Venezia: Candidate challenges campaign-donation warning

Things are heating up for Newport Beach council candidate Scott Peotter in his bid for the District 6 seat — maybe not in a good way.

On Aug. 1, Peotter got a letter from Newport City Clerk Leilani Brown alerting him that he was in potential violation of the city’s campaign-contribution limits.

Brown serves as the city’s election official. It’s her responsibility to review and maintain the campaign finance statements that candidates are required to report on state disclosure forms known as 460s.

In the letter, Brown acknowledges receiving Peotter’s most recent 460 form on July 31.

In question are contributions in the amount of $1,100 each from the owners of Woody’s Wharf — Greg and Christopher Pappas, Ralph Nudo and Mark Serventi — as well as another $1,100 from the Balboa Peninsula restaurant itself.

In total, $5,500 was donated to Peotter’s campaign.

For those unfamiliar with Woody’s Wharf, it’s been a popular restaurant at 2318 Newport Blvd. since 1965.

Brown’s letter explains, “Newport Beach Municipal Code section 1.25.03 prohibits a person from donating more than an adjusted $1,100 to any candidate-controlled committee and prohibits a candidate-controlled committee from accepting more than an adjusted $1,100 for a person with respect to any single elections.”

The code goes on to say the Political Reform Act of 1974 requires that campaign contributions be aggregated when donations are made by an individual — or a group of people controlled by that person.

In other words, as owners of Woody’s Wharf, the men control the campaign contributions made by the business, so the $1,100 from the restaurant itself could cause the four owners to exceed the contribution limit. The letter ends by saying that to correct this alleged violation, Peotter must return the $1,100 and amend his 460 form.

“Failure to correct this violation may result in criminal prosecution and forfeiture of office pursuant to Newport Beach Municipal Code Section 1.25.040,” writes Brown.

Peotter sees this differently, and at this point, doesn’t seem eager to return the money.

He says that because none of the individuals owns more than 50% of Woody’s, he’s not in violation of the code.

Peotter says that when he received the letter, he went looking for clarity from the California Fair Political Practices Commission, or FPPC.

He submitted his question about this issue on the watchdog agency’s advice line and advised the city clerk of his actions.

So far he hasn’t gotten an answer from the FPPC, but he says he looked up the code before accepting the campaign contributions and felt that it was pretty clear he could.

“The code is clear: If you accept funds of the owner, he has to control 50% of the company,” he said.

So what does this little bump in the road mean for Peotter’s campaign?

Politics is all about perception.

Campaign laws were written to avoid influence-peddling, and some could argue that a donation of this size could be seen that way. Serventi doesn’t see it that way.

He tells me the contributions to Peotter have nothing to do with influence-peddling.

Peotter was the first candidate who asked to meet with the restaurant owners, Serventi says, and they plan on making donations to other candidates.

The owners also thought their donations were well within the law.

Serventi pointed out that if he and his partners — and their spouses — all made legal donations of $1,100 each, they could’ve donated $8,800 and been well within the law.

But Peotter, a former city planning commissioner, knew these donations could raise an issue for him, which is why he looked at the code beforehand.

So was it a wise move on his part to even open this door?

Peotter gambled, and no matter which way the ruling goes, he’ll have a hard time moving away from the perception that he’s a bit too comfortable pushing the envelope.

Newport council campaigns have historically been contentious.

No question Peotter’s opponent, Mike Toerge, and his camp are paying close attention.

Voters will be watching too, as will the Feet to the Fire gang gearing up for the Oct. 1 forum, when Newport candidates take the stage at the Oasis Senior Center.

BARBARA VENEZIA, whose column appears Fridays, lives in Newport Beach. She can be reached at bvontv1@gmail.com.