— Photo courtesy Duffield for City Council 2014 ©
Questions about a newly elected city councilman’s ability to vote on certain issues without a conflict of interest have recently been raised, and answered – in part- by the Fair Political Practices Commission.
The city sent an inquiry to the commission asking about Councilman Marshall Duffy Duffield and his duties with concern to possible conflict of interest while the council is considering items related to the harbor.
Duffield represents District 3, which touches the harbor and covers Castaways, Westcliff, Dover Shores and Santa Ana Heights.
In a response letter to Newport Beach City Attorney Aaron Harp dated Jan. 6, the FPPC provided some advice on the matter.
On such subjects as rent for commercial tidelands pier permits/leases, dredging projects, zoning, and work where a Duffy Boats client may be involved, the FPPC stated that there would be a conflict of interest and Duffied would not be able to participate in any of those decisions.
The FPPC emphasized in the letter that they do not find out or investigate facts, but rather base their advice on the facts provided to them.
Some of the facts presented included that Duffield has been building boats in California for about 45 years and is the CEO of Duffield Marine Inc., and Duffy Boats, which has been widely successful and is well known locally, with more than 3,500 Duffy Boats in Newport Harbor alone. It also stated that the company owns property within city limits and has an annual commercial pier permit from the city.
Among the questions posed by the city was one regarding setting the rent for commercial tidelands pier permits/leases and whether or not Duffield could participate in that decision if Duffy Boats or a Duffy Boats client already has a permit.
The answer: “No,” with some explanation: A regulation provides “the reasonably foreseeable financial effects of a governmental decision on any real property in which a governmental official has a leasehold financial interest is material whenever: governmental decision will” among other things, increase or decrease the value of the property or impact the official’s use and enjoyment of the property.
“Because the decision will presumably change the rent charged for the lease, the Councilmember will have a conflict of interest,” the FPPC states in the letter. “The Councilmember would also have a conflict of interest based on his source of income (clients of Duffy Boats) being the subject of the proceeding concerning the decision before the official or the official’s agency where the decision involves the issuance, renewal, approval, denial or revocation of any license, permit, or other entitlement to, or contract with, the source of income, and there is any financial effect on the source of income.”
The city also questioned whether or not Duffield could participate in the decision that determines the zoning or use regulation for commercial, marine and residential properties that border upon Newport Harbor
Again, the answer was no.
“Since Councilmember Duffield is presumably rezoning or changing the use of his own property or that of his clients, he will have a conflict of interest,” the FPPC explains.
Other questions included: “May Councilmember Duffield participate in governmental decisions involving clients of Duffy Boats, in circumstances where the work/service performed by Duffy Boats for the client is in another jurisdiction (i.e., not in the City of Newport Beach)?” and “May Councilmember Duffield participate in governmental decisions involving clients of Duffy Boats in circumstances where the work/service performed by Duffy Boats for the client is in the City?”
Both times the FPPC answered no with the same explanation.
Income excludes “income received from any source outside the jurisdiction and not doing business within the jurisdiction, not planning to do business within the Jurisdiction, or not having done business within the Jurisdiction during the two years prior to the time any statement or other action is required under this title.”
But a “person is ‘doing business in the jurisdiction’ if that person has business contacts on a regular or substantial basis with a person who maintains a physical presence in the Jurisdiction of a public official. ‘Business contacts’ include, but are not limited to, manufacturing, distributing, selling, purchasing, or providing services or goods. ‘Business contacts’ do not include marketing via the Internet, telephone, television, radio, or printed media.”
The FPPC did note that there was no information provided by the city about the specific clients, but based on the other provided facts that they are appearing before or will be impacted by decisions by the council, they are doing business in Newport Beach.
“Therefore, if the decisions will have a material and foreseeable financial effect on these clients, who are a source of income to Councilmember Duffield, he will have a conflict of interest,” the FPPC letter reads. “Thus, if the decisions will have a material and foreseeable financial effect on Councilmember Duffield’s clients, he will have a conflict of interest.”
The FPPC was unable to answer several other questions without additional facts, including whether or not Duffield could participate in deciding how to allocate or expend tidelands or general fund revenue in the harbor, determining maintenance and improvement for the harbor, and approving certain harbor-related projects, like dredging.
And finally, if Duffield was prohibited to participate in certain discussions/issues, could Duffy Boats “wall off” Duffield from “participating within Duffy Boats’ organization on those matters as a way to allow his participation in the governmental decisions?”
The FPPC’s answer was that it would be impossible to do so.
“Considering the Councilmember’s relationship to his wholly owned business, it would not be possible to “wall him off from participating within Duffy Boats’ organization in order to allow him to participate in the decision in his official capacity,” they wrote.
Duffield could not be reached for comment.
Officials at FPPC also contacted the Attorney General’s office and the local District Attorney’s office, but had not received a written response.
