State looking into complaint about PAC

A state agency confirmed Tuesday that it is investigating whether a political action committee active in November’s Newport Beach City Council election failed to properly report donations and expenditures.

A spokesman for the Fair Political Practices Commission’s enforcement division said it is looking into Balboa Island resident Jeff Herdman’s assertion that a PAC supporting the “Team Newport” slate of candidates did not submit a legally required financial document.

“However, please be advised that at this time we have not made any determination about the validity of the allegations you have made,” the agency wrote in a July 7 letter responding to Herdman’s June 27 complaint.

Herdman alleged that the PAC, Residents for Reform, did not file a semi-annual statement for the Oct. 19 to Dec. 31 reporting period. State election law requires PACs to detail and make public donations and expenditures.

“Residents for Reform were part of a larger effort to circumvent Newport Beach campaign contribution restrictions, and to obscure the true parties behind unprecedented independent expenditures in the November City Council elections,” Herdman asserted in his letter to the FPPC.

Residents for Reform’s volunteer chairman, Bob McCaffrey, did not return a phone call seeking comment.

The Daily Pilot was not able to find a copy of the report covering the period on file in the Orange County registrar-recorder’s office or on the Newport Beach city website.

Residents for Reform formed in 2013 to “return fiscal responsibility to City Hall,” according to its website. The committee opposed what it deemed excessive spending on the new Civic Center and increased dock fees, among other projects.

The PAC endorsed the four candidates on the Team Newport slate who went on to win — Council members Scott Peotter, Marshall “Duffy” Duffield, Kevin Muldoon and Mayor Pro Tem Diane Dixon — and spent heavily on their campaigns and a successful effort to defeat then-Mayor Rush Hill.

Generally, when the FPPC receives a complaint, it reviews whether it has merit under the Political Reform Act, which the agency enforces.

If it determines there may have been a violation, an investigation begins, said FPPC spokesman Jay Wierenga.

The agency does not comment on open investigations.

“I feel like some progress is being made,” Herdman said of the agency’s letter. “It adds meat to all the research I’ve done. It validates that it hasn’t been a waste of time on my part.”

This is not the first time Herdman has sent a complaint to FPPC. He sent a letter to the state agency in April alleging that a campaign contribution that Peotter received last year violated Newport’s municipal code and the state Political Reform Act.

In that letter, Herdman alleged that contributions to Peotter from the Woody’s Wharf bar and restaurant and its four owners exceeded city campaign contribution limits.

Peotter disagreed with the city clerk’s opinion that the limit was breached but said he returned the money after receiving a letter from the city.

The FPPC’s investigation into Herdman’s allegations about Peotter is still ongoing, Wierenga said, declining to elaborate.

The FPPC can levy fines up to $5,000 for violations of the Political Reform Act.