FPPC Fines ‘Team Newport’

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Newport Beach City Council members known as “Team Newport,” their collective political consultant and campaign treasurer from 2014, have agreed to pay $27,000 for failing to properly report certain information on campaign finance statements, according to the California Fair Political Practices Commission.

Local groups Residents for Reform and Neighborhood Preservation Coalition, political consultant David Ellis, treasurer Lysa Ray, former council member Scott Peotter, current council members Marshall “Duffy” Duffield, Kevin Muldoon, and Diane Dixon, and the campaign committees that supported them are all named.

“Due to Ellis’ roles with RFR and NPC, and position as campaign consultant for the Team Newport candidates, RFR and NPC made, and the candidates received as contributions, coordinated expenditures that were not properly reported by Respondents on campaign statements, in violation of the Political Reform Act,” the FPPC document reads. “Further, NPC failed to register as a recipient committee and file the appropriate campaign statements, in violation of the Act, and both RFR and NPC failed to identify themselves as controlled by Ellis and primarily formed. RFR and NPC both also failed to timely file certain 24-hour contribution reports. Lastly, Ellis, a candidate himself, controlled multiple committees, thereby violating the Act’s one bank account rule.”

Collectively, the matter considers 11 counts of violations, according to the FPPC document.

The counts listed include failing to properly report non-monetary contributions and failing to timely file reports. The 11th violation states that “Ellis received contributions and made expenditures from multiple campaign bank accounts of controlled committees.”

Although the maximum penalty that can be imposed is $5,000 per count, FPPC explained their reasoning for a lighter fine.

“In this case, Respondents contend that they did not intend to conceal, deceive, or mislead the public, or evade their reporting requirements,” the document reads. “Further, the Enforcement Division found no evidence that Respondents otherwise failed to report contributions, outside of those described herein. Much of the subject activity of RFR and NPC, although mischaracterized, was otherwise reported on other statements and reports, thereby providing the public with some disclosure. The candidates contend that, although they knew that Ellis was involved with multiple committees, they did not understand that such overlapping roles would result in violations by the candidate-controlled committees. Further, RFR, NPC, Ellis, and the candidates do not have a prior history of violations.”

The Commission will consider the item on March 19.

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