Business linked to Newport mayor paid councilman to help create marijuana facility in Inland Empire, records show

A business linked to Newport Beach Mayor Marshall “Duffy” Duffield paid his City Council colleague Scott Peotter to help convert part of Duffield’s boat manufacturing facility in San Bernardino County to a medical marijuana cultivation or distribution hub, records show.

Peotter made at least $10,000 from DC Developments, a Duffield-associated company, according to Peotter’s state-required statement of economic interest forms.

A string of corporations that financially tie the two together appears to answer a question — has Peotter ever worked for Duffield? — that has dogged them for weeks as they seek reelection in November.

The legality of such a business relationship is unclear.

Duffield and Peotter did not immediately return messages seeking comment Thursday.

City Attorney Aaron Harp said he had not seen the records — obtained from the California secretary of state’s office and the city of Adelanto — until he received them from the Daily Pilot on Thursday. He said he was still reviewing them and had no immediate comment.

Adelanto, about 40 miles north of San Bernardino, is the location of the boat-building facility for Duffield’s Duffy Electric Boat Co.

Newport Beach activist Susan Skinner, a regular critic of Duffield and Peotter, filed a complaint with the California Fair Political Practices Commission in September seeking an investigation into the possibility of a Duffield-Peotter employment arrangement.

Duffield regularly recuses himself from City Council votes on Newport Harbor matters because of potential business conflicts related to Duffy Electric Boat Co., which has a harborfront office on West Coast Highway. Peotter does not recuse himself from those votes.

Skinner argued that if Duffield is a source of income for Peotter, Duffield’s conflicts of interest are also Peotter’s.

In an August email exchange between Skinner and Harp about the matter, Harp said Skinner’s information “is based upon a rumor” and that an answer from the city attorney’s office “ is not possible given the ethical rules related to the performance of our duties.”

Peotter and Duffield have demurred when asked about the issue. At an August council candidates forum, Duffield would not answer a question from his District 3 challenger, Tim Stoaks, about whether he has ever employed Peotter while they have served on the council. After the forum, Peotter said he doesn’t respond to rumors.

The city charter is silent on intracouncil financial conflicts of interest.

The provision Skinner cited, titled “Illegal Contracts. Financial Interest,” says council members cannot be “financially interested in any contract, sale or transaction made by them in their official city capacity,” with interest defined as a certain stock ownership.

State code has similarly broad provisions. One states that city officers “shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members.” Another says “no public official at any level of state or local government shall make, participate in making or in any way attempt to use his official position to influence a governmental decision in which he knows or has reason to know he has a financial interest.”

Neither addresses one council member employing another.

However, state business records show that a company connected to Duffield paid one connected to Peotter.

Peotter — representing architectural and development consultant Aslan Cos., of which he is chief executive — appeared before the Adelanto Planning Commission in September 2017 on behalf of DC Developments, a Duffield-associated company that runs properties including the Duffy boat factory on Muskrat Avenue in Adelanto’s manufacturing and industrial zone. Duffield is listed as a “manager/member” of DC Developments, according to the secretary of state’s office.

According to a city staff report for the Planning Commission meeting, Peotter asked for permission to subdivide the 4.7-acre Muskrat Avenue parcel into three lots and added that Duffield planned to apply for a permit to cultivate cannabis on the site.

Secretary of state records also show that Muskrat Consultants LLC registered as a corporation in November 2017, using the same address on Muskrat Avenue as the Duffy boatyard. Duffield also is a “manager/member” of Muskrat Consultants, which the California Bureau of Cannabis Control lists as a licensed medicinal marijuana distributor. It is one of 16 marijuana distributors in Adelanto.

Duffield and Peotter were part of a unanimous council vote in 2015 to ban medical marijuana cultivation, processing and delivery in Newport Beach.

Then-Councilman Keith Curry also was part of that vote. He agreed with the two then, but now he is a vocal critic of the pair who has frequently been questioned whether they have an employment relationship.

“Now we find out that not only are they in business together, they’re in a pot business together,” Curry said Thursday.

He said a business relationship would be “unacceptable” and said it’s “appalling” that they have been tight-lipped.

“They owe the public an answer,” Curry said.

hillary.davis@latimes.com

Twitter: @Daily_PilotHD