotter’s Form 460 related to the event in violation of the Political Reform Act, Herdman said.

Peotter said he accepted no gifts from Woody’s Wharf that night. He paid $500 for the fundraiser, according to a copy of another check made out to Woody’s that Peotter sent to the Pilot.

The $500 expenditure was not listed on his campaign disclosure forms.

In the letter Herdman calls attention to “Peotter’s decisive role in the 4-3 city council vote ... that reversed a prior decision on appealing litigation between the City of Newport Beach and Woody’s, potentially generating hundreds of thousands of economic benefit to Woody’s going forward.”

In March, a week after the City Council voted to ask the California Supreme Court to weigh in on the dispute with Woody’s Wharf, the council decided to withdraw its petition.

Selich, Peotter, Duffield and Councilman Kevin Muldoon voted to withdraw the petition. Mayor Pro Tem Diane Dixon, Councilman Tony Petros and Curry dissented.

In his letter, Herdman also details contributions made by Councilman Marshall “Duffy” Duffield, who was then a candidate and member of “Team Newport,” and the Duffield for City Council Committee.

The donations came to $1,150, an excess of the contribution limit by $50, the letter states.

Peotter said the $50 excess was a mistake that slipped past him, his campaign accountant and the city clerk.

He said he wrote a $50 check to Duffield refunding the money this week.

Herdman considers himself friends with Mayor Ed Selich and is “becoming friends with” Councilman Keith Curry, who has butted heads with Peotter.

The Balboa Island resident began looking into Peotter’s campaign finances after he heard about Peotter comparing Curry’s logic on council related to city debt to the legal defense strategy employed by the Menendez brothers, who were convicted of murdering their parents in the 1990s.

“It was too much for me, and I felt like I had to do something,” he said.