The state's political ethics watchdog found that Newport Beach councilman Mike Henn did not violate California's conflict-of-interest law when he championed the revitalization of Lido Village while acting as the city's mayor in 2011.
The letter, published Thursday, ends a two-year investigation by the Fair Political Practices Commission into a complaint filed in 2012 by former Newport Beach Planning Commissioner Robert Hawkins, who is frequently critical of Newport's council.
Henn said in a city news release that he is "glad to be completely vindicated in this matter."
He also expressed disappointment in the amount of time and money the FPPC and the city has spent investigating the "meritless allegations."
Hawkins' complaint highlighted an alleged conflict of interest in Henn's membership on the city's Neighborhood Revitalization Committee, where he championed improvements to Lido Village.
While Henn's council district includes Lido Village, which acts as a gateway to the Balboa Peninsula, the Daily Pilot reported in 2011 that the former mayor had financial ties to a shop in the area.
As a business consultant, Henn was paid more than $100,000 a year by Via Lido Drugs, the pharmacy and gift shop in Lido Village, according to his annual state financial disclosure form at the time.
The financial connection violated the Political Reform Act, the state's conflict-of-interest law, Hawkins said at the time.
Henn contended that he did not have a conflict of interest and later recused himself from votes involving improvements in the area.
"After completing our investigation, we found insufficient evidence of a violation of the act, and we are closing our file on this matter …" the FPPC wrote in the letter.
The letter also warned Newport Beach Mayor Rush Hill that he should have recused himself from decisions in 2011 that could have raised the value of the property he owns, but declined to fine him.
Henn could not be reached for further comment.