Newport resident files complaint with state against mayor, alleging business-driven conflicts of interest

A Newport Beach resident has filed a complaint with the state alleging that mayor and entrepreneur Marshall Duffield has wielded undue influence over how the city runs Newport Harbor.

In a 12-page letter to the California Fair Political Practices Commission dated Tuesday, Lauri Preedge said Duffield, owner of Duffy Electric Boat Co., has substantial economic interests in the harbor, with sales and service offices and thousands of customers. As a member of the City Council, she alleged, he has participated in or used his official position to influence harbor-related decisions in violation of state and local laws.

She also accused Councilman Scott Peotter of “aiding and abetting” Duffield as his “principal surrogate” when Duffield recuses himself from harbor-related council votes and presentations, including an April California Coastal Commission meeting where Peotter’s pitch for a “port” designation to allow the city some local permit approvals was met with skepticism and chuckles.

“While conflicted on most issues involving the harbor, Duffield appears to be intimately involved in behind-the-scenes decision-making on all issues involving the harbor,” wrote Preedge, a residential real estate agent. “His leadership is routinely mentioned by all of his council colleagues.”

In addition to seeking FPPC intervention, Preedge requested investigations by the Newport Beach city attorney, Orange County district attorney’s office and state attorney general’s office.

An FPPC spokesman said Thursday that the agency had not received the complaint.

Duffield said he had heard about the complaint but had not read it. He declined further comment.

Peotter said the idea that Duffield could be a “grand manipulator,” using him as a surrogate, was so unlike Duffield as to be “laughable.”

“Anybody who knows Duffy would know that Duffy would never ask anyone to do anything for him,” Peotter said.

Preedge’s complaint contained several elements, including:

Port master plan: Preedge said Duffield’s participation in the initial council meeting outlining a port master plan was inappropriate. The city dropped the idea after the Coastal Commission’s cool response, and Duffield recused himself from discussions and votes in subsequent meetings, including one to terminate the contract with lobbyists trying to help Newport achieve the port status.

Australian boat trip: Preedge alleged that Duffield has directed city staff outside the chain of command and cited as an example Duffield’s efforts in 2016 and ’17 to have city fire and lifeguard representatives travel to Australia to inspect a water-jet-driven boat model that he was interested in for surf rescues, harbor patrol and harbor fire suppression instead of propeller-driven vessels. The Australia trip cost about $6,000.

Harbor decisions: Preedge cited 15 major harbor-related actions the council has taken since Duffield’s 2015 swearing-in, including reduced rental rates for moorings, residential docks, commercial marinas and fuel docks; taking over harbor administrative duties from the Orange County Sheriff’s Department Harbor Patrol; realigning the Harbor Department and attempts to secure federal funding for a major dredge.

“While many of these initiatives may very well have positive public policy aspects to them, it is clear that Duffield is driving the agenda, he is putting his loyalists in place to manage the operations of the harbor and he is using the office of mayor to advocate policies, particularly in land use and the upcoming revision of the city general plan, that will benefit his businesses,” Preedge wrote.

Preedge reminded the FPPC of a 2015 letter it sent the city advising that Duffield could not participate in votes in which he could have a conflict of interest.

Preedge’s FPPC complaint did not mention that she also lodged a complaint to the council in April accusing a majority of its members of meeting in secret to negotiate City Manager Dave Kiff’s impending exit, in violation of the state open meetings law.

hillary.davis@latimes.com

Twitter: @Daily_PilotHD